Fraud allegations on appeals from county court – Mavris v Xylia

The Chancellor of the High Court, Sir Geoffrey Vos has given an important judgment dealing with how the High Court should deal with appeals from the County Court that are based on the ground of fraud.

In Mavris v Xylia (1//11/17) it was common ground that two tenancy agreements had been made but there was a dispute as to the which documents were the genuine agreements: an issue that the forensic scientist instructed as a single joint expert could not resolve. The trial judge preferred the evidence of the defendants and their witnesses, including two Greek accountants who gave evidence in support of how the defendants said the second agreement had been made at a meeting in a hotel in Athens.

In the course of the trial the defendants disclosed a bank statement which revealed that one of the defendants was in receipt of housing benefit. After the trial the claimant obtained a redacted version of the tenancy agreement submitted for the housing benefit application by making a subject access request to the local authority. The version obtained was similar to the first agreement produced by the claimant (Agreement A) rather than the version produced by the defendants (Agreement B).

The claimant appealed on the ground that the new document (Agreement A1) satisfied the requirements of Ladd v Marshall and tended to show that Agreement A was genuine rather than Agreement B. The claimant argued that if Agreement A was genuine then the judge would have approached the issues of credibility differently.

On the appeal the defendants argued that Agreement A1 would not have affected the outcome as the evidence of the Greek accountants had been accepted.

The Chancellor held that Agreement A1 did not incontrovertibly demonstrate that the judge had been misled but it did tend to show those matters. The Chancellor followed Noble v Owens [2010] EWCA Civ 224 and ordered that the issue of the fraud had to be determined by a trial and remitted this issue to the County Court. To keep the proceedings costs-effective the Chancellor gave directions to avoid the matter coming back to the High Court. If the County Court decided that there had been no fraud, then the appeal would stand dismissed and if the County Court decided that fraud had been proved, then the appeal would be allowed and there would be a retrial of the claim before the same judge dealing with the fraud trial. The parties were ordered to file and serve pleadings dealing with the issue of fraud.

The case resolves the doubt about what a party who believes they have been the victim of a decision obtained by fraud in the County Court should do (see Bishop v Chhokar [2015] EWCA Civ 24) and how the court should deal with an appeal that raises a prima facie but not incontrovertible case of fraud.

Zachary Bredemear acted for the claimant/appellant.