LTE Scientific Ltd. v Thomas & Anor

On an appeal from a case-management order, an appellate court should ordinarily be slow to interfere. It must intervene where the judge’s reasoning is defective, including where the judge has failed to assess the real prejudice caused by admitting late factual evidence.

Delay or a party’s earlier failure to appreciate the need for evidence does not alone justify exclusion. The court should permit relevant evidence where the opposing party can answer it without real prejudice, while maintaining an urgent trial timetable. Proposed expert evidence may properly be excluded where it is unhelpful or inadmissible and would jeopardise an imminent hearing. Evidence of the parties’ subjective intentions in negotiations is inadmissible to construe their written agreement.

LTE Scientific Ltd bought the assets and goodwill of a company controlled by Mr Thomas. On the same day, Mr Thomas entered a service agreement containing a 12-month covenant restricting work for LTE’s competitors after his employment ended.

LTE alleged that Mr Thomas had breached that covenant and obtained an interlocutory injunction. A preliminary issue was ordered on whether the covenant was enforceable. Before that urgent hearing, LTE sought to adduce a further factual affidavit, expert evidence and cross-examination. A deputy High Court judge refused those steps, apart from extending the hearing estimate.

LTE appealed the case-management decision. The central issue was whether the requested evidence and procedural measures should be permitted without compromising the prompt determination of the preliminary issue.

1. Appeal allowed in part. Lord Justice Neuberger, with whom Lord Justice Longmore agreed, granted permission to appeal only in respect of the further affidavit of LTE’s witness. The appeal was otherwise refused.

2. The proposed expert report was properly excluded. It was largely composed of general material which could instead be put to the trial judge, and its case-specific conclusions were either unhelpful or based on information supplied by LTE’s witness rather than expert knowledge. Even if it had been relevant and helpful, admitting it would probably have lost the imminent trial date. That would have been particularly unfair while an injunction under a time-limited covenant remained in force.

3. The court also declined to order cross-examination in advance. The trial judge was better placed to decide whether cross-examination was useful and, if so, on what topics. The court indicated that the market, the businesses at the time of sale, and Mr Thomas’s expertise could potentially be relevant. However, subjective evidence of what the parties intended their agreement to mean in negotiations was inadmissible on construction, following [1998] 1 WLR 896.

4. The deputy judge’s exclusion of the further factual affidavit was flawed because he had not addressed the decisive question of prejudice. A party’s failure to anticipate the need for late evidence is not normally sufficient by itself to exclude it. The proposed evidence concerned matters already in issue and could be answered without real prejudice to Mr Thomas. Paragraphs 11 onwards of the affidavit were therefore admitted, subject to Mr Thomas being allowed time to respond. Paragraphs 3 to 10 were to be ignored for the preliminary issue.

5. The preliminary issue was to be heard without delay, preferably with two days available if required. There was no order for costs.

• Court of Appeal (Civil Division) Allowed LTE’s appeal only as to the admission of part of the further factual affidavit: [2004] EWCA Civ 1622.
• High Court of Justice, Queen’s Bench Division A deputy High Court judge refused permission for further factual and expert evidence and for cross-examination, save for extending the hearing estimate to one day.