First Discount Ltd v Guinness & Ors

The exceptional jurisdiction to reopen a final appeal requires more than evidence suggesting procedural corruption. Under the jurisdiction associated with Taylor v Lawrence [2003] QB 528, now encapsulated in the Civil Procedure Rules 1998, rule 52.17, reopening must be necessary to avoid real injustice, occur in exceptional circumstances, and be unavailable through any alternative effective remedy. A probable corruption of process must be accompanied by a powerful probability that it caused an erroneous result. Available claims in deceit, proceedings to set aside a judgment for fraud, or appropriate third-party remedies may defeat an application. In bill-of-exchange litigation, fraud may provide a defence if raised promptly, but very substantial delay weighs heavily against reopening. The applications were refused.

First Discount obtained judgment against Mr Cranston on bills of exchange. Master Rose gave judgment on 25 November 1997, and Buckley J refused an extension of time on 14 April 2000. The Court of Appeal later extended time and granted permission to appeal, but dismissed Mr Cranston’s appeal in [2002] EWCA Civ 71.

Three Guinness defendants had submitted to a consent judgment on 27 August 1997. Buckley J likewise refused an extension of time, and no appeal was brought. After Mr Tuli pleaded guilty in July 2006 to offences concerning the management of First Discount, both groups relied on further evidence suggesting fraud and perjury. The central issue was whether the evidence justified reopening the concluded appeal or granting a more than six-year extension of time to seek permission to appeal.

Applications refused. Lord Justice Longmore rejected both Mr Cranston’s application to reopen the earlier appeal and the Guinness defendants’ application for an extension of time and permission to appeal. Lady Justice Arden agreed and added observations concerning possible remedies against a third party.

1. The jurisdiction arising from Taylor v Lawrence [2003] QB 528 is exceptional and is now reflected in rule 52.17 of the Civil Procedure Rules 1998. The court treated itself as bound by the later approach in Re Uddin (A Child) [2005] EWCA Civ 52, notwithstanding a possible difference of approach in Couwenbergh v Valkover [2004] EWCA Civ 676.
2. Finality may yield where there is a probable corruption of process, but there must also be a powerful probability that the corruption caused an erroneous result. The guilty plea gave the allegations of perjury substantial force, but it did not necessarily establish that either defendant would have a successful defence to the bills. The necessary causal probability was therefore not demonstrated.
3. The applicants also failed the requirement that there be no alternative effective remedy. They could bring claims in deceit against First Discount and Mr Tuli, and could seek to set aside judgments procured by fraud. Arden LJ held that an appropriate remedy against City (Europe) Ltd, the discount house, could also be considered. Bankruptcy did not eliminate those possible routes, since claims could have been pursued through or assigned by the trustee.
4. Finality and delay were important additional considerations. Bills of exchange are treated as the equivalent of cash, and judgments on them had stood for nearly ten years. Fraud raised at the proper time may afford a defence even to summary judgment, but allegations raised so long afterwards were not an appropriate basis for reopening or a substantial extension of time. The Guinness defendants’ unexplained delay was also relevant.

• Court of Appeal (Civil Division) — In [2007] EWCA Civ 378, both applications were refused.
• Court of Appeal (Civil Division) — In [2002] EWCA Civ 71, the court extended time, granted permission to appeal in Mr Cranston’s case, and dismissed the appeal.
• High Court, Queen’s Bench Division — Buckley J refused extensions of time on 14 April 2000. In the Guinness proceedings, no application for permission to appeal was launched.
• Queen’s Bench Division — Master Rose gave judgment against Mr Cranston on 25 November 1997. The Guinness defendants submitted to a consent judgment on 27 August 1997.