“For the reasons given above, the Consolidated Table of Costs for£25,842.73 is denied and not admitted and the Defendant challenges the authenticity of these items.”
“a) ….all parties must serve on each other copies of the signed statements of…all witnesses on whom they intend to rely… b) Oral evidence will not be permitted at trial from a witness whose statement has not been served in accordance with this order or has been served late, except with permission from the Court.”
“42 I should not leave this aspect of the case without commenting on what may seem a harsh decision. In my judgment, Mitchell’scase and Denton’scase represented a turning point in the need for litigation to be undertaken efficiently and at proportionate cost, and for the rules and orders of the court to be obeyed. Professional litigants are particularly qualified to respect this change and must do so. Allegations of fraud may in some cases excuse an insurer from taking steps to protect itself, but here this insurer missed every opportunity to do so. It admitted liability before satisfying itself that the claim was genuine, perhaps because it mistakenly thought the claim was a small one. That does not excuse the months of delay that then followed. The insurer must in these circumstances face the consequences of its own actions.”
“In my judgement, the allegations that are made now as to wholesale forgery of documents, of presenting the Court with a completely false case, bolstering it with manufactured documents, and putting forward what is effectively a fraudulent claim and relying on positive evidence from Mr McDonnell requires a clear pleading. Anything else would deny the Claimant justice under Article 6 and the Court would be at a loss to know what exactly the claim was.”
“There is no application to amend the pleadings, and it would not be, in my judgement, open to the Defendant to make a positive case of fraud against the Claimant. The degree to which the Claimant can be cross examined at the trial is a matter for the trial judge, and I will leave over that issue to that stage.”
“JUDGE: Well, this is quite worrying because it looks as if somehow or other documents are being tampered with. HARRIS: It does, Your Honour, yes.”
“That email is written by Mr McDonnell, we are told, no doubt, to support the invoices produced by the claimant which is a very odd email and if this email is suspect of course, the kind of claims in it are also suspect….I don’t have to make any assertions about how that did happen or could have happened and in fact, because of the rules of pleading they’re assertions I can’t make. But what I do say is these are the documents which the claimant relies on to try and support her case and if the documents themselves are suspect at worse then of course, that in my submission has a retrograde effect on her case as a whole…”
“But even if we’ve set that point aside, .. we’ll consider what evidence my learned friend has, to support his submission that the documents are fraudulent, or forgeries, or whatever you want to call them. Of course, he has no evidence. There is no evidence that the invoices are forged. No evidence that the bank statements are forged. There is no pleaded defence… based on forgery, and as we have seen, the invoices are supported by contemporaneous emails…”
“I heard C’s evidence over several hours yesterday and the evidence was tested robustly but entirely properly. Having heard and assessed her answers. I found her to be a truthful and reliable witness. In fact, the longer the cross examination went on, the more I was convinced of her truthfulness. “But in the end, this case boils down to whether or not, on balance, I am persuaded that’s case is truthful and made out. On all evidence. I am satisfied with that.” “The second question is loss. Mr Harris, on instructions, sought to question the validity of the C’s case on this going as far as suggesting that some documents cannot be regarded as completely genuine and they go as far as to raise a sufficient degree of scepticism so as to undermine C’s case. Again, I have considered the submissions and questions with great care. Judges always have to be alert to this possibility. The documents may not be real, but in this case, having heard C, I am entirely satisfied that the documents are entirely genuineand have not been tampered with.”
“I am entirely satisfied about [the claimant’s] evidence that the statements came from Santander and have not been altered or tampered with.”. iii) In relation to the McDonnell invoices the Judge said. “There were a number of invoices from Mr McDonnell for plasterwork and it is claimed he carried out this work. This* was called into question by D. Again, having heard C’s evidence, I am satisfied that all works were carried out and that C is in a position to say that they were, she having actually observed the works during and after the works were completed. It is clear from bank accounts that C paidhim a considerable sum of money. Mr Harris sought to throw up that there was, not a direct tallying, but given the situation, it doesn’t undermine C’s overall case. He was the partner of a good friend of hers. She tells me she paid part bank transfer and part cash and highlighted cash withdrawals. They don’tquite add up to the invoices, but that doesn’t lead me to conclude it was ascam. I am satisfied that this work was carried out and paid for”. (*The defendant’s note on this point suggests that the Judge said that the invoices were called into question: “Also invoices-also called into question, but…”) iv) The Judge also rejected the opinion of the SJE that the plasterwork had not been carried out. That opinion had partly been based on the Mr Stimpson’s view that the type and colour of the plaster in the flat was no longer used and could not be replaced, which he had then accepted was wrong. The Judge said: “I have to weigh up that against clear and persuasive evidence of C as to what happened. The SJE assessed after the event. I am not satisfied that the SJE’s conclusions justify me saying that C has failed to prove her case.”. v) In relation to the Fleetways Invoices the Judge said: “Alongside these invoices, there were two invoices in respect of the boiler and fan. There is no doubt that they are in existence, and there seems to be no concerns that it was paid for by C. I am satisfied the work was done.”
“In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
“Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment”
“Issue estoppel, too, has been extended to cover not only the case where a particular point has been raised and specifically determined in the earlier proceedings, but also that where in the subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier.”
“It thus appears that, although Henderson v. Henderson, 3Hare100, was a case of cause of action estoppel, the statement there by Wigram V.-C. has been held to be applicable also to issue estoppel. That statement includes the observation that there may be special circumstances where estoppel does not operate. The instant case is concerned with the nature of such special circumstances.”
““the underlying principles upon which estoppel is based, public policy and justice, have greater force in cause of action estoppel, the subject matter of the two proceedings being identical, than they do in issue estoppel, where the subject matter is different”
“Once it is accepted that different considerations apply to issue estoppel, it is hard to perceive any logical distinction between a point which was previously raised and decided and one which might have been but was not. Given that thefurther material which would have put an entirely different complexion on thepoint was at the earlier stage unknown to the party and could not by reasonablediligence have been discovered by him, it is hard to see why there should be a different result according to whether he decided not to take the point, thinking ithopeless, or argue it faintly without any real hope of success.”
“In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has becomeavailable to a partyfurther material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point wasspecifically raised and decided, being material which could not by reasonablediligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result.”
“Arnold v National Westminster Bank plc.. is accordingly authority for the following propositions. (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or nonexistence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”
“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that thereshould be finality in litigation and that a party should not be twice vexed in thesame matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should havebeen raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much moreobviously abusive, and there will rarely be a finding of abuse unless the laterproceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takesaccount of the public and private interests involved and also takes account of allthe 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.”
“68 This appeal turns on the outcome of a bare-knuckle fight between two important and long-established principles of public policy. The first is that 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 it could be shown that a judgment had been obtained by fraud, and noallegation of fraud had been raised at the trial which led to that judgment, a party seeking to set aside the judgment was not required to show that the fraud could not have been uncovered with reasonable diligence in advance of the obtaining of the judgment; that, therefore, an absence of reasonable diligence was not of itself a reason for staying as an abuse of process a claim to set aside a judgment on the grounds of fraud”
“[COUNSEL FOR MRS TAKHAR]: … The [Profit Share Agreement], my lord, is a very odd document…. Mrs Takhar is adamant that she saw it for the first time in disclosure. My lord noted in the failed application for forensic handwriting experts that Mrs Takhar had been very candid, that she had not suggested thatdocuments had been forged when she was not able to do so, and that is one of the reasons why her application for forensic handwriting evidence failed. She said she could not remember. She may have signed it. It might be her signature. It could not be her signature but on this one it is different. This one, she says, ‘No, I did not see this’ and being the amateur sleuth that I am, I have looked at her signature on this and on others and it does look a bit suspect but we do not have forensic document examination evidence and that is that, but we do have clear evidence from Mrs Takhar. She will not deny and allege a forged signature if she does not feel she is entitled to. She says she saw this for the first time. It is highly believable. … THE JUDGE: Your case is that your client did not sign anything? [COUNSEL FOR MRS TAKHAR]: Did not sign anything, yes. I know. My lord, I am bound by Mrs Takhar’s evidence. Her evidence is that this is the first time she saw it. I have not put things to the Krishans I did not feel entitled to put. THE JUDGE: Well, you are not bound by her evidence. You are entitled to say she cannot remember it. [COUNSEL FOR MRS TAKHAR]: Yes. That is what she said. THE JUDGE: Assuming that she has forgotten it, then what? [COUNSEL FOR MRS TAKHAR]: Well, happily, it is not a problem for her case because, as you rightly identified, if she was willing to sign the TR1s, she– THE JUDGE: No. If she has forgotten it, then you say it is just another exampleof signing whatever is put before her without reading it. [COUNSEL FOR MRS TAKHAR]: My lord, it is but it just seems so odd…” [COUNSEL FOR MRS TAKHAR]: My lord, it is but it just seems so odd…”
“Mr Peter Matthews, from whom she received advice from 2008, suspected fraud.”
“However, [Mr Matthews] is not a document examiner, nor an accountant, nor a valuer. He was merely a financial adviser. Whilst he had suspicions, he had noproof of fraud, as he was forced to accept in his evidence at the trial. For my part, I too was suspicious but had no proof and could not get any proof until after disclosure and receipt of a copy of the Profit Share Agreement with my signature on it together with the other suspect signatures produced by the Defendants.”
“..fraud is a thing apart. This is not a mere slogan. It also reflects an old legal rule that fraud unravels all … once fraud is proved, ‘it vitiates judgments, contracts and all transactions whatsoever’: Lazarus Estates Ltd v Beasley[1956] 1QB702 , 712 per Denning LJ. Parties entering into a commercial contract will no doubt recognise and accept the risk of errors and omissions in the preceding negotiations, even negligent errors and omissions. But each party will assume the honesty and good faith of the other; absent such an assumption they would not deal.”
“37. I would not follow the dicta in Owens Bank Ltd v Bracco, Owens Bank Ltdv Etoile Commerciale SA … because, with respect, the dicta are contrary to principle and earlier authority. The assumption is that the court and the losing party were successfully imposed on by the fraud of the successful party, but relief should nevertheless be denied and the judgment allowed to stand because the defrauded party was careless or lacked diligence in the preparation of his case … Contributory negligence is not a defence to an action for fraud whether the relief claimed is rescission or damages. As Brennan J said in Gould v Vaggelas(1985) 157CLR215 , 252: ‘A knave does not escape liability because he is dealing with a fool.’ “38. Means of knowledge of the falsity of the representation without actualknowledge is no defence and a representee has no duty to make inquiries to ascertain the truth …”
“In an action for fraud, a plaintiff must prove that he was deceived but need not prove that he was diligent. Where the action seeks the judicial rescission of ajudgment, the plaintiff must prove that he and the Court were deceived and hecan only do this by showing that he has discovered the truth since the trial. Where this is done, and the fresh facts are material, fraud is established. Lord Buckmaster said [in Hip Foong Hong v H Neotia and Co[1918] AC 888 ] that if fraud was proved the judgment was vitiated, and he can only have meant that nothing else had to be proved apart from fraud. That means there is no need to prove due diligence as well.”
“The idea that a fraudulent individual should profit from passivity or lack of reasonable diligence on the part of his or her opponent seems antithetical to any notion of justice. Quite apart from this, the defrauder, in obtaining a judgment, has perpetrated a deception not only on their opponent and the court but on the rule of law.”
“in cases where it is alleged that a judgment was obtained by fraud, it may only be set aside where the party who makes that application can demonstrate that thefraud could not have been uncovered with reasonable diligence in advance of the obtaining of the judgment”
“In my view, it ought now to be recognised that where it can be shown that a judgment has been obtained by fraud, and where no allegation of fraud had been raised at the trial which led to that judgment, a requirement of reasonable diligence should not be imposed on the party seeking to set aside the judgment.” 129. At paragraph 55, however, he said this: “55 Two qualifications to that general conclusion should be made. Where fraudhas been raised at the original trial and new evidence as to the existence of thefraud 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 deliberatedecision may have been taken not to investigate the possibility of fraud inadvance 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. In Mrs Takhar’s case, she did suspect that there may havebeen fraud but it is clear that she did not make a conscious decision not toinvestigate it. To the contrary, she sought permission to engage an expert but, asalready explained, this application was refused.”
“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”
“proceedings of this kind are abusive only where the point at issue and the evidence deployed in support of it not only could have been raised in the earlierproceedings but should have been: see Johnson v Gore Wood[2002] 2AC1 , 31 (Lord Bingham of Cornhill) and the Virgin Atlantic case[2014] AC160 , para 22 (Lord Sumption JSC). As Lord Bingham observed in the former case, it is “wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.”
“66 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 samereasons. 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.”
“But I have been unable to follow him all the way down a path which seeks to erect a reliable bright-line boundary between types of case where one principle or the other should clearly prevail. There will be too many cases where that supposed bright line is either invisible, or so technical that it fails to afford a basis for choosing between the two principles which accords with justice, common sense or the duty of the court to retain control over its own process, and thereby protect it from abuse. I would have preferred a more flexible basis upon which, recognising that many cases will straddle any bright line, the court can apply a fact-intensive evaluative approach to the question whether lack of diligence in pursuing a case in fraud during the first proceedings ought to render a particular claim to set aside the judgment in those proceedings for fraud an abuse of process. This approach would in particular seek to weigh the gravity of the alleged fraud against the seriousness of the lack of due diligence, always mindful of the principle that victims of a fraud should not be deprived of a remedy merely because they are careless.”
“As I understand the law with regard to res judicata, it is not the case, and it would be intolerable if it were the case, that a party who has been unsuccessful in a litigation can be allowed to re-open that litigation merely by saying, that since the former litigation there is another fact going exactly in the same direction with the facts stated before, leading up to the same relief which I asked for before, but it being in addition to the facts which I have mentioned, it ought now to be allowed to be the foundation of a new litigation, and I should be allowed to commence a new litigation merely upon the allegation of this additional fact. My Lords, the only way in which that could possibly be admitted would be if the litigant were prepared to say, I will show you that this is a fact which entirely changes the aspect of the case, and I will show you further that it was not, and could not by reasonable diligence have been, ascertained by me before.”
“the case involved Scottish law rather than English and in any event was onewhere the “new” facts were not new: they had been discovered and could have been deployed in the earlier proceedings”
“A representee who knows or discovers the truth in time is not deceived and such knowledge is a good answer to any action based on the misrepresentation”
“Where the action seeks the judicial rescission of a judgment, the plaintiff must prove that he and the Court were deceived and he can only do this byshowing that he has discovered the truth since the trial.”
“The claimant must provide proper particulars and plead and prove that since the judgment he has discovered fresh facts which alone, or in combination with those previously known, establish that the judgment was obtained by fraud or collusion.”
“Was or was not this a matter proper to be gone into upon the present motion? That seems to me to be the only question which ultimately arises; and in my judgment it was most material to that question, which beyond all doubt ought to have been gone into upon this motion, namely whether anything material to disturb (if proved) the judgment of this House had been newly discovered by the plaintiff. That involvesa double proposition; first, that something has been newly discovered, which is all they have attempted to prove, and then that that something is material.”
“The judgments of the Court of Appeal and of the House of Lords in Boswell v. Coaks contain some important observations as to the mode in which a motion such as that which is now before us ought to be dealt with. Lord Selborne points out that it is not sufficient for the plaintiff to allege fraud. It is the duty of the Court to receive such evidence, pro and con, as is material to the question whether there really has been, since the former judgment, a new discovery of something material todisturb the former judgment”
“Such proceedings are equitable in origin and nature…and in fact are proceedings for the judicial recission of the judgment....Such proceedings, when successful, do not result in the ‘scandal of conflicting decisions’…. because if the second action succeeds the first judgment is set aside”
“Proof that an English decision was procured by the fraud or collusion of the successful party is an answer to reliance on that judgment as an estoppel or for any purpose, including an action or proceeding such as an application for bankruptcy. The principle applies to an ex parte judgment, and one entered by consent which can be set aside on any ground, including fraud, on which a court can set aside a contract.”
“10.1... a party must set out in any statement of case: • full particulars of any allegation of fraud, dishonesty, malice or illegality; and • where any inference of fraud of dishonesty is alleged, the facts on the basis of which the inference is alleged”
“Dear DC Garbett, I have informed Mr Justice Linden that you have made contact with me today by telephone and by email. As I said in my email on23 April 2020 , however, in fairness to the parties to the application before him, he cannot take into account or act on any information which has not been shown to them. He has therefore asked me not to reveal or send the contents of your communications to him unless and until you notify me that you are content for him to provide the same information to the parties so that they are in a position to comment. He has also asked me to encourage you to take legal advice if you have concerns and to take any further steps formally, using the court’s processes, rather than informally. You should also bear in mind that the hearing of Ms Elu’s application has taken place and Mr Justice Linden intends to send a draft judgment to the parties late this week or at the beginning of next. “197.I also asked him to email counsel as follows: “Further to my previous emails on this subject, Mr Justice Linden has asked me to let you know that DC Garbett has been back in contact with me by telephone and email today. He has asked me to send her an email in the following terms, and I have done so: [MESSAGE ABOVE]”