Recent case on the court’s jurisdiction to set aside judgment for fraud

I wrote recently about the position of a judgment which is later discovered to have been procured by fraud. Mr Justice Leech had cause to consider such a potential (but not, ultimately, actual) case in Tinkler v Esken Ltd [2022] EWHC 1375 (Ch) (and thank you to Arun Chauhan for alerting me to this judgment in one of his posts on LinkedIn):

5. Mr Tinkler now invokes the court’s jurisdiction to set aside the Judgment for fraud on the grounds that individual witnesses (whose conduct can be attributed to SGL) deliberately failed to disclose documents (or destroyed them) and that they gave false evidence at the Trial.

Paragraphs 11 to 35 of the judgment are especially interesting in re-affirming the correct approach:

11. It was common ground that one party is entitled to have a judgment set aside for fraud if three limbs or conditions are satisfied: first, the successful party (or someone for whom it must take responsibility) committed conscious and deliberate dishonesty (“Limb 1“); secondly, the dishonest conduct was material to the original decision (“Limb 2“); and, thirdly, there was new evidence before the Court (which was either not given or not disclosed in the earlier proceedings) (“Limb 3“). The principal issues between the parties were the test for materiality under the Limb 2 and the way in which the Court should approach new evidence deployed under Limb 3.

The analysis that followed on each of these limbs in this section of a long judgment is worth a read.

The Court also reminded itself of some particular features when dealing with allegations of fraud:

36. Mr Leiper also made a number of general points about the trial of fraud claims. He reminded me that although the standard of proof was the civil standard, the Court should take account of the fact that fraud is inherently improbable. In Bank St Petersburg PJSC v Arkhangelsky [2020] 4 WLR 5 Males LJ summarised the approach which the Court should take at [117]:

“In general it is legitimate and conventional, and a fair starting point, that fraud and dishonesty are inherently improbable, such that cogent evidence is required for their proof. But that is because, other things being equal, people do not usually act dishonestly, and it can be no more than a starting point. Ultimately, the only question is whether it has been proved that the occurrence of the fact in issue, in this case dishonesty in the realisation of the assets, was more probable than not.”

37. Mr Leiper also reminded me that proof of fraud requires cogent evidence which must be commensurate with the seriousness of the conduct: see JSC BTA Bank v Ablyazov [2013] EWHC 510 (Comm) at [37] (Teare J). He submitted that where the Court was being invited to draw an inference of dishonesty from primary facts the Court must be satisfied that “an inference of dishonesty is more likely than one of innocence or negligence”: see JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm) (Flaux J). In the present case, Mr Tinkler alleges both perjury and the deliberate destruction and non-disclosure of documents. I accept that cogent evidence is required before those allegations can be found to be proved.

The claim to set aside the judgement for fraud was ultimately dismissed.

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