J J Harrison (Properties) Ltd v Harrison

On an application for permission to appeal, fresh evidence may be admitted where it satisfies the Ladd v Marshall principles: it is apparently credible, could not reasonably have been obtained for the trial, and is sufficiently material that it might affect the result. A credible post-trial letter concerning a party’s earlier decision not to investigate possible wrongdoing can materially affect an assessment of laches.

An extension of time may be granted where the new evidence provides a satisfactory explanation for the delay and objectively supports a reassessment of the prospects of appeal. Permission should be granted where the proposed grounds have a real prospect of success. A limitation argument concerning an account of profits is not fanciful merely because the claim is framed in equity.

The defendant, Peter Harrison, sought permission to appeal from liability findings made by Mr Kevin Garnett QC, sitting as a Deputy High Court Judge. The judge had held that a 1986 sale of land by the claimant company to its director was liable to be set aside for breach of the self-dealing rule, but rescission was no longer possible. The company elected for an account of profits. The judge rejected defences of laches and limitation and refused permission to appeal.

The applications concerned permission to appeal, admission of a February 2001 letter as fresh evidence, and an extension of time. The central issues were whether the letter might materially affect the laches assessment, whether it explained the delayed application, and whether proposed arguments under sections 21 and 23 of the Limitation Act 1980 had a real prospect of success.

Lord Justice Mummery gave the judgment of the court, with Mr Justice Wilson agreeing. The applications were allowed.

1. The February 2001 letter was admitted as fresh evidence under CPR 52.11(2)(b). It was apparently credible, was not available to the defendant’s advisers at trial, could not reasonably have been obtained earlier, and was material to laches. The letter suggested that the company’s members had deliberately decided in 1992 not to investigate possible wrongdoing. That evidence, together with the company’s knowledge of the transaction and its profits, might have influenced the judge’s conclusion that pursuing the claim was not unconscionable.
2. The delay in seeking permission was satisfactorily explained. The letter could reasonably lead the defendant and his advisers to reassess the prospects of an appeal on laches. The court therefore extended the time for appealing under CPR 52.6.
3. Permission to appeal was granted because the laches ground had a real prospect of success. The court did not determine the merits of laches, but identified a prima facie inconsistency between the new letter and evidence relied upon at trial.
4. Permission was also granted on the limitation ground. The proposed argument under sections 21 and 23 of the Limitation Act 1980 was not fanciful. The claim was for an account of profits, rather than recovery of trust property or its proceeds within section 21(1)(b), and it was arguable that that provision did not apply.

Costs were reserved to the outcome of the appeal, and expedition was recommended.

• Court of Appeal (Civil Division): The court granted permission to appeal, admitted fresh evidence, extended time for appealing, reserved costs, and recommended expedition.
• High Court: Mr Kevin Garnett QC, sitting as a Deputy High Court Judge, decided liability on 7 December 2000, ordered an account of profits, rejected laches and limitation defences, and refused permission to appeal.