Stanford v Klotho Brands: High Court strikes out AllSaints founder's fraud claim and imposes restraint order

The High Court has struck out a claim brought by AllSaints co-founder Kevin-Gerald Stanford seeking to set aside a 2022 declaration confirming Klotho Brands' ownership of the fashion retailer's shares, finding that Stanford lacked standing to bring the claim as an undischarged bankrupt and imposing an extended civil restraint order barring him from further litigation for three years.

In Stanford v Klotho Brands Limited & Ors [2026] EWHC 1917 (Ch), Amanda Hardy KC, sitting as a Deputy High Court Judge, granted applications by Klotho, formerly known as Lion/Heaven UK II Limited and part of Lion Capital's portfolio, and its co-founder Lyndon Lea, to strike out proceedings Stanford issued in November 2025 seeking to overturn a declaration made in April 2022 by Deputy Judge Ambrose that Klotho held good legal and beneficial title to shares in All Saints Retail Limited, acquired from Stanford under a 2011 sale agreement and a 2012 settlement.

Deputy Judge Ambrose had expressly rejected Stanford's allegations that he was fraudulently induced into those agreements, finding no realistic evidential basis for the claim, and Stanford did not appeal. When he later breached an injunction restraining him from disputing Klotho's title, HHJ Paul Matthews found him in contempt of court to the criminal standard and imposed a 32-week suspended custodial sentence, having already dismissed several applications by Stanford aimed at delaying the contempt proceedings, at least three of which were certified as totally without merit.

Stanford's 2025 claim sought to set aside the Ambrose declaration on the basis it had been procured by fraud on the court and misuse of the CPR Part 8 procedure. Before Judge Hardy, Stanford maintained, somewhat inconsistently with his pleaded case, that he was not challenging the correctness of the 2022 declaration but only its scope, arguing the underlying factual basis for Klotho's title had never been properly adjudicated and that he needed clarity on what conduct might expose him to imprisonment for contempt.

The judgement rejected this characterisation. Judge Hardy found the claim's substance remained a challenge to property rights in the shares, a cause of action that vested automatically in the Official Receiver when Stanford was made bankrupt in May 2023 over his failure to pay Klotho's costs from the 2021 proceedings. Applying the principle in Heath v Tang that only narrow categories of personal claims, such as defamation or assault, survive bankruptcy outside the trustee's control, the judgement held Stanford's claim fell squarely within the general rule. Drawing on his own pleadings, which repeatedly referenced section 306 of the Insolvency Act 1986 and sought joinder of his trustees, the court found he had actual knowledge he lacked standing when he issued the claim, meeting the threshold established in Pathania v Adedeji for striking out rather than merely staying proceedings.

Although the standing finding was sufficient to dispose of the claim, the judgement went on to hold that, had it been necessary, it would also have struck out the claim as an impermissible collateral attack on Mr Justice Marcus Smith's earlier case management decision to proceed under Part 8, as barred by issue estoppel given the Ambrose judgement's clear rejection of the fraud allegations, and as vexatious litigation.

Having found the claim totally without merit, and noting that HHJ Matthews had already certified at least three prior applications by Stanford on the same footing, the court concluded the threshold of persistence for an extended civil restraint order was comfortably met, describing Stanford's conduct as repeated attempts to relitigate the same subject matter.