Fistar v Riverwood Legion and Community Club Ltd

The Riverwood Legion and Community Club Ltd (the Club) brought proceedings against the Fifth Defendant, Ms Fistar, seeking to recover funds misappropriated from the Club. Ms Fistar had "invested" money with a fraudster, who subsequently dissipated these funds. Crucially, the fraudster used money stolen from the Club to repay Ms Fistar, and Ms Fistar then used these repaid funds to acquire Torrens land. The Club argued that the fraudster held the bank cheque purchased with the stolen funds on trust for the Club. The appeal concerned whether the Club's personal claim against Ms Fistar was available, particularly in light of potential claims under the rule in *Barnes v Addy* and the decision in *Farah Constructions v Say-Dee Pty Ltd*.

The central legal issues before the Court of Appeal of New South Wales were whether the Club's personal claim against Ms Fistar was precluded by the availability of other remedies, such as a proprietary claim or a claim against the direct recipient of the stolen funds. The Court also considered the nature of overlapping claims at common law and in equity, and whether Ms Fistar could be considered a volunteer in relation to the funds she received. The Court was required to determine if its reasoning was consistent with or confirmatory of the Club's personal claim, and to assess the applicability and correctness of existing authorities, including *Austin v Khaliffe*.

The Court of Appeal allowed the appeal, finding that the Club's personal claim against Ms Fistar was not barred. The Court reasoned that the Club was entitled to pursue a personal claim for money had and received against Ms Fistar, even though she was not the initial recipient of the stolen funds. The Court distinguished *Austin v Khaliffe*, finding it did not preclude the Club's claim. The Court held that Ms Fistar was not a volunteer in the relevant sense, as she had provided value in her dealings with the fraudster. The Court concluded that the principles established in *Farah Constructions* did not prevent the Club from pursuing its personal claim.

Consequently, the Court of Appeal ordered that the appeal be allowed with costs. The previous orders made on 6 May 2015 and 12 May 2015 were set aside, and in their place, the proceedings were dismissed with costs as against the Fifth Defendant.