Summary

On an application to put in fresh evidence on appeal, the Court of Appeal should be particularly cautious where what was intended was to put in, in effect, further cross-examination of a witness, including an expert, where that expert or witness had been cross-examined at a trial.

Facts

The applicant (U) sought permission to appeal against the judge's decision ((2005) EWHC 279 (Comm)) on the principles applicable to valuing leases in the context of the damages claim brought by the respondents (R), and applied to amend its notice of appeal and to admit fresh evidence in the Court of Appeal. U had advised on the appropriate value of equipment leases purchased by the respondent fund. The contractual structure under which U had given that advice gave rise to an argument as to whether it owed a duty of care directly to the fund. The judge held that it did and gave permission to appeal on that aspect. He also ruled on the principles to be applied in assessing damages and had refused permission to appeal on that aspect. On the valuation aspect, the judge had considered the evidence of a witness (D) called for the respondents (R). D's evidence included the use of "matrices" in estimating the residual value of equipment. Following judgment, U's solicitors wrote letters to R's solicitors seeking to ascertain the information on which D's matrices had been produced. U applied to the Court of Appeal for permission to appeal on the valuation aspect. U also applied to put fresh evidence before the Court of Appeal, consisting of R's solicitors' replies, and to amend its notice of appeal to add a challenge to the judge's ruling on the use of matrices. U contended that, from the information and answers received as to the basis and methodology used to create the matrices, it could demonstrate that D had not in fact relied on numerous comparables, but had created his matrices from his own experience and via his own expertise, and that the answers in R's solicitors' letters, which had been approved by D, should be put before the Court of Appeal.

Held

(1) The arguments on valuation were complex and the Court of Appeal gave permission to appeal on valuation once it became clear that to assess the prospects of success properly at only a short hearing would be extremely difficult. Since a large amount of money was at stake and debating arguability needed longer than could ordinarily be made available on a permission application, and because arguing arguability would become time wasted when an appeal might itself not last that much longer, the right course, particularly as an appeal was already coming to the court, was to grant permission. (2) Apart from the correspondence none of the material sought to be placed before the court seemed to come within the concept of "fresh evidence". The real issue was whether answers obtained in what might be termed "the further cross-examination" of D in the correspondence should be admitted in the Court of Appeal. The Court of Appeal should be particularly cautious where what was intended was to put in, in effect, further cross-examination of a witness, including an expert, where that expert or witness had been cross-examined at a trial. In the circumstances it was right to test the fresh evidence by reference to the pre-CPR principles, Ladd v Marshall (1954) 98 SJ 870 applied. (3) The judge's judgment had left it open to U to challenge the actual matrices used at the trial of quantum. All he had held was that in general matrices were a permissible tool. The fresh evidence did not support any new ground of appeal. Permission to amend to challenge the use of matrices was refused. (4) The fresh evidence should not be admitted in relation to those points for which permission to appeal had been granted. The principles from Ladd v Marshall were good guides to the ultimate question of whether fairness in the circumstances required the principle of finality in litigation to be overridden. Conducting that balancing exercise the evidence should not be permitted to go before the Court of Appeal, particularly on the basis of a concession made by R, that in relation to certain items named in his report D did not rely on comparables in the way he had originally asserted in his report.

Application granted in part