Action Against One Fraudster Should Not Prevent Action Against Another

In the recent Court of Appeal decision in Dexter Limited (in Administrative Receivership) v Vlieland-Boddy [2003] EWCA Civ 14 the Court rejected the argument that successive actions against alleged fraudsters were an abuse of process.

Background

Dexter Limited ("Dexter") brought proceedings against the first and fourth defendants (and others) alleging a fictitious and fraudulent scheme, involving the purported acquisition of a prototype engine and components by Dexter, on the part of the first and fifth defendants and the first defendant's brother, Martin Vlieland-Boddy. The scheme procured the advance of £2 million from a bank for their use and not for the benefit of Dexter. The sum of £2 million was allegedly applied in favour of, amongst others, the first and fourth defendants. By the proceedings, Dexter sought the recovery of these allegedly misappropriated monies.

Prior to bringing the proceedings which gave rise to this appeal, Dexter had brought two earlier sets of proceedings in relation to the same scheme, as follows:

(a) the "first action": against Martin Vlieland-Boddy in which judgment had been entered against him in the sum of £2 million (plus interest and indemnity costs), following the abandonment by Martin Vlieland-Boddy of his defence part way through trial; and

(b) the "second action": against Edwina Harley, in which service of the claim form had been set aside on the ground that there was no jurisdiction to bring the claim against Edwina Harley alone (who was domiciled in Spain) under the Brussels Convention.

Issues

The appellants, Clive Vlieland-Boddy, the first defendant, and his mother, Edwina Harley, the fourth defendant, appealed from the order of Lloyd J refusing their applications to strike out the claims brought against them (and others) by Dexter as an abuse of process.

The first and fourth defendants argued that the present proceedings were an abuse of process on the basis that they could and should properly have been joined as defendants to the first action and there was no evidential reason as to why this could not have happened. In particular, the first defendant argued, in effect, that he was being "vexed twice" as similar allegations had been made in respect of him in the first action, even though he was not a party to that action. The fourth defendant raised issues with respect to Dexter's conduct in obtaining (and continuing) a freezing order against her and the delay in commencing these proceedings...