Factual and Procedural Background
The appeal arose from an action seeking to set aside an earlier judgment said to have been procured by fraud. [Para 37] The Claimants, a family of dairy farmers, owned a Scottish farm and a Cumbrian farm; after financial difficulties, they and associated entities borrowed money from Company A, which took a charge over both farms. [Para 38] Company A later appointed Defendant/Appellant as receiver over the Cumbrian farm, and he took possession and arranged a sale to Company B. [Para 39]
In 2013, the Claimants brought the Manchester Action against Company A, Defendant/Appellant, and Company B, challenging Company A’s right to appoint a receiver. [Para 40][Para 41] The claims against Defendant/Appellant and Company B were parasitic on the case against Company A, and the Manchester Action was dismissed by Judge Bird in 2014 after he preferred the evidence of Person A; the Claimants were ordered to pay costs. [Para 46][Para 47]
Later proceedings in Scotland led Judge Wolffe to find that Person A had defrauded the Claimants on a large scale, fabricated documents, and obtained the loan and charge by fraud and related wrongdoing; she set aside the loan and charge. [Para 48][Para 49] In 2023, the Claimants brought the present action against Company A and Defendant/Appellant, alleging that the Manchester judgment had been procured by Person A’s fraud and seeking to set it aside and obtain a retrial. [Para 50] Judge Kerr found for the Claimants in 2025. [Para 53][Para 54]
Legal Issues Presented
- Whether the equitable jurisdiction to set aside a judgment procured by fraud can extend to setting aside that judgment against a non-fraudulent party to the original proceedings. [Para 90][Para 94]
- Whether the defence of laches barred the Claimants from obtaining relief. [Para 91][Para 144][Para 158]
Arguments of the Parties
Appellant's Arguments
- The Appellant argued that the fraud-based jurisdiction could only be used against the party guilty of fraud, and that the authorities did not support setting aside the judgment against a non-fraudulent party. [Para 90][Para 97][Para 105][Para 110][Para 115]
- He relied on cases said to show that fraud must be attributable to the party against whom relief is sought, or at least to someone whose fraud can properly be treated as that party’s own. [Para 97][Para 108][Para 125][Para 126]
- On laches, he argued that the Claimants delayed for years before bringing the 2023 Action and that he was prejudiced by the death of Person A, which removed a key witness. [Para 145][Para 148][Para 155][Para 162]
Respondents' Position
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 |
Fraud-based setting aside requires conscious and deliberate dishonesty, materiality, and causation of the impugned judgment. |
This was the agreed starting point for the fraud analysis. [Para 55][Para 56][Para 59] |
| Takhar v. Gracefield Developments Ltd [2019] UKSC 13; [2020] AC 450 |
Approved the Highland formulation and treated the action to set aside for fraud as a substantive cause of action. |
The court relied on Takhar as the leading authority, but noted it did not decide the present issue about a non-fraudulent party. [Para 60][Para 97][Para 135][Para 139] |
| Jonesco v Beard |
Fraud “spreads to and infects” the judgment. |
Cited by Judge Kerr to support the view that the judgment, not merely the wrongdoer, is tainted by fraud. [Para 74] |
| Cameron v Cole (1944) 68 CLR 571 |
A person against whom a claim is made must have a fair opportunity to appear and be heard. |
Used as an analogy for situations where a judgment may affect parties who were not fully heard. [Para 76] |
| Boswell v Coaks |
The fraud must be that of the party against whom the judgment is to be set aside; fraud by others was treated as fatal to relief against innocent defendants. |
Discussed as an authority relied on by the Appellant, but the court did not treat it as controlling for the present facts. [Para 105][Para 106][Para 110][Para 115] |
| Odyssey Re (London Limited) v OIC Run-off Limited |
Fraud by a witness may be attributed to a company if the witness is integral to the litigation team and the party adopts that evidence. |
The court used it as part of the route to concluding that fraud may, in some circumstances, be treated as shared between parties. [Para 108][Para 116][Para 119] |
| Abouloff v Oppenheimer (1883) 10 QBD 295 |
A party should not be allowed to take advantage of its own wrong. |
Referenced within the Odyssey Re discussion as supporting the anti-fraud principle. [Para 113] |
| Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9; [2008] Bus LR 1157 |
Fraud can be attributed to a co-party where both make common cause and the fraudulent evidence is adopted by the other party. |
The court relied on this reasoning to hold that Person A’s fraud could be treated as Defendant/Appellant’s for the purpose of the set-aside action. [Para 120][Para 125][Para 126][Para 130][Para 131] |
| Tinkler v Esken Limited [2023] EWCA Civ 655; [2023] Ch 451 |
Suggested an analogy between setting aside a judgment for fraud and deceit. |
The court accepted the analogy had limited force because the issue now before it had not been directly decided there. [Para 97][Para 99][Para 100] |
| Finzi v Jamaican Redevelopment Foundation Inc [2023] UKPC 29; [2024] 1 WLR 541 |
Only the ratio of a case creates precedent, and fraud claims may be abusive if the evidence is not new without good reason. |
Used to caution against over-reading earlier cases and later to explain the abuse-of-process aspect of fraud claims. [Para 100][Para 101][Para 139] |
| Henderson v Henderson (1843) 3 Hare 100 |
Matters that could and should have been raised earlier may be barred in later proceedings. |
Distinguished from the fraud-based substantive cause of action in the postscript. [Para 135][Para 137][Para 139] |
| Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46; [2014] AC 160 |
Cause of action estoppel principles and their relation to later claims. |
Cited to note that the new claim might not have been barred if the fraud-based invalidity could not reasonably have been discovered earlier. [Para 140] |
| Clone Pty Ltd v Players Pty Ltd [2018] HCA 12 |
Discussed alternative routes for challenging earlier judgments. |
Used only as a reminder that other procedural avenues may exist besides a fraud action. [Para 141] |
| Hollington v. Hewthorn and Co Ltd |
Prior findings do not automatically bind non-parties. |
The judge said it did not assist the Appellant because the Scottish fraud findings were directed at Company A, not Defendant/Appellant. [Para 151] |
| Lindsey Petroleum v Hurd (1874) LR 5 PC 221 |
Laches depends on substantial delay, prejudice, and equitable assessment of the circumstances. |
Provided the framework for rejecting the laches defence on the facts found by the judge. [Para 157][Para 158][Para 161] |
Court's Reasoning and Analysis
On ground 1, the court accepted that Highland and Takhar were the starting point, but stressed that neither case answered the specific question whether fraud by one party can justify setting aside the judgment against an innocent co-defendant. [Para 94][Para 96][Para 100] The court then reviewed Boswell, Odyssey Re, and Cinpres and extracted three principles: the fraud must usually be that of the party against whom relief is sought, a witness’s fraud may suffice if the witness is integral to the litigation team, and fraud by one party may in some circumstances be attributed to another where both made a common cause and the second party adopted the fraudulent case. [Para 108][Para 117][Para 125][Para 130]
Applying those principles, the court held that Defendant/Appellant’s position was parasitic on Company A’s defence: he had no separate position on the key issue, adopted Company A’s case and evidence, and benefited when Person A’s fraud caused the claim against him to be dismissed automatically once the claim against Company A failed. [Para 131] The court therefore treated Person A’s fraudulent evidence as effectively Defendant/Appellant’s own for this purpose and concluded that the judgment could properly be set aside against him. [Para 131][Para 132]
The court rejected the argument that it was inconsistent to set aside the judgment against Defendant/Appellant but not against Company B, because Company B had not been joined to the 2023 Action, so no order could be made against it. [Para 133] The court also noted, by way of postscript, that the fraud action and Henderson v Henderson are distinct: the former is a substantive cause of action, while abuse of process remains a separate control on reopening litigation. [Para 135][Para 139]
On ground 2, the court held that the laches challenge was really an attack on factual findings. [Para 159][Para 161][Para 165] It read Judge Kerr’s judgment as finding that the Claimants’ efforts were sustained, unrelenting, and time-consuming through no fault of their own, so the delay was neither unexplained nor unjustified. [Para 151][Para 159][Para 161] Because that finding defeated the first limb of laches, the court considered there was no need to resolve the prejudice point separately. [Para 162][Para 163]
Holding and Implications
The appeal was dismissed, and permission to appeal on the laches ground was refused. [Para 132][Para 134][Para 165][Para 166][Para 169][Para 170]
The direct consequence was that the High Court order setting aside the Manchester judgment against Company A and Defendant/Appellant remained in force. [Para 132][Para 134] More broadly, the decision confirms that a fraud-tainted judgment may, in appropriate circumstances, be set aside against a non-fraudulent party who adopted and benefited from the fraudulent case, and that laches in this context remains a fact-sensitive equitable defence. [Para 131][Para 139][Para 161]