Praxis Capital Ltd v Burgess

The power under Civil Procedure Rules 1998, rule 3.1(7), should not ordinarily be used to reopen or vary a final order determining substantive litigation. A party seeking to challenge such an order on the basis of alleged fraud or fresh evidence should generally use an appeal or issue fresh Part 7 proceedings seeking to set aside the judgment. The court should not give directions for a new trial under rule 3.1(7), particularly where contested factual and expert evidence would be required and there is no urgency.

The claimant had previously brought proceedings concerning alleged breaches of employment obligations, confidentiality and post-termination restrictions. Following an expedited trial in 2015, the claim was dismissed and the claimant was ordered to pay the defendant’s costs.

In 2018, relying principally on alleged similarities between the claimant’s documents and material appearing on other companies’ websites, and on an expert forensic-linguistic report, the claimant applied to vary the earlier final order. It sought delivery-up and deletion orders, further disclosure, reconsideration of the substantive judgment and variation of the costs order. The central issue was whether the application could properly proceed under rule 3.1(7), or whether a fresh claim was required.

1. The application was dismissed. The draft order did not directly seek relief from the order dismissing the substantive claim and did not properly address the substantive costs order. In any event, the only potentially relevant jurisdiction was that under rule 3.1(7) of the Civil Procedure Rules 1998.
2. Rule 3.1(7) should not be exercised in the circumstances of this case to reopen a final order made after a substantive trial. The public interest in finality, the undesirability of giving litigants two opportunities to litigate and the need to preserve the appellate process required a principled restriction of the apparently broad power.
3. Latimer Management Consultants Ltd v Ellingham Investments Ltd was materially different. It concerned variation of a costs order following a material representation about solvency, rather than an attempt to challenge the substantive result of litigation. It therefore provided no assistance.
4. The observations in Clutterbuck & Anor v A were well-founded and were followed. A final order could be challenged, if at all, by appeal or by fresh proceedings under Part 7 seeking to set aside the judgment for fraudulent or false representations. Such proceedings would require pleadings, disclosure, witness statements, cross-examination and a trial.
5. It was inappropriate to give directions for such proposed litigation under rule 3.1(7). The matter was not urgent, the claimant had chosen an inappropriate procedural route and the expert evidence had not been admitted under rule 35.4(1). The court could not assess the significance of the alleged copying without properly admissible expert evidence and resolution of disputed facts.
6. The claimant’s alternative proposal to undertake to issue a fresh claim was also refused. Any future claim could be brought separately and, after pleadings had closed, returned for appropriate case management directions.

The judgment states that the 2015 order dismissing the original claim was made after trial and that permission to appeal was refused. The time for seeking permission from the Court of Appeal was extended, but no appeal was known to have been brought.