Ackerman v Thornhill & Ors

Claims which seek to reopen issues decided in earlier litigation may be barred by cause of action estoppel, issue estoppel or the Henderson v Henderson abuse of process principle. The bar also applies where the earlier proceedings ended by settlement.

A judgment obtained by fraud may be set aside only where the claimant shows conscious and deliberate dishonesty, materiality, and fresh evidence which was unavailable and could not reasonably have been obtained at the earlier trial. Materiality requires evidence capable of entirely changing the way the earlier court approached and decided the case. Documents disclosed in the earlier proceedings cannot ordinarily constitute such fresh evidence.

The claimant had previously litigated allegations that the first defendant, who had acted as an expert in a property-business demerger, was biased, had colluded with the other defendants and had acted improperly. Those allegations were rejected at trial in the 2011 claim, and the subsequent appeal was compromised by a consent order containing an agreement not to revive the claims.

The claimant later brought the 2015 claim, relying on transactions and alleged concealment said to show fraud, secret commissions, breach of duty and collusion. He sought to set aside the earlier judgment, the consent order and subsequent adjustment reports. The defendants applied to strike out the claim or obtain summary judgment, relying on res judicata, abuse of process and the settlement terms.

1. The 2015 claim was struck out. The central allegations were substantially the same as the allegations of actual bias, fraud and collusion decided against the claimant in the 2011 claim. The alternative contractual and fiduciary formulations did not alter the essential issue.
2. The later allegations also concerned matters which properly belonged to the earlier litigation. Under the principles stated in Arnold v National Westminster Bank plc, Virgin Atlantic Airways v Zodiac Seats UK and Henderson v Henderson, points which were decided, or which could and should have been raised with reasonable diligence, cannot ordinarily be litigated again. The same principle applies where the earlier proceedings were compromised by settlement.
3. The consent order provided an additional bar. Its clause 18 prevented the claimant from pursuing or reviving in new proceedings the claims which were the subject of the 2011 claim. Settlement agreements should not be undermined save on the clearest grounds.
4. There was no realistic prospect of setting aside the 2011 judgment for fraud. The applicable requirements were: fresh evidence unavailable, and unobtainable with reasonable diligence, at the first trial; conscious and deliberate dishonesty; and materiality, meaning that the evidence was an operative cause of the judgment and would have entirely changed the way the earlier court approached and decided the case.
5. The relevant transaction documents had been disclosed to the claimant’s solicitors during the 2011 proceedings and were therefore available. Their omission from the claimant’s case could not satisfy the fresh-evidence requirement. The alleged communications with the Charity Commission did not support a realistic case of dishonest concealment, and knowledge of the inquiry itself could not have materially changed the earlier judgment.

The judgment describes an earlier claim between the same parties, decided by Vos J on 21 December 2011: [2011] EWHC 3428 (Ch). Limited permission to appeal was granted, but the appeal was dismissed by consent under a settlement order dated 20 July 2012. The present court struck out the later claim.