Practice and procedure – Admission of late evidence – Claim for specific performance of agreement for sale of land – Defendant seeking to rescind agreement on ground of fraudulent misrepresentation – Claimant asserting that honesty of representation demonstrated by statements made by person not initially called as witness – Whether appropriate to admit late evidence from that person – Application allowed
By two separate agreements, the defendant agreed to purchase a former fire station from the claimant for £4.2m and an area of adjoining land from the city council for £1.8m. The agreement with the claimant was subject to the standard commercial property conditions (1st ed). The defendant failed to complete the purchases on time to comply with a completion notice served on it by the claimant.
The claimant brought proceedings for specific performance of its sale agreement, but the defendant denied that it was liable to complete. By its defence, and in a claim against the city council under CPR 20, it claimed that it was entitled to rescind the contract on the ground of a fraudulent representation in the sales particulars made by the claimant and the city council through their selling agents. The alleged misrepresentation was an incorrect statement that the fire station alone could accommodate 600 bedrooms within a development of student or key worker accommodation; the claimant and the city council accepted that this was incorrect but denied that the statement had been made fraudulently.
The trial of the action ran for 10 days, during which both sides called their respective evidence. The defendant’s cross-examination of the selling agents focused on what had been said at a number of meetings between them and various planning officials of the city council, including J. The council had not called J as a witness, notwithstanding that their case was founded on statements made by him that were alleged to show that the representation in the sales particulars had been based on an honest belief.
The claimant and the city council applied to the court to rely on further evidence, including that of J. The defendant argued that it would be prejudiced by the admission of J’s evidence at such a late stage in the trial and that the court should not permit it.
Held: The application was allowed.
CPR 1.4 imposed a duty on trial judges actively to manage cases in order to further the overriding objective in CPR 1.1 of dealing with cases in a just manner. The trial judge had to exercise his discretion as to whether to admit late evidence in accordance with the principles of the CPR, consistently with the court’s overriding duty to give each party the opportunity fairly and fully to present its case, while ensuring that a decision in favour of one party based on that duty did not unfairly affect other parties. Although the court had to be fair to the party that was not at fault, a decision to exclude evidence should not be made merely because it was late. The judge should take account of all factors in the case and weigh them together to come to the appropriate conclusion, in accordance with the duties enshrined in the CPR. Lateness was only one factor, and a party that sought to introduce new evidence was not placed under a heavy onus to justify it simply because it was late. If important evidence emerged late in the trial, it was essential that it was heard, provided that it would not fatally prejudice the other party. Where the late evidence could be dealt with properly by the other party, even on terms as to adjournment in costs, then the evidence should ordinarily be allowed: Worldwide Corporation Ltd v GPT [1998] EWCA Civ 1894 and Cobbold v Greenwich London Borough Council [1999] EWCA Civ 2074 applied; Mason v Mills & Reeve [2011] EWCA Civ 14 not followed.
It was incumbent on a trial judge to deal with such matters robustly and expeditiously. If the decision were exercised according to the principles set out above, it should ordinarily fall within the remit of the judge’s discretion. Although the Court of Appeal had a residual power to overturn decisions made by the trial judge when they were so unreasonable that they could not have been reasonably made, that power should be exercised sparingly: British Sugar plc v Cegelec [2004] EWCA Civ 1450 applied.
In the instant case, the city council had given no sufficient reason why they had not originally called J as a witness. It ought to have been obvious to them, before the trial, that J’s evidence would be vital and his unexplained absence would be criticised by the defendant. However, if the evidence were not admitted the trial would proceed on an entirely false basis, with the potential to perpetuate a serious injustice against the claimant and the city council. The defendant’s case involved allegations of fraud by professionals carrying out their business and by officers of the city council, and a finding of fraud would have very serious consequences. Consequently, the claimant and the city council should be given the fullest opportunity properly and fairly to present their case to challenge the defendant’s allegations. Any prejudice to the defendant caused by the need for the parties to revisit their cross-examination in the light of the new evidence could be compensated by an adjournment to give the defendant’s counsel time to refamiliarise himself with the material. Given that the court was aided by its own notes and a transcript, an adjournment would not affect the court’s ability properly to recall the evidence and deal with it fairly as between the parties. On the other hand, it would be a gross injustice if the defendant were able to rely on the absence of J as a witness to criticise the city council’s case and to have the case decided in its favour on that ground, in circumstances where J had in fact been available as a witness. Even assuming, contrary to the foregoing, that there was a heavy onus on an applicant to justify the admission of late evidence, that onus had been discharged because the case for introducing J’s evidence was overwhelming.
Jonathan Seitler QC (instructed by Browne Jacobson LLP, of Nottingham) appeared for the claimant; Wilson Horne and Anthony Gill (instructed by Knights Solicitors LLP, of Newcastle-under-Lyme) appeared for the defendant; Barry Denyer-Green (instructed by the legal department of Nottingham City Council) appeared for the Part 20 defendant.
Sally Dobson, barrister
