Mohamed Razeem v Vibhutiben Desai

A claim to set aside an earlier judgment for fraud is an independent claim concerning the conduct of the earlier proceedings. Previous abusive litigation does not, by itself, justify striking out a fresh claim if the pleaded case discloses reasonable grounds.

To succeed, the claimant must plead and establish conscious and deliberate dishonesty, materiality, and causation. Materiality concerns whether the alleged fraud was an operative cause of the earlier judgment, assessed against the evidence supporting that decision. The second court does not retry the original dispute on honest evidence.

A strike-out application is determined primarily from the particulars of claim, assuming pleaded facts to be true except where wholly unsustainable. Standard disclosure extends only to documents relevant to an issue in the original claim, not material relevant solely to cross-examination on credit.

Mr Razeem issued a fresh claim seeking to set aside four judgments obtained by Mrs Desai, alleging that they had been procured by fraud. The principal allegation concerned Mrs Desai’s alleged failure to disclose her husband’s conviction, together with allegations concerning leases, payment records, signatures and stock-taking documents.

Mrs Desai applied to strike out the claim under CPR rule 3.4(2)(a) and (b), and alternatively sought security for costs under CPR rule 25.13(2)(g). The central questions were whether the pleaded fraud claim was bound to fail and whether the claimant’s previous conduct justified treating the fresh claim as an abuse of process.

1. Strike-out threshold. The claim was struck out under CPR rule 3.4(2)(a) and (b). The relevant question was whether the claim, as pleaded, was bound to fail. The court considered the particulars of claim and the earlier judgments, while assuming pleaded facts to be true unless wholly unsustainable.
2. Independent fraud claim. A claim to set aside a judgment for fraud is independent of the cause of action in the original proceedings. Earlier abusive conduct did not, without more, prevent a claimant from bringing a properly constituted fresh claim. The court therefore rejected an approach which conflated the claimant’s prior abuse with the viability of the 2023 claim, applying Takhar v Gracefield Developments Ltd [2019] UKSC 13.
3. Applicable fraud test. Following Tinkler v Esken Ltd [2023] EWCA Civ 655, the court preferred the approach in Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 to that in Hamilton v Al-Fayed (No. 4) [2001] EMLR 15. The claimant had to plead conscious and deliberate dishonesty, materiality, and causation. Materiality required the alleged fraud to have been an operative cause of the judgment, assessed by its impact on the evidence supporting the original decision, not by asking what result might follow from a retrial on honest evidence.
4. Application. The conviction allegation was hopeless. The claimant had pleaded that he knew of the charge before the sale-back agreement and before the original trial, making conscious and deliberate dishonesty impossible to establish. The alleged documents were not shown to concern an issue in the original claim, which had focused on whether the agreed price included stock. The remaining allegations were either immaterial, incoherent, previously raised, or contradicted by the original judgments. They could not satisfy the essential elements of the fraud claim.
5. Disclosure. There was no freestanding obligation to disclose adverse documents under CPR rule 31. Without an order for disclosure, standard disclosure was confined to documents relating to an issue in the original proceedings. Documents relevant only to cross-examination on credit fell outside that scope, applying Favor Easy Management Ltd v Wu [2010] EWCA Civ 1630.
6. The security-for-costs application was not determined because the claim had been struck out.