Stor RB One v Kanthasamy: High Court limits fraud of a party rule on setting aside judgements

A guarantor cannot set aside a judgement on the basis of a forgery committed by a co-defendant where the innocent judgement creditor neither committed nor adopted the fraud, the High Court has held.

Adam Kramer KC, sitting as a High Court judge, gave judgement in Stor RB One Ltd v Kanthasamy [2026] EWHC 2625 (Comm) on 16 October 2026. The decision applies the Court of Appeal's recent guidance in Lindsay's Estate v Outlook Finance Ltd [2026] EWCA Civ 1005 and cautions against extending it.

The claim

Mr Kanthasamy sought to set aside an October 2023 order granting summary judgement against him for £541,951 plus interest under a personal guarantee. He alleged that the guarantee and related legal advice documents were forged by the director of the principal debtor, a co-defendant in the original claim. The defence in that claim, which he signed, had admitted the guarantee.

Stor RB One Ltd applied to strike out the claim or obtain reverse summary judgement. The strike out on the legal question was adjourned pending Lindsay's Estate.

The governing principles

The Court of Appeal held that fraudulent evidence must be that of the party against whom the judgement is set aside. A witness's fraud is not enough unless the witness is vital to the party's case and integral to its litigation team. The fraud of one party may be treated as another's where the two adopt a common cause and the second adopts the fraudulent evidence for its own benefit.

Mr Kanthasamy initially argued that any fraud would suffice, on the footing that fraud unravels all. After Lindsay's Estate he confined himself to adoption. The judge said the jurisdiction is an exception to res judicata, to be applied with care, and that not just any fraud unravels all. The focus is on whether the party relying on the judgement is sufficiently at fault to be denied that reliance, and benefiting from a fraud is not enough.

Why adoption failed

Attribution was not in issue, since the alleged forger did not act for Stor. The judge held that Stor had not adopted the fraud.

Following Vos MR's description in Tinkler v Esken Ltd of the jurisdiction as akin to deceit, he required an intention to deceive the court. The pleaded deceit was of Stor in April 2022, inducing it to lend, with Stor then innocently relying on the guarantee in its claim. The forgery was meant to deceive Stor, not the court. The adoption cases, he said, do not allow one person's guilty state of mind to be combined with another's misleading act.

Nor had Stor made common cause with the alleged forger, who gave no evidence. Relying on a document whose validity no one challenged was not adoption of his evidence. The structural adoption seen in Cinpres Gas Injection Ltd v Melea Ltd and Lindsay's Estate, where the innocent party's case stood or fell with the fraudster's, did not arise, because the guarantee's validity was never in issue.

The claim was struck out and, alternatively, reverse summary judgement was granted.

Procedural applications

Mr Kanthasamy filed amended particulars of fraud on 11 September, after the 31 July deadline. The judge found the breach deliberate and unjustified, since the explanation was that he chose to await the Court of Appeal. No sanction attached to the deadline, so relief from sanctions principles did not apply. He permitted the amendment under his general discretion because it caused no prejudice and did not delay the strike out, but was inclined to award indemnity costs on it.

He also refused permission to add the alleged forger and Mr Kanthasamy's former solicitors, given the strike out. Even otherwise, he would have declined for want of pre-action steps, a draft claim form, adequate pleading and service on the proposed parties. Fresh proceedings remain open.