CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2979 (Comm)

Ground 4 recognises that each secondary claim for unjust enrichment required SKAT to show not merely that it made a payment or payments under a mistake of fact induced by fraud, but also that the given secondary respondent against whom the claim was made was enriched at SKAT’s expense. That element of the common law unjust enrichment claim, as confirmed and explained in ITC (Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018] AC 275), on any view confines the cause of action. How tightly it does so is the issue that divided HHJ Bird in Tecnimont and HHJ Paul Matthews in Terna Energy (Tecnimont Arabia Ltd v National Westminster Bank plc [2022] EWHC 1172 (Comm); Terna Energy Trading doo v Revolut Ltd [2024] EWHC 1419 (Comm)).

On that division, I sided with HHJ Paul Matthews (judgment at Appendix 7, [43]), which favoured SKAT. I do not consider there to be a realistic argument that the legal test I therefore applied (ibid, [44]) was incorrect. SKAT did not contend by or under Ground 4 that I misapplied that test, on the facts, if it is the correct test, nor would I have said that there was any realistic argument to that effect. (For completeness only, I should note that at Appendix 7, [45], I contemplated the possibility in principle that an unjust enrichment claim against a corporate Godson D in relation to its own tax refund claims would not have failed on the ITC point; but SKAT in fact made no such claim at trial.)

I also do not consider it sensibly arguable that the judgment at Appendix 7, [42], misreads Lord Reed’s remark about tracing claims in ITC at [48]. In any event, that remark concerns only a situation in which a defendant holds an asset into which the claimant can trace an interest, in other words (in this case) an asset shown to be now held by a secondary respondent in respect of which SKAT has a valid pure tracing claim, to which any possible unjust enrichment claim could add nothing anyway.

As regards the secondary claims, therefore, I would have refused permission to appeal in respect of unjust enrichment claims come what may.

The question to consider next is how far it is practicable and proper to go to supplement my trial judgment with further findings of fact, reasons or conclusions, in relation to issues not addressed in that judgment because they did not arise. I was referred by Mr Graham KC to Greenwich Millennium Ltd v Essex Services plc [2014] EWCA Civ 960, [2014] 1 WLR 3517, at [7], per Jackson LJ (with whom Beatson and Gloster LJJ agreed), and School Facility Management Ltd v Governing Body of Christ the King College [2021] EWCA Civ 1053, at [2] and [22], per Popplewell LJ (with whom Nicola Davies and Dingemans LJJ agreed).

In School Facility Management, Popplewell LJ merely recited as procedural fact that in a judgment granting permission to appeal, Foxton J had addressed the issue raised by the appeal much more fully than he had in his original judgment, amplifying his reasons for being against the appellant on it. It is evident from the circumstances summarised by Popplewell LJ, and by Foxton J in his permission to appeal judgment, [2020] EWHC 1477 (Comm), [2020] 1 WLR 4825, at [6]-[8], that no point was taken, before him or before the Court of Appeal, as to whether Foxton J should have done so. School Facility Management therefore establishes no relevant principle.

In Greenwich Millennium, Jackson LJ said that he had wondered whether it was legitimate to take into account the amplification by Coulson J (as he was then), in his judgment refusing permission to appeal, of the reasons for his original decision, and had concluded that it was. It is not apparent that an issue was raised about that, however, so again I do not consider that Greenwich Millennium is authority for any particular rule on the point.

Jackson LJ in turn referred to English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409. That case is an important authority on the nature and extent of a court’s duty to give reasons explaining its decisions, and on the approach to be taken to an appeal on the ground that a court has not given adequate reasons. In giving the judgment of the court, Lord Phillips of Worth Matravers MR at [24]-[25] endorsed and encouraged the limited notions that:

In the present case, Ground 4 does not complain of an absence of adequate reasons. Nor is there any suggestion, as part of Grounds 1 to 3, that my decisions as to how many of the issues raised by secondary claims had to be considered have any impact on the soundness or otherwise of my dismissal of the primary claims. Therefore, English v Emery Reimbold decides nothing as to whether it might be proper for me now to amplify my reasons for dismissing the secondary claims, and if so how far I should or should not go in that respect.

As in all three of those Court of Appeal authorities, none of the secondary respondents raised any objection before me to SKAT’s invitation that I consider supplementing the trial judgment as regards the secondary claims. In the absence of any contest on the question, or (therefore) any substantial consideration of it in argument, I have adopted the approach that I have a discretion whether to supplement the trial judgment in relation to the secondary claims, and if so how far to go, by dealing with issues to which they would or might have given rise had they not failed for the reasons given in that judgment. In exercising that discretion, in my view it is proper to have regard to the following considerations (not intended to be a complete or prescriptive list):

That last aspect is a significant factor for the secondary claims in the present case. I considered that “[the] utility of considering liability issues that would have arisen only if SKAT’s claims had not failed at multiple prior stages, and in truth my ability sensibly to consider such issues, has its limit” (judgment at Appendix 7, [116], emphasis added). That was said in the specific context of SKAT’s case against Sanjay Shah, but it was not a concern confined to that case. I do not regard it as appropriate to attempt now to decide (more strictly, to decide how I would have decided) points of fact that will only need to be decided (in order finally to determine one of more of SKAT’s claims) if findings of fact in the judgment are now overturned on appeal, where the exact nature or scope of the point, or the correct resolution of it, might be influenced by the different, and ex hypothesi inconsistent, findings of fact that it would then be said I should have made.

Many of the secondary respondents were litigants in person at trial, and might again be litigating in person for any proceedings before the Court of Appeal. I consider that favours, other things being equal, a more expansive willingness to deal with further points of law, where I can do so by reference to the facts found in the judgment or limited further facts I consider that I can sensibly make now, rather than (in effect) to say that it is sufficient to do justice overall that a respondent can raise points in the Court of Appeal, if necessary by respondent’s notice.

Taking those matters into account, I have decided to supplement the trial judgment, as regards the secondary claims, to the following extent, but no further.

Firstly, for a good number of the secondary respondents, the subject matter of the secondary claims against them was exclusively: (i) in unjust enrichment claims, money paid to them (or to corporate entities of their) for their work at Solo or their participation (through corporate entities) as contracting parties in Solo Model and/or Maple Point Model trading; (ii) in proprietary tracing claims, assets (if any) held by them that were traceably derived from such payments. However, if such a secondary respondent is neither a primary respondent nor a corporate entity whose directing mind at the material time was that of a primary respondent, then on the premise upon which the appeal proposed by SKAT would proceed, that secondary respondent earned in good faith, under for them valid and enforceable contractual arrangements, all that came to them (directly or indirectly), so there could be no possibility of an unjust enrichment claim or of a constructive trust over their retained traceable assets (if any). I do not consider it arguable, as Mr Graham KC contended in the only answer put forward for SKAT, that if the secondary respondent participated in some element of what I called the collateral dishonesty in the case, e.g. obfuscatory invoicing, that would deny them the otherwise sound defence of having honestly given good consideration entitling them to receive and retain (as against SKAT) what was paid.

For that further reason, I would have refused permission to appeal come what may in respect of the secondary claims against the following secondary respondents, and each of them:

Secondly, as regards SKAT’s proprietary claims, my approach in the case of Liability Defendants would have been consistent with my approach to that claim against Syntax (trial judgment at [626]). If by the end of the long and thorough trial process, SKAT pursued only a claim for hypothetical declaratory relief, rather than relief in respect of identified assets, I would have required strong good reason specific to that respondent’s case why I should not refuse declaratory relief and therefore dismiss the claim. In my discretion, I would have refused declaratory relief on that basis, and therefore I would have refused permission to appeal in any event as regards proprietary claims, as against (using the short names set by Appendix 1 to the trial judgment, which I note (as reminder to SKAT’s representatives) do not match exactly the short names used by SKAT in its written submissions at trial):

Thirdly, I would have refused permission to appeal in any event as regards SKAT’s proprietary claim against Mr Smith concerning a property in Rayleigh, Essex. It was purchased using money from Mr Smith that SKAT said it could trace back to tax refund payments it made in response to refund claims generated by Solo Model trading. It is owned (with ordinary registered title) by Mr Smith’s wife and children. SKAT did not allege that that was a device to conceal Mr Smith’s interest or that this was a tainted gift that SKAT had some entitlement to unravel.

I would have said that there was no reason to find that the house in Rayleigh was not intended to be the gift it appeared from the legal title to have been, and that Mr Smith has no equitable beneficial interest in the property. I would not have regarded that as a finding there was any realistic prospect of SKAT overturning on appeal. In the Smith family’s circumstances, to the extent I had evidence of them, I would not have agreed with SKAT that there was an implied intention as a result of Mr Smith’s having funded the purchase, and subsequently having contributed to household bills, repairs and improvements, that he have an ownership interest in the house. There was no evidence for the existence of an express agreement that he be a co-owner.