Judgment today was handed down in Tinkler v Esken Limited [2023] EWCA Civ 655, the appeal brought by Andrew Tinkler [“Mr Tinkler”] against Esken Limited [“Esken”], the company of which he was (formerly) CEO and shareholder; a notable anniversary, being five years from a key event in this epic dispute. On 9 June 2018, Mr Tinkler (as the Court later held) breached his fiduciary duties by sending to all of Esken’s employees a copy of a letter he had sent to Esken’s shareholders the previous day, criticising the board and urging the removal of the chairman. This event – amongst others – precipitated Mr Tinkler’s removal from Esken as a director and employee. There followed High Court proceedings in late 2018 ([2019] EWHC 258), in which His Honour Judge Russen KC endorsed Esken’s removal of Mr Tinkler (Stobart Group: Rosenblatt helps secure judgment – Rosenblatt (rosenblatt-law.co.uk)).
Through separate proceedings, Mr Tinkler subsequently came into possession of documents he deemed should have been disclosed by Esken in the 2018 proceedings, but were not. On that basis, Mr Tinkler commenced new proceedings in the High Court, seeking to have the 2018 judgment set aside on the basis that it had been procured by fraud. Mr Tinkler alleged in these new proceedings that Esken dishonestly suppressed relevant material and that, during the trial, its witnesses knowingly gave false testimony. In June 2022, the Court found (again) in favour of Esken; Mr Justice Leech dismissed the claim (Rosenblatt secures High Court win for Esken Limited – Rosenblatt (rosenblatt-law.co.uk)). Mr Tinkler appealed. It is the judgment in this appeal that has now been handed down. Rosenblatt has represented Esken from the very start.
The Court of Appeal (Sir Geoffrey Vos MR, Popplewell and Snowden LJJ) took this opportunity to clarify the law upon which a claim that a judgment has been obtained by fraud should be brought. During the proceedings, it was common ground that a judgment be set aside for fraud where the claimant established: (i) that the successful party (or someone for whom it must take responsibility) committed conscious and deliberate dishonesty at some stage in the proceedings; (ii) that this dishonest conduct was material to the original decision reached by the Court; and (iii) that there was new evidence before the Court that had not been available in the original proceedings.
Mr Tinkler’s appeal was predicated, in part, on his belief that Mr Justice Leech had taken a different – and incorrect – approach. Mr Justice Leech commenced each of his findings by considering the findings made in the 2018 proceedings; then he identified the new evidence on which Mr Tinkler relied; then he considered whether the new evidence provided cogent evidence of dishonest misconduct; and finally he considered if the new evidence affected the reliability of the original decision. Mr Tinkler believed Mr Justice Leech had placed too much reliance on the findings of the original judge, HHJ Russen KC, without sufficiently considering the evidence in the 2018 proceedings alongside the new evidence; and that only when adding the new evidence to the original evidence could the true facts be established, the fraud proved and the judgment be set aside.
Whilst the Court of Appeal did consider the approach taken by Mr Justice Leech to be somewhat unorthodox, they were satisfied that his judgment correctly determined the issues, and that his decision should stand.
An essential flaw in Mr Tinkler’s argument was the blurring of what it was he had asked the Court to do. A claim to set aside a judgment on the grounds it was obtained by fraud arises from the Court being deceived, not the unsuccessful party. Only once a Court has determined that there was a fraud and the judgment be set aside should the parties then return to the substantive issues of the original claim. Whilst it may have been necessary for the Court to consider evidence before the Court in the original proceedings so as to assess the significance of the gap alleged to have been caused by the absence of the new material – and thus the likelihood of that material having been suppressed – the Court in the current claim had to avoid making new findings of fact that supplanted those in the original judgment, for the original judgment remained sound unless the current case determined it had been obtained by fraud and should be set aside. Mr Tinkler, in his appeal, had tried to have his cake and eat it too, by using the claim to set aside the judgment as a vehicle to making new findings of fact relevant to the original proceedings without all of the original evidence being before the Court.
The Court of Appeal has, in this judgment, clarified the law. The first limb is now the consideration of the new evidence, thus making as the Court’s starting point the determination of whether that new evidence is strong enough to call into question the original judgment. Consideration then turns to whether or not there was conscious or deliberate dishonesty in the suppressing of that evidence; and if that evidence was material to the original outcome. With the focus now upon the weight of the new evidence, the original evidence need not be troubled unduly, nor the findings in the original judgment called into question until such time as the Court is satisfied that the original judgment was obtained by fraud, and that the original proceedings must be tried anew – and in full.
The Rosenblatt team was led by Partner Anthony Field, assisted by Legal Directors Lucy Hamilton-James and Nick Leigh. Rosenblatt instructed Richard Leiper QC and Daniel Isenberg of 11KBW.
A copy of the judgment can be found [William Andrew Tinkler v Esken Limited (formerly Stobart Group Limited) – Find case law (nationalarchives.gov.uk)]
