Jones v Kyrrex Ltd [2026] EWCA Civ 1212: when a court order affects someone who was never a party

Before establishing RWS, I acted for Kyrrex Limited while I was at Healys LLP in the proceedings which led to this appeal.

I was involved in the challenge at first instance, the preparation and filing of Kyrrex's appeal to the Court of Appeal and the appeal work which followed.

When my suspension from practice took effect in February 2026, I could no longer continue acting for Kyrrex as its solicitor in the proceedings. Kyrrex therefore instructed The Brooke Law Group LLP to take the appeal forward.

I did not act for Kyrrex at the Court of Appeal hearing. The appeal was subsequently argued by Brad Pomfret KC, Mark Lorrell and Ian Chai, instructed by The Brooke Law Group LLP, and was allowed by the Court of Appeal.

RWS was not instructed in these proceedings.

If you have received a tracing report, an exchange agreement or an order that may affect your position, RWS can provide an independent review of the documents and the issues within its non-reserved consultancy scope.

This is a case I know particularly well.

I had acted for Kyrrex for a considerable period before I had to stop acting. I was involved through the challenge at first instance, the preparation and filing of the appeal, and the work on that appeal afterwards.

I was therefore extremely pleased to see the appeal succeed.

There was obviously a personal satisfaction in seeing an appeal which I had worked on allowed by the Court of Appeal. More importantly, however, I had considered the outcome at first instance to be an injustice to Kyrrex.

I do not say that as criticism of the first-instance judge personally. Indeed, Nugee LJ described his judgment as impressive and, when dealing with one aspect of his reasoning, expressly recognised that the error was entirely understandable given the way the case had been argued before him.

But the result remained very difficult to accept.

Kyrrex had suffered the loss of a very substantial quantity of Bitcoin as a result of an order made in proceedings to which it had never been a party. The factual premise which led to the order was subsequently shown to be wrong. Yet, following the first-instance decision, Kyrrex was left to bear the loss.

The Court of Appeal ultimately described the position in considerably stronger terms than I ever needed to.

Nugee LJ held that it would be "prima facie grossly unjust" to Kyrrex to refuse to set the order aside. He described Kyrrex's case that the order should never have been made as "overwhelming" and appearing likely to be unanswerable.

Peter Jackson LJ put the essential problem particularly clearly. The effect of the original order, he said, had been to make Kyrrex the "unwitting insurer" of Mr Jones's loss.

Although the case arises from cryptocurrency litigation, the judgment is important well beyond crypto assets. It gives useful Court of Appeal guidance on a deceptively short procedural rule: CPR 40.9.

Mr Gary Jones was himself the victim of a serious fraud.

Between January 2019 and January 2020 he bought approximately 89.6 Bitcoin and transferred it to what he believed was a legitimate cryptocurrency investment platform.

It was not.

The Bitcoin was stolen. Mr Jones brought proceedings against persons unknown and others, and obtained a proprietary injunction and a tracing order.

The tracing exercise identified a wallet associated with Kyrrex, a cryptocurrency exchange. On the basis of that tracing evidence, the court made an order. Huobi, another exchange, made a transfer pursuant to the order which apparently debited Kyrrex's exchange account of approximately 98.2 Bitcoin.

Kyrrex had not been a party to the original proceedings. It had not been given notice of the application. It had no opportunity to challenge the tracing evidence before the order was made.

The tracing evidence was subsequently shown to be wrong. The Bitcoin in Kyrrex’s account was not Mr Jones’s Bitcoin.

Kyrrex sought to challenge the order under CPR 40.9.

The judge dismissed Kyrrex's application because he considered that it was not directly affected by the order. He also considered that the application would fail on alternative merits, delay and prejudice grounds. The Court of Appeal overturned the refusal and set aside the relevant transfer provisions.

The result at first instance was that Kyrrex — which had not been a party, had not been heard, and whose Bitcoin had been transferred on the basis of evidence that was wrong — was left without a remedy under CPR 40.9.

CPR 40.9 is a short rule. It provides that a person who is not a party but who is directly affected by a judgment or order may apply to have it set aside or varied.

The rule is deceptively simple. It raises a number of questions: what does "directly affected" mean? Does the rule apply after an order has been executed? What is the relationship between CPR 40.9 and the general jurisdiction to vary or set aside orders?

The text of the rule is: "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."

Before this case, there was relatively little Court of Appeal authority on the scope and application of the rule.

The Court of Appeal allowed Kyrrex's appeal.

On the threshold question — whether Kyrrex was directly affected — the Court held that the debit to Kyrrex's exchange account was a direct consequence of the order. That was sufficient to bring Kyrrex within CPR 40.9. The Court considered the meaning of "directly affected" by reference to the purpose of the rule and the need to protect non-parties whose position is materially altered by an order made without their participation.

On the execution point, the Court rejected the argument that CPR 40.9 was unavailable because the order had been executed. The rule would be of very limited value if it could be defeated simply by executing the order before the non-party had an opportunity to challenge it. The Court confirmed that the jurisdiction survives execution.

On the merits and the exercise of discretion, the Court held that the first-instance judge had erred. The correct approach required the court to consider whether it would be just to set the order aside, having regard to all the circumstances. Given that the tracing evidence was wrong, that Kyrrex had not been a party, and that the order had been made without Kyrrex having any opportunity to be heard, it would be prima facie grossly unjust to refuse to set it aside. Nugee LJ described Kyrrex's case as overwhelming and appearing likely to be unanswerable. The alternative merits, delay and prejudice considerations did not displace that conclusion.

The Court set aside the relevant transfer provisions of the earlier order. Questions about the ownership of the Bitcoin and any repayment obligation were left for further determination. The judgment does not itself resolve those proprietary or ultimate claim questions.

The judgment is significant for CPR 40.9 generally, not only in cryptocurrency cases.

CPR 40.9 provides a route for a non-party to ask for a judgment or order to be set aside or varied. The applicant must identify a legally recognised interest that the judgment, order or its enforcement appears capable of harming directly and materially. Financial or practical disadvantage, without that connection, does not establish standing. The Court accepted that Kyrrex's exchange-account rights could qualify even if they were merely contractual. Standing is the gateway to making the application; it does not decide whether relief should be granted.

It also illustrates the importance of reliable tracing evidence. An order made on the basis of tracing evidence that is subsequently shown to be wrong creates a real risk of injustice to third parties who were not before the court.

In the cryptocurrency context specifically, the case highlights the need for careful attention to exchange arrangements and the rights of exchanges and account holders who may be affected by orders made in proceedings to which they were not party.

The distinctive relevance of this case is CPR 40.9 and the rights of a non-party directly affected by an order. It is not the controlling judgment for every kind of cryptocurrency claim. Ownership and repayment questions remain to be determined in the proceedings.