VIEWING THE WOOD FROM THE TREES: ASSESSING WITNESS CREDIBILITY: A “CUT OUT AND KEEP” GUIDE

 The judgment of Teare J in Deripaska and Danilina v Chernukhin case [2019] EWHC 173 (Comm), is (at present) only available via a link on the Serle Court website.  It is useful in that a few paragraphs encapsulate the judicial approach to witness credibility, allegations of dishonesty and the difficulties of dealing with witnesses from abroad and witnesses via interpreters.

THE CASE

The action related to the joint development of a site in Moscow, coupled with a claim for family assets. The trial took 19 days.  Witness credibility was very much in issue.

JUDICIAL OBSERVATIONS AS TO THE ASSESSMENT OF WITNESS CREDIBILITY

Paragraphs 10 – 16 of the judgment are under the heading “Approach to the evidence”. This involves a consideration of the guidance given to judges when considering witness evidence.

10. In resolving the stark conflicts of evidence in this case I have sought to adopt the approach described by Robert Goff LJ (as he then was) in The Ocean Frost [1985] 1 Lloyd’s Reports 1 at p.57:
Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth.
11. The material events span the period between 2001 and 2016, during which Mr. Chernukhin left Russia in 2004, the relationship between Mr. Chernukhin and Mrs. Danilina came to an end in or before 2007, Mr. Deripaska took control of TGM (by force or the threat of force) in 2010 and the value of its site has greatly increased (though there is, inevitably, a dispute as to by how much). A court is usually assisted in resolving disputed evidence by reference to contemporaneous documents. In this case there are remarkably few such documents which came into existence before the SHA was signed in 2005 (or which have survived the passage of time and events) which might throw light upon the true parties to the SHA. However, there were several later events which are said to throw light upon that issue, and those events have generated documents. In addition to having regard to such contemporaneous documents as there are and to the inferences which can be drawn from the later actions of the principal actors the court will also have regard to the inherent probabilities. In doing so I have borne in mind the note of caution sounded in The Business of Judging by Tom Bingham (as the author chose to be called) at p.14:
An English judge may have, or thinks that he has, a shrewd idea how a Lloyd’s broker, or a Bristol wholesaler, or a Norfolk farmer, might react in some situation which is canvassed in the course of a case but he may, and I think should, feel very much more uncertain about the reactions of a Nigerian merchant, or an Indian ship’s engineer, or a Jugoslav banker. Or even, to take a more homely example, a Sikh shopkeeper trading in Bradford. No judge worth his salt could possibly assume that men of different nationalities, educations, trades, experience, creeds and temperaments would act as he might think he would have done or even – which might be quite different – in accordance with his concept of what a reasonable man would have done
12. In this case the probabilities must be assessed, as best this court can, in the light of the collapse of the USSR, the emergence of private enterprise in Russia, the accumulation of huge wealth by a few individuals, the manner in which “oligarchs” do business with each other, the importance of support from those in power, the loyalties which huge wealth can generate and the use of offshore companies and trusts to hold (and hide) such wealth
13. The principal actors in this drama have given evidence. Of course, where the events about which the witnesses speak have taken place many years ago their evidence cannot, on many matters of detail, be expected to be reliable. In Gestmin v Credit Suisse [2013] EWHC 3560 (Comm) Leggatt J., at paragraphs 15-21, commented upon the unreliability of human memory in the light of psychological research, as did Tom Bingham in The Business of Judging at pp.16-18. Their comments must be particularly appropriate in a case where evidence is given in 2018 of what happened in 2001-2005 and 2007. However, I find it difficult to rule out the possibility that, in contrast with recollection of events such as an accident, there may still be some major matters (as for example the person with whom a witness struck a deal, or the person for whom the witness acted over a period of time) in respect of which the witness may have some real and reliable recollection. I have nevertheless borne in mind Leggat J.’s advice at paragraph 22 as to the best approach for a judge to adopt which, unsurprisingly, mirrors that of Robert Goff LJ.
In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.
14. In this case most of the evidence was given by witnesses not speaking their first language and some through an interpreter. In such cases demeanour can rarely assist in deciding where the truth lies. In Kairos Shipping v Enka, The Atlantik Confidence [2016] 2 Lloyd’s Reports 525 at paragraph 11, I said:
First, a fact-finding judge can gain little from the demeanour of a witness when the witness is foreign, comes from a different culture and does not give evidence in his first language or does so through an interpreter; see The Business of Judging by Tom Bingham at p.11. In The Ikarian Reefer at p.484 lhc para. (4) Stuart-Smith LJ said that “most experienced judges recognise that it is not easy to tell whether a witness is telling the truth, particularly if the evidence is given through an interpreter.” Second, in all cases, but especially in those cases where scuttling is alleged, the assessment of the reliability of a witness depends, not only upon a consideration of the extent to which his evidence is consistent with what is not in dispute, is internally consistent and is consistent with what the witness has said on other occasions but also upon a consideration of the extent to which his evidence is consistent with the probabilities. That involves placing the evidence in the context of the case as a whole. As was said in The Ikarian Reefer at p.484 lhc para. (4) the evidence of those impugned “has to be tested in the light of the probabilities and the evidence as a whole
15. Moreover, in this case all sides say that the evidence which their opponents give on the major matters in dispute consists of lies. As will become apparent from my comments upon the witnesses there are real grounds to doubt the honesty of each of the principal actors and of many of the other witnesses. Nevertheless, there can be no doubt that one side is in fact telling the truth with regard to the principal issue of fact in the TGM claim. The court’s determination of who is telling the truth on that issue, and on the central issue in the Family Assets claim, must depend upon matters other than their evidence. The court’s findings in this case, where the material events took place many years ago and where there are grounds to doubt the honesty of those most intimately involved in those events, can only be reached by testing the rival versions of the truth by reference to the known events, matters which are common ground, such contemporaneous documents as there are, the probabilities and such other evidence as is reliable and casts light on the events in question.
16. It is not possible to mention each and every strand of evidence relied upon by Counsel in their full and helpful closing submissions. I have, however, sought to consider and take into account all of the matters which they have raised.1 Not all issues which arise upon the evidence need to be resolved. I am principally concerned with those which enable the court to be able to determine on the balance of probabilities the two principal issues – namely, whether Mr. Chernukhin or Mrs. Danilina was the true party to the SHA and what, if anything, was agreed between them before his marriage to Mrs. Chernukhin in 2007. Although some issues in the narrative of events can be resolved by reference to the evidence which is most relevant to those issues, the court must, before reaching a conclusion on the two principal issues, take into account the whole of the relevant evidence, described by Lord Devlin in The Judge at p.63 as “the tableau… the text with illustrations”. Finally, having examined the relevant evidence the court must stand back from the detail of the evidence and view the matter in the round, in order to ensure that the wood is not obscured by the trees.