Jeffery v Jeffery

An order made in a party’s absence may be set aside under CPR rule 39.3 only where the applicant acted promptly, had a good reason for non-attendance, and has a reasonable prospect of success at the rehearing. All three requirements must be established, although satisfaction of them does not necessarily require the order to be set aside.

A judgment allegedly obtained by fraud may be challenged only on stringent grounds. The applicant must show conscious and deliberate dishonesty, material to the judgment and operative in causing the result. Materiality is assessed by its impact on the original decision, rather than on the outcome of a possible retrial. Generalised allegations and evidence which would not have changed the original decision do not justify a stay of enforcement.

The claimant had obtained charging orders against the defendant in respect of unpaid costs orders. A deputy High Court judge subsequently made an order for sale of the defendant’s property.

The defendant, who had not attended the hearing, applied under CPR rule 39.3 to set aside the order or stay its operation. He intended to bring proceedings alleging that earlier costs orders and the judgment underlying them had been obtained by fraud, including alleged concealment concerning property transactions.

The court therefore considered whether the defendant had a reasonable prospect of successfully setting aside the earlier orders and, consequently, whether there was any proper basis for staying the order for sale.

1. The applications to set aside or stay the order for sale were dismissed. The existing charging orders remained valid and effective. In those circumstances, an order for sale was the only real order the court could make, unless the defendant could show a real prospect of successfully challenging the underlying orders.

2. Under CPR rule 39.3, the applicant had to establish three cumulative requirements: promptness, a good reason for failing to attend the hearing, and a reasonable prospect of success at the rehearing. Failure to establish any one requirement was fatal. Even where all three requirements were shown, the court retained a discretion whether to set aside the order.

3. The court applied the principles identified in Takhar v Gracefield Developments Limited [2020] AC 450, drawing on Royal Bank of Scotland plc v Highland Financial Partners LLP [2013] 1 CLC 596. A fraud challenge required proof of conscious and deliberate dishonesty relating to relevant evidence, conduct, statements or concealment. That dishonesty had to be material and causative: the fresh evidence had to show that the earlier matter was an operative cause of the judgment and would have entirely changed the way the original court approached and decided the case.

4. Materiality was to be assessed by reference to the original decision, not by asking what result might follow if the matter were tried afresh on honest evidence. The conditions were stringent and protected against abusive attempts to reopen concluded litigation. Where fraud had already been raised at the original trial, the court might also have a discretion whether to entertain a later application.

5. The defendant’s allegations concerning Fairmile House did not show conscious and deliberate dishonesty by the claimant. Nor could the alleged concealment realistically have affected the findings on testamentary capacity, knowledge and approval, or undue influence. The alleged fraud had therefore no real prospect of being shown to have been an operative cause of the earlier judgment.

6. The court was not determining the proposed fraud application itself. It was deciding whether the material disclosed a real prospect of success sufficient to justify a stay. It did not, and the applications were dismissed.