CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

As it happens, I agree with SKAT that it was plain on the contemporaneous evidence that Lindisfarne at the time in fact understood that the CANs themselves would be and were being submitted to SKAT. Mr Baker of Lindisfarne did some basic research for himself, as part of getting comfortable with becoming involved, that made it clear that specific payment confirmation for the ‘dividend’ income in relation to which a tax refund claim was made was typically required. An email of his to Mr Horn on 1 February 2015 queried, in effect, whether it would be a problem for the client’s intended tax refund claim that CANs in the form Mr Horn had suggested Lindisfarne might use would not identify to the tax authority particular numbered securities or show share ownership. Mr Horn’s team took pains with Lindisfarne to ensure that minute details in the client’s name or address in a CAN (e.g. changing “Apt.1710” to “#1710” in an address, or “Rd” to “Road”) would match “the 6166s”, which could only be a reference to some kind of official tax form (even if, as Messrs Baker and Hogarth both said in evidence, they did not know or ask precisely what form it was). Similar pedantic care was insisted upon in how exactly the details of the Danish securities were recorded (e.g. the spacing within the typed name of the Danish company). Messrs Baker and Hogarth cannot have failed to conclude, and I am satisfied that they did in fact conclude at the time, that their CANs were going to SKAT (and not just being used by the Tax Agents as a source of information).

It follows from Lindisfarne’s purpose in issuing its CANs that if it knew them to convey falsehoods, or to convey information in the truth of which it had no honest belief and which was in fact false, then Lindisfarne would have been liable, if SKAT had been misled thereby into paying out tax refund claims, as a primary liability in deceit.

Lindisfarne argued that it would be wrong to assess SKAT’s claims against it on the basis of what SKAT would get from its CANs, read in isolation from the full monthly account reports prepared for its clients. I find that there was never any thought that those reports might be going to SKAT; and I do not accept evidence to the contrary given by Messrs Hogarth and Baker (the former more insistently and even less credibly than the latter). It can be said in favour of Lindisfarne that it is inherently unlikely that it thought its CANs said anything that would be falsified by the full account statements, but that is not the same point. I have borne that in mind when judging what Lindisfarne thought its CANs said; but the immediate, and different, suggestion, which I reject, is that Lindisfarne thought at the time that SKAT was or might be receiving and taking into account the full monthly reports.

Lindisfarne, acting by Messrs Baker and Hogarth, understood its CANs to be accurate contemporaneous records of income events for their clients that were based on the dividends declared by the Danish company that, in turn, were dividends that were subject to the Danish WHT regime. Messrs Baker and Hogarth saw the details recorded in the CANs as doing no more than identifying accurately the Danish share issue, and share volume, by reference to which that income had arisen, and the calculation of the income amount that had been credited. They did not at the time consider that their CANs made statements anything like any of the core representations alleged by SKAT.