Capital Bank Plc v McDiarmid

An appellate court should not interfere with a trial judge’s findings of fact where the evidence was fairly evaluated, adequate reasons were given and the conclusion was open on the material. Credibility findings may be assessed with documentary and expert evidence; handwriting evidence need not be conclusive if properly weighed.

Fresh evidence on appeal remains subject to the Ladd v Marshall criteria [1954] 1 WLR 1489, applied as discretionary considerations under modern procedure: reasonable diligence, probable important influence and credibility. Evidence merely suggesting dishonesty, or relating to an unidentified document unrelated to the issue, is insufficient. Opinion evidence on factual issues is inadmissible. An appellate argument based on an unpleaded case will not ordinarily be entertained.

Capital Bank sued Mr McDiarmid under a guarantee relating to West Somerset Logistics Ltd’s hire-purchase agreement for a truck. Mr McDiarmid alleged that his signature had been forged. Mr Recorder Dennys QC found the signature genuine and entered judgment for the bank, with interest and costs.

Mr McDiarmid sought permission to appeal, challenging the Recorder’s factual evaluation and raising an unpleaded due-diligence argument. He also sought to adduce an affidavit and other fresh material. The central issues were whether the authenticity finding was open to the Recorder and whether the proposed fresh evidence could justify appellate intervention.

Both applications were refused. Lord Justice Dyson gave the leading judgment. Lord Justices Wall and Buxton agreed with the reasons and the result.

1. The authenticity of the guarantee signature was the only issue before the Recorder. It was a pure question of fact. The Recorder gave detailed reasons for his assessment of the witnesses and the surrounding evidence. The Court of Appeal was not a trial court and could not interfere merely because it might have reached a different conclusion. The finding was plainly open to him.
2. The Recorder was entitled to take Mr McDiarmid’s credibility into account with the other evidence. He treated the witness statement of Miss Webster as providing only limited support and correctly treated the handwriting evidence as inconclusive but relevant to be assessed with the evidence as a whole.
3. The proposed argument that the bank failed to act with due diligence could not assist Mr McDiarmid. It had not been pleaded, and no case had been pleaded that the alleged failure caused him to enter into the guarantee.
4. Under the modern appellate procedure, the principles in Ladd v Marshall remained relevant as discretionary considerations rather than inflexible rules. The court had to consider whether the evidence could have been obtained with reasonable diligence for trial, whether it would probably have an important influence on the result, and whether it was apparently credible. These considerations reflected the balance between finality and achieving the right result, consistent with the overriding objective.
5. The Wills affidavit did not satisfy the important-influence requirement. It did not identify the document witnessed with sufficient particularity and more probably concerned the hire-purchase agreement and direct-debit details, not the guarantee. The Crowe material showed, at most, possible dishonesty by Mr Ainsby and did not link him to the alleged forgery. Mr Self’s factual opinion was inadmissible opinion evidence. The exacting requirements for fresh evidence were therefore not met.

Applications refused.

• Court of Appeal (Civil Division): On 7 February 2006, refused permission to appeal and refused permission to adduce fresh evidence.
• Exeter County Court: On 8 June 2005, Mr Recorder Dennys QC found that the guarantee bore Mr McDiarmid’s genuine signature and entered judgment for Capital Bank Plc, with interest and costs.