In the matter of Jones v Persons Unknown [2026] EWCA CIV 1212 the Court of Appeal Civil Division considered if, and when, a third party can make an application to set aside a judgment or order.

BACKGROUND

The Claimant, Mr. Jones, was the victim of cyber fraud. Having responded to an advert promising high returns for cryptocurrency investment; he invested nearly £500,000 purchasing bitcoin which he then transferred to the fraudulent trading exchange, Extick Pro, between January 2019 and January 2020. When Mr. Jones asked for his money back, he was refunded circa £3,000. He commissioned an expert report to track his Bitcoin (“the Report”). The Report claimed to have identified the specific tHEL wallet being used by the fraudsters (“the Wallet”). The Wallet was controlled by Huobi Global LTD (“Huobi”), the Fourth Defendant.

Mr. Jones issued a claim in June 2022 against four defendants – the first three of whom were unidentified classes (1 the fraudsters, 2 the companies that own or control the accounts into which Mr. Jones Bitcoin was transferred, 3 innocent receivers of his Bitcoin). The fourth was Huobi, as identified in the Report. None of the Defendants engaged in proceedings. A freezing injunction was granted against the first and second Defendants in the sum of £1.75million and a proprietary freeing injunction granted against the first, second and fourth Defendants which froze the Wallet up to £1.75million.

The matter was listed before Mr. Nigel Cooper KC (sitting as a Deputy High Court Judge) (“Mr. Cooper”) for an application for summary judgment. Mr. Cooper made an order in favour of Mr. Jones. The parts of the order relevant to this article are:

1. The first, second and fourth defendants were required to pay Mr. Jones 89.61 Bitcoin to be transferred from the Wallet.
2. The freezing injunction extended until the transfer is made
3. The first and second defendants were required to pay Mr. Jones £148,000 in costs which were to be paid by the first, second and fourth defendants transferring 8.63 bitcoin from the Wallet   

The fourth Defendant, Huobi, complied with the order and transferred Mr. Jones 98.2 bitcoin (to cover damages and costs) from a different wallet under its control but then reimbursed itself from a wallet used by Kyrrex. Kyrrex had placed bitcoin with Huobi which was allocated to the Wallet and credited to Kyrrex’s account. When Kyrrex challenged this transfer of bitcoin, Huobi responded by showing them the court order of Mr. Cooper.

Having obtained their own expert report, which concluded that there was no link between Mr. Jones’ bitcoin and the Wallet, and taken several months to obtain information from Mr. Jones’ solicitors, in November 2024 Kyrrex made an application to set aside Mr. Cooper’s order.

 

THE APPLICATION

The application was heard by HHJ Richard Pearce (sitting as a judge of the High Court) (“the Judge”) in June 2025.

The legal test (“the Test”) is set out in CPR 40.9 as follows: “A person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside or varied.”

Applying the Test, the Judge refused the application on the basis that Kyrrex was not directly affected by the judgement and, in any event, would not meet the merits test when considering merits of the claim, delay there was delay in making the application and consequent prejudice that would be caused.  

 

APPEAL

Kyrrex appealed on 6 grounds, namely: the Judge was wrong to find Kyrrex were not directly affected; the Judge was wrong to find the application would have failed in any event on the basis of delay or merits; the Judge was wrong that the underlying defence lacked merit; breach of natural justice; breach of the right to be heard; and breach of Article 6 ECHR.

Mr. Jones served a respondents notice seeking to uphold the judgment for the reasons given by the Judge and because Kyrrex had had a remedy against Huobi.

 

DECISION

The Court of Appeal allowed the appeal and set aside the relevant paragraphs of Mr. Cooper’s order.

Ground 1

Considering extensive case law on the Test, Nugee LJ identified 6 points to consider in determining whether a party is “directly affected”:

1. The Rule applies in a very wide range of cases
2. The applicant’s interest must be affected by the judgment and be capable of recognition in law
3. A person may be directly affected in many ways
4. It is not necessary for the applicant to show they have lost their rights
5. It is necessary for the application to show they have been directly affected
6. It is only necessary to show the judgment/order would prima facie be capable of materially and adversely affecting his legal interests, not that it would in fact do so

Applying the evidence to the above principles, the Court of Appeal found that Kyrrex was directly affected by the order of Mr. Cooper. Nugee LJ stated at para 73, “there is no doubt that the reason Huobi took the 98.2 Bitcoin out of the tHEL wallet was because that is what the order said”. It was accepted that Kyrrex had not established a proprietary interest, however, the Court of Appeal found that there was a contractual interest which is capable of recognition in law.

It was argued by counsel for Mr. Jones that Kyrrex were not directly affected as there were approx. 1546.76 Bitcoin in the Wallet, most of which did not belong to Kyrrex. It was Huobi’s decision to debit the 98.2 Bitcoin to Kyrrex rather than anyone else with an interest in the Wallet. The Court of Appeal, however, found that the Order identified the Wallet, which was Kyrrex’s wallet, and in any event, by directing the Bitcoin be paid from the Wallet, it would result in loss to someone interested, even if this was a class of persons. If this were the case, the whole class would be directly affected as they would inevitably have 98.2 less to share between them.

Accordingly, Ground 1 was made out.

 

Ground 3 (dealt with out of turn)

The second limb of the Test is whether the court exercise its discretion to set aside a judgment or order. The Judge had considered the merits of the defence to be lacking because Kyrrex “simply does not have the proprietary interest sufficient to justify the right that it seeks to enforce” and “it does not show a legal basis for depriving Mr. Jones of the benefit of a judgment that he has obtained against other parties.”

Nugee LJ stated at para 104 “The relevant question is not how strong the merits are of a restitutionary claim by Kyrrex to recover the Bitcoin from Mr Jones. The relevant question is the much simpler one of whether Kyrrex had an arguable claim that Mr Cooper’s Order was made on a completely false basis and should never have been made.” Nugee LJ found, and Peter Jackon and Foxton LJJ agreed, that Kyrrex plainly had an arguably case.

Ground 3 was also made out.

 

Ground 2

It was argued that Mr. Jones was prejudiced by the delay as Huobi had been struck off the Seychelles Register Register of International Companies making it difficult to proceed against it; to pursue anyone else would be far more difficult given the passage of time and Mr. Joens’ financial situation had changed.  The Judge found there was delay between Kyrrex becoming aware of the transfer of Bitcoin and making an application.

The Court of Appeal considered the question “whether Kyrrex’s delay, and such prejudice as that might have caused Mr Jones, is sufficient to outweigh Kyrrex’s case that Mr Cooper’s Order should never have been made and should therefore be set aside.” On the basis of the strength of Kyrrex’s case, Ground 2 was made out and the appeal allowed.

 

CONCLUSION

In determining this matter, the Court of Appeal considered a plethora of case law determined either way with regard to application of r.40.9 and determined a clear set of points to consider when deciding if a third party can apply to set aside a judgment or order pursuant to CPR 40.9.

Whilst Kyrrex were successful in their appeal, applicant ought beware that the Test is not an easy obstacle to overcome. At para 105 Nugee LJ, stated “… this case [is] rather different from the run-of-the-mill case in which a judgment has been entered, often by default, and an application is made to set it aside. In the ordinary case the question for the Court in assessing the merits of the applicant’s case is whether the applicant has an arguable defence to the claim, or whether, if the matter were re-opened and went to trial, the claimant would indeed show that he was entitled to judgment in his favour.

R40.9 has a high threshold.