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

The seeming partial agreement with the last part of that long final question was the answer relied on by SKAT. It was put on the premise that Mr Bains had said something in the preceding answers that he had in fact denied three times. His evidence elsewhere during his cross-examination was consistent, and I accept from him, that he (i) saw the CANs as informative documents for the clients, (ii) had no intention that they should contain anything that was incorrect, and (iii) did not know, or give any thought at the time to, what (if any) statements had to be or were made to SKAT by or through the Tax Agents when submitting a tax refund claim. The Acupay Reclaim Agreement that Mr Bains was asked to review in September 2012, while he was at Solo, made Acupay’s client (which would be the USPF or, later, LabCo) “responsible for providing Acupay with all the relevant information and documentation required for a tax reclaim in the relevant jurisdiction”, which it stated would include, without limitation: “I. a full Power of Attorney … which gives Acupay the authority to make the claim on behalf of the Client, and receive the funds on its behalf; and II. a Certificate of Residence issued by the relevant government agency in the Client’s jurisdiction. The Client accepts that each jurisdiction to which Acupay is applying for refund will have different information and document requirements and agrees to provide to Acupay any further information or documentation which is required by the presiding tax authority, as requested by Acupay.” That was consistent with Mr Bains’ understanding that whatever the Tax Agent had to send to SKAT would be sorted out between the Tax Agent and the clients, and in my judgment will have confirmed that understanding for him.

In relation to the honest custodian representation alleged by SKAT, Mr Bains reasonably acknowledged that he imagined a client to whom a CAN was issued would believe that the custodian who had issued it honestly believed statements made by it to be true. SKAT founded its submission that Mr Bains realised that the honest custodian representation was made to it on its claim that he knew that CANs went to SKAT as part of tax refund claims. I was not persuaded that Mr Bains did know that, so SKAT’s submission failed. In any event, as I have said in relation to other trial defendants, above, appreciation that CANs went to SKAT does not in my view translate into appreciation that the Tax Agents were making a representation to SKAT that the custodian honestly believed the core representations to be true.

As with Mr Patterson, therefore, I would not have found Mr Bains liable as an accessory to any deceit enabled by the Solo Model trading, if I had found that there was deceit.