“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 Board thus considers that, where a claimant relies on evidence not adduced in the original proceedings to allege that a judgment or settlement in those proceedings was obtained by fraud, the burden is on the claimant to establish (1) that the evidence is new in the sense that it has been obtained since the judgment or settlement, or (2) if the evidence is not new in this sense, any matters relied on to explain why the evidence was not deployed in the original action. Furthermore, where the evidence is not shown to be new in this sense, the claim is likely to be regarded as abusive unless the claimant is able to show a good reason which prevented or significantly impeded the use of the evidence in the original action.”
“In Park, it was significant that Mr Park had attempted to raise the issue of fraud in the original proceedings but was prevented from doing so because a procedural default had resulted in an order debarring him from defending the claim. Furthermore, to enter a default judgment in this situation, the finance company had had to represent to the court that the facts stated in its particulars of claim were true. The Court of Appeal made positive findings that (1) the particulars of claim contained statements which the finance company knew to be untrue and (2) when the finance company represented to the court that it was entitled to enter judgment in default based upon the untruthful representations in its particulars of claim, it must have known that it was not entitled to do so (see paras 43-52). The default judgment which Mr Park was seeking to have set aside was therefore one which the Court of Appeal expressly found was obtained by dishonestly deceiving the court. In these circumstances bringing an action to set aside the judgment clearly could not be regarded as an abuse of the court’s process. On its facts, therefore, the conclusion reached by the Court of Appeal in Park, even though not the reasoning derived from Lord Sumption’s dicta in Takhar, was entirely justifiable.”
“The judgments in Flower show, as Lord Sumption in Takhar also made clear, that it is the fraud and the materiality that need to be proved (see also Lord Buckmaster in Jonesco v. Beard[1930] AC 298 at pages 300-1). It must be shown that the judgment was obtained by the fraud, and that the court was induced to make a potentially wrong judgment by the fraud. The party that lost as a result of the fraud must prove the fraud “wholly free from … any of the matters originally tried”
“The factual issues tried by Judge Russen ought only to have been re-considered in detail if the fraud action had succeeded before the judge, if Judge Russen’s judgment was set aside, and when a new trial of those issues was ordered”
“Each of the parties (other than [PREI]) undertakes to the others that he will exercise all powers and rights available to him as a director, officer, employee or shareholder in [the Company] (or in any other Group Company) in order to give effect to the provisions of this Agreement and to ensure that [PREI] complies with its obligations under this Agreement.”
“The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether [the claimant] has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 . ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]. iii) In reaching its conclusion the court must not conduct a “mini- trial”: Swain v Hillman. iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]. v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 . vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co Ltd[2007] FSR 63 . vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .” i) The court must consider whether [the claimant] has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 . ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]. iii) In reaching its conclusion the court must not conduct a “mini- trial”: Swain v Hillman. iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]. v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 . vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co Ltd[2007] FSR 63 . vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“Such ‘relational’ contracts, as they are sometimes called, may require a high degree of communication, co-operation and predictable performance based on mutual trust and confidence and involve expectations of loyalty which are not legislated for in the express terms of the contract but are implicit in the parties’ understanding and necessary to give business efficacy to the arrangements. Examples of such relational contracts might include some joint venture agreements, franchise agreements and long-term distributorship agreements”
“84. An applicant for an order on a without notice application must make full and frank disclosure of all material facts; Brinks Mat Ltd v Elcombe[1988] 1 WLR 1350 at 1356G. The material facts are the facts which might reasonably be taken into account by the judge in deciding whether to grant the application; MRG (Japan) Ltd v Engelhard Metals Japan Limited[2003] EWHC 3418 at [23]. It is for the court to determine what is material according to its own judgment and not by the assessment of the applicant or his legal advisors; Brinks Mat at 1356H. If the court considers there to have been material non-disclosure it is not an answer that the applicant in good faith took a different view; MRG at [24]. The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries; Brinks Mat at 1356H. The duty is not confined to the applicant’s legal advisors but rests upon the applicant itself; Fundo Soberano de Angola v Dos Santos[2018] EWHC 2199 at [53]. Although expressed as a duty of disclosure, the ultimate touchstone is whether the presentation of the application is fair in all material respects; Fundo Soberano at [52]. 85. In an application for permission to serve out of the jurisdiction, the focus of the inquiry is whether the Court should assume jurisdiction over a dispute. The Court needs to be satisfied that there is a serious issue to be tried; that there is a good arguable case to hear it; and that England is clearly the appropriate forum. Beyond this, the Court is not concerned with the merits of the case; MRG at [26]. There is no duty to disclose facts which could not on any reasonable view affect the judge in deciding those questions; MRG at [30]. 86. A failure to comply with the duty of full and frank disclosure on applications for permission to serve out is very serious – an individual or entity has been subjected to the Court’s jurisdiction and exposed to costs without an opportunity to be heard; The Libyan Investment Authority v JP Morgan Markets Ltd[2019] EWHC 1452 at [120]. The Court has a discretion: (a) to set aside the order for service and require a fresh application; or (b) to treat the claim form as validly served and deal with non-disclosure if necessary by a costs order; see NML Capital Limited v Republic of Argentina[2011] UKSC 31 :[2011] 2 AC 495 at [136]. Such is the importance of the duty that in the event of any substantial breach the Court inclines strongly towards setting aside the order and not renewing it, even where the breach is innocent; Banco Turco Romana SA (in liquidation) v Cortuk[2018] EWHC 622 at [45]. Where the breach is deliberate, the conscious abuse of the Court’s process will almost always make it appropriate to impose the sanction; Banco Turco at [45]. The sanction operates not only to punish the applicant for the abuse of process but also to ensure others are deterred from such conduct in future; Banco Turco at [45].” 115. To that summary should be added the observations in Mex Group Worldwide Ltd v Ford (CA)[2024] EWCA Civ 959 ,[2025] 1 WLR 975 at [121] that to justify setting aside an ex parte order the breaches must be material and any assessment of the breach must be proportionate. Ultimately in considering whether to discharge the order and/or renew it, the court will always be guided by the interests of justice. Only clear-cut and obviously important breaches which really matter should be relied upon; Mex Group at [112] and [128]. The alleged failures 116. There are a variety of alleged failures to make full and frank disclosure. I will discuss the individual alleged failures first and consider them cumulatively at the end. 117. Durnont’s expert at the hearing before the Deputy Judge was Mr Pawel Moskwa, an advocate and partner in the firm of MJH Moskwa. Mr. Moskwa’s evidence was prepared as an independent expert with the appropriate declaration to that effect in accordance with the requirements ofCPR Part 35 . When they were served with these proceedings the solicitors to M-JWK and Ms Bandurska pointed out that Mr Moskwa was not independent, but was Durnont’s lawyer acting for Durnont in a number of claims in Poland. This elicited an apology in a witness statement by Mr Alun-Jones, an acknowledgment that this should have been drawn to the attention of the Deputy Judge and a statement that this was an inadvertent omission which was not deliberate or with malicious intent. It is the Defendants’ position that, while they do not assert that this was a deliberate misleading of the Court by the lawyers, this was nevertheless information which must have been known by Durnont, and it is an egregious failure to give full and frank disclosure which is on its own sufficient to engage the court’s punitive jurisdiction. It is Durnont’s position, which I accept, that although not independent, Mr Moskwa’s evidence was nevertheless honest, impartial and accurate. 118. Mr Purchas also relied upon the failure of Mr Moskwa to identify in his report that the allegation in the Particulars of Claim that the dishonesty of Władysławand Michael could be attributed to M-JWK was not correct under Polish law. That was how the claim appears to have been put to the Deputy Judge at the hearing, although the pleaded case also relies (correctly under Polish law) on the attribution of Ms Bandurska’s knowledge and wrongdoing. This would include an attribution of her knowledge of Władysław/Michael’s dishonesty if that were established. Knowledge of the correct position as to attribution will still have led to the conclusion that there was a serious issue to be tried against M-JWK. There has been a failure to draw attention to a relevant point of Polish law, but it would have made no difference to the Deputy Judge. 119. Mr Purchas also relied upon the absence of any explanation, either by Mr Moskwa or in Durnont’s evidence, that the court bailiff process in Poland was independent, that the bailiffs are independent emanations of the Polish state, and the valuation of the Certificates for the purposes of the auction was undertaken by or on behalf of the bailiffs. These points were important, he says, to show that the bailiff process was not interfered with by Władysławand Michael and that the independent valuation of the certificates casts doubt on Durnont’s assertion that they were worth 100 million euros or the thesis that there must have been a fraud. I do not think there is anything in this point. Again I do not think the evidence of the independence of Court bailiffs is anything other than what an English judge would assume. Mr Purchas accepts that the fact that the bailiff process is an independent process does not mean that it cannot be interfered with or that the valuation is accurate. At the very least the effect of the bailiff auctions is that M-JWK was able to acquire the Certificates at a 25% discount to the valuation. Perhaps the bigger point is that Durnont asserts that M-JWK has bought PREI’s Certificates effectively using PREI’s money as M-JWK was part of a structure almost wholly owned by PREI. I do not consider information about the independence of the bailiff process in Poland was information which needed to be disclosed as part of the duty of full and frank disclosure. 120. Mr Purchas also relied on the absence of any explanation in Mr Moskwa’s expert report that Ms Bandurska’s duties as a member of its management board included acting in its best interests. That seems a similar position to that under English law and would have come as no surprise to the Deputy Judge. There is a dispute as to the significance of this duty under Polish law and whether it absolves Ms Bandurska of wrongdoing in relation to the enforcement of the Default Judgment and the failure to inform PREI of the bailiff sales. Ms Bogdanska says it does not. Mr Purchas contends that it does and provides clear defences for Ms Bandurska, although as far as I can see this is primarily based on Ms Bandurska’s evidence being accepted when she says that she believed she was acting in M-JWK’s best interests. What has happened is that money in the hands of M-JWK which was intended to be used to discharge PREI’s debt to the Bank without creating any liability on the part of PREI to reimburse M-JWK has been applied in a way which has created under the operation of Polish law a debt by way of subrogation to M-JWK. There must in such circumstances be a real question as to whether it was in the best interests of M-JWK to obtain a judgment in respect of that debt and to seek to enforce it. I was shown advice from KPMG which suggested that even after the subrogation there were a number of options for regularising the position as between PREI and M-JWK which did not involve the course taken by M-JWK. There is clearly an issue to be tried here. I do not consider that there is any failure to make full and frank disclosure here. 121. Mr Purchas says that in relation to default judgment the key authorities of Takhar v Gracefield Developments[2020] AC 450 and Park v CNH Industrial Capital Europe Ltd[2022] 1 WLR 860 were not placed before the court and there was no explanation of some of the elements of the test outlined in Highland Partners. In fact Highland Partners was referred to in Mr Riches’ skeleton argument and it is plain from the transcript that the judge had read it in advance of the hearing as he discussed the differences between that case where there had been a decision on the merits and this one where there is a default judgment. Mr Riches confirmed, and Mr Purchas accepted, that the judge was referred to Takhar during the course of the hearing. In his judgment the Deputy Judge cites Highland Partners, Takhar and Park (which he had found from his own researches). He summarised the key elements of the Highland Partners test and applied it. Mr Purchas’ submission of a failure to make full and frank disclosure is therefore technical and without real substance. The judge had the necessary authorities and rightly concluded that there was a serious issue to be tried. Disclosure of Park by Durnont, and leading the judge through the relevant principles in the authorities, may have at best saved the judge some time, but would have made no difference to the outcome. 122. Mr Dawid’s criticism is that the judge should have been told expressly that the provisions of clause 12 of the SSA to which he was referred were stipulated by clause 12.12 to be for the benefit of only the Bank. Clause 12 identifies certain reserved matters which will not be undertaken without both the Bank’s consent and a shareholder resolution with a minimum 90% majority of shareholders voting. Clause 12.7 made the disposal by a portfolio company of a substantial part of its business a reserved matter. The judge was referred to this clause in relation to the disposal of the Bialystok mall where, while it seems the Bank may have known and approved of the proposed sale of the mall, the terms of clause 12 were not otherwise complied with. Mr Dawid’s position appears to be that the effect of clause 12.12 is that only the Bank can complain of a breach of clause 12 and that had this been drawn to the judge’s attention it would have affected his view that it was arguable that this was a relational contract. It is certainly less than clear what the effect of clause 12.12 is on the right of the other parties to complain of a breach. Mr Riches accepts that on reflection it ought to have been drawn to the judge’s attention, and he has apologised for not doing so. However, the significance here was in the failure to comply with clause 12, not who could complain of it. The point being made by Mr Riches was that the failure to comply with it was part of a fraudulent course of conduct pursuant to which the Bank would be secretly bought out from the proceeds of sale of the mall. Further, clause 12 was not material to the issue of whether this was a relational contract – the judge considered that there was nothing express in the SSA which negated it being a relational contract, but that a prima facie case was supplied by the evidence of Mr Rothe. 123. Mr Dawid raised two other points in his skeleton argument. The first is that various points should have been made about Władysławand Michael not being directors of Fazita, or agents of Fazita, or Fazita’s appointed directors under the SSA. These points are not significant. Durnont pleaded the structure of Fazita and the indirect interest of Władysławand Michael in it as beneficiaries of a Jersey trust. Nevertheless Durnont contends that Fazita was Władysławand Michael’s creature and under their de facto control. The pleaded claim is not based on Władysławand Michael having legal control over Fazita, it being clear from the nature of the pleaded structure that it is not. The other points are also not significant. Władysławhas acted, and Fazita has held him out, as Fazita’s appointed director of PREI. I do not consider the failure to identify the argument now raised by D1 as to whether he was technically correctly appointed, is a failure to make full and frank disclosure. I do not consider the failure to identify what evidence Durnont had available to prove that Władysławand Michael were Fazita’s agents is a failure to make full and frank disclosure. The facts stated in the pleaded claim are assumed to be true and set the parameters for the judge determining the application for service out. The pleaded claim raises a serious issue to be tried as against Fazita. 124. Mr Hayman raised a further point on which he said there had not been full and frank disclosure. There was before the judge an application for permission to amend the Particulars of Claim to add new paragraphs 62A and 62B pleading the events surrounding the claim which had been brought by PSPT and the default judgment it obtained. That application was supported by a witness statement of Mr Alun Jones who at paragraph 36 said that the PSPT fraud was simply a further example of the Defendants’ fraudulent action and did not add any new cause of action, but that if it didCPR 17.4 would apply and the amendment should be permitted as arising out of the same or substantially the same facts as already in issue. No relief is sought in the APOC in respect of the matters pleaded in paragraphs 62A and 62B. The judge’s order of8 June 2023 gave Durnont permission to amend. It also gave the Defendants permission to set aside or vary the order underCPR Part 11 orCPR 23.10 . 125. Mr Hayman says that paragraphs 62A and 62B introduced new allegations of breach; either of Article 415 or breach of fiduciary duty and that it is at least obviously arguable that they raise a new cause of action. Mr Hayman referred to Diamandis v Wills[2015] EWHC 312 where at paragraph 48 Mr Stephen Morris QC summarised the analysis of Longmore LJ in Berezovsky v Abramovich[2011] 1 WLR 2290 as to what amounts to a new cause of action. That summary identified that an amendment to plead new or different loss from the same cause of action and same breach did not amount to a new cause of action but new loss arising from a different cause of action or a different breach might do. 126. There are a number of problems with Mr Hayman’s submission. Firstly, it is made as a ground for setting aside the judge’s order in its entirety for a failure to make full and frank disclosure. Yet it is unclear to me what it is that it is said was not disclosed to the judge in the witness statement of Mr Alun Jones. Secondly, the judge’s order gave the Defendants permission to apply to set aside or vary the order and they have done so. This is the hearing of their application. Yet no application has been made to set aside the order for permission to amend and to disallow the amendments as not satisfying the test inCPR 17.4 . Władysławand Michael’s position in their skeleton argument and oral submissions appears to be, in the alternative, if the judge’s order for service out of the jurisdiction is not set aside then the amendments should be disallowed, presumably for a failure to make full and frank disclosure, and Durnont made to reapply “so that the limitation issues can be properly argued”