Banks & Anor v Cox & Anor

On an application to rely on fresh evidence after a retrial, the evidence should be complete, capable on its face of changing the main run of the case if accepted, and shown to have been unavailable despite due diligence. A later challenge cannot ordinarily reopen the order directing a retrial without something of much more fundamental significance. In assessing an arguable misrepresentation about a business, withdrawal of the business’s foundation may constitute an immediate change in its nature even where the consequences emerge later. The issue remains fact-sensitive.

The claimants bought a nursing and care home business and took a lease of the premises from the defendants. At the original trial, Lloyd J found for the defendants. The claimants obtained a retrial on the ground of newly discovered evidence. On the retrial, Lawrence Collins J found that fraudulent misrepresentation had induced the purchase and lease.

The defendants applied for permission to appeal, relying on alleged representation difficulties, fresh evidence, challenges to the findings on the local authority’s warning letter, and quantum. The central issues were whether the proposed fresh evidence and legal challenge justified further appellate consideration, and which remaining grounds had sufficient viability.

Disposition

Lord Justice Sedley adjourned the application for permission to appeal to a full court, on notice to the claimants, in respect of sections 1(a), 1(b) and 3(a) of the defendants’ skeleton argument. Permission was refused at that stage on the remaining grounds.

1. Fresh evidence. Evidence relied upon after a retrial should be put into complete form. If believed, it should appear capable of changing the main run of the case. The applicant must also show that it was unavailable through due diligence in time for the retrial. The proposed evidence concerning earlier marketing of the home and the meeting minutes was presently incomplete, so those matters required consideration by the full court.
2. Misrepresentation. The earlier Court of Appeal approach was a permissible legal approach to the question whether the local authority’s warning disclosed a material change in the nature or conduct of the business. A change may occur when the foundation of a business is withdrawn, even though its consequences emerge later. Whether the answer to the pre-contract enquiry was false might therefore depend more on the facts than on law, although sufficiently strong facts might be required.
3. Rejected grounds. The representation difficulties at the retrial disclosed no error by the trial judge. Quantum had no present relevance except at a later quantum hearing. The challenge to the order for a retrial could not be used to reopen the earlier stage of the litigation without something of much more fundamental significance.
4. Further procedure. The full court could determine the appeal directly if it concluded that permission had a real prospect of success. The hearing was expedited, and notice of the adjourned application had to be served on the claimants’ solicitors by 9 April 2001.

• Court of Appeal (Civil Division): The present application was adjourned to a full court on limited grounds, with permission refused on the remaining grounds: [2001] EWCA Civ 492.
• Court of Appeal (Civil Division): The claimants obtained a retrial on the ground of newly discovered evidence after the original trial.
• Chancery Division: Lloyd J found for the defendants at the original trial. On retrial, Lawrence Collins J found that fraudulent misrepresentation had induced the claimants’ purchase of the business and lease of the premises.