Hertfordshire Investments Ltd v Bubb

Reopening a case on fresh evidence after final judgment at a contested trial is exceptional and requires strong grounds. The same principles apply whether the application is made by appeal or under the County Court rehearing procedure.

The Ladd v Marshall criteria remain relevant under the Civil Procedure Rules, although they operate as discretionary principles rather than inflexible rules. The overriding objective does not reduce the decision to a simple balance of prejudice.

An application to extend the strict time limit for seeking a rehearing must reflect the finality of the judgment. A good reason for delay will normally be required. Lack of irremediable prejudice and the availability of a costs order are insufficient by themselves. A solicitor’s ignorance of the applicable time limit is not a satisfactory explanation.

In Hertfordshire Investments Ltd v Bubb [2000] 1 WLR 2318, a lender brought possession proceedings under a regulated loan secured on the defendants’ home. The district judge dismissed the claim after the lender failed to prove that the credit broker was licensed, with the consequence that the agreement was treated as unenforceable.

The lender later produced the correct licence and applied about six weeks out of time for a rehearing. Another district judge refused both an extension and a rehearing because the evidence could have been obtained with reasonable diligence and there was no adequate reason for the delay. On appeal, the county court judge granted relief after balancing the importance of the evidence and potential prejudice to the lender against the absence of uncompensatable prejudice to the defendants.

The first defendant appealed. The central questions were whether the fresh-evidence principles governing appeals also governed County Court rehearings and what standard applied to an extension of time sought after final judgment.

1. Appeal allowed unanimously. Lady Justice Hale delivered the reasoned judgment. Lord Justice Sedley and Lord Justice Swinton Thomas agreed. The county court judge had applied an insufficiently stringent approach to both the rehearing and the extension of time.

2. The power under Order 37, rule 1 of the County Court Rules 1981 to reopen a case following final judgment on the ground of fresh evidence was governed by the same principles as an application to introduce fresh evidence on appeal. The procedural route and the court in which the proceedings began did not justify different substantive standards. Strong grounds were required because litigants must present their full cases at trial and litigation must come to an end.

3. Although rule 52.11(2) of the Civil Procedure Rules no longer required “special grounds”, the criteria stated in Ladd v Marshall [1954] 3 All ER 745 remained matters which necessarily had to be considered. They were principles rather than rigid rules. The court had to examine whether the evidence could have been obtained with reasonable diligence, whether it would probably have an important influence on the result, and whether it was apparently credible. A simple balancing exercise under the overriding objective was insufficient. Here the first criterion was plainly unsatisfied because the correct licence was readily obtainable before trial.

4. The application to extend the strict rehearing deadline also had to reflect that judgment followed a trial attended by represented parties. Authorities addressing pre-trial defaults did not govern the post-trial position. Rule 3.9 of the Civil Procedure Rules was mainly directed to pre-trial defaults, while rules 27.11(3) and 39.3(5) supported a more stringent approach after judgment. There must normally be a good reason for post-trial delay. The solicitors’ ignorance of the time limit was no excuse. The claimant therefore could not obtain indulgence for both its failure to produce readily available evidence and its unexplained late application.

5. The claimant was ordered to pay the first defendant’s costs, including the costs of the three earlier hearings, subject to detailed and legal-aid assessment.

1. Court of Appeal: In Hertfordshire Investments Ltd v Bubb [2000] EWCA Civ 3013, the court unanimously allowed the first defendant’s appeal and displaced the order granting an extension and a rehearing.
2. Edmonton County Court, HHJ Riddell: Allowed the lender’s appeal from District Judge Rose. He extended time and ordered a rehearing, principally because of the importance of the new evidence and the potential prejudice to the lender if the original judgment remained final.
3. Edmonton County Court, District Judge Rose: Refused the late application. The evidence failed the reasonable-diligence requirement and there was no reason to extend time.
4. Edmonton County Court, District Judge Morley: Dismissed the possession claim after a contested trial because the lender had not proved that the credit broker was licensed.