John Andrew Park v CNH Industrial Capital Europe Ltd t/a CNH Capital
| Jurisdiction | England & Wales |
| Judge | Lady Justice Andrews,Lord Justice Edis,Sir Geoffrey Vos |
| Judgment Date | 24 November 2021 |
| Neutral Citation | [2021] EWCA Civ 1766 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2021/0534 |
[2021] EWCA Civ 1766
Sir Geoffrey Vos, MASTER OF THE ROLLS
Lady Justice Andrews
and
Lord Justice Edis
Case No: B2/2021/0534
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT BLACKPOOL
HIS HONOUR JUDGE KHAN
Lower Court Case No. E00BC708
Royal Courts of Justice
Strand, London, WC2A 2LL
Jonathan King (instructed on direct access) for the Appellant
Ben Harding (instructed by Gisby Harrison) for the Respondent
Hearing date: 4 November 2021
Judgment Approved by the court for handing down
(subject to editorial corrections)
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INTRODUCTION
This is an appeal against an order made by His Honour Judge Khan (“the Judge”) in the Blackpool County Court striking out a claim brought by the appellant (“Mr Park”) which sought to set aside a default judgment entered against him in earlier proceedings brought by the respondent (“CNH”) on the basis that it had been obtained by fraud. The Judge's order was itself made on appeal by CNH against a decision of District Judge Woosnam refusing its application to strike out Mr Park's claim as an abuse of the process of the court, and giving directions for the matter to proceed to trial.
The Judge was persuaded that the District Judge had misdirected himself on the question of what would amount to an abuse of process for these purposes. He accepted CNH's contentions that the claim was abusive for the following reasons:
i) Mr Park's claim for fraud was based on facts that were known to him at the time of the original action, and therefore failed to satisfy the requirement for “fresh evidence”;
ii) there was no deception of the court when the default judgment was entered;
iii) the claim was fundamentally inconsistent with Mr Park's defence in the original action; and
iv) the alleged fraud was not the operative cause of the default judgment, which was due to Mr Park's own procedural failings.
A party who seeks to set aside a judgment for fraud must establish that both he and the court were deceived by the party in whose favour judgment was entered. The principles which govern such applications were summarised by Aikens LJ in Royal Bank of Scotland plc v Highland Financial Partners lp [2013] EWCA Civ 328, [2013] 1 CLC 596 at [106], and approved by Lord Kerr JSC in the leading case of Takhar v Gracefield Developments Ltd [2020] UKSC 13, [2020] AC 450 (“ Takhar”) at [57]. Applying them to the present claim, Mr Park needs to establish conscious and deliberate dishonesty by CNH in relation to a statement made, evidence given or action taken which was relevant to the judgment it procured, and that the dishonest conduct was an operative cause of the court's decision to enter judgment in those terms.
In the course of his oral submissions on behalf of Mr Park, Mr King took us to evidence demonstrating, in the clearest terms, that the court was deceived at the time when the judgment in default was entered. We heard submissions from Mr Harding on that issue, but he was unable to provide any satisfactory answer. We indicated that this was our view, and invited Mr Harding to take instructions from his client. Having done so, Mr Harding informed us that CNH no longer opposed the appeal, and that he would make no further oral submissions in response to the grounds of appeal relied on by Mr Park.
In the light of these developments, consideration was given to whether the Court of Appeal should agree to make an order recording that the appeal was allowed by consent, without the necessity of delivering a judgment. However, in response to further questions of counsel, it became clear that CNH was not prepared to concede that Mr Park's claim was not an abuse of process, but only to accept that it should not have been struck out at this juncture, and that the District Judge's order should be restored. Indeed, it appeared that CNH envisaged that the abuse of process arguments might be aired again at trial. In those circumstances, we were not prepared to allow the appeal without giving our reasons.
Mr Harding, having taken further instructions, accepted that the appropriate course was that the Court should determine the matters in issue and explain the basis upon which it was allowing the appeal. He confirmed that he was not going to make any further oral submissions. We therefore announced at the end of the hearing that the appeal would be allowed, for reasons that would be provided in reserved judgments.
BACKGROUND
Mr Park is a contract farmer in Lancashire. His farm is called Park Hall Farm. In 2007 Mr Park and his wife set up a limited company, Park Organic Farms Limited (registered no. 06048475), through which to run their farming business (“POFL”). Mr Park was the sole director of POFL and Mrs Park the company secretary, until it was dissolved in August 2017.
CNH is a finance company. On 4 June 2013, 20 November 2013, and 22 March 2014, Mr Park signed four unregulated hire-purchase agreements with CNH relating to farm equipment for use in the business. Two were signed on the same day, 22 March 2014.
Each agreement was on a CNH proforma which stated that:
“This Agreement is made between CNH Capital Europe Limited (trading as CNH Capital)… and the Hirer named below. CNH Capital agrees to hire and the Hirer agrees to take on hire the Equipment described below on the terms and conditions set out in this Agreement.
The Hirer
Limited company – NAME ONLY
Park Hall Farms Limited
trading as
Park Hall Farms Limited.”
The hirer's address was given as the address of Mr and Mrs Park's farm. All that information was typed in the agreements by someone on behalf of CNH. There is an issue as to whether it was inserted before or after Mr Park signed them. In the signature box on the second page of the form, entitled “Hirer Signature”, Mr Park signed under the typed words “for and on behalf of the Hirer” and next to the words “signature(s) of Hirer.” Adjacent to his signature, his position is described as “director”. That word, and the date, are both entered in handwriting, which is possibly that of Mr Ian Smith.
Mr Smith was the relevant area sales manager for CNH Industrial NV, the manufacturer and seller of the farm equipment, who was responsible for completing sales and finance agreements for their customers. It was Mr Smith who arranged the finance with CNH and gave Mr Park the documents to sign on each of the relevant occasions. Mr Harding confirmed that the only witness statement served in the original proceedings which was of relevance to this appeal was Mr Smith's witness statement of 24 February 2017. In that statement, Mr Smith described the process by which he arranged the finance with CNH. He would submit the finance proposal to CNH, they would assess it “for underwriting purposes”, and they would then let him know if the deal was approved and the terms. He would then notify the customer and arrange a meeting to sign the documentation.
Mr Park also signed a personal guarantee in respect of “all agreements entered into between CNH and ‘the customer named below’.” The named customer was “Park Hall Farms Limited”. Its address was identified as the address of Park Hall Farm, but the company's registration number was stated as 03616349. All those details were handwritten on the first page of the guarantee by Mr Smith. Again, there is an issue as to whether those details were inserted before or after Mr Park signed the document. Mr Park says he has no recollection of signing the guarantee, but on the face of it his signature (which is on the front page) was witnessed by Mr Smith.
Mr Smith's evidence is that he only took one guarantee because it was an “all monies” guarantee and he assumed that it would extend to cover all further hire-purchase agreements. The date written on the guarantee is 4 June 2013, which is the same as the handwritten date next to Mr Park's signature on the first hire-purchase agreement. The latter was countersigned by someone on behalf of CNH on 17 June 2013. The guarantee was therefore the first in the sequence of agreements, as one might expect, since the consideration for it was the extension of finance to the hirer under the hire-purchase agreements.
There is and was no company with the name “Park Hall Farms Limited”. The company registered under registration no. 03616349 was named “Park Hall Farms Enterprises Ltd”. That company had no connection with Mr Park or his wife. Its registered office was at a different Park Hall Farm, in Shropshire. There is no suggestion that the name “Park Hall Farms Limited” or the registration number typed in the guarantee emanated from Mr Park, nor that he was in any way responsible for the hirer being named as “Park Hall Farms Limited” in the guarantee or the hire-purchase agreements.
None of the indemnity provisions in the guarantee has the effect of making Mr Park personally liable for any sums due to CNH under or in connection with the four hire-purchase agreements in circumstances in which the named hirer is a company which does not exist. CNH could not enforce the hire-purchase agreements against the non-existent company, nor could they enforce the guarantee against Mr Park, unless and until the agreements (including the guarantee) were rectified to correct the mistake in the name of the hirer. The guarantee has never been rectified.
Mr Park's evidence is that his company, which ran the farming business for which the equipment was intended from the address identified, was always intended to be the hirer. That was the mistake that needed to be corrected by the substitution of POFL for the...
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