Background
Stor RB One Ltd obtained summary judgment in October 2023 against Konnec Ltd under a receivables purchase agreement and against Sripiragash Kanthasamy under a personal guarantee. The defence, signed by Kanthasamy, admitted that he had entered into the guarantee and had not paid under it. The resulting order required him to pay £541,951 plus interest and was later enforced through charging-order, possession and bankruptcy proceedings.
Kanthasamy brought a new claim seeking to set aside that judgment, alleging that Konnec’s operator, Mr Kandiah, had forged the guarantee and related legal-advice documents. He did not allege that Stor knew of the forgery. Stor sought to strike out the claim or obtain reverse summary judgment. After initially dismissing summary judgment on the facts, the court adjourned the legal issue pending the Court of Appeal’s decision in Lindsay’s Estate v Outlook Finance Ltd [2026] EWCA Civ 1005.
The Court’s Holding
The court held that Kanthasamy’s claim fell outside the “fraud of a party” rule. A judgment may be set aside for fraud where the fraudulent evidence is attributable to the party against whom the judgment is challenged, or where that party adopted another party’s fraud in the legally relevant sense. Merely benefiting from or innocently relying on a forged document is insufficient.
Stor neither acted dishonestly nor adopted Kandiah’s alleged fraud. Kandiah was adverse to Stor, did not speak for it, and allegedly forged the documents to deceive Stor into advancing funds—not as part of a deliberate fraud upon the court. Stor’s claim also did not structurally stand or fall with Kandiah’s position in the manner found sufficient in cases such as Lindsay’s Estate. The court therefore permitted Kanthasamy’s late pleading amendment but struck out his claim, alternatively holding that it had no real prospect of success.
The court also refused Kanthasamy’s application to add Kandiah and JMW Solicitors LLP as defendants. Once the claim against Stor was struck out, there was no existing claim to which they could be joined. The proposed claims could instead be brought separately, and the court expressed no view on their fundamental merits.
Key Takeaways
- A judgment is not set aside merely because third-party fraud may have influenced the underlying events or because an innocent judgment creditor benefited from it.
- “Adoption” requires more than innocent reliance: the successful party must have made common cause with the fraudster or have a claim or defence structurally dependent on the fraudster’s position.
- The fraud must involve conscious and deliberate dishonesty directed at misleading the court and must have been an operative cause of the judgment.
Why It Matters
The decision applies the Court of Appeal’s recent guidance in Lindsay’s Estate and emphasizes the narrow scope of the fraud exception to finality and res judicata. Courts should not expand that exception merely because a successful party relied upon a document later alleged to be forged.
A litigant who says that a third party caused liability through forgery or professional negligence may still pursue that person directly, but cannot set aside an innocent creditor’s judgment without establishing attribution, legally sufficient adoption, or another recognized basis for relief.