Banks & Anor v Cox & Ors

On an application to adduce fresh evidence on appeal, the court must exercise its discretion in accordance with the overriding objective. The principles in Ladd v Marshall remain relevant as considerations, although they are no longer rigid rules under the Civil Procedure Rules. The court should consider whether the evidence could reasonably have been obtained for the trial, whether it could materially influence the result, and whether it is apparently credible. Where the evidence may expose an unsafe finding and leave a possible fraud without redress, the interests of justice may require a retrial, while recognising the disadvantages caused to the opposing party.

Mr and Mrs Banks appealed from Lloyd J’s dismissal of their claims against Mr and Mrs Cox for fraudulent, reckless or negligent misrepresentation arising from the purchase of a nursing home, and against their solicitors for negligence. The appeal concerned only the claim against the Coxes.

The Banks sought permission to rely on fresh evidence from Mr Blunt, Mr Bishop and Mrs Banks. The central evidence was Mr Blunt’s account that Mrs Cox had been told about a local authority letter warning of financial reductions before the sale. The question was whether the evidence should be admitted and, if so, whether the first-instance findings were safe.

1. Appeal allowed; retrial ordered. The evidence of Mr Blunt satisfied the relevant principles governing fresh evidence. The further evidence of Mr Bishop and Mrs Banks was admitted consequentially.
2. The principles in Ladd v Marshall remained relevant under the Civil Procedure Rules, but as considerations guiding the discretion rather than as inflexible rules. The court had to exercise that discretion consistently with the overriding objective. The approach stated in Hickey v Marks was accepted.
3. The Banks had exercised reasonable diligence. Mrs Banks had made several attempts to locate Mr Blunt, and requiring further solicitor-led inquiries would have imposed a counsel of perfection rather than the standard of reasonable diligence.
4. Mr Blunt’s evidence was apparently credible. Its ultimate reliability was a matter for the trial judge after oral evidence and cross-examination.
5. The evidence could have an important influence on the result. If accepted, it could support findings that Mrs Cox knew of the local authority’s warning, discussed it before the sale, and deliberately concealed it. It could also undermine the findings on misrepresentation, causation and the reliability of other evidence.
6. Lloyd J had erred in treating the local authority letter as incapable of falsifying the answer to the pre-contract inquiry. A material change may be immediate even though its consequences emerge later. Withdrawal of the financial foundation on which a business depends may affect its nature or essential quality.
7. The judge’s approach to causation also required reconsideration. In a fraudulent or reckless misrepresentation case, the representation is presumed to have induced the transaction unless the representor proves that it did not even cause the claimant to persevere with a decision already made, applying Barton and County Nat West Ltd.
8. In the light of the fresh evidence, the findings of Lloyd J were unsafe. A retrial before another Chancery Division judge was ordered. Costs of the appeal and the fresh-evidence application were left to the discretion of the retrial judge.

• Court of Appeal (Civil Division) — [2000] EWCA Civ 5565: appeal from Lloyd J’s dismissal of the misrepresentation claim allowed; fresh evidence admitted and retrial ordered.
• Chancery Division — Lloyd J, 17 April 2000: claims against Mr and Mrs Cox and their solicitors dismissed. No appeal was pursued against the solicitors.