Fraud unravels all. But whose fraud does it need to be? This is the question examined by the Court of Appeal in Estate of Euan McIntyre Lindsay & Anor v Outlook Finance Ltd & Anor [2026] EWCA Civ 1005. The Court held that, in some circumstances, a judgment may be set aside not only against the fraudulent party, but also against a non-fraudulent party who adopted and relied on the fraudulent evidence for its own benefit.
Summary of the facts
In 2009, the Lindsay family borrowed money from Outlook, the First Defendant, securing the borrowing by charges over the Scottish Farm and the Cumbrian Farm. In 2012, Outlook appointed the Second Defendant, Mr Butcher, as a receiver over the Cumbrian farm, who caused it to be sold to Beattie. In 2013, the Lindsays claimed that Outlook had no right to appoint a receiver and they claimed consequential relief as against Outlook, Mr Butcher and Beattie. As the claims against him were parasitic on the claims against Outlook, Mr Butcher adopted the relevant parts of Outlook’s defence and instructed the same counsel. In 2014, the Judge dismissed the Lindsays’ claims, preferring the evidence of Mr Fradgley, who owned and controlled Outlook.
Outlook then sought to enforce its security over the Scottish farm. Following protracted proceedings, in August 2021, the Outer House of the Court of Session found that Mr Fradgley had defrauded the Lindsays on a large scale, fabricating documents and falsifying the records of the Lindsays’ family company. The Scottish Court further found that the loan and charge upon which the English action had been based were obtained by “lesion, facility and circumvention” (broadly equivalent to the English law concept of undue influence) and fraudulent misrepresentations. The Scottish Court set these aside. Outlook went into liquidation and paid nothing.
In 2023, the Lindsays claimed that the English judgment was the result of Mr Fradgley’s fraud on the court and should therefore be set aside as against Outlook and Mr Butcher. In 2025, following a trial, Kerr J agreed. In particular, Kerr J found that it was not inequitable to set aside the judgment as against the non-fraudulent party, Mr Butcher.
Mr Butcher appealed on two grounds. This article focuses on the first of those grounds: whether Kerr J had been wrong to hold that the equitable jurisdiction to set aside a judgment procured by the fraud of one person extends to setting aside the judgment as against a non-fraudulent party to the original proceedings.
The relevant law
The key cases on the jurisdiction to set aside a judgment due to a fraud on the court are Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 and Takhar v. Gracefield Developments Ltd [2019] UKSC 13. Neither discuss the possibility of a judgment being set aside against a party other than the party guilty of fraud.
The Court of Appeal therefore treated the issue as one not directly answered by those leading authorities, and turned to older and less familiar authorities dealing with fraud by someone other than the party against whom the judgment was sought to be set aside, namely Boswell v Coaks, an unreported decision of the Court of Appeal dated 5 November 1892, Odyssey Re (London Limited) v OIC Run-off Limited, another unreported decision of the Court of Appeal, and Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9.
Zacaroli LJ, with whom the other Lord Justices agreed, derived 3 principles from these authorities:
- In order to set aside a judgment on the grounds that it has been procured by fraud, it is necessary to show that the fraudulent evidence was that of the party against whom the judgment is to be set aside.
- Fraudulent evidence given by a witness for a party is not enough, unless the witness’ evidence is vital to the party’s case and the witness was an integral part of the litigation team.
- In some circumstances it is appropriate to treat the fraud of party A as that of party B, for example because the two parties adopt a common cause in the proceedings and party B adopts the fraudulent evidence of party A for his own benefit (albeit without knowing it is fraudulent), in which case the judgment may also be set aside against party B.
The third principle was directly applicable to Mr Butcher: (a) The case against him was parasitic on that against Outlook; (b) Mr Butcher had adopted and relied on the defence presented by Outlook and its legal representatives; and (c) Mr Butcher had adopted and relied on the evidence of Mr Fradgley in support of his defence and it was the fraud of Mr Fradgley (which was to be treated as the fraud of Outlook) that caused the court to be misled into dismissing the claim against Outlook, and therefore against Mr Butcher.
Takeaway
The practical lesson is that a party who adopts another party’s evidence because the case against it is parasitic on that other party’s case may also be exposed if that evidence later proves to have been fraudulent. The risk is not confined to the fraudster. Where a defendant’s position depends substantially on another party’s evidence, practitioners should consider whether the client needs to preserve a distinct position, adduce separate evidence, or test the co-party’s evidence more robustly. The decision is a reminder that the consequences of fraud may extend beyond the party that committed it.
