MORE ABOUT WITNESS STATEMENTS AND THE ICI CASE: WHEN EVIDENCE IS NOT ADMISSIBLE AND (WHEN IT IS) IT IS NOT RELIABLE

We are looking again at aspects of the judgment of Mr Justice Fraser in  Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd [2018] EWHC 1577 (TCC).The previous post in this case looked at the “duplicate” witness statements of the defendant.  Here we look at one aspect of the claimant’s evidence that was ruled to be inadmissible.  Those parts of the evidence that were admissible were not credible.

“Evidence must be relevant to be admissible, and if a binding finding has been made on a particular point in the liability judgment, then further evidence on the same point in the quantum proceedings (particularly evidence directly contrary to that finding) cannot be relevant. If it is not relevant, it cannot be admissible in strict terms”

THE CASE

The judge was hearing the trial on damages following a liability trial. At the liability trial the judge had made several findings of fact that were adverse to the claimant. The claimant’s approach to these findings appeared to be to ignore them.

THE JUDGMENT ON THE RELIABILITY OF A WITNESS FOR THE CLAIMANT

1. Mr Henk Boerboom’s 3^rd witness statement was said to be a “reply witness statement” to the statements of Mr Wells, Mr McGrady and Mr Riley. Before he was sworn, I raised with Mr Bowdery my concern that Mr Boerboom’s written evidence contained matters of evidence that were directly contrary to findings that had been made in the liability judgment. Mr Bowdery assured me that, as he put it, “no disrespect was intended”. Whilst, of course, this was reassuring, that was not the point. Evidence must be relevant to be admissible, and if a binding finding has been made on a particular point in the liability judgment, then further evidence on the same point in the quantum proceedings (particularly evidence directly contrary to that finding) cannot be relevant. If it is not relevant, it cannot be admissible in strict terms. Rather than take time, in a time-limited trial, dealing with an application to strike through passages, the more cost-effective approach was to allow the whole statement in without ruling on the specific admissibility of particular sentences, with Mr Mort having the opportunity to make submissions in due course. That was the course which I adopted. However, it is of note that Mr Boerboom had not changed his views of the rights and wrongs of what had happened in 2014 and 2015 as a result of the liability judgment in 2017.

This approach was hardly likely to endear the witness to the judge, who could compare the difference in statements made for the liability trial.

1. I reject Mr Boerboom’s evidence in this trial, that Mr Barton resigned because he had “personal problems at home”. There is nothing whatsoever to support it, and I consider that statement to be plainly factually wrong. No explanation was proffered by Mr Boerboom for why he did not give this evidence last year, when he expressly said that he did not know why Mr Barton resigned. Nor is it corroborated in any document whatsoever, and by now I have reached the point where I would not accept anything Mr Boerboom says about this project without some sort of independent corroboration. His statement about why Mr Barton left could also be interpreted as exposing Mr Barton to some criticism of his professionalism. This was a high profile project that was considerably over budget and in considerable delay, and Mr Barton was the Project Manager, tasked with a very important, if not the central, role in administering the contract with MMT. One imagines that a professional person in this situation would wish to see the project through to its conclusion, not abandon it a few months from the end when it is essentially at crisis point with its most centrally involved contractor MMT (save in the severest personal circumstances of an extreme kind). Yet this is what Mr Boerboom is now saying that Mr Barton did, by springing upon him his resignation which was “a surprise”. Mr Barton himself in an email of 9 October 2014 explained his decision, and I deal with this at [137] of the liability judgment. Mr Boerboom’s evidence is to the effect that what Mr Barton said in his e mail was not the real reason. I find this attitude by Mr Boerboom to the facts to be reprehensible. I consider that this evidence has been advanced now because I rejected Mr Boerboom’s evidence in the liability trial that he had no idea whatsoever why Mr Barton resigned. When he realised that this was simply inconceivable, this new reason is one designed to avoid any blame attaching to ICI’s behaviour at the time. The fact that this new explanation puts Mr Barton is an unfavourable light in terms of his professionalism does not concern Mr Boerboom. His explanation is also entirely at odds with the documents, and with the evidence from the MMT witnesses.

1. 1. Mr Boerboom also paid no attention to the fact that his purported appointment as Project Manager had been found by me to have been invalid. ICI’s pleaded case that it had overpaid MMT by approximately £10 million was based upon a figure calculated by Mr Brownlee in what was said to have been a Project Manager’s Final Assessment. Given Mr Brownlee was instructed by Mr Boerboom, and I had found that he could not validly be appointed as the Project Manager, it can therefore be seen that whatever Mr Brownlee was doing for Mr Boerboom, he cannot have been doing a Project Manager’s Final Assessment. There was no Project Manager to instruct him to do so. I found in the liability judgment that ICI was in repudiatory breach of its contract with MMT by failing to appoint a replacement for Mr Barton, but that breach was never accepted by MMT. As can be seen from the exchange of emails to which I have referred above emanating from Mr Hall about the November 2014 certificate, after Mr Barton left there was not even a semblance of attention paid by ICI to the contractual terms concerning interim valuations, or to the way that the NEC3 contract is supposed to operate. ICI simply massaged the interim valuation figures to suit whatever it wanted to achieve with MMT and to restrict its cashflow. To use Mr Hall’s own words, passed on by Mr Boerboom to Mr Schelhaas, ICI would “adjust the contra charge value to suit the level” ICI were “happy with”.

   2. Another point which, in my judgment, counted against the reliability and credibility of Mr Boerboom was his explanation concerning the commercial meeting on 7 and 8 October 2014. I have identified the factual circumstances of that meeting above. The agreements that were reached were referred to in emails passing between the parties that emanated from Mr McGrady of MMT in the days immediately following the meeting. Mr Boerboom had said earlier in his evidence that he approached the contract in the following way:

“I relied on Mr Jeff Conrad and Andy Barton to deal with the contract contractually. As you’ve already mentioned just now, there were many contracts in the project and I looked over in general, but I let the people who were dealing with the contracts act on the contracts, so for Merrell, this was Andy Barton, Mr Andrew Barton, and Mr Jeff Conrad”

1. 1. The reality at the time was however very different to how Mr Boerboom wished to portray it to the court. I have already dealt with the way in which the agreement between Mr Conrad and Mr Wells for the payment of £1.4 million for August and September 2014 was simply ignored by Mr Boerboom. That is inconsistent with Mr Boerboom’s evidence that he “let the people dealing with the contracts act on the contracts”, as he claimed. Also, the vast bulk of rates were agreed on a schedule – which was a sizeable spreadsheet called “MMT Schedule of Rates Master” – by Mr Barton, and this had been confirmed in an email from Mr McGrady in September 2014. However, Mr Boerboom told the court that he had been told that these agreements were “subject to final account judgment” and that he had been told this by Mr Conrad. Apparently, this had been done in the following terms:

“Henk, let’s agree to this, don’t worry about this, we will — this will all be subject to assessment on the final account.”

1. I reject this evidence. It does not match the contemporaneous correspondence. It does not match the way that the NEC3 form is supposed to operate. It is evidence that comes from Mr Boerboom, whose evidence as a whole I have concluded bears remarkably little, if any, resemblance to the truth. There is no substantiation of any of it from anyone else, and it is directly contrary to the evidence of the MMT witnesses. But further, it flies in the face of commercial reality. Senior personnel such as Mr Conrad, and the Project Manager Mr Barton, would not waste their time going through and reaching detailed agreements on an enormous number of very detailed components of a complicated account, simply as an exercise of going through the motions, with the expectation that they will do it all over again a few months later. There would be no point in doing so, and I find that they did not intend to do so on this project. Even if they were prepared to do so, their expectation would be that they would do it again using substantially the same material in any event, and they would surely expect to reach broadly the same results. Such a second exercise would be wholly redundant, and I do not accept that Mr Conrad ever told Mr Boerboom this would happen. Mr Barton and Mr Conrad were plainly engaged in reaching final agreements on all these matters, and on Mr Boerboom’s own evidence before me, had authority to do so. Yet further, the agreements that were reached after the meeting of 7 and 8 October were reached after a meeting with MMT that was specifically held to narrow down points of disagreement, in order to agree as many of the PMIs as possible, and in order to resolve the valuation of MMT’s work. The suggestion that this would be done, just a couple of months before the end of the works, only to be redone all over again, on the same material, with the intention being that the agreements of early October would be of no effect (or of effect only for a few interim applications) is nonsensical. I reject that interpretation which ICI seek to put upon these agreements.

2. ICI did, however, in early 2015 seek to have the entirety of what PROJEN had agreed contemporaneously with MMT so far as rates, quantities, measurements and value of PMIs included in interim payments, entirely re-valued on a wholly different basis to that adopted at the time in 2014. I find that this was done at the behest of Mr Boerboom, who wished to suppress the value of MMT’s works downwards as much as was humanly possible and by all and any possible means, whether legitimate or illegitimate. It was necessary for ICI to ignore all of the agreements that had been reached with MMT in order to do this, because those agreements were ones which led to a valuation of MMT’s works far higher than Mr Boerboom wanted to pay. It was for this reason that Blake Newport became involved. I deal with this when considering Mr Brownlee’s evidence.

3. My conclusion, should there be any room for doubt following my detailed findings above, is that Mr Boerboom is a wholly unreliable witness. He was obviously deferring to Mr Schelhaas, his superior, at the time on implementation of the strategy adopted by AkzoNobel, as shown in the email from him to Mr Schelhaas dated 5 December 2014 about MMT’s certificate for November 2014. Mr Boerboom appeared to me, on all the evidence before me and the contemporaneous documents that are available, more likely to be an instrument of a Steer Co decision to save AkzoNobel money on Project Fresco, rather than being on a frolic of his own, or bearing MMT any particular animus. If I am right and he was merely an instrument, he proved himself to be a remarkably effective one. It is regrettable that this effectiveness, which led ultimately to MMT’s financial problems (which eventually resulted in great problems with its bankers, and later on in liquidation, a sequence considered in greater detail below) was then compounded by the extremely low accuracy of his factual evidence to the High Court.