“An action to set aside an earlier judgment for fraud is not a procedural application but a cause of action”
“The principles are, briefly: 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.”
“…a bare-knuckle fight between two important and long-established principles of public policy. The first is fraud unravels all. The second is that there must come an end to litigation. I will call them the fraud principle and the finality principle.”
“Where fraud has been raised at the original trial and new evidence as to the existence of the fraud is prayed in aid to advance a case for setting aside the judgment, it seems to me that it can be argued that the court having to deal with that application should have a discretion as to whether to entertain the application. Since that question does not arise in the present appeal, I do not express any final view on it. The second relates to the possibility that, in some circumstances, a deliberate decision may have been taken not to investigate the possibility of fraud in advance of the first trial, even if that had been suspected. If that could be established, again, I believe that a discretion whether to allow an application to set aside the judgment would be appropriate but, once more, I express no final view on the question.”
“I would leave open the question whether the position as I have summarised it is any different where the fraud was raised in the earlier proceedings but unsuccessfully. My provisional view is that the position is the same, for the same reasons. If decisive new evidence is deployed to establish the fraud, an action to set aside the judgment will lie irrespective of whether it could reasonably have been deployed on the earlier occasion unless a deliberate decision was then taken not to investigate or rely on the material.”
“The evidence establishes that both Mr Buchanan and the Ruler relied on the Good Faith Representation. Whilst the Ruler and Mr Buchanan may have harboured suspicions about Mr Azima, it does not follow that they did not rely on the Good Faith Representation. The fact that a representee harboured suspicions regarding the honesty of a representor does not negate inducement (see Zurich Insurance Co plc v Hayward[2017] AC 142 at [18]-[20] (Lord Clarke) and [67]-[71] (Lord Toulson)).”
“More generally, I was not satisfied that there was sufficiently cogent evidence to establish a conspiracy between the RAKIA witnesses to advance a false case in these proceedings.”
“If I had found that RAKIA had hacked Mr Azima’s emails, I would not necessarily have excluded the illicitly obtained evidence as, without it, RAKIA would have been unable to prove its claims and Mr Azima would have been left with the benefit of his seriously fraudulent conduct. If, however, I had found that, as alleged by Mr Azima, not only had RAKIA hacked Mr Azima’s emails and used them as the evidential basis of this case, but also that its witnesses had conspired to put forward a fabricated case concerning RAKIA’s lack of involvement in the hacking, there would have been strong grounds to strike the proceedings out as an abuse of process, as envisaged in Summers v Fairclough Homes Ltd.”
“Ground Five: the Judge should have gone on to find that RAKIA was responsible for the hacking and that RAKIA’s claims fell to be struck out as an abuse of the process and/or the evidence obtained through hacking excluded as inadmissible.”
“Ground Six (A): In view of new evidence as to numerous phishing emails sent to Mr Azima and other persons associated with him and RAK-related matters, considered together with the other factors pointing to RAKIA’s responsibility, RAKIA should be found responsible for the hacking and the consequences set out in Grounds Five and Six should follow. Ground Six (B): In view of new evidence as to the activities of Mr Del Rosso and Vital Management Services Inc, and Cyber Root Risk Advisory Private Limited, considered together with the other factors pointing to RAKIA’s responsibility, RAKIA should be found responsible for the hacking and the consequences set out in Grounds Five and Six should follow.”
“Given the nature of the further evidence that Mr Azima has now managed to find, he would be entitled to bring fresh proceedings in the High Court to set aside the judgment of Deputy Judge Lenon on the basis that RAKIA had procured that judgment by fraud, and there could be no answer really from RAKIA that it was an abuse, so there could be fresh proceedings to set aside the judgment. And not just the hacking judgment, but the judgment, because that would be the order that would be set aside. […] what Mr Azima has done, quite properly we say and as the court might well expect him to do, is to bring this further evidence before this court on this appeal so that this court is able to consider whether this evidence should be considered by way of a remission to the court within the existing proceedings that are on appeal, rather than having the inefficient and slow process of starting fresh process and that, far from Mr Azima being liable to be criticised for what he’s done, as RAKIA do, he’s actually done the right thing. Mr Azima had options here. He could have simply issued fresh proceedings, but, quite properly, given this pending appeal, he has deployed this further material on this appeal”
“whether, if RAKIA was responsible for the hacking, the evidence obtained through hacking ought to have been excluded; or its claims should have been (or should now be) struck out.”
“We will assume, for present purposes, (a) that RAKIA’s case would have failed but for the existence of documents obtained as a result of the unlawful hacking of Mr Azima’s computer; (b) that RAKIA was responsible for that unlawful hacking; and (c) that at least some of RAKIA’s witnesses gave dishonest evidence about how RAKIA came into possession of the hacked material”
“Three other points are worthy of note. First, as we have said, the hacked materials ought to have been disclosed by Mr Azima anyway (except to the extent that they were legitimately covered by legal professional privilege). Second, to strike out RAKIA’s claim would leave Mr Azima with the benefit of his fraud. That element of public policy in civil cases is at least as strong, if not stronger, than disapproval of the means by which relevant evidence is gathered. Third, there are other ways in which the court may express its disapproval of the conduct of a party found to have procured relevant evidence by unlawful means: notably by penalties in costs or, perhaps, the refusal of interest on damages awarded.”
“In our judgment, even if the judge had found that RAKIA had been involved in the hacking of Mr Azima’s email accounts, it would have been wholly disproportionate to have struck out its claim, thereby leaving Mr Azima with the benefit of his frauds.”
“that neither the parties nor the judge who hears the remitted issues will be bound by any of the findings of fact made by the judge on the hacking claim. But his findings of fact on RAKIA’s substantive claims stand.”
“2. The appeal on ground 6 is allowed and paragraph 8 of the High Court Order is set aside. 3. The Appellant’s counterclaim is remitted to the Chancery Division of the High Court to be tried by a judge nominated by the Chancellor of the High Court. 4. In respect of ground 5, it is declared that even if it is established on the counterclaim that the Respondent was responsible for the hacking and dissemination of the Appellant’s data: a. the evidence obtained as a result of the hacking should not be excluded; and b. the Respondent’s claims against the Appellant should not be struck out. 5. Save as set out herein: a. No further order is made as to Grounds 1-4; b. Ground 5 is otherwise dismissed; c. No further order is made as to Grounds 6A and 6B. 6. The appeal under grounds 7, 8 and 9 is dismissed.[…] … 12. In the event that the Respondent succeeds in his counterclaim: a. paragraph 1(b) of the High Court Order is set aside and the question of any interest on the damages awarded to the Respondent shall be in the discretion of the Nominated Judge… b. paragraphs 3-7 of the High Court Order are set aside and the question of the costs of the Respondent’s claim against the Appellant (including any interest on costs and any interim payment) shall be in the discretion of the Nominated Judge…”
“54. …if Mr Azima had only obtained the new evidence after the appeal, he could have applied to have the judgment set aside as procured by fraud. If RAKIA’s case rested upon a fabricated and dishonest foundation, that relief would have been appropriate –Takhar v Gracefield Developments Ltd[2019] 2 WLR 984 , at [46]. Mr Azima properly raised the new evidence on appeal once it became available. It is wrong in principle for the CA’s decision to exclude that possibility before investigating the dishonesty.”
“The lower court is functus officio once it has delivered it [sic] decision. Consequently, it has no power to reconsider its decision unless ordered to do so by the appeal court. Care must therefore be taken when making a referral to identify the matters that the lower court may or should reconsider.”
“That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”
“33. If Mr Koshy’s allegations in the new action have substance, they clearly raise an important matter. Firstly, he alleges that a High Court judge was misled on a basic point that led the court into making an order for costs. In other words, he makes allegations about the integrity of the justice system and there cannot be any doubt but that it is of the utmost importance that the administration of justice should not be undermined by misinformation provided by one party … 34. On the other hand, the issue is not now simply whether the allegations in the new action have substance but whether Mr Koshy has already had ample opportunity to have those allegations made the subject of judicial determination. Even though the allegations which Mr Koshy raises are of such seriousness and importance, nonetheless the justice system is not bound to provide more than one opportunity to run these issues. That is because the courts have to strike a fair balance between the interests of Mr Koshy on the one hand and of the other parties and the general interest on the other hand. That fair balance in my judgment is struck once Mr Koshy has had one effective opportunity to put his case.”
“58. …More fundamentally, Mr Koshy has already had at least one opportunity to have his claim fully ventilated in a court of law. He chose to have an adjudication of his claim on a limited basis … Mr Koshy had been alerted to the potential difficulties in his appeal…There is a well-recognised public interest in the finality of litigation … 59. …For the reasons given, I would hold that it was an abuse of process for Mr Koshy to commence the new action and to seek to have another opportunity to bring a claim to have the order of Harman J as to costs set aside. In my judgment, the factors mentioned in the preceding paragraph, and in particular the factor that Mr Koshy has already had the opportunity to have an adjudication of the issues in the new action, which he rejected despite the clear warnings given by this court, outweigh the factors which weigh in his favour.”
“39. It is clear, therefore, that where an allegation of fraud is involved, there are two courses which may be adopted. The dissatisfied party may bring a new action to set aside the judgment already obtained on the basis that it was obtained by fraud: Flower v Lloyd[1877] 6 Ch D 297 ; Hip Foong Hong v H Neotia & Company [1918] QC 888; and Jonesco v Beard[1930] AC 298 . Such a route was adopted in the Royal Bank of Scotland case and in the Takhar case. In such circumstances, the successful party retains the benefit of the judgment unless it is set aside and can seek to strike out the claim to set it aside as an abuse of the court’s process. 40. In Salekipour v Parmar[2017] EWCA Civ 2141 ,[2018] QB 833 , the Court of Appeal expressed a preference for this approach but did not decide the issue. The same preference was expressed by the Court of Appeal in Daniel Terry v BCS Corporate Acceptances Limited, BCS Offshore Funding Limited, John Taylor[2018] EWCA Civ 2442 at [38], although, once again, it was unnecessary to decide the point. 41. The second and alternative route, which is the one adopted here, is to appeal the original order, alleging that the judgment upon which it is based was obtained by fraud. A retrial will be ordered where the fraud is admitted or incontrovertible. Where, as in this case, it is neither admitted nor incontrovertible, a “Noble v Owens order” is sought by which the issue of fraud is remitted to the court below and decided within the same proceedings.”
“If the relevant evidence (here the forged document) was something in the melting pot of the evidence before the court, whether relating directly to relevant facts or to relevant issues of credit, with all that is in the melting pot taken into account by it in coming to a judgment, whether or not one part is highlighted more than another, it will be "an" operative cause.”
“there will be cases in which the new evidence is so fundamental to the credibility of the witness that it will be material even though it is not directly relevant to the substantive issues. For example, if a solicitor gives evidence that she is a solicitor and holds a valid practising certificate but conceals from the Court that she has been struck off for mortgage fraud, I would consider evidence of the striking off to be material. Likewise, where two witnesses conspire together to mislead the Court, I would consider evidence of the conspiracy to be material.”
“If, however, I had found that, as alleged by Mr Azima, not only had RAKIA hacked Mr Azima’s emails and used them as the evidential basis of this case, but also that its witnesses had conspired to put forward a fabricated case concerning RAKIA’s lack of involvement in the hacking, there would have been strong grounds to strike the proceedings out as an abuse of process, as envisaged in Summers v Fairclough Homes Ltd.”