BL-2021-002235 - [2025] EWHC 1966 (Ch)

Although the defendant sought the transfer of the proceedings from Part 8 to Part 7, on 11 February 2022 Marcus Smith J declined to make such an order. The matter accordingly proceeded to a trial under CPR Part 8, of which the defendant had notice, but declined to attend. The deputy judge considered the written evidence, though without the benefit of cross examination, and held that she was satisfied that the defendant had not proved his allegations of fraud. The claimant’s claim succeeded, and the deputy judge made a declaration that the defendant no longer had any interest in the shares, and that the claimant had become their owner, and granted an injunction to restrain the defendant from asserting any interest in them: see the judgment under neutral citation number [2022] EWHC 850 (Ch).

In the course of her judgment, the deputy judge said this:

“74.

Mr. Stanford has made assertions in these proceedings that he was fraudulently induced to conclude the 2011 SPA and 2012 Settlement Agreement, and on that basis the agreements were null and void or were vitiated. He also asserts that a number of the Claimant’s directors had knowledge of that fraud. He failed to justify the matter being decided under Part 7. More significantly, he failed to provide any realistic evidential basis for substantiating these serious allegations of fraudulent inducement. His own assertions and statement evidence did not substantiate his case on fraud or knowledge of fraud, and I reject it.

75.

I reject his case that the allegations of fraud were substantiated or supported by the Claimant’s failure to affirm that there was no fraud. He appears to have considered that he was making a reasonable compromise in asking for an affidavit. However, he put forward no basis for his assertions and Mr. Lea [of the claimant] had made a clear and unequivocal statement, supported by a statement of truth making clear that neither he nor any other of the Claimant’s directors were aware of fraud. This statement was made in these proceedings at an early stage but this did not stop Mr. Stanford pursuing his position in an increasing number of documents.

76.

Mr. Stanford responded to this claim by making positive allegations of fraud and the burden lay upon him to establish those allegations. He failed to establish that the 2011 SPA or 2012 Settlement Agreement were induced by fraud. He put forward no other defence to the claim. It was implicit that if the SPA was valid then he had no answer to the Claimant’s case that it conferred title to the ASRL Shares on the Claimant and he retained no interest: this was apparent from its wording.”