Clear Call Ltd v Central London Investments Ltd

Fresh evidence on appeal remains subject to the three cumulative Ladd v Marshall conditions. It is not automatically admissible because the relevant date for a new tenancy may be the appeal date under section 64 of the Landlord and Tenant Act 1954. Evidence which could have been deployed at trial, or which adds little of real substance, will not justify admission. A historic rental comparable may be relied upon where the transaction occurred and the evidence does not establish a sham. An appellate court will not reopen a credibility-based rejection of a sham allegation without material fresh evidence.

Clear Call was the tenant of business premises whose new rent and interim rent were fixed by HHJ Faber at £125,700 and £80,000 per annum. The issue arose under Part II of the Landlord and Tenant Act 1954. Laing J dismissed Clear Call’s first appeal on 7 November 2014.

On this second appeal, Clear Call challenged reliance on a historic letting to Al Qahtani as a comparable, alleging that it was a sham. It also sought to adduce later witness statements and argued that section 64 required fresh evidence because the relevant date was the appeal date. The central questions were whether the evidence satisfied the appellate test for fresh evidence and whether the courts below were entitled to rely on the Al Qahtani transaction.

1. Appeal dismissed. Briggs LJ gave the reasons, with Sales LJ and the President of the Family Division agreeing. The Court of Appeal upheld Laing J’s dismissal of Clear Call’s first appeal.
2. Statutory valuation issue. Section 34(1) of the Landlord and Tenant Act 1954 required determination of the rent at which the holding might reasonably be expected to be let in the open market by a willing lessor, subject to the statutory disregards. The county court was entitled to assess the Qahtani and Lloyds transactions as comparables.
3. Fresh evidence. The three cumulative conditions in Ladd v Marshall continued to govern. Evidence that the premises remained vacant after trial added little and failed the second condition. Evidence that the tenant was registered as dormant could have been deployed at trial and failed the first condition. The remaining matters had no evidential substance or were equally available earlier.
4. Section 64 and Davy’s of London. Section 64 did not create an obligation to admit fresh evidence merely because the appeal date was relevant to the terms of the new tenancy. Davy’s of London (Wine Merchants) Limited v The City of London Corporation, [2004] EWHC 2224(Ch), was distinguishable. There, the evidence had been admitted and cross-examined by agreement, and the dispute concerned future events and a redevelopment break clause. This appeal concerned whether reliance on a historic transaction was proper.
5. Alleged sham. Even if the additional evidence and evidence in reply had been admitted, they would not materially advance the allegation. The transaction occurred after negotiations, rent was paid for a substantial period, and planning permission for a change of use was actively pursued. Later vacancy, dilapidation, dormant registration and alleged commercial implausibility did not establish that the letting was a sham or unreliable.

• Court of Appeal (Civil Division): Second appeal dismissed on 7 December 2016, reported at [2016] EWCA Civ 1231.
• High Court (Queen’s Bench Division): Laing J dismissed Clear Call’s first appeal by order dated 7 November 2014.
• County Court at Central London: HHJ Faber fixed the new rent at £125,700 per annum and the interim rent at £80,000 per annum by order dated 9 May 2014.