Salekipour & Anor v Parmar

The County Court has jurisdiction under sections 23(g) and 38 of the County Courts Act 1984 to hear independent proceedings seeking to set aside its own final judgment for fraud or perjury. Such proceedings constitute equitable proceedings for relief against fraud. Section 38 supplies the remedies available in equivalent High Court proceedings, including setting aside the judgment and directing a new trial.

Section 70 does not preclude that jurisdiction because its finality rule is expressly subject to other provision made by the Act. Where fresh evidence shows that a party suborned a material witness, the fraud may undermine that party’s credibility across the case. A claim based on such evidence should not be struck out where, if proved, it could materially affect the original judgment.

The appellants sought to set aside a final County Court judgment dismissing their claims against their landlords and allowing the landlords’ counterclaims. They alleged that the respondent had procured an important witness to give perjured evidence through threats concerning his lease.

District Judge Lightman struck out the fresh proceedings as an abuse of process. Her Honour Judge Faber held that the County Court lacked jurisdiction, although she concluded that the pleaded fraud was material and that the other grounds for striking out failed. Garnham J dismissed the appellants’ appeal in [2016] EWHC 1466 (QB), holding that sections 23 and 38 of the County Courts Act 1984 did not confer jurisdiction to rescind an earlier County Court judgment.

The principal issue was whether the County Court could entertain an independent equitable claim to set aside its own final judgment for fraud or perjury. The respondent additionally contended that the alleged perjury could not have affected the original decision.

1. Appeal allowed unanimously; respondent’s notice rejected. Sections 23(g) and 38 of the County Courts Act 1984 confer jurisdiction on the County Court to determine independent proceedings seeking to set aside a final County Court order obtained by fraud or perjury. The right to set aside a fraudulently obtained judgment is equitable. A claim that a defendant’s fraud defeated the claimant’s original case falls within the statutory language concerning proceedings for relief against fraud: paras [74], [78], [79], [86].

2. Section 38 supplies the remedies available once section 23 establishes jurisdiction. The County Court may therefore make any order that the High Court could make in equivalent proceedings, including setting aside the earlier judgment and directing a new trial. Section 70 does not require a narrower construction. Its finality rule is expressly subject to provision elsewhere in the 1984 Act: para [79].

3. The repeal of the former rehearing power in the County Court Rules did not silently remove a jurisdiction which County Courts had possessed since 1846. Such a result would create an unexplained procedural disparity between High Court and County Court litigants. There was no indication of a deliberate policy to produce that consequence: paras [69]–[74], [80]. The precise scope of CPR rule 3.1(7) remained unresolved because the appeal was decided under the 1984 Act: para [69].

4. Fresh proceedings are the normal route in ordinary civil litigation for resolving a challenge to a final judgment based on fraud, although the appropriate procedure depends on the circumstances. An appeal is often unsuitable for resolving new factual disputes requiring evidence: para [72].

5. The Court was inclined to regard the materiality formulation in Royal Bank of Scotland plc v Highland Financial Partners LLP as too demanding and to prefer the “real danger” approach in Hamilton v Al Fayed. A final determination of that question was unnecessary because the pleaded facts satisfied either formulation: paras [88]–[94].

6. If proved, subornation of the witness would affect both his evidence and the respondent’s credibility across issues which depended heavily on oral evidence. The alleged fraud could therefore infect substantially the whole judgment. It was inappropriate on a strike-out application to undertake a detailed reconstruction of how the trial judge would have decided each issue: paras [95]–[99]. The claim was permitted to proceed.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The court held that the County Court possessed jurisdiction under sections 23(g) and 38 of the County Courts Act 1984. The respondent’s notice was rejected: [2017] EWCA Civ 2141.
2. High Court: Garnham J dismissed the appeal, holding that the County Court lacked jurisdiction, but agreed that the pleaded evidence was material and that the other grounds for striking out failed: [2016] EWHC 1466 (QB).
3. County Court: Her Honour Judge Faber refused to set aside the strike-out because she considered that the County Court lacked jurisdiction. She otherwise found no abuse of process and held that the alleged subornation was material.
4. County Court: District Judge Lightman struck out the independent claim as an abuse of process.