The case of Clear Call Limited – v – Central London Investments Limited [2016] EWCA Civ 1231 [2017] provides further guidance of the application of the Ladd – v – Marshall ([1954] EWCA Civ 1) test for the submission of new evidence in a case where judgment has already been delivered. The case concerned the new rent on an unopposed business lease renewal pursuant to the Landlord and Tenant Act 1954 in which the tenant had been refused permission to adduce fresh evidence seeking to establish that one of the comparable transactions relied on by the landlord and accepted by the judge at first instance was a sham.
The facts of the case are that the tenant Clear Call had applied for a new tenancy. The landlord Central London Investments disagreed as to the terms, in particular the rent. Both parties called experts to give rental valuation evidence. Clear Call argued that one of the landlord's comparables was "suspicious" with an artificially inflated rent designed to push up the landlord's returns on other properties it owned, although the first instance judge was content to rely upon it when setting the rent. On the first appeal to the High Court, Clear Call applied to submit new evidence which dealt with the condition of the comparable property, that the lessee was a non-trading company and that it made no commercial sense to pay £400,000 a year to run a fish shop in Edgware Road. Laing J rejected the application because the evidence failed the Ladd – v – Marshall test. That test requires firstly that the evidence could not have been obtained with reasonable diligence at the trial; secondly that the evidence would probably have had an important influence on the outcome of the case, though it need not be decisive; and finally that the evidence must be apparently credible, though it need not be incontrovertible.
The Court of Appeal upheld that decision. The fresh evidence could, in substance, have been deployed at the trial and it therefore failed the Ladd – v – Marshall test. Reliance on dicta in Davy's of London (Wine Merchants) Limited – v – City of London Corp [2004] EWHC 2224 (Ch) was misplaced. Certain disputes as to the terms of the new tenancy might be suitable for fresh evidence. In the Davy's of London's case the dispute was about the insertion and detailed terms of a redevelopment break clause and it therefore turned on an assessment of future rather than past events whereas the present issue was as to whether the trial judge had properly relied on an historic transaction as a comparable. The new evidence was not an important influence on the outcome of the case, added nothing to the existing evidence and therefore failed to satisfy the Ladd – v – Marshall test.
The case illustrates the high threshold required for submission of fresh evidence and that care should be taken to ensure that all evidence (in particular as to past events) is presented at trial.
This article first appeared in the Estates Gazette.
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