UK: Action Against One Fraudster Should Not Prevent Action Against Another

Last Updated: 19 February 2003

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.


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.


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 despite being informed of her frail health. Both appellants relied upon the rule in Henderson v Henderson (1843) 3 Hare 100 in support of their contentions.


The Court of Appeal, dismissing both appellants’ appeals, considered, at some length, the most recent authoritative statement of the rule in Henderson v Henderson, as delivered by the House of Lords in the case of Johnson v Gore Wood & Co [2002] 2 AC 1. The main judgment of the Court of Appeal was delivered by Peter Gibson LJ (with whom Clarke and Scott Baker LJJ both agreed). Peter Gibson LJ described Henderson v Henderson abuse of process by reference to the speech of Lord Bingham in the Johnson case, as follows:

" … there should be finality in litigation and … a party should not be twice vexed in the same matter. … The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all."

Additionally, Clarke LJ set out practical guidance as to the general principles to be adopted in cases of this kind, derived from the recent authorities as follows:

"i. Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process.

ii. A later action against B is much more likely to be held to be an abuse of process than a later action against C.

iii. The burden of establishing abuse of process is on B or C or as the case may be.

iv. It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.

v. The question in every case is whether, applying a broad merits based approach, A’s conduct is in all the circumstances an abuse of process.

vi. The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C".

In reaching its decision the Court of Appeal acknowledged that there may be many "entirely legitimate reasons for a claimant deciding to bring an action against B first and, only later (and if necessary) against others". Reasons cited by the Court of Appeal included the cost of proceeding against more than one defendant and the solvency (or otherwise) of any intended defendants.


The decision will clearly benefit those faced with the task of investigating and recovering the proceeds of a fraud. Piecing together the factual matrix after the event may inevitably take some time and further potential defendants may not be identified until later in the investigations, even after court proceedings have dealt with some parts of the fraud. The decision will also be of assistance to claimants whose financial means are limited. If the fruits of one action are sufficient to fund further actions, this may lead to additional recoveries against other defendants who may have been implicated in, although not parties to, earlier proceedings. Those further actions will not, without more, amount to an abuse of process.

© Herbert Smith 2003

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

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