Section 168 determinations, waiver and shared ownership

The case
On 12 October 2021 the Upper Tribunal (Lands Chamber), in Bedford v Paragon ASRA Housing Limited [2021] UKUT 266 (LC), rejected an appeal against the refusal of the First-tier Tribunal to strike out as an abuse of process the Housing Association’s application for a section 168 determination that the tenant of a shared ownership lease had breached a covenant therein prohibiting sub-letting.

Remember that by section 168(1), Commonhold and Leasehold Reform Act 2002,

“(1)A landlord under a long lease of a dwelling may not serve a notice under section 146(1) of the Law of Property Act 1925 (c. 20) (restriction on forfeiture) in respect of a breach by a tenant of a covenant or condition in the lease unless subsection (2) is satisfied.

(2)This subsection is satisfied if—

(a)it has been finally determined on an application under subsection (4) that the breach has occurred,

(b)the tenant has admitted the breach, or

(c)a court in any proceedings, or an arbitral tribunal in proceedings pursuant to a post-dispute arbitration agreement, has finally determined that the breach has occurred.”

Appellant’s case
The tenant’s argument was that Paragon had waived the breach such that the application was obsolete:

14. Despite being aware of the breach of covenant by subletting Paragon appear not to have taken a decision to forfeit Mr Bedford’s until May 2020 and it continued to collect rent by monthly direct debit between December 2018 and May 2020.

17. The basis of the application to strike out the proceedings was said to be that they served no purpose because the right to forfeit the lease had been waived by Paragon’s acceptance of rent with full knowledge that Mr Bedford was subletting the property.  The sole purpose of an application under section 168, 2002 Act was to secure a determination that a breach had occurred as a prelude to the service of notice under section 146, 1925 Act and the commencement of forfeiture proceedings.  In circumstances where Mr Bedford had a defence that the breach of covenant had been waived, the pursuit of the application by Paragon was, he contended, an abuse of process.

First instance decision
The First-tier Tribunal did not accept it would be a “futile exercise” to make a determination of breach because forfeiture was not the only remedy available to Paragon (e.g. they may seek damages and/or an injunction). In any event the tribunal said it did not have the jurisdiction to determine the question of waiver of the forfeiture in this case. 

Upper Tribunal decision
Martin Rodger QC, Deputy Chamber President, dismissed the appeal:

(a) Alternative remedies46. I do not accept that the availability of alternative remedies for the breach of covenant was an irrelevant consideration in the FTT’s assessment of whether the application was an abuse of process.  On the contrary, it was highly relevant.  The most obvious alternative remedy that a landlord might seek in the face of a persistent breach of covenant by its tenant would be an injunction compelling the tenant to comply, either by requiring that he terminate the current sub-tenancy or by prohibiting any future sub-letting.  Mr Gallivan also referred to the possibility of a claim for compensatory damages on a negotiating basis, as had been directed, for example, by Lightman J in Crestfort v Tesco [2005] L & TR 20 where commercial premises had been sublet in breach of covenant.

[see also paragraph 47 of the judgment]

(b) Determination of waiver – “48. As for the second ground of appeal, Miss Cattermole is obviously correct in her submission that, in principle, the FTT could have determined whether the right to forfeit had been waived as part of its consideration of the application to strike out.  It was neither necessary nor strictly correct to approach the question as raising a matter of jurisdiction.  But that does not take the appeal very far. Even if I was to take the view that the FTT had erred by suggesting that it did not have jurisdiction to consider the issue of waiver, its decision not to strike out was obviously correct because the proceedings were plainly not an abuse of process.   Neither the detailed facts nor the application of the law to those facts was clear.  Although Mr Bedford made a lengthy witness statement in relation to the allegation of breaches of covenant and in support of his application to strike the proceedings out, he did not include any detail of the subletting itself.  Nor did the submissions prepared by counsel say any more than that “the property is sub-let” and only the 2018 tenancy agreement (which had expired in 2019) was exhibited.  Until the facts about the breaches themselves are established it cannot be ascertained whether the Paragon had sufficient knowledge of those facts to amount to waiver, and until it can clearly be seen that there has been a waiver it cannot be suggested that the proceedings were an abuse of process.

[see paragraphs 28-32 of the judgment re jurisdiction]

Conclusion
Modern shared ownership leases are assured tenancies:

(a) until the purchased share has been staircased to 100%, and until then

(b) for so long as the tenant/one of joint tenants live there as their only or principal home.

The permanent loss of security of tenure brought in by the Prevention of Social Housing Fraud Act 2013 by reason of sub-letting/parting with possession of the whole of the demised premises does not apply to shared ownership leases and so security of tenure can be ambulatory (section 15A, Housing Act 1988).

It follows that if security of tenure has been lost then forfeiture, and not the notice seeking possession approach, is the landlord’s route to recovering possession in a sub-letting case.

That is the context in which this appeal has to be seen.



Non admissions and (civil) defences

There is a widespread misconception that in civil claims a defendant can, by non-admissions, simply put the claimant to proof of the matters pleaded in the particulars of claim – whether that be with regard to the service of notices, allegations of anti-social conduct, etc.

In housing fraud cases, these failures to positively plead can be seen, by way of example, in respect of:

  • Details of visits to the demised premises;
  • Names of sub-tenants/occupiers;
  • Representations made leading to allocation of the premises;
  • Connections with other accommodation;
  • Monies received for use of premises.

How does such an approach sit with the CPR, especially rule 16.5 (emphasis added)?

“(1) In his defence, the defendant must state –

(a) which of the allegations in the particulars of claim he denies;

(b) which allegations he is unable to admit or deny, but which he requires the claimant to prove; and

(c) which allegations he admits.”

The short answer is “not well”, a longer answer being “not well at all”. To understand why, aside from reading CPR r. 16.5 (1)(b) and paragraph 10.2 of Part 16’s practice direction (“a defendant should deal with every allegation in accordance with rule 16.5(1) and (2)”), it is instructive to also read the judgment of Lord Justice Henderson in SPI North Ltd v Swiss Post International (UK) Ltd & Anor [2019] 1 W.L.R. 2865. Early in his judgment he explained:

“2…Under the Civil Procedure Rules , unlike the previous Rules of the Supreme Court (“RSC”), a non-admission may only properly be pleaded by a defendant where he is, in fact, unable to admit or deny the allegation in question, and therefore requires the claimant to prove it. 

3. Plainly, a defendant is able to admit or deny facts which are within his own actual knowledge, or which he is able to verify without undue delay, difficulty or inconvenience, by reference to records and other sources of information which are under his control or otherwise at his ready disposal.”

A breach of 16.5 may well lead to a strike out application. It may also be the case that the claimant seeks to “fill in the gaps” by means of a Part 18 Request for Further Information, bearing in mind the latter’s purpose:

1.2  A Request should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the first party to prepare his own case or to understand the case he has to meet.” [Practice Direction to CPR Part 18]

One note of caution is that Henderson LJ went on in his judgment, at paragraphs 49 & 54, to state that defendants were not obliged to make enquiries of third parties before pleading non-admissions.

“49. In my judgment, a number of factors point towards the conclusion that a defendant is “unable to admit or deny” an allegation within the meaning of rule 16.5(1)(b) where the truth or falsity of the allegation is neither within his actual knowledge (including attributed knowledge in the case of a corporate defendant) nor capable of rapid ascertainment from documents or other sources of information at his ready disposal. In particular, there is no general obligation to make reasonable enquiries of third parties at this very early stage of the litigation. Instead, the purpose of the defence is to define and narrow the issues between the parties in general terms, on the basis of knowledge and information which the defendant has readily available to him during the short period afforded by the rules for filing his defence.


54…I have little hesitation in concluding that the wording of rule 16.5(1)(b) does not import any duty to make reasonable enquiries of third parties before putting the claimant to proof of an allegation which the defendant is “unable to admit or deny”. But that is not the end of the matter, because Mr Drake advanced a further argument against the claimant’s approach which I find equally compelling. The argument was, in short, that rule 16.5(1) does not import a “process” requirement, of which the defendants were arguably in breach and which could for that reason alone have arguably justified striking out the defence (or parts of it) if the offending non- admissions were not remedied. In order to justify such a draconian remedy, submits Mr Drake, it would have been necessary for the claimant to establish, to the civil standard of proof, that the defendants actually could have had available to them knowledge (whether or not derived from third parties) which meant that they were in fact able to admit or deny specific allegations which they had chosen not to admit. In other words, it would not be enough merely to show that the defendants failed to make reasonable enquiries of third parties which they ought to have made. It would be necessary to go further, and to establish that the impugned non-admissions were in fact improper because the relevant allegations should have been either admitted or denied.”

Finally, it is worth noting that CPR r. 16.5 also provides:

“(3) A defendant who –

(a) fails to deal with an allegation; but

(b) has set out in his defence the nature of his case in relation to the issue to which that allegation is relevant,

shall be taken to require that allegation to be proved.

(5) Subject to paragraphs (3) and (4), a defendant who fails to deal with an allegation shall be taken to admit that allegation.

Judicial assessment of the facts

Judgment was handed down today in a multi-track possession trial in which I represented the local authority. The “simple” issue was whether the defendant had resided with the (mother) tenant at the time of her death and for at least the previous 12 months leading up to that time such that he was entitled to succeed to her (pre-1 April 2012) secure tenancy.

There was no documentary evidence supporting the defendant’s case and he relied on his own witness statement, that of a long-standing friend and some hearsay evidence (e.g. a letter from a former neighbour).

In her ex tempore judgment allowing the claim for possession, the Judge cited R (Dutta) v General Medical Council [2020] EWHC 1974 (Admin) and the judgment of Warby J at paragraph 39 and I thought it was a helpful reminder to place on this blog as to the proper judicial approach to the determination of facts:

“There is now a considerable body of authority setting out the lessons of experience and of science in relation to the judicial determination of facts. Recent first instance authorities include Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3650 (Comm) (Leggatt J, as he then was) and two decisions of Mostyn J: Lachaux v Lachaux [2017] EWHC 385 (Fam) [2017] 4 WLR 57 and Carmarthenshire County Council v Y [2017] EWFC 36 [2017] 4 WLR 136. Key aspects of this learning were distilled by Stewart J in Kimathi v Foreign and Commonwealth Office [2018] EWHC 2066 (QB) [96]: 

i) Gestmin:
We believe memories to be more faithful than they are. Two common errors are to suppose (1) that the stronger and more vivid the recollection, the more likely it is to be accurate; (2) the more confident another person is in their recollection, the more likely it is to be accurate.

Memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is even true of “flash bulb” memories (a misleading term), i.e. memories of experiencing or learning of a particularly shocking or traumatic event. 

Events can come to be recalled as memories which did not happen at all or which happened to somebody else. 

The process of civil litigation itself subjects the memories of witnesses to powerful biases. 

Considerable interference with memory is introduced in civil litigation by the procedure of preparing for trial. Statements are often taken a long time after relevant events and drafted by a lawyer who is conscious of the significance for the issues in the case of what the witness does or does not say. 

The best approach from a judge is to base factual findings on inferences drawn from documentary evidence and known or probable facts. “This does not mean that oral testimony serves no useful purpose… But its value lies largely… in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth”. 

ii) Lachaux:
Mostyn J cited extensively from Gestmin and referred to two passages in earlier authorities. I extract from those citations, and from Mostyn J’s judgment, the following: 

“Witnesses, especially those who are emotional, who think they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason, a witness, however honest, rarely persuades a judge that his present recollection is preferable to that which was taken down in writing immediately after the incident occurred. Therefore, contemporary documents are always of the utmost importance…” 

“…I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective fact proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities…”

Mostyn J said of the latter quotation, “these wise words are surely of general application and are not confined to fraud cases… it is certainly often difficult to tell whether a witness is telling the truth and I agree with the view of Bingham J that the demeanour of a witness is not a reliable pointer to his or her honesty.”

iii) Carmarthenshire County Council:
The general rule is that oral evidence given under cross-examination is the gold standard because it reflects the long-established common law consensus that the best way of assessing the reliability of evidence is by confronting the witness.

However, oral evidence under cross-examination is far from the be all and end all of forensic proof. Referring to paragraph 22 of Gestmin, Mostyn J said: “…this approach applies equally to all fact-finding exercises, especially where the facts in issue are in the distant past. This approach does not dilute the importance that the law places on cross-examination as a vital component of due process, but it does place it in its correct context…”

The Dutta case is worth reading in its entirety and emphasises that assessment as to the credibility/probative value of evidence is not a binary choice.

Where are you? The “missing” witnesses and drawing an adverse inference

The issue – adverse inferences

In June I wrote an article on a sub-letting trial which I had recently concluded, and one of the points raised was the importance to a party of their putting forward the best, and at times most obvious, evidence. I said:

Lastly, often one of the most compelling features of a case is what is not there more than what is. Why was there nothing (email, letter, statement, etc) from those persons found at the premises? Why was there nothing from the defendant’s adult children who apparently sometimes stayed there? Why was there nothing from the husband (not least to refute the notion that his wife lived with him)? Why was there nothing from the neighbours who surely after 26 years of the defendant apparently living at the premises could have confirmed as much? Don’t forget to consider and use authorities such as Wisniewski v Central Manchester Health Authority [1998] PIQR P324 where Brooke LJ considered the court’s ability to draw adverse inferences from the absence or silence of a witness (that can of course go both ways).

Last month I was in trial dealing with an “only or principal home” possession claim and my skeleton argument highlighted this same issue, and indeed the same authority, in a case where the defendant called no other witnesses than themselves:

Conversely, the Defendant’s evidence in support of her case is limited in the extreme.  She has further not called her husband, Mr……. or any person from the neighbouring flats and houses to the Property to give evidence.  Such absence is telling.  In Wisniewski v Central Manchester Health Authority [1998] PIQR P324 at [340] Brooke LJ considered the issue of “missing” witnesses and summarised the relevant principles:

“(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4) If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

Caution

Against that background it is important to note that Sir Ernest Ryder SPT cautioned in Manzi v King’s College Hospital NHS Foundation Trust [2018] EWCA Civ 1882 at [30]:

Wisniewski is not authority for the proposition that there is an obligation to draw an adverse inference where the four principles are engaged. As the first principle adequately makes plain, there is a discretion i.e. “the court is entitled [emphasis added] to draw adverse inferences”.”

Current jurisprudence

The brilliant blog – Civil Litigation Brief – recently reported on a High Court judgment by DHCJ Hodge QC in Ahuja Investments Ltd v Victorygame Ltd & Anor [2021] EWHC 2382 (Ch) in which the opening paragraph gave a flavour of what was to come:

In his farewell speech from the Delhi High Court, Justice J.R. Midha is reputed to have said that: “In the Court of Justice, both the parties know the truth; it is the judge who is on trial.” Never has that perceptive observation resonated more fully with me than in the present case, where both parties have signally failed to assist the court by calling evidence from three highly relevant potential witnesses, in breach of their duty under CPR 1.3 to help the court to further the overriding objective to deal with the case justly and at proportionate cost. As a result, this is not so much a case of “Hamlet without the Prince” as one of Hamlet without any of Polonius, Gertrude or Laertes (or Rosencrantz and Guildenstern without Hamlet, Claudius or the Player).

The facts of the case are unimportant for current purposes but rather the Judge’s consideration of Wisniewski and a Court of Appeal “warning” not to over-use the principles raised therein – in Magdeev v Tsvetkov [2020] EWHC 887 (Comm) at [150]-[154] – is of some interest and instruction:

65. In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first:

1.establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue;

2.identify the particular inference which the court is invited to draw; and

3.explain why such inference is justified on the basis of other evidence that is before the court.

Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure. A good illustration of this, in the context of the present case, may be afforded by what passed between Mr Singh and Mr Jandu over the phone in the few minutes before exchange of contracts for the sale of the property at 15.11 (GMT) on 1 March 2016.

To add to the Manzi, Magdeev and Ahuja line of authorities we also have Lord Leggatt’s lead judgment in the recent Supreme Court case of Royal Mail Group Ltd v Efobi [2021] UKSC 33 – referred to in Ahuja at [31] – at [41]:

The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.

Impact beyond adverse inferences

Finally, it is worth noting what DHCJ Hodge QC said in Ahuja at [32]-[33] (the “third aspect” concerned rectification):

“32.The omission to call a material witness or witnesses without reasonable explanation may have a significance that goes beyond the drawing of appropriate adverse inferences. Three particular aspects are of particular relevance to the present case. First, in a case where there are contemporary documents which appear on their face to provide cogent evidence on an issue which is contrary to the evidence of one of the parties to the litigation, the court may decide to take the documents at their face value, and decline to accept that party’s evidence to the contrary, where this is unsupported by the evidence of a non-party witness who clearly could have given evidence material to that issue and who might have, but has not, been called by that party as a witness. The same may apply where the evidence of one of the parties to the litigation is contrary to the known or probable facts.

33.Second, the failure to call a witness who might have been able to give evidence on a material issue may mean that the court is left with no direct evidence at all on that issue. In that situation, the party who might be expected to have called that witness cannot complain if the court rejects that party’s case on that issue and either makes a finding based on the inherent probabilities presented by the limited evidence that is before the court, or simply concludes that it is unable to make any finding of fact at all on that issue. This is an alternative way of analysing my conclusion as to what was said during the telephone conversation between Mr Jandu and Mr Singh between 15.02 and 15.06 GMT on 1 March 2016 (if Ahuja can be taken to have been advancing a positive case on that issue notwithstanding the paucity of Mr Singh’s evidence on the point).

Conclusion

It is clear that simply not calling a witness without apparent reason is not, in itself, necessarily sufficient to enable a court to draw adverse inferences (or indeed reach other negative determinations). However the “Wisniewski principle” remains sound and requires consideration as to its possible application in housing fraud/misuse cases.

Cornerstone on Social Housing Fraud – 2nd Edition now published

“A serious abuse of public housing resources for personal gain”

These were the words of a district judge concluding his judgment yesterday (3 June 2021) in a sub-letting possession case brought by a housing association. Regrettably such cases are not unusual and this blog has considered sub-letting matters previously.

However, I thought it might be helpful to highlight a few issues that stood out in this case which may assist and inform those dealing with similar cases.

Firstly, significant evidence requires, in most instances, a rebuttal / explanation. For example here, why were there padlocks on the internal room doors? Why did one of the occupants found at the property by the association describe the defendant’s claimed bedroom as a storage room? Why did the electoral roll evidence obtained by way of the credit reference report show multiple people registered there in the last 10 years or so, and often for long periods? Who were they? Why did the defendant’s bank accounts show so many cash payments into her account over the years?

The absence of clear (or any) answers to these matters in the pleaded case or witness evidence is significant. The attempt to “fill the gap” during cross examination may make matters even worse (and did here).

Secondly, sometimes you need to step back and see the bigger picture. A 2nd witness statement by the defendant served less than a week before trial is undoubtedly frustrating and should not have been necessary so late but what is to be served by opposing its submission? That is not to say there will never be a good reason – e.g. it raises new matters you would have wished to investigate – but where it largely says more of the same (e.g. my bills always went to the demised premises’ address) opposition to its admission can appear churlish, insecure and unattractive. In this instance it actually helped the association’s case because they could say that the defendant had failed even at that late stage to provide sufficient responses to the evidence seemingly against her.

Thirdly, your evidence may not have a knock-out point but that is not fatal to the case. Indeed my skeleton argument said as much: “It may be argued on behalf of the first defendant that individually none of the pieces of information provide conclusive proof of any sub-letting”. To paraphrase the district judge’s more artistic position on this, “Individually all of the above may not be enough but put all the pieces together and it beats with a single rhythm”. See also Lord Justice Mummery’s remarks in Lambeth LBC v Vandra [2006] H.L.R. 19 at para. 13:

“There was no direct evidence, it is true, but there was sufficient evidence from which a reasonable inference could be made about a state of affairs in which a number of people were paying to live in Miss Vandra’s flat and were in fact living there.”

Fourthly, remember that not every question in cross examination is designed to “catch the witness out”, though you may well be laying the trail. For example, it had been said that one of the occupants found at the premises was the defendant’s sister. A little time was spent at the start of the cross examination of the defendant asking her to explain her family set up. It became clear by that point that the said occupant was not after all her sister, and the other person found with her was not a family member as claimed.

Lastly, often one of the most compelling features of a case is what is not there more than what is. Why was there nothing (email, letter, statement, etc) from those persons found at the premises? Why was there nothing from the defendant’s adult children who apparently sometimes stayed there? Why was there nothing from the husband (not least to refute the notion that his wife lived with him)? Why was there nothing from the neighbours who surely after 26 years of the defendant apparently living at the premises could have confirmed as much? Don’t forget to consider and use authorities such as Wisniewski v Central Manchester Health Authority [1998] PIQR P324 where Brooke LJ considered the court’s ability to draw adverse inferences from the absence or silence of a witness (that can of course go both ways).

Conclusion
The district judge had little hesitation in finding that there had been a sub-letting of the whole of the premises, and that the notice to quit had brought the remaining common law tenancy to an end at its expiry. Even had it have been only of part the district judge indicated that he would have made an outright order – this was not the case for a second chance.

As well as the “usual orders” an unlawful profit order in the sum of £145,177.89 was made against the defendant based on estimated figures of the rents received by her over many years.

Finally, I must pay particular tribute to association’s counter fraud specialist, Raj Vine, and the intelligence officer Magnus Lærke-Hall for their fantastic and crucial work without which there could have been no successful outcome. As always, I was also served by excellent solicitors, this time in the form of Katrina Robinson and, before her, Victoria Smith of Capsticks.

“Cornerstone on Social Housing Fraud” 2nd Edition

Judgment obtained by fraud?

On 24 February 2021 the Court of Appeal handed down judgment in Dale v Banga and others [2021] EWCA Civ 240. The opening paragraph of the (main) judgment of Lady Justice Asplin makes it clear what the issue in the appeal was:

“This appeal raises the question of what the appeal court should do when fresh evidence is adduced after a trial which allegedly shows that the judgment below was obtained by fraud, the conduct relied upon being that of a witness and of a party to the action which took place after the events in issue, and is unrelated to the issues which were before the court. In particular, it raises the following questions: whether the fresh evidence (permission to rely upon it having already been granted) is capable of establishing that the Respondents misled the judge at trial by asserting that a letter of revocation in relation to a will had been duly attested; if so, whether the question of whether the judge was misled (the fraud issue) should be referred to the lower court to be determined or should be the subject of a separate action; and, if it is determined that the lower court was misled by fraud, whether a previous will should be admitted to probate on the basis of the original judge’s obiter dicta.”

This is an issue which this blog has previously dealt with.

The “fresh evidence” concerned the discovery that one of the two attesting witnesses to the letter had been sent to prison for fraud offences, and Mr Banga himself had been indicted with attempting to pervert the course of justice (though no evidence was offered at trial and he was acquitted):

“7…It is alleged, nevertheless, that it is incontrovertible that Mr Banga had sought to pervert the course of justice by the production of false invoices. 

8. Mr Brennan, on behalf of Mrs Dale, submits that if the fresh evidence had been available to be adduced at trial it would have entirely changed the way in which the judge approached the question of the proper attestation of the Letter and his conclusion in that regard. It is said that the fresh evidence: undermines Mr Arif’s credibility as a witness of fact (as to the attestation of the Letter); supports the conclusion that Mr Arif and Mr Banga are sufficiently dishonest to have attempted to deceive the court about the circumstances in which the Letter was signed by the attesting witnesses and even that it was a forgery and was produced on another occasion; made Mr Arif the obvious person to have been chosen to assist in attempting to deceive the court; and gave Mr Arif an obvious motive to assist Mr Banga and his family.”

Coming back to Asplin LJ’s judgment, she explained what would be necessary to allow for a set aside of the final judgment:

  • It is not sufficient that the evidence given below can now be proved to have been mistaken.
  • It is not sufficient that a witness committed perjury.
  • “It is necessary that the judgment was obtained by fraud and that the fraud was that of a party to the action or was at least suborned by or knowingly relied upon by that party” (27).
  • There are two options then available – a new action to set aside the judgment (as preferred by the Court of Appeal – Salekipour v Parmer [2018] QB 833) or an appeal against the original order as in the present case, alleging that the judgment upon which it is based was obtained by fraud (39-41).

As for the test on appeal:

“42…It seems to me that it is necessary to decide whether the new evidence is capable of showing that the judge was deliberately misled by the Respondents and that the judgment may have been obtained by fraud. It must be sufficient to justify pleading a case of fraud. It must be capable of showing that there was conscious and deliberate dishonesty which was causative of the judgment being obtained in the terms it was. The conscious and deliberate dishonesty must be that of a party to the action, or was at least suborned by or knowingly relied upon by a party.

43. Secondly, if that threshold test is satisfied, the court must determine whether on the facts and in the circumstances of the particular case, it is appropriate that the fraud issue should be remitted or otherwise dealt with within the same proceedings. There is no question but that the appeal court has power to “refer any claim or issue for determination by the lower court”: CPR 52.20(2)(b). The question is whether the discretion to do so should be exercised. It is not possible to list the matters which will be relevant to the exercise of that discretion because they inevitably depend on the circumstances.”

Ultimately, the court declined to remit the issue of fraud to the lower court and dismissed the appeal:

“45. Unlike in Noble v Owens, the new evidence is of allegedly similar fact and bad character. It does not go directly to the central matters of fact before the judge. It requires inferences to be drawn based upon the alleged lack of credibility of the witnesses who gave evidence before him and their alleged propensities. It is tangential. Furthermore, all of the conduct from which it is said that the inferences should be drawn post-dates the alleged attestation of the Letter.”

Cases cited in judgment:

Odyssey Re (London) Ltd & Ors v OIC Run Off Limited & Ors [2000] EWCA Civ 71

Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9

Takhar v Gracefield Developments Ltd & Ors [2020] AC 450

Royal Bank of Scotland plc v Highland Financial Partners lp [2013] 1 CLC 596

Noble v Owens [2010] EWCA Civ 224, [2010] 1 WLR 2491

Salekipour v Parmar [2017] EWCA Civ 2141, [2018] QB 833