Dale v Banga & others: When is new evidence not sufficiently connected to factual matters to show a judgment has been obtained by fraud?

Summary

• We have previously considered the Court’s approach to balancing the principles of “fraud unravels all” and the “finality of litigation” in the Supreme Court judgment of Takhar v Gracefield Developments Ltd and others [2019] UKSC 13 (20 March 2019) (https://tenetlaw.co.uk/articles/fraud-unravels-all/)
• In a later article we looked at the subsequent High Court judgment of Takhar v Gracefield Developments Ltd and others [2020] EWHC 2791 (Ch) which considered the correct test to be applied when assessing the materiality of new evidence (https://tenetlaw.co.uk/articles/takhar-v-gracefield-revisited/)
• The recent case of Dale v Banga and others [2021] EWCA Civ 240 explores the concept of materiality further; assessing whether new evidence was capable of showing that the judge was deliberately misled, and that the judgment may have been obtained by fraud.
• It was held that where new evidence is unrelated to the factual matters before the judge in the original trial, it does not meet that threshold.

Facts

The original trial concerned a bitter dispute between siblings over the estate of their father, Mr Kewel Banga (the “Deceased”), who died on 23 April 2014. The Deceased made a will dated 1 November 2012 (which was substantially in favour of his daughter, Mrs Dale, and her family) (the “2012 Will”) and a second will executed on 18 November 2013 (which substantially favoured his son, Mr Ravindar Banga (“Mr Banga”), and his family) (the “2013 Will”). The proper execution of a letter of revocation dated 27 June 2013 (the “Letter”) was contested, however it was held at trial that the Letter had been properly executed and was therefore valid. It was further held that the 2013 Will was only witnessed by one witness and was therefore invalid, meaning that the Deceased had died intestate.

The order containing a declaration that the Deceased died intestate was made on 26 January 2017. By application dated 24 February 2020, Mrs Dale sought permission to appeal and permission to rely upon fresh evidence. The fresh evidence was as follows:

• In May 2019, Mrs Dale had discovered that both Mr Saleem Arif (one of the two attesting witnesses to the Letter) and Mr Banga’s sons had been sent to prison for fraudulent trading and money laundering.
• The fraudulent trading was said to have taken place between 1 November 2014 and 31 May 2015.
• It was said that this dishonest wrongdoing overlapped with preparation for the original trial and, in particular, with the preparation of witness statements.
• In January 2020, Mrs Dale discovered that Mr Banga himself had also been indicted with attempting to pervert the course of justice by causing his solicitors to provide investigating officers with false invoices and supporting documentation to counter the allegations of money laundering. He was eventually acquitted as no evidence was offered by the prosecution at trial, but it was alleged that it was incontrovertible that Mr Banga had produced the false invoices.

In submissions on Mrs Dale’s behalf, Counsel stated that if this fresh evidence had been available at trial it would have entirely changed the way in which the judge approached the question of the proper attestation of the Letter and his conclusion on that issue. The Court of Appeal disagreed.

Setting aside a judgment on the basis of fraud

In addressing the matter of setting aside a judgment on the basis of fraud, Lady Justice Asplin at para.27 explained as follows: “It goes without saying that judgments are not set aside lightly. It is not sufficient that the evidence given below can now be proved to have been mistaken. If judgments and orders could be set aside on that basis, there would be an end to finality in litigation. Nor is it sufficient that a witness committed perjury. It is necessary that the judgment was obtained by fraud and that the fraud was that of a party to the action or was at least suborned by or knowingly relied upon by that party.”

Asplin LJ set out at para.28 the principles governing an application to set aside a judgment on the basis of fraud which had been summarised by Aikens LJ in Royal Bank of Scotland plc v Highland Financial Partners lp [2013] 1 CLC 596, and subsequently approved by the Supreme Court in Takhar. The principles are as follows:

1. First, there has to be a ‘conscious and deliberate dishonesty‘ in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned.
2. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be ‘material‘ (i.e. it must be shown that the fresh evidence would have entirely changed the way in which the first court approached and came to its decision).
3. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.

In assessing whether the fresh evidence was sufficient to warrant a trial of the fraud issue, Asplin LJ (at para.42) described the threshold test as follows: “It seems to me that it is necessary to decide whether the new evidence is capable of showing that the judge was deliberately misled by the Respondents and that the judgment may have been obtained by fraud. …It must be capable of showing that there was conscious and deliberate dishonesty which was causative of the judgment being obtained in the terms it was…”

Assessment of materiality

In assessing the materiality of the new evidence, Asplin LJ (at para.45) stated: “…the new evidence is of allegedly similar fact and bad character. It does not go directly to the central matters of fact before the judge. It requires inferences to be drawn based upon the alleged lack of credibility of the witnesses who gave evidence before him and their alleged propensities. It is tangential. Furthermore, all of the conduct from which it is said that the inferences should be drawn post-dates the alleged attestation of the Letter.”

Consequently, at para.51 Asplin LJ held that: “the new evidence is insufficient to meet the threshold test. It will always be more difficult for “indirect” evidence from which inferences must be drawn, to meet that threshold; and in this case, I consider the new evidence which post-dates the events with which the judge was concerned, is too far removed from those events to be capable of showing that the judgment was obtained by fraud.”

Comment

This judgment makes it clear that fresh evidence will only be capable of showing that a judgment may have been obtained by fraud where it shows that there was “…conscious and deliberate dishonesty which was causative of the judgment being obtained in the terms it was…”. In other words, the fraudulent conduct must have been used to achieve the result at court.

From one perspective it is not difficult to understand why Mrs Dale considered that knowledge of Mr Arif’s conviction and her brother’s indictment may have brought about a different result. Knowledge of such dishonest behaviour may have altered the judge’s interpretation of their evidence. However, the fresh evidence in this case was at best peripheral to the factual matters before the judge in the original trial, especially given that the dishonest conduct took place 12 months after the alleged conduct complained of by Mrs Dale in the original trial.

The case is a reminder that a decision to set aside a judgment for fraud will not be taken lightly and drilling down to the exact issues of fraud now being raised needs careful consideration.

Should you suspect that you are a victim of fraud or other wrongdoing, please do not hesitate to get in touch at hello@tenetlaw.co.uk