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

For those allegations of primary liability, SKAT needed a theory of attribution of responsibility other than that of agency. In that regard, in summary, SKAT submitted that attribution of responsibility, outside the case of agency, was not limited to the well-known case considered in Clerk & Lindsell on Torts, 24^th Ed. at 17-33ff, where D makes a statement to R, intending R to pass it on to C (as a statement made by R to C) in order to induce C to act on it. That well-known case was obviously capable of applying to a custodian, if by issuing a CAN it made a false statement to its client that it intended the client to pass on to SKAT, through the Tax Agent’s submission of a tax refund claim. But SKAT did not suggest that Sanjay Shah, for example, made false representations to the Tax Agents, or to any other party, intending that they be passed on to and relied on by SKAT. The factual allegation, leaving aside the separate case that he was the Tax Agents’ ‘true principal’ (as SKAT put it), was that Sanjay Shah, again for example, deliberately designed the Solo Model business in such a way that the Tax Agents would make statements to SKAT that he knew to be false and that he intended would induce SKAT to accept and pay tax refund claims.

SKAT submitted that though different forms of language have been used, the authorities taken as a whole, and basic justice, supported a principle that if D deliberately arranges things so that C is induced to act upon a misrepresentation made to C by R, by such means and with such intent that it is proper to say on the facts that D was using R as an instrument by which to achieve their (D’s) goal of misleading C into acting or failing to act by a representation essentially to the effect of the representation in fact made, D knowing it to be false or not having an honest belief in its truth, then C will be entitled to damages for deceit against D. That should be so, SKAT argued, whether or not R also had deceptive intent. If that principle be sound, then the liability it recognises on the part of D is a primary liability, since it does not require proof that R acted fraudulently.