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

Secondly, I would not have found that they realised at the time that the tax reclaim documents were misleading, as alleged by SKAT. Such a finding would have required a conclusion that the USPF or LabCo in question both (a) realised that a representation found to have induced SKAT to pay their tax refund claims would be or was made to SKAT by the reclaim documents submitted on their behalf, and also (b) knew it to be false or had no honest belief in its truth as required by Derry v Peek. I was satisfied that Messrs Godson, Fletcher, Jain and Preston did not know, and were not recklessly indifferent as to whether, the tax reclaim documents contained falsehoods. They trusted Mr Shah and SCP; and SKAT’s best efforts in cross-examination, and those individuals’ discreditable willingness to adopt Mr Shah’s habit of collateral dishonesty, did not persuade me that they were not at the time honestly trusting what seemed to them a plausible notion that Mr Shah, a high-profile and seemingly very successful entrepreneurial hedge-fund owner, with those working for him at SCP, had hit upon a way of accessing the market to support a structured trade that made for very low risk trading, indeed effectively risk-free, a small portion of the profits from which SCP was happy to pay to the USPFs or LabCos, respectively, that were needed for the trade to operate.

As regards the vast majority of (individuals behind) USPFs and LabCos, who were not part of the trial here, in my judgment there was no basis in evidence upon which the necessary two-part conclusion could be stated as a finding of fact. SKAT’s case largely boiled down to its optimistic mantra that it was so obvious that it was right, about what representations were made to it by the tax reclaim documents, that any participating USPF or LabCo must have realised they would be or were being made, and it was so obvious that the Solo Model used synthetic settlement, meaning there were no shares, that any such USPF or LabCo must have known of, or been reckless as to, the falsity of those representations, or alternatively someone from Solo must have explained the Solo Model in such detail to anyone coming on board as an equity buyer / potential tax refund claimant (via Tax Agents) that they could not have failed to realise that the deceit alleged by SKAT would or did result. I disagree. I am of course alive to the fact that in a fraud case, there may be a forensic incentive for a claimant to present the matter as simple and straightforward, and for defendants to insist that the claimant’s case is complex and difficult. However, in my judgment it is not any want of forensic skill and ability that caused SKAT to struggle with that throughout, and it was not cunning advocacy, or artificiality of analysis or explanation on the defendants’ side at trial, that causes me now to say that SKAT’s optimistic submission as to the obviousness of everything does not begin to reflect the reality of this case on the evidence.

Thirdly, as regards accessory liability on the part of Mr Shah for deceit, if there had been deceit, on the part of the Solo Model USPFs and/or LabCos, I would have found without any hesitation that Mr Shah instigated and encouraged the making by the Tax Agents of the Solo Model tax reclaims on their behalf.