Crypto Open Patent Alliance v Craig Steven Wright (WFO Application)
[2024] EWHC 743 (Ch)
Craig Wright v Peter McCormack (WFO Judgment)
5 July 2024
[2024] EWHC 1735 (KB)
High Court
Someone falsely claimed to be the creator of Bitcoin and sued someone else for defamation. The judge found the Bitcoin claim to be fraudulent, and ordered a freeze on the liar's assets to ensure the person they sued could get their legal costs back. The judge explained complex legal rules about freezing assets and getting money back from dishonest people.
Key Facts
- •Craig Wright (Claimant/Respondent) sued Peter McCormack (Defendant/Applicant) for defamation.
- •McCormack counter-applied for a Worldwide Freezing Order (WFO) against Wright for £1.548m in costs.
- •The defamation case centered on McCormack's tweets and YouTube video alleging Wright fraudulently claimed to be Satoshi Nakamoto.
- •Chamberlain J found for Wright but awarded only nominal damages (£1) due to Wright's dishonest conduct regarding serious harm to reputation.
- •Subsequent proceedings revealed Wright's fraudulent claim to be Satoshi Nakamoto, supported by forged documents.
- •Wright offered to release all cost entitlements in the defamation case, prompting McCormack's WFO application.
Legal Principles
Principles applicable to the grant of a WFO
COPA WFO Judgment at [2024] EWHC 743 (Ch) at [19]-[43]
Requirements for a good arguable case for recovery of costs
Not explicitly sourced but discussed throughout the judgment
Principles governing the requirement to show real risk of dissipation
COPA WFO Judgment at §§28-29 and Fundo Soberano de Angola v Jose Filomeno dos Santos [2018] EWHC 2199 (Comm) at §86
Principles governing claims to set aside judgments for fraud
Royal Bank of Scotland plc v Highland Financial Partners LP [2013] 1 CLC 596 at §106 and Takhar v Gracefield Developments Limited [2020] AC 450
General principles as to the exercise of the discretion to vary orders under CPR 3.1.7
Tibbles v SIG Plc [2012] 1 WLR 2591 at §39
Court's broad discretion to grant relief under s 37 of the Senior Courts Act 1981
Section 37 Senior Courts Act 1981, COPA WFO Judgment §25
Guidelines for foreign enforcement of WFOs
Dadourian v Simms [2006] EWCA Civ 399
Outcomes
Granted a WFO in the sum of £1.548m against Dr Wright.
McCormack has a strong arguable case for recovering costs, and there's a real risk of Wright dissipating assets. The court considered the dishonesty of Wright's claim and the costs pressure on McCormack.
Acknowledged the potential routes to recovery of costs, recommending an interim payment on account of the costs in the Chamberlain Order to avoid potential obstacles.
This approach allows McCormack to recover significant costs while ensuring the subsequent fraud claim can proceed without issues of affirmation.