Issitt & Anor v Harwood & Anor

On an application for permission to appeal, fresh evidence must be materially relevant and capable of giving the appeal a real prospect of success. Evidence about a witness’s reliability on a different issue will not satisfy that threshold. A party cannot revive an issue which was available before, and inconsistent with, an earlier unappealed order. In valuing contractual assets, a judge may use the methodology adopted by the parties and is not bound by expert evidence, even joint evidence. A reasoned departure from agreed expert evidence is permissible in a rare case where other evidence compels it. The judge may assess each expert point on its merits and rely on unchallenged evidence considered with the evidence as a whole. An appellate court will not intervene merely because criticisms can be advanced, particularly where the trial judge saw the witnesses and gave a careful judgment.

Mr and Mrs Issitt agreed to sell a nursing home business and its assets to Mr and Mrs Harwood, who entered into occupation and operated the business while paying the price by instalments. Following default, the Issitts obtained an order for possession and for an inquiry and account under the agreement. That order was not appealed.

At the subsequent inquiry, a High Court judge struck out parts of the Harwoods’ defence and counterclaim and assessed the sum payable under the contractual valuation provision. Permission to appeal was refused below. The Harwoods renewed their application in the Court of Appeal and sought to rely on an Employment Tribunal decision as fresh evidence, together with challenges concerning lawful occupation, the valuation procedure, expert evidence and expenses. The central questions were whether those points had any real prospect of success and whether the fresh evidence was materially relevant.

Application refused. Lord Justice Aldous gave the judgment, with Lord Justice Rix agreeing.

1. Fresh evidence. The Employment Tribunal decision concerned the reliability of Miss Issitt’s evidence about employment records and notes in a different dispute. It did not determine that she had deliberately suppressed evidence, and the issues and points on which she gave evidence differed from those in the valuation proceedings. Even assuming that the decision was admissible, it could not materially affect the judge’s assessment of the relevant evidence or give the proposed appeal a real prospect of success.
2. Lawful occupation and the prior possession order. The Harwoods had obtained what they had contracted for. They knew that the property was subject to charges in favour of Barclays Bank, and there was no basis for implying a term that their occupation would be free from that position. The point was also raised too late. It was available before the earlier order for possession, which proceeded on the basis that the agreement was enforceable, and no appeal had been pursued. The issue was therefore concluded by that order.
3. Contractual valuation. The judge carried out the task required by clause 19.2.2 by ascertaining the open market value of the premises, goodwill and fixtures using the factors accepted by both experts as the appropriate valuation method. It was too late for the Harwoods to rely on clause 19.2.3 or to resile from the approach adopted at trial, particularly after the result was known.
4. Expert evidence. A judge is not bound by expert evidence, even where experts agree. There was no inconsistency between the judge’s statement that he would depart from joint expert evidence only where other evidence showed it to be plainly wrong and his later conclusion that this was a rare case requiring rejection of the joint view. He gave reasons for that conclusion. He was entitled to examine each point on its merits and was not required to prefer either expert.
5. Expenses and appellate review. Although a judge cannot act without evidence, he may consider the evidence as a whole and rely on an unchallenged report or schedule where appropriate. The judge’s careful factual and evidential assessment, including his advantage in seeing the witnesses, disclosed no real prospect that the Court of Appeal would reach a different conclusion. Permission to appeal and the related application were refused.

• Court of Appeal (Civil Division): The renewed application for permission to appeal, including the application to rely on further evidence, was refused: [2001] EWCA Civ 1516.
• High Court: His Honour Judge Langan QC struck out the relevant defence and counterclaim and determined the inquiry under the agreement. Permission to appeal was refused.
• District Judge: District Judge Gill ordered that the agreement be brought to an end, possession be delivered to the Issitts, and an inquiry and account be taken. The appeal against that order was not pursued.