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Augustine Clement wins significant victory at the High Court

Onuegbu v Okeke

Queen’s Bench Division

11 October 2016

Case Analysis

Where Reported  unreported;
Case Digest Subject: Civil procedure

Keywords: Applications; Fraud; Jurisdiction; Setting aside; Stay of proceedings

Summary: The correct procedure where defendants wanted to challenge a County Court judgment in favour of the claimants which they argued had been obtained by fraud was to bring an appeal or to bring a fresh action to rescind the judgment in the High Court.

Abstract: The defendants challenged a judgment ordering that they pay the claimants £25,423 following an inquiry into damages.

The underlying claim had arisen from a long running dispute within the Nigerian Nnewi community. A schism arose within an unincorporated association with social and cultural objects for the benefit of members of the community. The defendants broke away and started a rival association, taking with them some assets. The claimants began an asset recovery procedure and obtained judgment against the defendants. An inquiry into damages was directed, and in April 2010 it was ordered that the defendants pay damages of £25,423. The defendants subsequently contended that the claimants had relied upon witness statements that contained false assertions and false evidence to support their claim, and applied to have the April 2010 order set aside. That application was struck out as an abuse of process with liberty to apply to set aside the striking out order. An application to set aside the striking out order was subsequently refused. Meanwhile, the claimants obtained a charging order over some of the defendants’ property and sought an order for sale. The defendants’ application to strike out the order for sale was dismissed.

The claimants argued that the instant application challenging the April 2010 order was neither an appeal nor a fresh action for rescinding it and so should be dismissed. The defendants submitted that the evidence showed that there was at least a credible case that the order had been obtained by deception and that there was a case to answer. They argued that the court should waive the procedural difficulties and give directions as to future conduct of the case. They further submitted that the order for sale should be stayed.

Held: Application refused.

(1) Salekipour v Parmar [2016] EWHC 1466 (QB), [2016] 3 W.L.R. 728 had held that the County Court had no inherent jurisdiction and had no jurisdiction to rescind an earlier judgment on the ground of fraud. It also held that the correct procedure for challenging a decision on the ground of fraud was to bring an appeal or to bring a fresh action to rescind the judgment in the High Court, Salekipour applied. The instant application was neither. Assuming that there was some evidence of fraud, the instant application was no more than an interim application notice. It was not appropriate for the court to determine the substantial issue. The choice was to either dismiss the application outright or order that it continue in another form. It was essential that fresh proceedings were launched for such a serious allegation. Accordingly, the court dismissed the application, allowing the defendants to launch fresh proceedings in the High Court if they wished to do so.

(2) Since the application had been dismissed, there were no extant proceedings, and so no power to order a stay. Even if there had been extant proceedings it would have been inappropriate to grant a stay. It was doubtful that the instant court had the power to halt a County Court judgment, either under the CPR or through its inherent jurisdiction. The defendants had adduced no evidence, as required under the CPR r.52.7, to enable the court to conclude that the balance of injustice was in their favour. It would be for the defendants to persuade the County Court that that was an appropriate course of action at the time they applied for it.

Judge: Morris J

Significant Cases Cited Salekipour v Parmar

[2016] EWHC 1466 (QB); [2016] 3 W.L.R. 728; Official Transcript; QBD; 23 June 2016

All Cases Cited Salekipour v Parmar

[2016] EWHC 1466 (QB); [2016] 3 W.L.R. 728; Official Transcript; QBD; 23 June 2016

Significant Legislation Cited Civil Procedure Rules 1998 (SI 1998/3132) r.52.7
Legislation Cited Civil Procedure Rules 1998 (SI 1998/3132) r.52.7
Solicitors For Claimant/Respondent Augustine Clement

For Defendant/Applicant:  Cale Solicitors

© 2016 Sweet & Maxwell