Takhar v Gracefield Developments Ltd

Balber Kaur Takhar, the appellant, appealed against the decision of the Court of Appeal to dismiss her claim that the judgment of the Chancery Division be set aside on the basis that it was obtained by fraud. The respondents to the appeal, Gracefield Developments Ltd and the Krishans, opposed the appeal. The case before the Supreme Court was concerned with the circumstances in which a party who has obtained judgment against another party may be permitted to set aside that judgment on the basis that it was obtained by fraud. The Supreme Court held that the Court of Appeal's requirement that the party who seeks to set aside a judgment on the basis that it was obtained by fraud must show that the fraud could not have been uncovered by the exercise of reasonable diligence before the original trial was incorrect. The Supreme Court held that, where no allegation of fraud had been raised at the trial which led to the judgment, a requirement of reasonable diligence should not be imposed on the party seeking to set aside the judgment. The Court held that the principle that fraud unravels all is deeply rooted in the common law, and its continued application is an important contributor to honesty within society, to the rule of law and to the ability of the courts to adjudicate disputes justly. The Court held that the absence of reasonable diligence is not of itself a reason for staying the claim to set aside the judgment. The Supreme Court allowed the appeal and restored the order of the Chancery Division.