Barnsley Metropolitan Borough Council v Norton

The Court of Appeal considered an appeal against summary judgment obtained by suppliers who relied on retention of title clauses in letters dated 3 June 2008 purportedly signed by a Jet Star director. The primary issues were whether fresh evidence should be admitted on appeal and, if so, whether it would have materially affected the judge’s finding that the defendant had no real prospect of defending the retention of title claim. The court applied the Ladd v Marshall criteria as explained in Aylwen v Taylor Johnson Garrett and considered due diligence and credibility of late evidence from (a) a former shareholder of Jet Star (Mr Brafman) and (b) an administrator (Mr Bennett) about what a director (Ms Deacock) had said about the date of signing. The court rejected Mr Brafman’s late evidence as not credible but admitted the administrator’s evidence as capable of raising a realistic, if limited, prospect of defence. Because that fresh evidence made the defence more than fanciful the court allowed the appeal but imposed a condition that the defendant pay £600,000 into court.

This was an appeal from a summary judgment given in the Chancery Court at Leeds (HHJ Langan QC) on a claim by three connected suppliers that certain goods supplied to Jet Star Retail Ltd were subject to a retention of title clause stated in three letters dated 3 June 2008 signed by the company’s buyer/director, Ms Dolly Deacock. Jet Star went into administration and its business was purchased by Internacionale; the suppliers sued Internacionale in conversion and for the value of unpaid goods. HHJ Langan granted summary judgment for the suppliers on the grounds that the defendant’s case was no more than suspicion and there were "no solid reasons for disbelieving" the suppliers’ evidence.

The appeal focused on whether fresh evidence should be admitted. The appellant sought to rely on late statements: (i) a statement by Mr Mark Brafman (a former shareholder and influential figure in Jet Star) denying knowledge of or involvement with the letters, and (ii) a statement by Mr Neil Bennett, an administrator, describing a conversation with Ms Deacock in which she had (allegedly) said the retention letters were signed in November 2008, shortly before administration, rather than on 3 June 2008. The court applied the three Ladd v Marshall criteria (as expounded in Aylwen): the evidence could not have been obtained earlier with reasonable diligence, it would probably have an important influence on the result, and it must be apparently credible.

• Nature of the claim/application: claim for conversion/damages arising from alleged retention of title clauses in supplier letters signed 3 June 2008.
• Issues framed by the court: admissibility of fresh evidence on appeal (Ladd v Marshall criteria); due diligence in seeking evidence pre-hearing; credibility and weight of the late evidence; whether the fresh evidence would have given the defendant a realistic prospect of defence to the summary judgment.
• Reasoning: the court found that Internacionale had not acted without due diligence in seeking administrator evidence and that the administrators controlled relevant material; Mr Brafman’s late evidence was inconsistent with his earlier statements and hence not credible so did not meet Ladd v Marshall. By contrast Mr Bennett’s statement, despite concerns about the circumstances in which it arose and the absence of prior disclosure, was sufficiently credible and relevant that it could have influenced the outcome by providing the defendant with more than a fanciful prospect of defence. Given the limited strength of that prospect the Court of Appeal allowed the appeal but conditioned the grant on payment into court of £600,000 to protect the claimant’s position.

The court therefore set aside the unconditional summary judgment and remitted the case to permit the defendant to defend if it complied with the payment condition; the decision highlights the stringent assessment of credibility required for late evidence and the court’s willingness to admit administrator evidence where it may materially affect an appeal from summary judgment.

Appeal allowed. The Court of Appeal admitted fresh evidence from the administrator (Mr Bennett) but excluded the later statement of Mr Brafman as not credible. The administrator’s evidence raised a prospect of a defence to the retention of title claim which was more than fanciful, so the summary judgment should not stand unconditionally. The appeal was allowed on condition that the defendant pay £600,000 into court to protect the claimants' position.

HHJ Langan QC, Chancery Court at Leeds: summary judgment for the claimants (24 March 2010). Permission to appeal granted by Longmore LJ (22 October 2010). Appeal determined in the Court of Appeal: [2011] EWCA Civ 384 (07 April 2011).