Background
In October 2023, HHJ Pelling KC granted summary judgment to Stor RB One Limited against Konnec Ltd and Mr Kanthasamy on a receivables purchase agreement claim and personal guarantee. The judgment against Mr Kanthasamy was for £541,951 plus interest. Mr Kandiah, a relative of Mr Kanthasamy, was a director of Konnec Ltd. The defendants did not appear at the original hearing.
In April 2026, Mr Kanthasamy sought to set aside the underlying judgment, alleging it was procured by fraud. He claimed the personal guarantee deed was forged, the independent legal advice certificate was forged, and he did not discover these facts until October 2025. He asserted that Mr Kandiah had misled him, falsely assuring him he bore no liability, and that Mr Kandiah consciously and dishonestly misled the court by filing a defence admitting the guarantee’s existence.
Stor applied to strike out Mr Kanthasamy’s claim and for reverse summary judgment, arguing (1) the legal principle did not permit set-aside against an innocent judgment creditor where fraud was committed by a co-defendant, and (2) Mr Kanthasamy had no real prospect of proving the guarantee was forged.
The Court’s Holding
Judge Adam Kramer KC addressed two distinct issues. On the legal question of whether a judgment can be set aside against an innocent creditor where tainted by third-party fraud, the judge declined to determine the matter summarily. Although he noted he might otherwise have done so, the recent High Court decision in Lindsay’s Estate v Outlook Finance Ltd (2025) held that judgments tainted by fraud of one party could be set aside against innocent co-judgment creditors. That decision is now under appeal to the Court of Appeal (heard 16–17 June 2026), with the first ground of appeal directly addressing whether the equitable jurisdiction extends to non-fraudulent parties. Rather than decide the question in isolation, Judge Kramer adjourned his application pending the Court of Appeal’s ruling, finding this procedurally more efficient and cost-effective. The judge emphasised that the appeal would make relevant pronouncements on the central legal point.
On the factual question of whether Mr Kanthasamy has a real prospect of proving forgery, the judge refused Stor’s application for reverse summary judgment. Although Mr Kanthasamy’s case was “difficult and unusual,” the judge found genuine factual issues warranting trial: the signature on the guarantee differs markedly from signatures on later documents Mr Kanthasamy admitted signing; evidence showed the independent legal advice certificate was indeed forged (both the firm DKLM and the purported solicitor Ms Hon denied involvement); and there were disputed facts about Mr Kanthasamy’s knowledge of the guarantee. The judge concluded that “there are real factual issues to be tried and his case is not so incredible that it is bound to fail.”
The judge also ordered that Mr Kanthasamy’s Particulars of Claim be amended rather than struck out, as they were defective in not clearly pleading all elements of the fraud allegation and not expressly identifying the alleged fraudster.
Key Takeaways
- A judgment procured by fraud may potentially be set aside even against an innocent judgment creditor where a co-party committed the fraud, but this principle remains unsettled pending Court of Appeal guidance in Lindsay’s Estate.
- Forgery of independent legal advice certificates and material discrepancies in signatures can establish genuine factual disputes sufficient to survive summary judgment dismissal.
- Pleadings alleging fraud must clearly identify the fraudster, the fraudulent act, and how the court was deceived; defective pleadings may be amended rather than struck out.
- The mere incredibility of a defendant’s account—even when bordering on implausible—does not justify summary judgment if factual disputes remain triable.
Why It Matters
This decision addresses an underdeveloped area of English law: the scope of equitable jurisdiction to set aside judgments where fraud taints the judgment but the judgment creditor bears no responsibility for the fraud. By adjourning pending the Court of Appeal’s decision in Lindsay’s Estate, Judge Kramer ensures consistency across the jurisdiction and avoids potentially deciding a novel point of law that will be authoritatively clarified on appeal. The case also underscores that documentary evidence of forgery (such as the fabricated legal advice certificate) can sustain set-aside claims even where other circumstantial evidence cuts against the claimant.
For practitioners, the judgment confirms that summary dismissal is inappropriate in fraud cases involving disputed factual elements (signature authenticity, document provenance) that require oral evidence and expert analysis. The eventual Court of Appeal ruling in Lindsay’s Estate will determine whether such claims can proceed against innocent parties, potentially reshaping the landscape of post-judgment fraud challenges in commercial litigation.