Samara v MBI Partners UK Ltd

In a renewed application for permission to appeal where a default judgment was challenged on fraud, the issue is whether there is an arguable case of dishonesty, not merely an arguable mistake or absence of reasonable grounds in identifying the contracting party. Isolated admissions or evidential gaps are insufficient if the judgment read as a whole rejects dishonesty and accepts the underlying contract as genuine. Permission should not be granted to introduce a subsidiary fraud case requiring a new trial in those circumstances.

The claimant had obtained default judgment in a contractual claim against the defendant. The written contract identified the employer as “MBI & Partners”, which was not a legal entity, rather than the defendant company. The defendant’s application to set aside the default judgment was refused. At trial, the defendant alleged that the judgment had been obtained by fraud, principally because the contract was forged. The judge rejected the allegation of dishonesty and accepted that the contract was genuine.

The defendant renewed its application for permission to appeal, relying on the claimant’s evidence about the identity of the contracting party. The central issue was whether that evidence disclosed an arguable case that the claimant had dishonestly identified the defendant as his employer.

Disposition. The renewed application for permission to appeal was refused.

1. Nature of the issue. The proceedings before the High Court concerned whether the default judgment had been obtained by fraud. They did not involve a general determination of whether the claimant had a good contractual claim. Fraud required dishonesty.
2. Identity of the contracting party. The evidence raised an issue about the identity of the employer. If the matter had been an ordinary application to set aside the default judgment, that issue could have justified allowing the application. The relevant question at this stage, however, was whether there was an arguable case that the claimant had dishonestly alleged that the defendant was liable to him.
3. Assessment of the judgment and evidence. It was insufficient to identify passages in which the claimant effectively accepted that he had no evidence identifying the defendant as the contracting party. The judgment had to be read as a whole. It substantially rejected dishonesty, extensively addressed the claimant’s evidence, and accepted that the contract itself was genuine. The claimant’s frankness and candour were inconsistent with the alleged dishonest representation.
4. Procedural consequence. In view of the seriousness of alleging fraud at this stage, and because the proposed subsidiary case would require a new trial, permission was not justified. The High Court’s judgment therefore stood.

• Court of Appeal (Civil Division): In [2015] EWCA Civ 1191, the renewed application for permission to appeal was refused.
• High Court, Queen’s Bench Division: His Honour Judge Graham Wood QC, sitting as a High Court judge, rejected the allegation that the default judgment had been obtained by fraud and accepted that the contract was genuine. An earlier application to set aside the default judgment had been refused.