The claimant appellant alleged that properties she owned were transferred to the first defendant under undue influence or other unconscionable conduct by the second and third defendants. The claim was dismissed. Three years later she claimed to set that judgment aside having been obtained by fraud. To support the allegation she brought evidence not available at the first trial that the defendants had forged her signature on a document. The defendants requested its strike out as an abuse of process, saying that reasonable diligence would have obtained the fresh evidence before the original trial. The judge refused the application and allowed the claim to proceed to trial, holding that the reasonable diligence condition did not apply where a party sought to set aside a judgment on the grounds of fraud, and there had been no abuse of process. The CA allowed the defendants’ appeal, holding that reasonable diligence was required by the claimant.
Held: The appeal succeeded. A person who applies to set aside an earlier judgment on the basis of fraud does not have to demonstrate that the evidence of this fraud could not have been obtained with reasonable diligence in advance of the earlier trial.
Fraud as such had not been pleaded at the first trial, and therefore this was not a relitigation of the issues at that first trial, and the authorities on which the defendant relied did not go to a proposition that, in cases where it is alleged that a judgment was obtained by fraud, it may only be set aside where the party who makes that application can demonstrate that the fraud could not have been uncovered with reasonable diligence in advance of the judgment. The law does not expect people to arrange their affairs on the basis that others may commit fraud.
An action to set aside an earlier judgment for fraud is not a procedural application but a cause of action. This cause of action is independent of the cause of action asserted in the earlier proceedings and there can therefore be no question of cause of action estoppel. There is also no question of issue estoppel, because the basis of the action is that the earlier decision is vitiated by fraud and cannot bind the parties.
Judges:
Lord Kerr, Lord Sumption, Lord Hodge, Lord Lloyd-Jones, Lord Briggs, Lady Arden, Lord Kitchin
Citations:
[2019] UKSC 13, [2019] 2 WLR 984, [2019] 3 All ER 283, [2019] WLR(D) 198, UKSC 2017/0072
Links:
Bailii, WLRD, SC, SC Summary, SC Summary Video, SC 2018 Oct 10 am Video, SC 2018 Oct 10 pm Video
Statutes:
Income Taxes Act 2007 132, Taxes Management Act 1970 9A Sch1A
Jurisdiction:
England and Wales
Citing:
At first Instance – Takhar v Gracefield Developments Ltd and Others ChD 6-May-2015
The claimant alleged that the defendant had obtained its judgment in earlier proceedings by fraud. The defendant now applied for the claim to be dismissed as an abuse of process. . .
Appeal from – Takhar v Gracefield Developments Ltd and Others CA 21-Mar-2017
. .
Cited – Hip Foong Hong v H Neotia and Co PC 15-Jul-1918
An appellate Court has inherent power to set aside a judgment obtained through fraud. Lord Buckmaster described how an appellate court should deal with an allegation that an earlier judgment had been obtained by fraud: ‘Where a new trial is sought . .
Cited – Hunter v Chief Constable of the West Midlands Police HL 19-Nov-1981
No collateral attack on Jury findigs.
An attempt was made to open up in a civil action, allegations of assaults by the police prior to the making of confessions which had been disposed of in a voir dire in the course of a criminal trial. The plaintiffs had imprisoned having spent many . .
Cited – Ashingdane v The United Kingdom ECHR 28-May-1985
The right of access to the courts is not absolute but may be subject to limitations. These are permitted by implication since the right of access ‘by its very nature calls for regulation by the State, regulation which may vary in time and place . .
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .
Cited – Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd SC 3-Jul-2013
Virgin Atlantic Airways Ltd sought to recover damages exceeding 49,000,000 pounds for the infringement of a European Patent which did not exist in the form said to have been infringed. The Technical Board of Appeal of the European Patent Office had . .
Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Cited – Kirby v the Owners of the Scindia (The ‘Marie Joseph’) PC 23-Jun-1866
A Bill of lading for the delivery of goods to order and assigns, is a negotiable instrument, which by indorsement and delivery passes the property in the goods to the indorsee, subject only to the right of the unpaid vendor to stop them in transitu. . .
Cited – Jonesco v Beard HL 1930
The plaintiff was a race horse trainer. He had made two claims against the defendant owner alleging first that the defendant had agreed to give him a share in some horses and second that the plaintiff had sold two horses to him but not been paid for . .
Cited – Lazarus Estates Ltd v Beasley CA 1956
There was a privative clause in the 1954 Act. A landlord’s declaration under the Act that work of a specified value, supporting an increase in rent, had been carried out on leased premises, could not be questioned after 28 days of its service on the . .
Cited – Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers and Managers Appointed) 21-Mar-2018
. .
Cited – McDonald v McDonald 13-Aug-1965
HCA – Appeal – New Trial – Fresh evidence – Tending to prove verdict obtained by fraud – Principles of grant of new trial on grounds of fraud and discovery of fresh evidence.
the High Court of Australia applied Hip Foong Hong and Jonesco v . .
Cited – Toubia v Schwenke 2002
Supreme Court of New South Wales – Court of Appeal
‘In an action for fraud, a plaintiff must prove that he was deceived but need not prove that he was diligent.’ Handley JA continued: ‘Where the action seeks the judicial rescission of a . .
Cited – Owens Bank Ltd v Bracco and Another (No2) HL 17-Jun-1992
The bank had obtained judgment in St Vincent to recover a loan. It now sought to register the judgment here for enforcement. The defendant wanted to argue that the judgment had been obtained by fraud, and to resist registration of the judgment. The . .
Cited – Callaghan v Hanson-Fox (Andrew) FD 1992
H sought to have set aside a decree absolute obtained on the petition of his now deceased wife on the ground of fraud, in that the petitioner had falsely sworn in her affidavit verifying the petition that the marriage had broken down irretrievably . .
Cited – The Ampthill Peerage Case HL 1977
There was a dispute about the legitimacy of an heir to the title. New evidence had been discovered after the trial.
Held: The House considered whether a new trial of an action might be ordered after discovery of new evidence: ‘The law knows, . .
Cited – Arnold v National Westminster Bank Plc HL 1991
Tenants invited the court to construe the terms of a rent review provision in the sub-underlease under which they held premises. The provision had been construed in a sense adverse to them in earlier proceedings before Walton J, but they had been . .
Cited – Gould v Vaggelas 1984
Brennan J said: ‘A knave does not escape liability because he is dealing with a fool.’ . .
Cited – McIlkenny v Chief Constable of the West Midlands CA 1980
The appellant had been convicted of an IRA bombing, causing loss of many lives. The appellant and his other co-accused alleged that their confessions had been induced by police violence. The trial judge ruled that their confessions were voluntary . .
Cited – Montefiori v Montefiori 1746
A note, given fraudulently, to carry on a marriage treaty, shall be good against the drawer, though given without any consideration.
Lord Mansfield said: ‘no man shall set up his own iniquity as a defence, any more than as a cause of action’. . .
Cited – Boswell v Coaks (No 2) 1894
An English judgment is impeachable in an English court on the ground that the first judgment was obtained by fraud but only by the production and establishment of evidence newly discovered since the trial and not reasonably discoverable before the . .
Cited – Redgrave v Hurd CA 1881
The plaintiff, an elderly solicitor wishing to retire, advertised for someone to enter into partnership with him and to buy his house. The defendant responded to the advertisement and negotiations followed, in which the plaintiff stated that the . .
Cited – Phosphate Sewage Co (Ltd) v Molleson (Peter Lawson and Son’s Trustee) HL 8-Jul-1879
Res judicata – Competent and Omitted – Case of a Claimant in a Sequestration making a Second Claim.
Averments in two successive claims in a sequestration in consequence of which – affirming judgment of Court of Session – the plea of res . .
Cited – Henderson v Henderson 20-Jul-1843
Abuse of Process and Re-litigation
The court set down the principles to be applied in abuse of process cases, where a matter was raised again which should have been dealt with in earlier proceedings.
Sir James Wigram VC said: ‘In trying this question I believe I state the rule . .
Cited – Flower v Lloyd CA 11-Jun-1877
The plaintiffs tried to restrain the defendant from infringing their patent. They succeeded at first instance but the order was overturned on appeal. An expert went to inspect the process at the defendant’s works. Later, employees gave affidavits . .
Cited by:
See Also – Takhar v Gracefield Developments Ltd and Others ChD 23-Oct-2020
The Claimant seeks to set aside a judgment obtained against her by the Defendants in 2010 in an earlier action – allegation that new evidence of forgery of signature. . .
See Also – Takhar v Gracefield Developments Ltd and Others (Consequential Orders) ChD 11-Nov-2020
. .
Lists of cited by and citing cases may be incomplete.
Undue Influence, Evidence
Updated: 23 March 2022; Ref: scu.634789