Skatteforvaltningen v Solo Capital Partners LLP & Ors

Where a national tax authority pays refund claims under an administrative claim form and credit advices without a process that establishes entitlement under domestic tax law, payments made in reliance on those documents are not, without more, recoverable as deceit: an administrative system that simply processes a correctly‑completed claim form and a custodial credit advice does not of itself amount to a representation to the authority that legal entitlement under domestic tax law exists.

This judgment resolves the Main Trial in consolidated claims concerning 4,170 alleged Danish dividend‑tax refund applications paid by SKAT in the period 2012–2015. The litigation advanced multiple causes of action (deceit, unlawful‑means conspiracy, dishonest assistance, knowing receipt, restitution and equitable claims) against a large cast of defendants accused of operating, facilitating or benefiting from cum‑ex/ dividend arbitrage trading models (the Solo, Maple Point and Klar models) that produced dividend‑related credit advices (“CANs”) and tax refund applications. The court found that all 4,170 refund applications were invalid under Danish tax law, that SKAT’s payment processes were limited and often non‑investigative, and that SKAT was not induced by any of the alleged representations to make payment. The court therefore dismissed SKAT’s pleaded claims against the trial defendants who participated, save that a pre‑existing default judgment against Syntax GIS Ltd required quantification of remedies, and the judge dealt with that restitution/credit exercise. The judge summarises the factual matrix, findings on advice taken, and the reasons why deceit and related civil claims were not established.

Held (numbered findings and disposition)

1. Overall disposition: SKAT fails on all contested liability claims in the Main Trial and the claims pursued at trial are dismissed so far as against the trial defendants who participated, save for the consequences of a default judgment entered against [2019] (default judgment) Syntax GIS Ltd which requires quantification (see below). The court finds no basis on the evidence to make proprietary declarations against other defendants or to uphold accessory or primary liability for deceit, or related equitable claims, in respect of the 4,170 tax refund claims paid by SKAT between 2012–2015.
2. Factual findings: The Solo, Maple Point and Klar trading models were designed to generate dividend‑related payment credits recorded by custodians and thereby to support tax refund claims presented to SKAT; the trading was centrally coordinated and in practice settled by internalised, matched book‑entry loops at custodians so that, by design, no transferrable shareholdings at VP Securities arose for the cum‑ex buyers. In consequence, no buyer actually became a registered shareholder through the trades; the payments reported in CANs were dividend compensation or market‑claim style credits rather than a cash distribution coming up a custody chain from the Danish issuer.
3. Danish tax law and validity: On the Validity Trial foundations reiterated in these proceedings, the court concludes that none of the 4,170 tax refund claims was a valid Danish entitlement under the Danish withholding tax statute and relevant legal tests. The court does not here re‑open the Validity Trial findings but records that entitlement under Danish law required conditions that were not satisfied in the Sample Trades or in the aggregated activity.
4. Misrepresentation and inducement: The court analyses the documents submitted to SKAT (Form 06.003 tax‑reclaim forms, supporting custodian credit advices and cover letters) and holds that, on an objective construction in their commercial and tax context, the pleaded core representations (tax‑ownership at dividend declaration, entitlement to the dividend under Danish tax law, receipt of a payment net of tax withheld by the Danish issuer, and an implied honest‑custodian belief) were not conveyed by the document set as required by SKAT’s pleaded case. Even where the cover letters used by some agents might arguably have suggested the tax representation, the practical evidence of the processing role (Mr Nielsen and Accounting II) showed that SKAT did not rely on cover letters and the processing staff did not treat the documents as disclosing the legal tests for entitlement. SKAT therefore failed the causation/inducement element of its deceit cases: the court finds that even where a representation could be said to have been made objectively, SKAT was not induced thereby because the administrative processing was essentially mechanistic and would have run the same route absent the alleged representations.
5. Attribution, agency and instrumentality: The court records the rules by which responsibility for representations made to a third party can be attributable to another person (agency, procuring/using as an instrument). On the facts, the court finds that while some defendants were directing minds of their entities, and while some custodians issued CANs at the generator’s request, there was no factual basis to hold the named individuals liable as principals or as instigators of an intentional fraud on SKAT in order to found primary liability or accessory deceit (other than as to Syntax under the default judgment). In particular the architects of the trading models did not intend, and did not appreciate, that the documents in question were being used to convey the specific legal representations SKAT pleaded; their conduct better fits a description of opportunistic exploitation of SKAT’s lax administrative controls than of an organised plan to trick SKAT by express falsehoods in the claim documentation.
6. Equitable and restitutionary claims: The court explains that where an applicant establishes that payments were procured by fraud a constructive trust or tracing may follow, but it was unnecessary to award proprietary or restitutionary relief here because SKAT did not establish deceit as pleaded against the participating defendants (except as to the consequences of the Syntax default judgment). The court also notes recoveries made by SKAT to date and uses the parties’ agreed accounting framework when quantifying the Syntax default judgment liability.
7. Outcome and orders: all live claims (other than as to syntax) are dismissed. The court quantifies SKAT’s entitlement under the Syntax default judgment (DKK2,763,859,045.79 paid by SKAT to Syntax for Solo Model claims on or after 19 September 2014; adjusted by credit for recoveries as a matter of the parties’ agreed spreadsheet) and will deliver a short supplemental hearing on computation, set‑offs and net recoveries. The court declines to grant the declaratory relief in contingent form sought against Syntax in the absence of evidence of retained traceable proceeds.

Practical guidance

• A tax authority’s routine administrative mechanism for receiving refund claims and a custodial credit advice does not, without additional proof, amount to a representation to the authority that a claimant satisfies complex domestic tax entitlement tests; courts will require factual proof of inducement where administrative payment mechanisms are used.
• Where claimants or intermediaries rely mechanistically on a routine clerical processing procedure the effect of perceived representations is a question of fact (systemic reliance may be proved but is fact‑sensitive); where representations are said to be implicit, the evidence must show contemporaneous or plainly foreseeable impact.

• High Court (Commercial Court): [2025] EWHC 2364 (Comm) – Claim determined at main trial (this judgment); default judgment previously entered against Syntax GIS Ltd (Second Claim).