THE “TRUE VOICE OF THE WITNESSES ARE NOTABLY LACKING FROM THEIR WITNESS STATEMENTS”: INORDINATE AMOUNT OF TIME & COSTS SPENT FOR NO GOOD REASON

In Estera Trust (Jersey) Ltd & Anor v Singh & Ors [2018] EWHC 1715 (Ch) Mr Justice Fancourt made some telling observations about the usefulness of witness statements prepared for the case.  This is a common observation in relation to witness statements in many areas of practice, but particularly commercial disputes.

“an inordinate amount of time and costs have been expended in preparing statements that are of limited value in resolving the factual disputes in this case.” 

THE CASE

This was an application for relief under sections 994-996 of the Companies Act 2006 on the grounds that the company was being operated in a manner that was unfairly prejudicial to the applicants. It involved a history of commercial and family dealings going back over 30 years.

THE JUDGE’S OBSERVATIONS ON THE WITNESS STATEMENTS

As part of the judgment the judge spent some time assessing the evidence of each the witnesses (some of those observations make interesting reading in themselves). Prior to the specific assessments he made these comments.

1. Before turning to consider the disputed facts relevant to the basis on which this part of the petition is advanced, it is convenient to say something about the witnesses of fact who gave evidence at the trial. I will come at a later stage (in Part VI) to the two expert witnesses who gave opinion evidence about the reasonableness of the amount of JS’s remuneration as chief executive of the Company.

2. The witness statements prepared for the main witnesses (HS, JS, Mr Machan and Mr Christensen) were very long. They traversed and commented upon a range of events – in the case of HS and JS, their family lives from an early stage and the history of the Company from 1977. It is clear to me that they are the products of careful reconstruction of events and states of mind, based on a meticulous examination of all the documents in the case by the large teams of lawyers involved. The true voices of the witnesses, and the extent of their real recollection, which became apparent when they were cross-examined over a number of days each, are notably lacking from the witness statements. As was demonstrated repeatedly in cross-examination, the statements mostly present considered argument and assertion in the guise of factual evidence and often with a slant that favours the case of the witness. In many instances, it emerged that this was without any real recollection on the part of the witness of the events or circumstances being described, but with a belief that the witness “would have” done or said something for superficially plausible reasons that are now advanced with the benefit of hindsight.

3. That is not to be taken as suggesting that, as part of this process, the witnesses have been deliberately dishonest about parts of their evidence. Rather, it seems to me that the process of creating the written statements has infected or distorted the true evidence that the witness was capable of giving. The written statement then, in turn, affects the witness’s memory of events when he or she comes to court to give oral evidence, having studied carefully his or her written statement in the days before doing so. It took skilful and painstaking work by counsel to remove the varnish that had been applied and identify what the witness could fairly recall and that of which he or she had no real memory at all.

4. The result is that, in my judgment, these principal witness statements are not of much greater value as evidence of the matters in dispute than detailed statements of case (largely duplicating the already lengthy and detailed statements of case that were previously prepared). In other words, an inordinate amount of time and costs have been expended in preparing statements that are of limited value in resolving the factual disputes in this case. While I take account of the contents of all the statements, and draw on particular passages where material, I am cautious about relying on factual assertions in the statements where these are not either supported by contemporaneous documents, or confirmed by the account that the witness gave of the matter when cross-examined or by the credible evidence of other witnesses.