Breith v Kelly

Permission to appeal on fresh evidence should be refused where the evidence could, with reasonable diligence, have been obtained before trial. The applicant must satisfy all three limbs of the Ladd v Marshall test: the evidence could not reasonably have been obtained earlier, it would probably have an important influence on the result, and it is apparently credible.

Where a partnership agreement provides separate mechanisms for expulsion and termination on notice, an immediate expulsion notice cannot ordinarily be construed retrospectively or alternatively as six months’ notice. An alternative notice should be expressly served.

The parties carried on a home-care business under a written partnership agreement. The defendant purported to expel the claimant for alleged breaches and conduct detrimental to the partnership. The county court found that the alleged grounds were not established, apart from a joint failing, and held that the notice was not six months’ notice under the agreement.

The defendant sought permission to appeal, relying on fresh evidence and arguing alternatively that the expulsion notice should be construed as a valid notice terminating the partnership on six months’ notice.

1. The application for permission to appeal was refused.
2. The fresh evidence did not satisfy the first limb of the Ladd v Marshall test, reported at [1954] 1 WLR 1489. Although the application form would probably have had an important influence on the result and was apparently credible, the defendant had believed before trial that the claimant had applied for outside employment. With reasonable diligence, she could have sought disclosure from the relevant agency or called evidence from it. The material did not establish that those steps would have failed.
3. The subsidiary contractual argument also had no reasonable prospect of success. The agreement contained two distinct mechanisms for ending the partnership: expulsion with immediate effect and termination on six months’ written notice. The expulsion notice was expressed in terms inconsistent with the alternative mechanism. It could not be construed as six months’ notice merely because it evidenced an intention to end the partnership.
4. If the defendant wished to rely on both mechanisms, she should have served an expulsion notice and stated expressly, without prejudice to its validity, that she was alternatively giving six months’ notice.

Order: Application refused.

• Court of Appeal (Civil Division): Permission to appeal from the decision of Slough County Court, HHJ Critchlow, was refused.