The Court of Appeal has refused to remit a question of fraud to be heard by the lower court, where a party alleged that fresh evidence obtained after trial showed the judgment of the lower court was obtained by fraud: Dale v Banga & others [2021] EWCA Civ 240.

The court held that where, as in this case, the fresh evidence was hotly disputed, in order to justify the issue being remitted to the lower court, the evidence must be capable of showing that the judge was deliberately misled. This includes a requirement that the evidence is capable of showing that there was conscious and deliberate dishonesty by a party to the action (or knowingly relied on by a party) which was material to the original decision. The judgment suggests that this test will always be more difficult to meet where, as here, the evidence is “indirect” (in this case, aimed at showing the lack of credibility of a witness in the original trial).

Although the facts of this case concern an interfamilial probate dispute, the case will be of wider interest as the court provided useful guidance on the circumstances in which an appeal court can set aside a judgment and order a retrial on the basis of fraud.

Background

The underlying dispute relates to the validity of: (1) a will dated 1 November 2012 (“2012 Will”) which would have substantially favoured the appellant (“Mrs Dale”, daughter of the deceased); (2) a will dated 18 November 2013 (“2013 Will”) which mostly favoured the respondent (“Mr Banga”, son of the deceased); and a letter of revocation of the 2012 Will dated 27 June 2013 (“Letter”). In November 2016, the High Court handed down judgment, holding that the 2013 Will was invalid but the Letter was valid (having been executed and duly witnessed by two witnesses), which meant that the deceased had died intestate. The judge also recorded his “non-binding conclusion” on a third issue, rejecting Mr Banga’s argument that the 2012 Will had been procured by undue influence.

In 2019, Mrs Dale discovered that one of the Mr Banga’s witnesses, who had been found to have attested the Letter, had been convicted of the criminal offences of fraudulent trading and money laundering. Mr Banga himself had been indicted with attempting to pervert the course of justice but had been acquitted.

Mrs Dale alleged that, if this fresh evidence had been available to be adduced at trial, it would have entirely changed how the judge approached the question of the attestation of the Letter and his conclusion in that regard. Mrs Dale sought:

  • a direction that the question of whether the judgment was obtained by fraud be remitted to the court below (though to a different judge, as the original judge had since retired); and
  • a conditional order that, if that question was answered in the affirmative, the 2012 Will be admitted to probate (thereby giving effect to the judge’s “non-binding conclusion” on that issue).

Decision

The Court of Appeal declined to remit the issue of fraud to the lower court, and dismissed the appeal. Asplin LJ gave the leading judgment, with which Hayden and Moylan LJJ agreed.

The court outlined what has to be proved in order to set aside a judgment on the basis of fraud, noting that “judgments are not set aside lightly”. It is necessary to show that the judgment was obtained by fraud and that the fraud was that of a party to the action or was knowingly relied upon by that party; a mistake as to evidence, or the perjury of a witness, would not be sufficient.

The court referred to the policy considerations and principles which govern an application to set aside a judgment for fraud, as outlined by the Supreme Court in Takhar v Gracefield Developments Ltd [2020] AC 450 (considered here) namely that:

  1. There has to be conscious and deliberate dishonesty in relation to the evidence given or matter concealed;
  2. The relevant evidence (or concealment) must be “material”, i.e. fresh evidence shows the previous evidence was an operative cause of the court’s decision to give judgment in the way it did; and
  3. The materiality of the fresh evidence should be assessed by reference to its impact on the evidence supporting the original decision (rather than its potential impact on a retrial on honest evidence).

The court noted that, where an allegation of fraud is involved, there are two courses which may be adopted:

  1. To bring a new action to set aside the judgment already obtained on the basis that it was obtained by fraud; or
  2. To appeal the original order and seek a retrial, by alleging that the judgment upon which it is based was obtained by fraud. A retrial can take place where the fraud is admitted or incontrovertible. Otherwise, as in this case, a so-called “Noble v Owens order” can be sought (following the decision in Noble v Owens [2008] EWHC 359 (QB)) for the issue of fraud to be remitted to the lower court.

The Court of Appeal proposed a two stage test as to whether the fraud issue should be remitted to the lower court:

  1. The appellate court must determine whether the new evidence is capable of showing that the judge was deliberately misled by a party and that the judgment may have been obtained by fraud (the threshold test), which requires that:
    • the new evidence must be sufficient to justify a pleading of fraud;
    • it must be capable of showing that there was conscious and deliberate dishonesty which was a causative element of the judgment being decided the way it was; and
    • the dishonesty must be that of a party to the action, or at least suborned by or knowingly relied upon by a party.
  2. If the threshold test is satisfied, it is a matter of the appellate court’s discretion as to whether, on the facts and in the circumstances of the particular case, it is appropriate that the fraud issue should be remitted or otherwise dealt with within the same proceedings.

Applying these principles to the case, the Court of Appeal found that the threshold test was not met. The evidence on which Mrs Dale was seeking to rely was circumstantial evidence, relating to the alleged bad character or lack of credibility of Mr Banga and the witness. The new evidence did not go directly to the central matters of fact before the judge, and the events took place after the attestation of the Letter. The court noted that it will always be more difficult for the threshold test to be satisfied by “indirect” evidence from which inferences must be drawn.

Even if the threshold test had been met, the Court of Appeal would have declined to remit the matter to the lower court, as it would not have been expedient, convenient and proportionate to do so. The judge had since retired and a new judge would have to begin again, so it was unlikely that time or costs would be saved.

In any event, it would be inappropriate to grant the conditional order sought, impugning the judgment in relation to the validity of the Letter but saving the judge’s obiter dicta in relation to whether the 2012 Will was obtained by undue influence. The court expressed the view that this was Mrs Dale’s real reason for seeking a direction that the fraud issue be determined within the existing proceedings, rather than a fresh action, and it would represent a considerable extension to the approach in Noble v Owens.

Gayatri Gogoi
Gayatri Gogoi
Associate
+44 20 7466 2663