South East Asia Metal Ltd v Zahoor

Under rule 52.11(2) of the Civil Procedure Rules 1998, the discretion to admit evidence not before the lower court is governed by the requirements in Ladd v Marshall [1954] 1 WLR 1489: reasonable diligence, probable influence on the result and apparent credibility. A party cannot rely on confidentiality arrangements where it had a right to inspect the material, or was closely connected with someone who could have arranged inspection. The requirements are considered together, but finality is a pressing public need. Admission will therefore be exceptional in an ordinary commercial dispute. Evidence concerning documents already before the trial judge, which does not demonstrate a probable miscarriage of justice, will not normally justify a further appeal.

South East Asia Metal Ltd sought permission to appeal against a judgment of the High Court, Chancery Division, and permission to adduce documents discovered after trial in approximately 600 boxes held in Oregon.

The High Court had dismissed both the company’s claim for repayment of $958,000 and Mr Zahoor’s counterclaim for $2.5 million. The deputy judge found that numerous documents relied on by the company were forged or fraudulent.

The central issues were whether the further documents could have been obtained with reasonable diligence before trial, whether they would probably affect the result, and whether they were apparently credible.

The Court of Appeal, in the judgment of Lord Justice Longmore, agreed by Lord Justice Lawrence Collins and the Master of the Rolls, refused both applications.

1. Applicable test. Rule 52.11(2) of the Civil Procedure Rules 1998 gives the court a discretion to receive evidence not before the lower court. That discretion is governed by the three requirements in Ladd v Marshall [1954] 1 WLR 1489: the evidence could not have been obtained with reasonable diligence for use at trial; it would probably have an important influence on the result; and it was apparently credible, although it need not be incontrovertible.
2. Reasonable diligence. Mr Masood could not realistically be treated as a disinterested witness. He was closely aligned with the company, had supplied documents for the litigation and had been actively involved in related anti-Zahoor proceedings. Before trial he could have searched the Oregon boxes, sought permission to do so, or asked that relevant documents be disclosed. In addition, the company itself had a contractual right to inspect the boxes. Its alleged confidentiality concerns therefore did not prevent the evidence being obtained with reasonable diligence.
3. Other considerations. The requirements had to be considered together. In theory, failure to satisfy the first requirement might not be fatal where new evidence unequivocally demonstrated a miscarriage of justice. That was exceptional, however, particularly in an ordinary commercial dispute where finality of litigation was a pressing public need. The documents did not show that the judge must have been wrong. They concerned material already before her, and the evidence was not a decisive demonstration of error.
4. Postscript. The court noted, without deciding the point, that a future case might require consideration of an alternative action to set aside a judgment for fraud where the credibility of post-trial evidence could not be assessed satisfactorily on appeal.
5. Disposition. The further evidence was not admitted. The proposed appeal was hopeless without it. Permission to appeal and the application to adduce further evidence were both refused.

• Court of Appeal (Civil Division): refused permission to appeal and refused the application to adduce further evidence.
• High Court, Chancery Division: the deputy judge dismissed South East Asia Metal Ltd’s claim for $958,000 and Mr Zahoor’s counterclaim for $2.5 million, having found that numerous documents were forged or fraudulent.