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

Fecha: 02-Oct-2025

Objection was taken in closing argument, however, that it had become unfair for SKAT to ask the court to consider possible liability on that basis, because of the way the trial had unfolded. On Day 10

Objection was taken in closing argument, however, that it had become unfair for SKAT to ask the court to consider possible liability on that basis, because of the way the trial had unfolded. On Day 108, I upheld that objection, with the possible exception of SKAT’s case against Lindisfarne. As I made clear in my ruling, that was not a decision that a case of reckless indifference as to meaning did remain fairly open to SKAT against Lindisfarne; it was a decision to reserve judgment about that. It is not now, therefore, a point affecting multiple trial defendants, so I only summarise here the circumstances that led me to make that ruling:

(i)

SKAT mentioned the point in its written opening, citing Pisante within an exposition of general principles. It was said to be a third possible qualification to a rule that if a representation is ambiguous, liability in deceit requires the representor to have understood that he was making the representation held by the court to have been made. That is wrong, in my view. The limited discussion in Pisante makes reference to the law on ambiguous representations, but not so as to limit the scope of any possible liability for reckless indifference to such cases.

(ii)

In response, SKAT was challenged by defendants, in opening, to provide a full and properly developed submission (of the sort that in Pisante I said I thought would be needed), if it intended to contend for liability on the basis of reckless indifference as to meaning. SKAT did not rise to that challenge, and nothing further was said about the point until closing argument.

(iii)

No case of reckless indifference as to meaning was opened on the facts against or put in cross-examination to any of the trial defendants alleged to be liable in deceit, except perhaps, as regards cross-examination, Lindisfarne (although the potentially relevant cross-examination even in its case was a single question put only to Mr Hogarth, not to Mr Baker).

(iv)

The passing general reference to Pisante from SKAT’s written opening was repeated in SKAT’s written closing submissions, again only as a point possibly relevant to a case of ambiguous representations. However, no factual case of reckless indifference as to meaning was mentioned, let alone set out in any detail, against any trial defendant, except that it was said of Lindisfarne, as an alternative case, that “Lindisfarne was at best reckless or indifferent to the statements [its CANs] would convey to third parties”. In oral argument, no legal argument or factual submission was developed for SKAT, or (therefore) responded to by defendants.

(v)

In an exchange with the court in SKAT’s oral reply submissions on the facts against the SSDs on Day 91, prompted by looking (for a different purpose) at how SKAT’s factual case had been pleaded, Mr Goldsmith KC for SKAT said that the recklessness case pleaded within (e.g.) paragraph 7C(a) of the pleading against Sanjay Shah was pursued by SKAT, if it needed it, leading to the objection I upheld on Day 108 that it was no longer fairly open to SKAT to pursue that case.

The main impact of the fact that the representor here was always a Tax Agent almost always not alleged to have been acting fraudulently was that any liability in deceit would require proof that:

(i)

a party to whom the law of deceit would attribute responsibility for the Tax Agent’s representations to SKAT acted fraudulently, that is to say with intent that the Tax Agent make a representation that was in fact made (as a matter of the material essence of what was said), to induce SKAT to pay a tax refund claim, that party knowing the representation to be false or being recklessly indifferent, not caring whether it be true or false; and

(ii)

the trial defendant under consideration either (a) was that party, so as to have a primary liability for deceit, or (b) was liable as an accessory to the deceit of that party.

On the first aspect, attributing responsibility, there was no difficulty of principle in this case where the allegation was that the Tax Agent’s named client was acting fraudulently in authorising the Tax Agent to submit the claim. If SKAT proved that on the facts, then the named client in question committed fraud against SKAT through the Tax Agent, and in principle trial defendants might be liable as accessories to that fraud. However, SKAT also alleged primary liability on the basis of attributing responsibility to, and an alleged fraudulent intent on the part of, the following:

(i)

in relation to the Solo Model, (a) the custodians (SCP, Old Park Lane, Telesto and West Point), (b) Sanjay Shah, (c) each of the DWF Ds (while at Solo), and (d) Mr Jain (in respect of his LabCos’ tax refund claims);

(ii)

in relation to the Maple Point Model, (a) the custodians (NCB, Indigo and Lindisfarne), (b) each of the DWF Ds (for 2014 trading only in the case of Rajen Shah and Mr Dhorajiwala), and (c) Maple Point;

(iii)

in relation to the Klar Model, (a) the custodian (Salgado) and (b) Mr Klar himself.