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

Therefore, thirdly, I come to the question whether, in what the respondent did in preparing and sending the letter in January 2025 and the notice in May 2025, he breached the terms of the 2022 order. I remind myself of the material words of the order. He is restrained

“from asserting in any way whatsoever any rights, interest or claims in or to the ‘A’ ordinary shares and preference shares which he had formerly held” (emphasis supplied)

in All Saints Retail Ltd. These are the shares that he says were unlawfully taken from him by the Icelandic banks in 2009, and then sold to the applicant in 2011.

The letter of 2 January 2025 asserts that

“KBHF misappropriated and used my assets … meaning KBHF never obtained lawful title.”

It also asserts that

“ … fraud prevents any transfer of ownership that would extinguish my equitable interest in the assets.”

These are explicit statements that, because of the alleged fraud, the bank never obtained good title to the respondent’s shares, and hence they still belong to him. But these are the very shares which were then sold by the bank to the applicant. The respondent is therefore indirectly asserting a beneficial interest in those shares, contrary to the terms of the injunction.

The notice of 9 May 2025 refers to

“the unlawful misappropriation of those shares … using my assets without authority, consent, or lawful title. … The taint attaches at the point of misappropriation and renders the title irrecoverably defective. No downstream transaction, including the 2011 Share Purchase Agreement, can cure or sanitise the origin. The shares are criminal property in law and void in equity, incapable of conferring lawful control or benefit.”

Once again, the respondent is making an explicit statement that his shares have been misappropriated, rendering the title “irrecoverably defective” and the 2011 share purchase agreement could not operate to transfer them further. Since the transferee under the 2011 agreement was the applicant, this is an indirect statement that the applicant has not obtained good title to those shares. It is another breach of the 2022 order.

However, in the case of each of the January letter and the May notice, there are also provisions stating in effect that there is no intention to breach the terms of the order. I set them out earlier. Amongst other things, the letter says:

“This correspondence is not intended to challenge the Court’s authority or assert rights over the shares referenced in the Order.”

And the notice says:

“this notice does not challenge, circumvent or seek to vary the sealed Order dated 5 April 2022. It asserts no legal or equitable claim … ”

The question is whether the disclaimers make any difference. In my judgment they do not. Of course, the letter and the notice must be construed as a whole, and to that extent these disclaimers are just as much a part of the construction matrix as any other part of the documents. But, once the exercise of construction has been gone through, and the meaning of the words has been ascertained, then, if they otherwise amount to a breach of the terms of the order, the inclusion of the disclaimers will not save them. The court looks to the substance of what has been said, and not to the form. The declaration is an empty gesture. It is repugnant to the substance, and must be put aside.

As already noted above, it is not necessary that the respondent should have understood or believed that what he did was in fact a breach of the order. It is enough that he knew he was doing the acts which I have held amount to breaches of the order.