Riyad Bank & Ors v Ahli United Bank (UK) Plc

Under Civil Procedure Rules 1998, r 52.11(2), fresh evidence should be admitted on appeal only where special grounds justify it. The Ladd v Marshall criteria remain powerful guidance, but the ultimate question is whether fairness justifies overriding finality in order to achieve the right result.

An appellate court should be particularly cautious where post-trial material amounts to further cross-examination of a witness already cross-examined on reliability. Evidence should be excluded where it is only marginally relevant, a concession resolves the material point, and its admission would impose a disproportionate burden. A new ground of appeal cannot be founded on a general methodological ruling where the application and reliability of the method remain open for determination at a later trial stage.

The proceedings concerned advice given on the value of 198 equipment leases purchased by a fund for just over US$100 million. In a first-stage Commercial Court trial, Moore-Bick J decided the duty issue and laid down principles for valuing estimated residual value, while leaving precise quantum for a second stage.

Ahli United Bank (UK) plc had permission to appeal the duty ruling. Permission to challenge the valuation ruling was initially refused. At this hearing, the Court of Appeal granted permission on four existing valuation grounds, concerning the valuation benchmark, renewals, discount rates and the permissible valuation range.

The bank also sought to introduce post-trial solicitor correspondence about an expert's residual-value matrices and to amend its notice of appeal. It contended that the material undermined the expert's reliability and justified a new challenge to the use of matrices. The central issue was whether that material should be received as fresh evidence and whether the proposed new ground was arguable.

1. Disposition. Waller LJ, with whom Dyson LJ agreed, granted permission to appeal on the four existing valuation grounds. The court refused permission to amend the notice of appeal and refused to admit the proposed fresh evidence.

2. Fresh evidence. Under Civil Procedure Rules 1998, r 52.11(2), fresh evidence may be received only if the court orders otherwise. The requirement for special grounds remained. The criteria in Ladd v Marshall, [1954] 1 WLR 1489, remained powerful guidance: reasonable diligence, likely material influence on the result, and apparent credibility. They informed, rather than displaced, the ultimate balance between finality in litigation and achieving the right result.

3. Particular caution. The court should be especially cautious where the proposed evidence is effectively further cross-examination of a witness, including an expert, who was cross-examined at trial. The first-stage order had contemplated that cross-examination on reliability would occur then. It would therefore require a compelling justification to use later questions and answers to reverse the trial judge's assessment of credibility or reliability, or to seek a new trial.

4. Application. The proposed correspondence did not support an arguable new ground about matrices. Moore-Bick J had held only that matrices were generally a permissible tool. He had expressly left open at stage 2 challenges to the construction, evidential basis and use of each particular matrix. As to the existing valuation grounds, the expert's reliability on the disputed points was at most marginally relevant. The respondents' concession concerning the limited equipment categories gave the appellant an adequate answer to the point it wished to make. Admitting dense correspondence to explore matters of marginal relevance would be disproportionate.

• Court of Appeal (Civil Division) — in [2005] EWCA Civ 1419, granted permission to appeal on four existing valuation grounds, but refused the applications to adduce fresh evidence and to amend the notice of appeal. The merits of the valuation appeal were not determined.
• Court of Appeal (Tuckey LJ) — refused, on paper, permission to appeal the valuation aspect.
• Commercial Court — Moore-Bick J, on 1 March 2005, decided the duty issue and the principles governing valuation at the first stage of a split trial. He granted permission to appeal the duty issue but refused permission on valuation.