Sartipy v Chatsworth Court Freehold Company Ltd & Anor

A claim to set aside a judgment for fraud requires genuinely new evidence. Evidence already obtained and relied upon in the earlier proceedings cannot satisfy that requirement. Re-litigating issues previously raised, where the party failed to comply with an unless order, may also constitute an abuse of process. On an application for summary judgment, the court must avoid conducting a mini-trial and should permit an allegation of fraud to proceed where there is a realistic case for trial. However, the allegation must have a proper evidential basis. The relevant dishonesty must be conscious and deliberate; alleged recklessness is insufficient.

The claimant sought to set aside or rescind a 2011 judgment for unpaid service charges, alleging that the freeholder’s predecessors had agreed a set-off or compromise which had not been taken into account. The defendants applied to strike out the claim or obtain summary judgment.

The alleged documents had been obtained and relied upon by the claimant in earlier proceedings. The issues had also been raised in the original service charge claim, but the defence was struck out after non-compliance with an unless order. The central questions were whether the claim depended on new evidence, whether it was an abuse of process, and whether there was a real prospect of proving the dishonesty required to set aside a judgment for fraud.

1. New evidence. The court held that Takhar v Gracefield Developments Ltd [2017] EWCA Civ 147 required the claimant to establish that the evidence relied upon could not have been discovered with reasonable diligence in the earlier proceedings. The present case failed that first hurdle because the documents supporting the alleged compromise had already been obtained and relied upon. The fact that the earlier judgment followed non-compliance with an unless order did not make the requirement inapplicable; if anything, it made the case more extreme.
2. Abuse of process. The same set-off allegations had been raised in the original defence. The claimant could not have another attempt to litigate the same issues in fresh proceedings. The history of repeated attempts by the claimant and her son to re-litigate dismissed claims reinforced the conclusion that the new claim was an abuse of process.
3. Fraud and summary judgment. The court approached the application with caution and did not conduct a mini-trial. A realistic case of fraud should proceed to trial. Nevertheless, setting aside a judgment for fraud required conscious and deliberate dishonesty, as illustrated by Royal Bank of Scotland Plc v Highland Financial Partners LP [2012] EWHC 278. Recklessness was insufficient.
4. The evidence showed that the defendants’ solicitor had made appropriate inquiries of the predecessors in title and their solicitors. There was no arguable case that she had been reckless, still less dishonest. Summary judgment would therefore have been granted even apart from the new-evidence and abuse-of-process grounds. The claim was struck out.