Kitover v Galmarley Ltd (t/a Bullionvault.Com) & Anor

A stakeholder may invoke Civil Procedure Rules 1998, Part 86 where competing claims are reasonably expected, even though no rival claim has yet crystallised. The court should not assume the outcome of the dispute when deciding whether that procedural requirement is met.

Illegality does not automatically defeat a civil claim. The court must consider the purpose of the prohibition, other relevant public policies, and whether denial of the claim would be proportionate. Civil courts should avoid imposing a disproportionate additional penalty for conduct falling primarily within the criminal or regulatory sphere.

Bullionvault commenced a stakeholder claim under CPR Part 86 concerning gold bullion held in an account opened in the name of Paul Haller. Earl Richmond Kitover claimed that he had used Haller’s identity and that he was the true account holder and owner of the bullion.

The court determined whether Part 86 was available despite no claim having been made by Haller, whether alleged forgery and money laundering affected Kitover’s claim, and whether Kitover had proved that he and Haller were the same person.

1. Part 86 CPR. Bullionvault was a stakeholder and had reasonable grounds to expect a claim on behalf of Haller. The requirement for competing claims to be made or expected was therefore satisfied. The absence of an actual competing claim did not prevent the proceedings from falling within Part 86, since deciding otherwise would assume the result of the trial: [18]-[20].
2. Illegality. Applying the approach in Patel v Mirza [2016] UKSC 42, the court considered the purpose of the rules against forgery and money laundering, other relevant public policy, and proportionality. Denying the claim would not enhance those purposes, no other relevant public policy required denial, and denial would be disproportionate if the claim were proved. Punishment remained principally a matter for the criminal justice system and regulators: [21]-[27].
3. Identity and entitlement. The burden lay on Kitover to establish on the balance of probabilities that he was Haller. The evidence, considered in the round, including the address evidence, the 2018 visit, access to the account and possession of original documents, established that it was more likely than not that Kitover had used a false name and that Haller was the same person as Kitover: [41]-[49].

The proceedings began as a stakeholder claim issued by Bullionvault under CPR Part 86. Master Teverson directed that the matter proceed to trial rather than summary determination. The High Court then tried the issues of identity, the applicability of Part 86 and the effect of alleged illegality.