The Estate of Euan Mcintyre Lindsay & Anor v Outlook Finance Limited (In Liquidation) & Anor [2026] EWCA Civ 1005

[2026] EWCA Civ 1005Case No CA-2025-003201
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2025] EWHC 3100 (KB)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING’S BENCH DIVISION
Mr Justice Kerr
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 31/07/2026
Before
LORD JUSTICE SINGHLORD JUSTICE ARNOLDLORD JUSTICE ZACAROLI
Between
THE ESTATE OF EUAN MCINTYRE LINDSAY (Deceased)Claimants/WILLIAM DONALD LINDSAYRespondents
John Wardell KC and Henry Bankes-Jones (instructed by Kennedys Law LLP) for AppellantJeffrey Bacon (instructed by direct access) and Gunnercooke LLP for RespondentsHearing Hearing date: 16 June 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on 31 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Introduction

[1]This appeal raises a short point of principle in the context of a claim to set aside a judgment procured by fraud. The history is somewhat complicated, but the facts necessary to understand the point of law raised can be summarised as follows.[2]The claimants are William Donald Lindsay and the estate of the late Euan McIntyre Lindsay (the “Lindsays”). They are from a family of Scottish dairy farmers who owned, among other things, a farm in Scotland (the “Scottish Farm”) and a farm in Cumbria (the “Cumbrian Farm”). The family encountered financial difficulties in about 2008. In September 2009, the Lindsays and associated entities borrowed funds on a secured basis from the first defendant, Outlook Finance Limited (“Outlook”). Outlook was granted a charge over the Cumbrian Farm (the “Charge”), and the Scottish Farm.[3]Outlook was an entity owned and controlled by Mr Derek Fradgley (“Mr Fradgley”). In 2012 Outlook appointed the second defendant (“Mr Butcher”) as Law of Property Act receiver (“LPA”) of the Cumbrian Farm. He took possession of the Cumbrian Farm and certain plant, machinery and, pursuant to an appointment under a different agreement, livestock there. Mr Butcher caused the Cumbrian Farm to be sold to R&W Beattie Ltd (“Beattie”).[4]In February 2013, the Lindsays issued proceedings in the Birmingham District Registry, which were subsequently transferred to the Manchester District Registry (the “Manchester Action”), claiming that Outlook had no right to appoint a receiver under the terms of the Charge.[5]There were three defendants to the Manchester Action: Outlook, Mr Butcher and Beattie.[6]As against Outlook, the Lindsays sought damages for breach of a collateral agreement, declarations that Outlook was not entitled to take possession of cattle, and damages for trespass to goods and conversion. This was based on the assertions that(1) there was an agreement that so long as interest was paid and capital repayments commenced within a certain period, no steps would be taken to enforce the Charge;(2) there was an agreement that Outlook would await the sale of the Scottish Farm before claiming its capital;(3) other agreements had been reached which meant Outlook had no right to the cattle. There was no challenge to the loans or to the validity of the Charge in the Manchester Action.[7]As against Mr Butcher, the Lindsays sought declarations that his appointment was invalid, that he held all sums received by him since his appointment on trust for the claimants, damages for trespass and/or conversion, and an account of sums received by him.[8]As against Beattie, the Lindsays sought an order rescinding the sale agreement.[9]The claims against Mr Butcher and Beattie were parasitic on the claims against Outlook. Mr Butcher adopted the relevant parts of Outlook’s defence and instructed the same counsel.[10]In a judgment delivered on 2 June 2014, HHJ Bird dismissed the claims in the Manchester Action against Outlook, essentially on the basis that he preferred the evidence of Mr Fradgley. Having done so, it was unnecessary to determine the claims as against Mr Butcher and Beattie. They were dismissed as a necessary consequence of the dismissal of the claim against Outlook. The Lindsays were ordered to pay the costs of all three defendants.[11]There then followed protracted proceedings in Scotland (the “Scottish Proceedings”). Outlook sought to enforce its security over the Scottish Farm. The Lindsays issued their own proceedings in which they sought to set aside the loan and security documents (including the Charge) which had gone unchallenged in the Manchester Proceedings. In 2017, before the Scottish Proceedings reached trial, Mr Fradgley died.[12]The Scottish Proceedings culminated in a trial before Lady Wolffe in the Outer House of the Court of Session. In a reserved opinion delivered in August 2021, she found that Mr Fradgley had defrauded the Lindsays on a large scale. He had fabricated documents and falsified the records of the Lindsays’ family company. She found that the loan upon which the Manchester Action had been based and the Charge were obtained by “lesion, facility and circumvention” (broadly equivalent to the English law concept of undue influence) and fraudulent misrepresentations. She set aside the loans and the Charge and ordered repayment of overpayments that had been made to Outlook. Outlook went into liquidation and paid nothing.[13]In 2023 the Lindsays brought this action (the “2023 Action”) against Outlook and Mr Butcher asserting that the judgment in the Manchester Action had been obtained by fraud on the part of Mr Fradgley, and that the judgment and consequential order should be set aside as against Outlook and Mr Butcher. It is contended that Mr Butcher’s appointment as LPA receiver and agent had been invalid and that his conduct in seizing the farm, cattle, plant and machinery amounted to trespass and conversion. The Lindsays seek a retrial.

Judgment in the 2023 Action

[14]The trial in the 2023 Action came before Kerr J in October 2025. In his judgment dated 26 November 2025, he found in favour of the Lindsays.[15]After setting out the facts in some detail, the judge reached the conclusion that Mr Fradgley had deceived HHJ Bird in the Manchester Proceedings by portraying himself as an essentially honest businessman (save in one respect, as he had admitted inventing a fictional bank) who had dealt honestly and in good faith with the Lindsays. Specifically, the judge made the same findings of fact as to the details of Mr Fradgley’s dishonesty as had been made by Lady Wolffe in the Scottish Proceedings: §83 of the judgment.[16]There was no dispute before the judge as to the applicable legal principles, which were summarised by Aikens LJ in Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 (“Highland”), at §106:
“first, there has to be a ‘conscious and deliberate dishonesty’ in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be ‘material’. ‘Material’ means that the fresh evidence that is adduced after the first judgment has been given is such that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court’s decision to give judgment in the way it did. Put another way, it must be shown that the fresh evidence would have entirely changed the way in which the first court approached and came to its decision. Thus the relevant conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.”
[17]As the judge noted, at §94, this formulation of the principles was endorsed by the Supreme Court in Takhar v. Gracefield Developments Ltd [2019] UKSC 13; [2020] AC 450 at [56]-[57] (“Takhar”), to which I return below.[18]Kerr J’s conclusions are set out from §143 of his judgment. At §145, he accepted the Lindsays’ submission that evidence given by Outlook in the Manchester Proceedings amounted to:
“conscious and deliberate dishonesty in relation to relevant evidence given; namely, that the loan and security documents were genuine and had not been procured by fraudulent misrepresentations; and that the full £1.8 million was due. Mr Fradgley’s control over MBDFL and the fabrication of its company documents was a matter concealed from HHJ Bird. There is no difficulty about these findings.”
[19]At §146, he accepted the claimants’ submissions that those matters played an important role in persuading HHJ Bird to adopt the approach he adopted to the oral and written evidence and were causative of the judgment in Outlook’s favour:
“Mr Fradgley’s dishonest, untruthful and fraudulently given evidence was material. Most of the evidence subsequently obtained, enabling the Lindsays ultimately to unmask the fraud, was not available to them in the Manchester proceedings.”
[20]Kerr J accepted that a retrial against Outlook would not be an abuse of process:
“It was Outlook’s continued attempts to extract money and land from the Lindsays which eventually provided them with the evidence they needed to unmask Mr Fradgley’s fraudulent conduct. I do not agree that the Lindsays took too long to obtain the fresh evidence and secure the findings of Lady Wolffe in the Scottish proceedings. It was necessary to proceed step by step with dogged tenacity and determination and the Lindsays did so.”
[21]As against Mr Butcher, Kerr J accepted that none of the elements of a cause of action for setting aside the judgment was satisfied. He was not guilty of dishonesty before HHJ Bird, and logically the second and third requirements did not arise. He could only, therefore, set aside the judgement as against Mr Butcher if the equitable jurisdiction to do so “extends to setting aside a judgment tainted by fraud against a party who is not implicated in or complicit in the fraud.”[22]He concluded that it did, finding as follows:(1) The basis of the jurisdiction to set aside a judgment is “a suit in equity to impeach a judgment”, or a “special jurisdiction to reverse transactions procured by fraud”. (§152)(2) The vice of the fraud is that it taints the impeached judgment, which is set aside not to punish the fraudster, but “to protect the integrity of the legal process”, noting that the tests propounded by Aikens LJ in the Highland case are directed not at the parties but at the impeached judgment. (§154)(3) That accords with the view that “fraud unravels all”, and with Lord Buckmaster’s observation in Jonesco v Beard that fraud “spreads to and infects the whole body of the judgment”. (§155)(4) The party’s innocence is relevant, but as to the scope of the remedy, and not to the existence of the equitable jurisdiction. (§156)(5) There are other cases where, aside from fraud, a party might lose the benefit of a judgment in his favour: e.g., where the judgment affects the rights of parties who had not been joined, citing the “fundamental principle of natural justice that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case” (Cameron v Cole (1944) 68 CLR 571, per Rich J at pp.590-591. (§157-158).[23]Kerr J thus concluded, at §162:
“For those reasons, I prefer the claimants’ submissions that the remedy can extend to setting aside the impugned judgment as against a non-fraudulent party to the original proceedings. The tests for setting aside the impugned judgment need not be met for each party individually. They are directed at the integrity of the judgment and not, or not only, at the integrity of the party guilty of tainting it with fraud. The court may set aside the impugned judgment as against any party to the original proceedings who has been served in the action to set it aside.”
[24]The principles to be applied were (see §164):
“The court should apply equitable principles in the normal way. I would not call it a matter of the court’s discretion. The question is whether it is fair and equitable to exercise the jurisdiction, examining the facts and taking all relevant circumstances into account, including any laches or other equitable defence. That the party is not guilty of the fraud which taints the impugned judgment is likely to be a factor of considerable importance.”
[25]Applying those principles to Mr Butcher, the judge concluded that it was not inequitable to set aside the judgment, because:(1) Mr Butcher was an experienced insolvency practitioner, who voluntarily – and for reward – took part in the plan to take possession of the Cumbrian Farm on Outlook’s behalf.(2) In so doing, he took the risk inherent in acting as an LPA receiver, in respect of which he can be expected to have taken out insurance.(3) In respect of certain of his actions as LPA receiver, he acted against legal advice (for example, he was advised to obtain a court order before forcing entry to the Cumbrian Farm).(4) He largely aligned himself with Outlook, presumably being paid for his work, and thus benefitted from its actions. He benefitted from Mr Fradgley’s deception of the court, because it led to the claim against him being summarily dismissed.[26]Kerr J also rejected the defence of laches. He found that the time taken by the Lindsays to obtain the findings of fraud against Outlook in the Scottish Proceedings was a good answer to the defence of laches.

The grounds of appeal

[27]There are two grounds of appeal. The first is that the judge was wrong to hold that the equitable jurisdiction to set aside a judgment procured by fraud of one person extends to setting aside the judgment as against a non-fraudulent party to the original proceedings. As Mr Wardell KC, who appeared with Mr Bankes-Jones for the appellant, acknowledged, this raises only the point of principle whether the equitable jurisdiction is capable of extending to such a case. If the judge was right to hold that it does, then there is no appeal against the judge’s exercise of that jurisdiction (as summarised at §‎24 above).[28]The second ground of appeal is that the judge was wrong to reject the defence of laches.[29]The judge gave permission to appeal on ground 1. Subsequently, Singh LJ deferred the application on ground 2 to be addressed at the hearing of the appeal, with the appeal to follow if permission was granted.

Ground 1

[30]The parties agreed that the principles to be applied in setting aside a judgment for fraud are those summarised by Aikens LJ in Highland (see above), as approved in Takhar (above). In neither of those cases was there any discussion of the possibility of a judgment being set aside against a party other than the party guilty of fraud. Both parties sought to draw support for their position from the way in which the jurisdiction was expressed or described in cases where the only issue was whether a judgment could be set aside against a party because of that party’s fraud.[31]Mr Wardell relied on Takhar, in which it was decided that a party seeking to set aside a judgment on the ground that it had been obtained by fraud was not required to show that the fraud could not with reasonable diligence have been uncovered in advance of obtaining the first judgment: see §54 of the judgment of Lord Kerr. Mr Wardell relied specifically on the way in which Lord Sumption, at §60 to §62, analysed the action to set aside an earlier judgment for fraud, not as a procedural application, but as a cause of action, independent from the cause of action in the earlier proceedings, and part of a special jurisdiction exercised by equity to reverse transactions procured by fraud. Such an action could be brought without leave because it was a substantive right. Mr Wardell also sought to draw support from a comment of Sir Geoffrey Vos MR in Tinkler v Esken Limited [2023] EWCA Civ 655, [2023] Ch 451, at §12:
“In modern terms, we can perhaps regard the action to set aside a judgment for fraud as akin to an action for deceit. The only significant differences are that the court, rather than the opposing party to the first action, has to be shown to have been deceived, deliberate dishonesty is required, and materiality rather than simple reliance must be shown. If the elements are made out (misrepresentation or misleading conduct, made or undertaken fraudulently, with reliance for deceit and materiality for an action to set aside a judgment), the contract or the judgment can be rescinded or set aside.”
[32]Mr Wardell relied on the fact that none of the constituent parts of a claim in deceit were made out against Mr Butcher: he was not dishonest in the evidence he gave in the Manchester Proceedings, and HHJ Bird had not placed any reliance on that evidence. Mr Wardell acknowledged that the significant differences noted by the Master of the Rolls – in particular the point that it is the court, not any other party, that must be shown to be deceived – deprive the analogy with deceit of much of its force. Mr Wardell nevertheless maintained that Lord Sumption’s analysis in Takhar is helpful.[33]Since the issue we face on this appeal was not raised in those cases, or any other of the cases to which we were referred, the help to be got from them is limited, particularly bearing in mind the salutary warning of Lord Leggatt in Finzi v Jamaican Redevelopment Foundation Inc [2023] UKPC 29; [2024] 1 WLR 541, at §60 (“Finzi”):
“It is important not to lose sight of the basic tenets of common law reasoning that every judgment must be read in context, by reference to what was in issue in the case, and that it is only the ratio of the decision which establishes a precedent and not obiter dicta. All too often advocates treat the analysis of cases as if it were simply an exercise in looking at the language used by judges, forgetting that it is not particular verbal formulations that make the common law but the principles on which the actual decisions in cases are based.”
[34]It was common ground at the hearing of the appeal that there was no authority directly on point. After we had circulated a draft judgment to the parties, however, it was brought to our attention that there are indeed authorities in which the question of setting aside a judgment against one party based on the fraud of someone else has been squarely raised and considered. We therefore invited further submissions from the parties on those authorities.[35]The first authority is Boswell v Coaks, an unreported decision of the Court of Appeal dated 5 November 1892. I am grateful to the appellant for tracking down a copy of this decision from the National Archive. The plaintiff in that case brought an action “to re-open a five years litigation” which had been determined against him by a judgment of the House of Lords. The defendant applied to stay or dismiss the action on the grounds it was vexatious and oppressive. The plaintiff alleged that the earlier judgment had been obtained by the fraud of one of the defendants, Mr Coaks. North J dismissed the claim. On appeal, the Court of Appeal (Lindley, Bowen and A.L. Smith LJJ) rejected the plaintiff’s contention that Coaks had been guilty of any fraud. It dealt with the position of the other defendants to the original action as follows:
“As regards the point taken by the Solicitor General for the other Defendants viz, that the judgment can only be set aside if at all against those who procured it by fraud and it is not suggested that the other Defendants had anything to do with the fraud alleged this point appears to us to be fatal as regards all the Defendants except Coaks and we think that it would be fatal to any further action to set aside the sale of the whole.”
[36]The decision of the House of Lords on a further appeal is reported at (1894) 6 R 167. It affirmed the decision of the Court of Appeal that there was no basis to set aside the judgment on the grounds of fraud, but there is no reference in it to the position as against any of the other defendants.[37]Boswell v Coaks was applied in the second authority, another unreported decision of the Court of Appeal in Odyssey Re (London Limited) v OIC Run-off Limited, 13 March 2000. The majority of the Court, Nourse LJ and Brooke LJ, found that a witness for one of the parties, Mr Sage, had given perjured evidence at an earlier trial before Hirst J. They both agreed, however, with the third member of the Court, Buxton LJ (who dissented on the facts), that (in the words of Nourse LJ) “it is necessary for the perjured evidence which procures the judgment to be the evidence of a party to the proceedings.”[38]Buxton LJ began his analysis of the legal position by reference to the doctrine of issue estoppel, to which the possibility of setting aside a judgment on grounds of fraud was an exception. He said:
“The essence of issue estoppel is, however, that it operates only between the parties to the original suit: it is unreasonable and unjust to permit the same issue to be litigated afresh between the same parties … In that context, it can be seen as not merely accidental but as springing from the essential nature of res judicata, that the protection obtained by the successful party can only be taken away by his fault.”
[39]He cited and followed the Court of Appeal decision in Boswell v Coaks, finding that, although the case had been decided on the basis that no fraud was established, the conclusion that “the fraud must be either that of the party or be procured by a party” was not obiter and remained good law. He also regarded the principle that a foreign judgment obtained by fraud would not be enforced in this jurisdiction as persuasive, based as it was – in part at least – on the well-established rule of law that no person shall take advantage of their own wrong, citing Abouloff v Oppenheimer (1883) 10 QBD 295, per Lord Coleridge CJ at p.300.[40]He rejected an argument that there is a public interest in setting aside a judgment obtained by fraud beyond the private interest of the parties, reiterating the point that the “fraud of a party rule” was recognised as a matter of ratio in Boswell v Coaks.[41]In fact, Nourse LJ and Brooke LJ (but not Buxton LJ) held that the perjured evidence of Mr Sage was sufficient to result in the setting aside of the earlier judgment, because his evidence was to be treated as that of Orion, the party. This was based on the proposition that where the relevant party is a company:
“for the purposes of the fraud of a party rule, it is in certain circumstances possible for perjured evidence to be treated as that of a company, even where it is neither procured or knowingly adopted by the company nor given by someone who is part of the company’s directing mind and will or a person to whom the conduct of the litigation has been delegated.”
[42]That test was satisfied in the case of Mr Sage, since he was the witness, above all, on whose evidence the success of Orion’s case had come to depend, and he had become a committed member of the team which took decisions as to how Orion’s case was to be presented:
“The evidence established that Orion deliberately sought … to make Mr Sage feel part of a team which was helping to row it to victory. Whatever the rights and wrongs of that may have been, Orion succeeded in identifying him with its own interests and thus with itself.”
[43]The third authority is Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9, [2008] Bus LR 1157. In that case, Mr Ladney filed an international patent application naming Mr Hendry as the inventor. Mr Hendry claimed to have made the invention while working for Mr Ladney. C Ltd sought an order under section 12 of the Patents Act that the patent application should proceed in its name because Mr Hendry had acquired knowledge of the relevant process, of which he was not the sole inventor, while working for C Ltd. Mr Hendry’s evidence was accepted by the hearing officer, which decision – although overturned in the High Court – was upheld in the Court of Appeal. Mr Ladney subsequently assigned the patent to M Ltd, a company he controlled. C Ltd later learned that Mr Hendry had perjured himself in the earlier proceedings and brought a claim seeking a declaration under section 37 of the Patents Act 1977 that it was entitled to be registered as proprietor of the patent.[44]The judge found that Mr Hendry had perjured himself in the earlier proceedings but that Mr Ladney neither knew of nor knowingly took advantage of Mr Hendry’s perjury. He accordingly concluded that Mr Ladney was not precluded from relying on the doctrine of res judicata because the exception to that doctrine based on the fraud of a party was limited to the party concerned and, in relation to Mr Ladney’s claim, Mr Hendry had been merely a witness.[45]That decision was reversed by the Court of Appeal. On appeal, among the numerous points taken, were:(1) whether Mr Hendry was more than a mere witness, but a vital part of the litigation team such that his evidence was to be attributed to Mr Ladney (the “ litigation team point”); and(2) whether the fact that Mr Hendry was actually a party to the first proceedings (so could not himself invoke res judicata) meant that his co-party in those proceedings, Mr Ladney, should be treated likewise (the “Hendry a party point”).[46]Jacob LJ, in a judgment of the Court, saw a close connection between these two points. As to the “litigation team point”, which was based on the reasoning of the majority of the Court in Odyssey Re I have referred to above, Jacob LJ found that although Mr Hendry was a vital witness on whose evidence Mr Ladney’s case depended, that was not enough without Mr Hendry also being a “committed member of the team which takes decisions about the litigation”. Since the point had not been pleaded or argued below, it would not be right for the Court of Appeal to hold that that was the case. He found, however, that the earlier judgment should be set aside as against Mr Ladney on the basis of the “Hendry a party point”. I set out his reasoning at §106 to §107 of the judgment in full:
“106 Quite apart from the “litigation team” point (which we have rejected) we have come to the conclusion that Hendry’s evidence the first time round should be regarded as that also of Ladney and that Hendry’s fraud should be treated as also that of Ladney. Both Hendry and Ladney were actually parties to the first proceedings. Hendry was seeking to justify his claim to be the inventor, to be named on the patent as such and to have had the right to have assigned the property in the invention to Ladney. Ladney was claiming to be the owner of the right to apply for the patent by virtue of assignment from Hendry. They had a common foe, Cinpres, and made common, and completely intermixed cause against it. One could not succeed without the other. True it is that Ladney’s claim was much the more valuable commercially, but we do not see that value has anything to do with it. Besides even Hendry had a commercial interest in the patent belonging to Ladney for he would be entitled to royalties if that were so. Not so if the patent belonged to Cinpres. 107 Putting it another way it would be wrong to say that Hendry was a “mere witness” in the first proceedings. He was more than merely a witness for Ladney – he was Ladney’s “comrade in arms”
. His fraud by way of perjury was being adopted by Ladney and should be regarded as Ladney’s. Hendry himself clearly could not resist the earlier judgment being set aside on the grounds of his fraud. Given that, the whole judgment is unravelled and should be set aside.”[47]Mr Wardell submitted that these authorities confirmed Mr Butcher’s case that it was impermissible to set aside the judgment against him where fraud was not alleged against him, irrespective of what may have been proved against Outlook.[48]I do not accept that submission. I take from the three cases summarised above the following principles. First, in order to set aside a judgment on the grounds that it has been procured by fraud, it is necessary to show that the fraudulent evidence was that of the party against whom the judgment is to be set aside. Second, fraudulent evidence given by a witness for a party is not enough, unless the witness’ evidence is vital to the party’s case and the witness was an integral part of the litigation team. Third, in some circumstances it is appropriate to treat the fraud of party A as that of party B, for example because the two parties adopt a common cause in the proceedings and party B adopts the fraudulent evidence of party A for his own benefit (albeit without knowing it is fraudulent), in which case the judgment may also be set aside against party B.[49]The third proposition applies in my view to the facts of this case. The Lindsays’ claim against Mr Butcher in the Manchester Proceedings depended on the proposition that Outlook was not entitled to enforce the Charge. That was an issue that arose between the Lindsays and Outlook, upon which Mr Butcher had no separate position of his own. His case was parasitic in this respect on that of Outlook. He adopted and relied on the defence presented by Outlook and its legal representatives in the Manchester Proceedings, and he adopted and relied on the evidence of Mr Fradgley in support of that defence. The fraud of Mr Fradgley (which it is common ground is to be treated as the fraud of Outlook) caused the court to be misled into dismissing the claim against Outlook, and for that reason alone the court also dismissed the claim against Mr Butcher. The Lindsays and Mr Butcher were both innocent of Mr Fradgley’s fraud, but Mr Butcher has in fact, albeit unknowingly, reaped the benefit of it. The circumstances are such as to make it appropriate to regard Mr Fradgley’s fraudulent evidence as that of Mr Butcher, notwithstanding that Mr Butcher was ignorant of its fraudulent nature.[50]For these reasons, albeit for different reasons than those of the judge (inevitably so, given the relevant authorities were not cited to the judge), I conclude that the judge was correct to set aside the judgment in the Manchester Proceedings against Mr Butcher.[51]Mr Wardell relied in his skeleton also on the inconsistency between setting aside the judgment as against Mr Butcher, but not against Beattie, when there was no material distinction between their positions. The short answer to this is that the Lindsays chose not to join Beattie as a defendant to the new action. It was therefore not open to the court to make any order against Beattie. The inconsistency, if there is one, lies in the Lindsays’ decision to sue only Outlook and Mr Butcher in the 2023 Action. The Lindsays, however, saw no practical value in joining Beattie, and they cannot be required to incur the additional cost of joining Beattie for no practical benefit.[52]Accordingly, I would dismiss the appeal on ground 1.[53]I add the following by way of post-script. As I have observed above, Lord Sumption emphasised in Takhar that a claim to set aside a judgment on the grounds it was obtained by fraud is a substantive cause of action. In this respect he noted that it differs from the principle named after the decision in Henderson v Henderson (1843) 3 Hare 100, that a party is precluded from raising in subsequent proceedings matters which were not, but could and should have been, raised in the earlier proceedings. The action to set aside a judgment for fraud and the Henderson principle have the same policy objective and the same preclusive effect, but the former is a substantive cause of action, while the latter is better analysed as part of the “juridically distinct but overlapping principle which empowers the court to restrain abuses of its process”, a concept which “informs the exercise of the court’s procedural powers.”[54]As the decision in Takhar makes clear, the two principles require proof of different things: one requires proof of fraud and materiality (see Highland), the other would require an investigation of the extent to which the new claim could and should have been brought in the earlier proceedings. Abuse of process nevertheless remains relevant in the context of actions to set aside a judgment for fraud. In Finzi, the Privy Council held that unless the evidence on which the claim of fraud was new – in the sense that it had been obtained since the judgment – then the claim was likely to be regarded as abusive unless the claimant was able to show a good reason which had prevented or significantly impeded the use of the evidence in the original action.[55]In a case, such as this one, where the first judgment dismissed the claim, the main point in setting it aside would be to preclude it operating as a cause of action estoppel. I observe that where the new claim is based on an allegation that was not in play in the first claim and therefore not determined by it (here, the invalidity of the Charge due to Mr Fradgley’s fraud as opposed to its mere unenforceability), a new claim may not in any event be barred by cause of action estoppel, provided (as applied to the facts of this case) the invalidity of the Charge could not have been discovered with reasonable diligence prior to the earlier judgment: see Lord Sumption’s summary of cause of action estoppel at §22 of his judgment in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46; [2014] AC 160, cited by Lord Kerr in Takhar at §26.[56]That is not this case, however, where the Lindsays have framed their claim solely by way of an action to set aside the earlier judgment. I merely note the possibility that there may be other routes open to a party seeking to re-open issues determined in previous litigation, which do not involve a new substantive cause of action to set aside the earlier judgment (another might be an application for permission to appeal out of time: see the discussion of the history of the alternative ways to set aside a judgment in the decision of the High Court of Australia in Clone Pty Ltd v Players Pty Ltd [2018] HCA 12, at §43 to §48). This has some relevance because, as Singh LJ observed in argument, the existence of other possible avenues points against applying an overly expansive interpretation of the principles which apply to setting aside a judgment on the grounds of fraud. For the reasons given above, it does not affect the conclusion that the judge was right to set aside the judgment as against Mr Butcher.

Ground 2

[57]It is necessary to explain in more detail the way in which the laches defence came before, and was dealt with by, the judge.[58]No defence of laches was pleaded in Mr Butcher’s original defence. His witness statement contained no evidence of any prejudice which might support a plea of laches.[59]Three weeks before trial, Mr Butcher sought permission to amend to plead laches. Two points were made: first, unreasonable delay by the Lindsays in pleading fraud (given the length of time the documents on which they relied had been in their possession) and in commencing the 2023 Action and, second, prejudice to Mr Butcher arising from the death of Mr Fradgley who was now unable to give evidence in the proceedings.[60]Mr Butcher’s amendment application was heard on the first day of the trial. The judge granted permission to amend on condition that Mr Butcher could not add to the scope of the evidence to be heard and that further particulars of the plea were provided over the short adjournment.[61]In the further particulars served by Mr Butcher, it was pleaded that the “unjustified delay” in bringing the 2023 Action had materially impacted Mr Butcher’s defence of the proceedings to his detriment. That prejudice stemmed specifically from the fact that in their recently amended particulars of claim, the Lindsays alleged that Mr Butcher had breached his duty of good faith to them, relying on the same documents and other matters pleaded as against Outlook (including Mr Fradgley’s dishonesty, and that Mr Butcher was aware of that dishonesty). It was pleaded on behalf of Mr Butcher that the delay in bringing proceedings meant that he had lost the opportunity to canvass with Mr Fradgley the creation of the documents relied on by the Lindsays, and accordingly of responding to the very serious allegations now made against him.[62]Counsel for the Lindsays confirmed (at the latest) at the outset of the trial before Kerr J that it was not alleged that Mr Butcher had himself acted dishonestly in the Manchester Proceedings.

The judge addressed the question of laches only briefly in the judgement, at §176:

“I also reject the defence of laches. The efforts of the Lindsays, particularly Rodger, were sustained and unrelenting. The process was time consuming through no fault of theirs. The rule in Hollington v. Hewthorn and Co Ltd does not assist Mr Butcher because the findings of fraudulent conduct made by Lady Wolffe are binding on Outlook and they are directed at Outlook and not at Mr Butcher. They are not relied on by the claimants as against Mr Butcher because the claimants do not accuse Mr Butcher of fraud. But the time it took to obtain those findings is a good answer, in my judgment, to the defence of laches.”
[64]That must be seen, however, in the light of earlier passages in the judgment in which the Judge addressed the evidence relevant to the question of whether the Lindsays were guilty of unjustifiable delay. Much of that evidence was contained in a lengthy section of the witness statement of Mr Rodger Lindsay (the brother of William Lindsay) under the heading “How we got to Lady Wolffe”. The judge summarised this (starting at §68 of the Judgment), describing the “twists and turns” of multiple legal processes. The witness statement itself contains a detailed account of the pressure placed on the Lindsays by Outlook (including reporting them to the police for stealing cattle, and the actions commenced to enforce the debts claimed by Outlook), and the difficulties encountered and costs incurred by the Lindsays (none of which have been recovered in light of Outlook’s insolvency). The judge referred to the commencement by Outlook of three sets of proceedings in Scotland in 2014 and 2015, the basis of which was that the Lindsays were indebted to Outlook in respect of the loans and unpaid costs. He referred to further proceedings (commencing in 2016) brought by the Lindsays “to counter Outlook’s claims”.[65]The ground of appeal against the judge’s conclusion on laches is expressed in the following terms:
“The judge … was wrong in fact and law to hold that Mr Butcher could not succeed in his defence of laches, in circumstances where the Claimants had admitted to having delayed issued proceedings against Mr Butcher for many years whilst pursuing parallel proceedings in Scotland in which fraud was alleged against [Outlook].”
[66]In the skeleton argument in support of that ground, it is said that judge wrongly failed to address the very significant length of delay in bringing the 2023 Action relying on the fraud of Outlook, given that they had known about that fraud for many years, having commenced the Scottish Proceedings alleging facility, circumvention and lesion as long ago as 2016. So far as prejudice is concerned, the only matter specifically referred to is that Mr Butcher, having proceeded on the basis that no further claim would be made against him, did not take steps to retain documents relating to his receivership, or retain other crucial paperwork which would have been of assistance to him in defending these proceedings. In the absence (as Mr Bacon pointed out) of any pleading or evidence supporting that assertion, Mr Wardell rightly did not pursue this at the hearing of the appeal.[67]The law relating to laches was not in dispute. Mr Wardell accepted that he was required to show that there was a substantial and unexplained delay, and that Mr Butcher had suffered prejudice or detriment of some sort. The principle was described in the following terms by Lord Selborne LC in Lindsey Petroleum v Hurd (1874) LR 5 PC 221, at pp.239-240:
“Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay is most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any Statute of Limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay, and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other so far as relates to the remedy.”
[68]Mr Wardell’s submissions at the hearing of the appeal focused firstly on the delay. He took us carefully through various parts of the evidence, and the judgment of Lady Wolffe, to demonstrate that various elements of the case in fraud against Outlook had either been known to the Lindsays, or were reasonably available to them, at least by the time they commenced their claims in 2016 in the Scottish Proceedings if not even earlier. The difficulty with the submissions on this point is that the judge reached clear findings at §176 (which, as I have indicated, must be read together with the earlier parts of the judgment) that the Lindsays’ efforts in seeking to establish that the loans and Charge were obtained by fraud were “sustained and unrelenting”, that the process was time consuming “through no fault of theirs” and that the time it took to obtain those findings “is a good answer … to the defence of laches.” I read those passages in the judgment as a finding that the delay, albeit lengthy, was neither unexplained nor unjustified. Mr Wardell candidly accepted that, if the judge made such a finding, then it was not one which was open to challenge on this appeal.[69]Mr Wardell pointed to the fact that in the sole paragraph in which he dealt with laches, the judge made no reference to detriment. The argument as to detriment before the judge was the same as that pleaded in the further particulars, namely the prejudice in losing the opportunity to investigate matters with Mr Fradgley because he died in 2017. Mr Bacon objected that this was not the point raised by the ground of appeal as explained in the skeleton. That is a fair criticism, but Mr Bacon was able to deal with the substance of the point (as it had been advanced before the Judge), and I would not dismiss Mr Wardell’s reliance on it on that basis.[70]Mr Wardell submitted that it was implicit in §176 of the judgment that the judge had accepted Mr Bankes-Jones’s submission that Mr Butcher had suffered detriment, and that it was not open to the Lindsays to challenge that, because there was no respondent’s notice raising the point. I do not accept that submission. I consider the better reading is that which was suggested by Arnold LJ during the hearing, namely that the reason the judge did not expressly address the question of detriment was because it was unnecessary to do so having concluded (as I have noted above) that there had been no unexplained or unjustified delay.[71]Moreover, Mr Butcher would be in some difficulty in relying on the lost opportunity to investigate matters with Mr Fradgley in circumstances where (as Mr Wardell accepted) it could not be said that there was any unjustified delay – or any ground for saying that the claim was barred by laches – prior to 2017. It could not be said therefore that the lack of the opportunity to explore matters with Mr Fradgley was caused by the Lindsays’ delay.[72]In short, the application for permission to appeal the laches point is properly characterised as a challenge to the judge’s findings of fact, in respect of which no error of law has been identified. Accordingly, I would refuse permission to appeal on ground 2.[73]I agree.[74]I also agree.

Cited in 1 later judgment