It has long been held by the Courts in England and Wales that where misappropriated money is paid into a joint bank account, both signatories to that account are jointly and severally liable to make good the loss to the claimant. The joint account holders are often referred to as having each been unjustly enriched.
But what about a situation where one joint account holder has no knowledge that any misappropriated money has been paid into and then out of the account without any benefit to the innocent account holder? It seems unfair that a joint account holder in those circumstances should be liable to repay any monies to the claimant.
In a number of recent decisions the courts have agreed that liability in these circumstances is unfair.
The courts have made a distinction between cases where the money is still held in the account and where the claim is for money which went through a joint account and is no longer held there. It does not seem unfair that money remaining in the joint account can be subject to a claim for money had and received and liable to be repaid. But the courts have held that, in the absence of either knowing receipt or dishonest assistance, the innocent account holder has no liability for ‘money had and received’ in respect of money which simply goes through a joint account.
In Primlake Ltd v Matthews Associates  EWHC 1227 Lawrence Collins J stated in respect of trust funds in a joint account claimed against an innocent accountholder:
“335. …In my judgment the authorities would justify the conclusion that Mr Matthews is liable for money had and received (and also, probably, as a trustee on resulting trust) on the basis of an absence of consideration in the sense of no legal basis for the payments…
336. So far as concerns Mrs Matthews, she would be liable, as a volunteer, to make restitution of the money still in her control. But, subject to what is said in paragraph 341 below, she would not be liable for money which went through the joint accounts, but is no longer held by her, except on the basis of dishonest assistance or knowing receipt…”
The caveat to the claim against Mrs Matthews being that after an inquiry into what dealings had been effected by Mr & Mrs Matthews, the claimant might have been able to trace the money into assets purchased with the misappropriated money.
Academic commentary after Primlake sought to justify the decision on the basis that Mrs Matthews had been enriched at the point money was credited to the joint account but that she had a ‘change of position’ defence, the change of position being Mr Matthews withdrawing the money without Mrs Matthews’ knowledge.
That academic justification does not stand up to scrutiny because, as the court held in Credit Suisse (Monaco) SA v Attar  EWHC 374 (Comm), there must be a causal relationship between receipt of the money and the change of position. Where the defendant does not know that the money has been paid to him or her, there is no causal link between the mistaken or wrongful receipt of the funds and any change of position.
In Stanbridge v Advanced Industrial Technology Corporation Limited  EWHC 1009 (Ch) HHJ Dight stated:
86, The positions taken by the court and the reasoning of the judges in the Euroactividade case, the OEM case and the Primlake case persuade me that as a matter of principle the court may refuse to order restitution by a joint account holder of monies siphoned through her account where she has not benefitted from them as a matter of fact and had no knowledge that her account was being used as a conduit by the other joint account holder.
87. In my judgment the fact that the earlier “change of position” defence asserted by Mrs Stanbridge in respect of AITC’s counterclaim was struck out does not mean that AITC is entitled to succeed on its restitution claim. The basis of the change of position which was struck out was entirely different to the principles involved in considering the siphoning issue and in my judgment does not prevent Mrs Stanbridge from asserting that AITC is not entitled to succeed on this part of its case.
88. I find that in this case the advance was of no benefit to Mrs Stanbridge and she was not “enriched” by it. Further, I repeat my earlier finding that she was innocent of the use being made of the joint account and…acted in good faith. In my judgment it would be unjust to require Mrs Stanbridge to make restitution by repaying to AITC a sum equivalent to the advance monies…”
HHJ Dight appears simply to have considered the obvious meaning of the word ‘enriched’ and concluded that if a joint account holder is unaware of the deposit and withdrawal of misappropriated money and has received no benefit from that money that account holder has not been enriched at all, let alone unjustly.