Century Financial Holdings Ltd & Anor v Jamtoff Trading Ltd & Ors

A judgment obtained by fraud may be set aside through a distinct route from an appeal, but the jurisdiction must be exercised cautiously to preserve finality. Fresh evidence must materially undermine the original judgment; arguments proposing only a different interpretation of evidence are appeal points. In fraudulent misrepresentation, reliance is established if the representation was present to the claimant’s mind or influenced its conduct. But-for causation is unnecessary. Joint and several liability is not displaced merely because co-fraudsters also deceived one another. A seller who is the beneficiary under a letter of credit owes no contractual or tortious duty to present conforming documents. Claims which could and should have been raised in earlier proceedings may be barred as an abuse under Henderson v Henderson.

Jamtoff had obtained judgment for fraudulent misrepresentation against Century Financial Holdings Ltd, Sanjay Thakrar and Paresh Thakkar. The judgment awarded €795,060, with the defendants jointly and severally liable. Permission to appeal was refused.

Century and Sanjay subsequently brought a claim to set aside the judgment based on alleged new evidence of Paresh’s fraud. Century also brought a claim for delivery up of a bill of lading, conversion, negligence and breach of contract. Jamtoff applied under CPR 3.4 to strike out both claims. The issues were whether either claim disclosed reasonable grounds and whether the claims constituted an abuse of process.

1. The fraud set-aside claim. The power to set aside a judgment for fraud is distinct from an appeal, but it must be carefully controlled because of the need for finality and the risk of circumventing a refusal of permission to appeal. The court assumed, without deciding, that fraud by any party could suffice and that the relevant causation threshold was whether there was a real danger that the fraud affected the outcome.
2. The alleged new evidence, even if new and true, did not undermine the original findings. The original judgment rested on two misrepresentations: that Century was a bank and that the first letter of credit had been issued. Evidence that Paresh had earlier sent a forged letter of credit did not negate Jamtoff’s reliance on Century and Sanjay’s later misrepresentations. The goods were shipped after those representations.
3. In fraudulent misrepresentation, reliance is not onerous. Under Edgington v Fitzmaurice, it is enough that the representation was present to the claimant’s mind or influenced it; but-for causation is unnecessary. Arguments proposing a different interpretation of the existing evidence, or relying on material available at the original trial, were appeal points rather than grounds for setting aside for fraud.
4. Any internal deception between alleged co-fraudsters did not undermine their joint and several liability to Jamtoff. The fraud-set-aside claim disclosed no reasonable grounds and was struck out under CPR 3.4. The judge also considered it an abuse of process.
5. The delivery-up claim. A seller who is the beneficiary under a letter of credit owes no contractual or tortious duty to present conforming documents. Failure to do so affects entitlement to payment under the credit. A conversion claim would require evidence that Jamtoff took the bill of lading for its own use and that Century had a possessory right. Century, as issuing bank, had not received the bill of lading and had no such right.
6. The delivery-up claim should also have been raised in the original proceedings. Its later pursuit was a classic Henderson v Henderson abuse. It disclosed no reasonable grounds and was struck out under CPR 3.4. Jamtoff therefore succeeded in both applications.

The current decision was at first instance. The underlying judgment was given by HHJ Waksman QC on 14 August 2015, with a supplemental judgment on 30 September 2015: [2015] EWHC 2654 (QB). Permission to appeal was refused by HHJ Waksman QC and subsequently by Sales LJ on 25 January 2016.