Marchmont Investments Ltd. v BFO SA

An appellate court has discretion to admit fresh evidence under the Civil Procedure Rules, exercised in accordance with the established Ladd v Marshall guidelines. Evidence should ordinarily be refused where it could have been obtained for trial through reasonable diligence, even if it is apparently credible and might materially affect the result.

The reasonable-diligence requirement promotes finality in litigation. A party who appreciates a witness's potential importance must make a real and timely effort to locate that witness. The overriding objective does not justify a second opportunity to produce evidence that reasonable pre-trial enquiries could have secured.

The claimant appealed from Master Moncaster's finding that no oral standstill agreement had been made between the claimant's controlling director and the defendant bank. The Master preferred the bank's witness and found the alleged agreement unsupported by contemporaneous documents.

The appeal depended entirely on proposed fresh evidence, principally a post-judgment statement from a third person who had attended the relevant meeting and supported the claimant's account. The respondent accepted that this evidence was apparently credible and might have influenced the result. The central issue was whether the claimant had shown that the evidence could not, with reasonable diligence, have been obtained for the trial.

1. The appeal was dismissed unanimously. The court refused to admit the proposed fresh evidence because the claimant had not satisfied the reasonable-diligence limb of the Ladd v Marshall test.

2. Under Rule 52.11(2)(b) of the Civil Procedure Rules, the court has a discretion to receive fresh evidence on appeal. That discretion is exercised in accordance with established guidelines. The first Ladd v Marshall principle reflects the public policy that litigation should achieve finality. A disappointed litigant should not ordinarily receive a second opportunity to rely on evidence which ought to have been produced at the original hearing.

3. The claimant understood before trial that the missing attendee might be an important witness. Its solicitors asked the bank for information about him, but did not press for an early response. After the bank declined to provide the information, the claimant made only one informal attempt to find him. It did not employ readily available methods such as Internet and directory searches, enquiries through its English or French lawyers, further requests to the bank, or an application for disclosure of his address.

4. The evidence did not show that the witness was difficult to find. The ease with which he was located after the claimant knew it had lost supported the conclusion that a real pre-trial effort would have found him. The claimant therefore failed to demonstrate reasonable diligence, notwithstanding the respondent's acceptance that the evidence was apparently credible and potentially influential.

5. The overriding objective did not require a retrial. Justice would not be served by giving the claimant a further opportunity which it could and should have taken before the first hearing. The court expressed no conclusion on what effect the fresh evidence might ultimately have had if admitted.

The appeal was dismissed with costs, summarily assessed at £18,575.

• Court of Appeal (Civil Division): Dismissed the claimant's appeal and refused to admit the proposed fresh evidence. Costs were summarily assessed at £18,575.
• High Court, Chancery Division: Master Moncaster found after trial that the alleged oral standstill agreement had not been made. Waller LJ subsequently granted permission to appeal.