ASSESSING THE RELIABILITY OF WITNESSES: HOW DOES THE JUDGE DECIDE? ANOTHER EXAMPLE

There have been several posts on this blog about the way in which a civil judge assesses the reliability of witnesses.  A further example can be seen in the judgement of Stephen Smith Q.C., sitting as a High Court judge,  in Freemont (Denbigh) Ltd -v- Knight Frank LLP [2014] EWHC 3347 (Ch).  The judge accepted the evidence of witnesses called by the defendant in the face of documentary evidence provided by the claimant.

THE ISSUES

The judge was deciding a number of preliminary issues in relation to whether the claimant was able to rely on a valuation provided by the defendant. This involved deciding the terms of the retainer and whether a duty of care was owed.

This required the judge to decide between the evidence of various witnesses, in particular between attendance notes prepared by a solicitor for the claimant and witnesses called by the defendant. The defendant’s case was that the file notes were concocted.

DECIDING BETWEEN THE WITNESSES

The judge did not shrink from addressing the issues head on.  Further he referred, as several other judges have explicitly in their judgments, to the “Bingham” guidance.

1. There is a conflict of evidence between these witnesses as regards the parts of the file notes which I have set out or referred to earlier in this judgment. It is not possible to resolve that conflict without finding that either Mr Bhailok or Mr Vose and Mrs Leece-Roberts have not told the truth in their evidence. If I have to resolve the conflict, I have to choose between them; and if I decide that it was Mr Bhailok who was not telling the truth, it will follow that he (or someone in cahoots with him) is guilty of having concocted a significant number of documents with a view to trying to improve Freemont Denbigh’s prospects of success in the litigation by misleading the Court.
2. I have asked myself whether it is necessary for me to resolve this conflict. I understand that each party contends that it may prevail, irrespective of how the conflict is resolved. However, each party also contends that if the conflict is resolved in its favour, I cannot do otherwise than answer the preliminary issues in its favour. I therefore have no option but to decide whether Mr Bhailok, on the one hand, or Mr Vose and Mrs Leece-Roberts, on the other, have not told the truth.
3. In his instructive article entitled The Judge as Juror: The Judicial Determination of Factual Issues, published in Current Legal Problems 38, Mr Justice Bingham (as he then was) made this observation:

“The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely from case to case:

(1) the consistency of the witness’s evidence with what is agreed, or clearly shown by other evidence, to have occurred;

(2) the internal consistency of the witness’s evidence;

(3) consistency with what the witness has said or deposed on other occasions;

(4) the credit of the witness in relation to matters not germane to the litigation;

(5) the demeanour of the witness.”

1. Mr Justice Bingham went on to conclude that the first three of the tests may be regarded in general as giving a useful pointer to where the truth lies, whereas the fourth test is more arguable. As regards the fifth, he was of the view that:

“the current tendency is … on the whole to distrust the demeanour of a witness as a reliable pointer to his honesty.”

Mrs Leece-Roberts

1. Mrs Leece-Roberts was a reluctant witness. I do not know the circumstances in which she was persuaded to give the short statement she did to Knight Frank’s lawyers. However, when the time came for her to appear at the trial, it became clear that she was not going to attend voluntarily. I was told that her attitude was shaped in part by her embarrassment at giving evidence against a party for whom she used to act, and in part by the practical consideration of a recent accident having unfortunately befallen her husband, who needed her assistance in order to obtain proper medical attention. In those circumstances I was persuaded to issue a witness summons on short notice requiring Mrs Leece-Roberts to attend Court at a time when it was thought that she would be least needed by her husband. She duly attended.
2. Once Mrs Leece-Roberts entered the witness box, it quickly became apparent to me that she was obviously a witness of the truth. Her calm and careful manner when giving evidence, and her quiet assurance when rejecting suggestions made on behalf of Freemont Denbigh that she would indeed have said or heard what the controversial passages in Mr Bhailok’s notes purported to record her as having said or heard, were impressive.
3. It is correct that Mrs Leece-Roberts could not remember the content of particular conversations she had had with Mr Bhailok at the relevant times, and she accepted that she could not. But after a gap of eight years, for the first seven of which she would have been blissfully unaware that her communications so long ago would eventually be subject to microscopic analysis, she could scarcely be criticized for not recalling the words actually spoken. It lies uneasy in the mouth of a claimant who has left it until almost the very last minute of the limitation period before issuing a claim, to cast doubt on the evidence of non-party witnesses because they have genuinely forgotten in the intervening years precisely what was said in telephone conversations which lasted just minutes.
4. Mrs Leece-Roberts was adamant that she would not have said the things which Mr Bhailok said she said and which Knight Frank challenge. I would have had no hesitation in accepting her denials even in the absence of the factors which discredit Mr Bhailok’s account to which I refer below. Mrs Leece-Roberts was in my judgment one of those witnesses – perhaps a rarity as Mr Justice Bingham suggested – whose demeanour whilst giving evidence was a reliable pointer to the truth.
5. I should mention specifically the note of the telephone conversation on 24th July between Mr. Bhailok and Mrs Leece-Roberts, which contains at least one sentence which Knight Frank challenge. Mr James Hall, counsel for Freemont Denbigh, submits that Mrs Leece-Roberts did not take issue with the challenged passage when the note was shown to her in cross-examination, which is correct. However, in my judgment that does not mean that Mrs Leece-Roberts “tacitly accepted” the accuracy of that passage. That would have been inconsistent with the essential thrust of her evidence, in particular as regards the contents of the other notes she was shown or commented upon.

Mr. Vose

1. Mr Vose left Knight Frank several years ago and has no continuing duty of loyalty to the firm. Like Mrs. Leece-Roberts he gave his evidence calmly, albeit at times a little nervously. His nervousness was understandable, given the allegations of negligence levied against the report he prepared.
2. Like Mrs Leece-Roberts, Mr Vose was adamant that he, or as the case may be Mr Bhailok, did not utter the controversial words which Mr. Bhailok recorded as having been uttered during the course of their conversations in 2006. There was nothing in Mr Vose’s demeanour whilst giving evidence to indicate that Mr Vose was not telling the truth when he denied the points put to him on behalf of Freemont Denbigh.

Mr. Bhailok

1. Mr Bhailok gave his evidence calmly and confidently. As with Mr Vose, I observed nothing in Mr Bhailok’s demeanour whilst giving evidence which suggested that he might not be telling the Court the truth.
2. Mr Jamie Smith, counsel for Knight Frank, referred me to a number of matters not germane to the litigation which he said discredited Mr Bhailok as a witness of truth. One of these matters was the fact that Mr Bhailok was disciplined by the Solicitors’ Disciplinary Tribunal in 2001. I agree with Mr Smith that it was not accurate to describe the charges found proven against Mr Bhailok as “technical account breaches“, as Mr Bhailok did in cross-examination: the Tribunal actually found Mr Bhailok and Mr Fielding had been guilty of conduct unbefitting solicitors, for a number of reasons. However the charges found proven were not charges of dishonesty, and those findings, in my judgment, do not impugn Mr Bhailok’s credibility.
3. Another matter which Mr Smith referred me to was Mr Bhailok’s unsuccessful attempt to reclaim the VAT paid on three high value motor vehicles which he purchased using Bhailok Fielding monies: one vehicle (a Bentley Continental) was seemingly for his own use, another (a Mercedes) was for the use of his wife, and the third (another Mercedes) for the use of his brother. But whilst Mr Fielding was cross examined in connection with the rejection of the reclaim by the VAT Tribunal (and, surprisingly, indicated that he had no knowledge of the purchases), Mr Bhailok was not; it would therefore not be fair to Mr Bhailok for me to attribute to him a dishonest motive for the VAT claim when that allegation was not put to him and he did not have the chance to comment upon it.
4. A further matter to which Mr Smith referred in this connection is something which does not quite fit Mr Justice Bingham’s description in test (4), because it concerns Mr Bhailok’s evidence at an interlocutory stage of these proceedings, and is therefore “germane” to the proceedings, albeit not to the Preliminary Issues. I suppose such a matter might be described as falling within test (4) a fortiori.
5. When the proceedings commenced in 2013, Knight Frank made an application for security for costs. Freemont Denbigh resisted the application. The evidence for Freemont Denbigh was given by Mr Bhailok, in the form of his first and second witness statements, and Mr Patel. In the course of his evidence, Mr Bhailok addressed the suggestion made by Knight Frank that he himself was personally involved with Freemont Denbigh and Acebench Investments. The suggestion was made because of the recognition in the authorities that impecunious claimants asked to provide security for costs can be expected to seek financial support for the proceedings from those who stand to benefit (whether directly or ultimately) from success in the proceedings.
6. Mr Bhailok rejected the suggestion that he was personally involved with either Freemont Denbigh or Acebench Investments, and in doing so he said this:

“I can confirm that I have never been a director or shareholder of the Claimant or Acebench Investments Limited as suggested and therefore I am not required to provide security for the Claimant. The articles referred to by Ms Lewis in her witness statement are factually inaccurate such as the reference to me being a director of Acebench Investments Limited. Ms Lewis identifies that these articles are inaccurate in her own witness statement … so I am unsure what the relevance of the articles are to the application. This seems to me to be a deliberate attempt by the Defendant to muddy the waters by attempting to undermine my credibility as the articles have no relevance to the basis of the application. I am a solicitor and an officer of the court and am aware of my duties when signing the statement of truth attached to this witness statement.”

1. It is correct that Mr Bhailok had never been either a director or a shareholder of Acebench Investments. But what Knight Frank did not know at that point in the proceedings, was that Mr Bhailok (and his wife) had been at all material times, and remained, shareholders of Acebench Limited, the parent company of Acebench Investments. I accept Knight Frank’s criticism of Mr Bhailok’s evidence in the first sentence of the passage I have just quoted, that it was not candid; indeed, I have no doubt that the evidence was deliberately not candid. Had Mr Bhailok provided the Court with the complete picture, he could not have gone on to say with any confidence, “and therefore I am not required to provide security for the Claimant“.
2. In my judgment this demonstrated lack of candour is a factor which does count against the credibility of Mr Bhailok. If it had stood alone, it would at least have caused me to be circumspect before accepting Mr Bhailok’s evidence on any controversial issue.
3. Mr Smith also referred to the inaccuracies in the evidence of Mr Bhailok and Mr Patel regarding the source of funds for the acquisition of the site by Freemont and/or Freemont Denbigh, to which I have referred. He submits that it is incredible that Mr Bhailok and Mr Patel, when sitting down together to prepare that evidence, as they did in 2013, could have so fundamentally misremembered the true sequence of events.
4. I agree that it is difficult to understand how such serious mistakes could have been honestly made. In the light of the errors, my findings as regards the credibility of Mr Patel, and in the absence of documentary corroboration for any of the transfers alleged to have been made by Freemont or Freemont Denbigh in respect of the purchase of the site, I cannot find that either company actually transferred funds in connection with their respective acquisitions of the site. I therefore do not accept that any person actually paid £310,000 plus VAT for the site, other than Acebench Investments. And that means that the evidence of Mr Bhailok and Mr Patel (including Mr Patel’s attempted correction of his initial evidence in his second witness statement) to the effect that Freemont Limited or Freemont Denbigh did make actual payments to purchase the site, was untrue, as they must have known.
5. The interlocutory evidence is therefore a significant pointer to the conclusion that as between Mrs Leece-Roberts and Mr Vose on the one hand, and Mr Bhailok on the other hand, it is the former two witnesses who are to be believed rather than the latter, on the question of the authenticity of the challenged passages in the notes of discussions to which I have referred. But significant though this point is, there is in my judgment an even stronger reason for disbelieving Mr Bhailok, which falls within Mr Justice Bingham’s test (1).
6. Careful study of the challenged parts of the discussions recorded in the notes, when set in their context, convinces me that the challenged aspects cannot have taken place. They are out of kilter with the contemporaneous correspondence for the reasons I have endeavoured to explain when discussing them. And it defies belief that if Mr Bhailok really had intended Knight Frank’s report to be prepared for the purpose of enabling Freemont/Freemont Denbigh to make a decision on whether to sell some or all of the site at some point in the future, that important consideration did not find expression in any of the contemporaneous (and unchallenged) documentary communications.
7. Mr Hall strenuously urged me to accept that the challenged parts of the notes were accurate. He rightly referred me to the well-known passages in the speech of Lord Nicholls of Birkenhead in Re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563, to the effect that whilst the standard of proof in a civil case is on the balance of probabilities, the probability of a solicitor concocting false documents to support a case, even ostensibly for the benefit of a (distant) family member, is so unlikely that it would require very persuasive evidence. He submitted that I should reject Knight Frank’s case because:

“it invites the Court to find an incredibly elaborate, foresightful, and sophisticated scheme of forgery, concoction and the persuasion of witnesses to perjure themselves (as well as [Ayub Bhailok] being prepared to take exceptional risks with his own career as a solicitor, and with the future of [Bhailok Fielding] as a firm) which is inherently unlikely.”

Whilst I consider that this submission exaggerates the elaboration and sophistication which was required, and believe that the only witness who may have been persuaded to give perjured evidence was Mr Patel, I agree with the general thrust of this submission. I have therefore given very anxious consideration to whether my conclusions on the key points are wrong. Nonetheless, I do not believe that they are.

1. In short, therefore, I accept Knight Frank’s submission that the challenged passages in Mr Bhailok’s attendance notes were concocted because (a) I accept that Mrs Leece-Roberts and Mr Vose were witnesses of the truth and their evidence cannot be reconciled with Mr Bhailok’s, (b) in my judgment Mr Bhailok’s evidence in the interlocutory proceedings was such as to cast doubt on his general reliability as a witness on points of controversy, and (c) most important of all, the challenged passages in Mr Bhailok’s notes do not fit with the story told by the unchallenged contemporaneous material.

FINDINGS AS TO WITNESS CREDIBILITY THE KEY

This issue is also discussed in a number of other posts.

1. Litigators must know about credibility.

2. Witness Statements and Witness Evidence: More about Credibility.

3. Which Witness will be believed?Is it all a lottery?

4. The witnesses say the other side is lying: What does the judge do?