PRELIMINARY ISSUES, WITNESS CREDIBILITY AND SUMMARY JUDGMENT: WHEN THE DEFENDANTS’ CHICKENS COME HOME TO ROOST…

The judgment of Mr Justice Lane in Antuzis & Ors v DJ Houghton Catching Services Ltd & Ors [2019] EWHC 843 (QB) is interesting for many reasons. It concerns a claim for damages for exploited labour. It confirms that directors can be liable for a company’s torts. It involves a (successful) application for summary judgment in unusual circumstances.  However we are looking, primarily, at the judge’s assessment of witness credibility and the necessity to then ignore those findings on the related application for summary judgment.

“I do not consider it damaging at all to the credibility of the claimants’ witnesses that none was able to identify specific weeks when particular malpractice occurred. It was not their legal responsibility to keep relevant records. It does not lie in the mouth of the defendants to say, in these circumstances, that the claimants’ lack of specificity should count against them: see Carol Keefe v The Isle of Man Steam Packet Company Ltd[2010] EWCA Civ 68.”

THE CASE

The claimants brought an action for unpaid wages and unlawful deductions from their income.

  1. [they] contend that they were employed by the first defendant (D1) in an exploitative manner, commonly working extremely long hours and being paid less than the statutory minimum prescribed by the Agricultural Wages Act and the Orders made under it. The claimants were employed at various farms to catch chickens, which were then transported for slaughter and subsequent human consumption.
  2. The claimants further contend that they were frequently not paid the sums which were recorded as being due to them on their respective pay slips, which had in any event been calculated on a fictional basis. Payments were often withheld as a form of punishment for alleged transgressions. D1 made no attempt to pay the claimants holiday pay, to which they were entitled, or to pay overtime at the prescribed rates. Nor was a claimant permitted to take absence on account of bereavement.
  3. Deductions were also, the claimants say, unlawfully made in respect of so-called employment fees and for rent, in respect of premises at which the claimants were effectively required to reside, with the rent being in excess of the maximum permitted under the legislation.

THE HEARING

The hearing was concerned with the preliminary issue as to whether the personal defendants in the action were jointly liable with the limited company defendant that employed the claimants. The claimants then had an application for summary judgment.

ASSESSMENT OF THE WITNESS EVIDENCE
  1. The oral evidence was extensive. For the claimants, I heard from Tadas Balciauskas, Robertas Urbonas and Antanas Urnikis, each with the assistance of interpreters in the Lithuanian language. For the defendants, I heard from Samantha Shanks, Darrell Houghton (D3) and Jacqueline Judge (D2). A synopsis of the evidence is set out in the Appendix to this judgment.
  2. I turn to assess the evidence. Each of the three claimants who gave oral evidence did so in a calm and measured fashion. Despite skilful cross-examination by Mr Allen, they did not resile in any material respect from their witness statements. It was plain that each was doing his best to assist the court. Thus, when it was put to Mr Urbonas that it was correct that supervisors worked with team members, and they all engaged in catching, he acknowledged that this did happen. He also accepted that if the hours worked shown on one of the payslips were true, that would not be a bad week’s pay; but pointed out that the payslip had actually under-recorded by very many hours. Each of the claimants avoided straying into the realm of speculation.
  3. Although the evidence of the three claimants was in accord on many issues, items of detail varied. Far from undermining their credibility, I consider this underscores the fact that each of them was telling the truth.
  4. I do not consider anything turns on the absence of text message or similar evidence to show that the witnesses did not at the time complain to friends or relatives in Lithuania. I accept there may have been an element of pride involved. What is far more telling, I find, is that when the claimants attempted to complain to Jackie Judge, the consistent evidence was that she was not only unmoved, but would take action designed to punish those concerned or, frequently, the entire household. So, when Mr Balciauskas and his colleagues refused to work, they were evicted from their premises.
  5. I do not consider it damaging at all to the credibility of the claimants’ witnesses that none was able to identify specific weeks when particular malpractice occurred. It was not their legal responsibility to keep relevant records. It does not lie in the mouth of the defendants to say, in these circumstances, that the claimants’ lack of specificity should count against them: see Carol Keefe v The Isle of Man Steam Packet Company Ltd[2010] EWCA Civ 68.
  6. The claimants’ evidence was also overwhelmingly demonstrative of the use made by D2 and D3 of the manifestly unsavoury and generally problematic individual known as Edikas Mankevicius (hereafter Edikas). The claimants’ evidence shows that Edikas was used by the defendants as an enforcer, to ensure that chicken catchers followed what I have concluded was the gruelling and exploitative work regime that was being imposed upon them by the defendants.
  7. In making my findings, I am aware that the defendants point to a small number of individuals, including one Kalinkinas, who provided written testimony to the effect that there were no problems regarding D2 and D3. They did not give oral evidence. Their circumstances and motivation are unclear, save that Kalinkinas was a supervisor, a class of worker who, I am satisfied, was treated better by D2 and D3 than were chicken catchers. I have borne in mind whether a judge, who did hear these individuals, as well as the three claimants who gave evidence before me, would be likely to find that their testimony undermined that of the claimants. I do not consider it would. The claimants’ witnesses spoke to their own experience, as chicken catchers, and that of their colleagues who did the same work. Viewing the evidence before me as a whole, and in the light of my firm conclusions regarding the evidence of D2 and D3, to which I shall shortly turn, it is in my view fanciful to suggest that any oral evidence from these individuals would materially affect the outcome.
  8. I also bear in mind that certain of the claimants worked for significant periods for D1 and that some returned to do so, after periods elsewhere. That is, however, an indication of the extent to which the claimants needed to earn money. The fact that they were prepared to work in circumstances where they may have been unaware of their rights under English law does not detract from their credibility.
  9. I turn to the defendants’ witnesses. I found Samantha Shanks, overall, to be a witness of truth. She did not seek to escape from the obvious difficulties in which she was placed. She candidly accepted, on several occasions, that the calculations she applied to arrive at the number of hours that a chicken catcher had worked were not merely notional but entirely fictional. I accept what she said in her written statement that D2 had told her it was impossible to ascertain the hours of the chicken catchers. The fact that what D2 said was untrue in theory does not affect my finding that this is what Ms Shanks was told by D2. As it happens, what D2 said was true as a matter of fact because no records were kept of such hours by D2 or D3.
  10. Ms Shanks’ evidence does not begin to show that she considered, or ought to have considered, that the hours given to her in respect of the drivers could be used accurately to calculate the hours worked by chicken catchers during a particular week. As the evidence as a whole shows, merely using the drivers’ hours would not necessarily produce reliable figures. In that regard, what D2 is recorded as saying in paragraph 12 of Ms Shanks’ statement is correct; namely, that “it was very difficult to keep track of who was working”.
  11. I agree with the claimants that, in one respect, Ms Shanks’ witness statement is not right. At paragraph 13, she said that D2 never instructed her to calculate the chicken catchers’ hours in any particular way. It is fair to say that that statement is, to some extent, qualified in paragraph 13, because Ms Shanks went on to say that “we did discuss how we would calculate the notional hourly rate and adopted that method”. In the event, however, Ms Shanks agreed unequivocally under cross-examination that D2 did, in fact, tell her to do things that way. Although she resiled from this in re-examination, I consider what she said in cross-examination is more likely to represent the truth. Ms Shanks would have had no reason of her own to devise such a system. Her evidence is, in any event, clear that D2 was fully aware of what was going on.
  12. Ms Shanks was frank that she did not know the times of day that workers worked, or whether they had worked sufficiently to qualify for the overtime rate. She was also adamant that catchers were not paid for travel time.
  13. I regret I found Darryl Houghton (D3) to be a thoroughly unsatisfactory witness. I accept that, in certain very limited respects, he gave reliable evidence. He said that profits of less than £2000 from D1 would be “absolute nonsense”, which was subsequently demonstrated to be the case, when the figure in question was identified as relating to a balance sheet, rather than to profits earned in a financial year. I also accept that he and D2 would, on occasions, make payments from their personal account that were intended to facilitate the cash flow problems faced by D1. That, however, is the extent of my positive findings from D3’s evidence.
  14. It is manifest, in my view, that D3 was, at least from July 2007, fully aware of the requirement to pay employees at the minimum rate required under the AWO and, generally, as to the legal obligations of a Gangmaster. He knew, in all likelihood before 2009, that charging work-finding or employment fees would be classed by the GLA as a failure of a critical nature, so far as licensing was concerned. He was aware, at least from 2007, that proper records of hours worked had to be kept by a Gangmaster in respect of chicken catchers. He knew from 2007 that there needed to be a record of annual leave and a record of payments of annual leave. All of this emerges from the effective cross-examination of Mr Hendy, as seen in the synopsis.
  15. D3’s awareness of these legal obligations and the consequences of breaching them are underscored by the decision to employ Mr Godfrey to assist with regulatory compliance. D3’s evidence about what he did with the “guidance” and “tools” provided by Mr Godfrey, was however, entirely unsatisfactory.
  16. Mr Allen asked me to place limited weight on the GLA inspection reports, which D2 and D3 said they had not seen until the hearing, or very shortly beforehand. This included the draft report of Mr Moorhen. These documents had, however, been disclosed to the solicitors for D2 and D3, much earlier. Be that as it may, the evidence given by D3, in cross-examination, demonstrates clearly that he was aware of the relevant responsibilities of a Gangmaster. That is so, even if one places only limited weight on the details of the reports.
  17. I agree with Mr Hendy that the credibility of D3 was undermined by his contention, in respect of a particular payslip, that the hours recorded on it were the actual hours worked by the chicken catcher concerned. It is, frankly, nonsense to believe that, given the fictional basis of the calculation, the hours on the payslip could, in fact, represent reality. They could do so only as a result of unbelievable coincidence.
  18. Here and elsewhere, as can be seen from the synopsis of the evidence, D3 was exposed as someone who is prepared to say anything at all which he thinks might serve his purpose. This is further demonstrated by the blatant contradictions between his more recent evidence and his appeal witness statement relating to the GLA licence revocation. It is also demonstrated by his change of tack as to when he was obtaining workers through the auspices of Edikas. The suggestion that, since the GLA’s inception, he had used Edikas only for translating purposes is, in particular, an obvious untruth.
  19. D3 denied that workers stayed out on duty overnight, except on one particular occasion when health and safety issues were said to have intervened. But that was plainly not the position in truth, as D3 effectively accepted in cross-examination. D3’s evidence about whether travel time was paid was likewise, totally bizarre.
  20. A common thread running through the evidence of D2 and D3, not just in these proceedings but in the regulatory appeals, is that they seek to deflect criticism of their activities by blaming professionals whom they have employed. Ms Shanks is a prime victim; but an analysis of her evidence, taken in the round with that of D2 and D3, shows the abject failure of this attempt to shift blame. The GLA noted as much in their reply to the notice and grounds of appeal against the 2012 licence revocation. Their assessment was entirely right. When this was put to D3 in cross-examination, his response was depressingly characteristic: he complained that his counsel had been two hours’ late arriving at the appeal hearing.
  21. So far as concerns the visit of Mr Moorhen to D3, the overwhelming likelihood is that he was shown documentation relating to a driver who, it is common ground, generally had their hours properly recorded; or he was shown some of the materials Mr Godfrey had urged D3 to use; or it was a combination of both. The reality of the matter is, I find, is that Mr Moorhen was not given a correct picture of what was, in reality, happening in D1’s business. That finds support from the fact that another officer of the GLA was plainly sceptical about Mr Moorhen’s draft report, as can be seen from the comments annotated upon it.
  22. Both D2 and D3 sought to emphasise that Mr Moorhen had spent time with Ms Shanks. That visit is recorded in paragraph 4 of Ms Shanks’ statement. She describes it as not being a long one. Ms Shanks says that she explained the method of calculation of the payslips to Mr Moorhen and that “he seemed to be satisfied with the way I had arrived at those figures”.
  23. D3, however, clearly knew that the figures were fictional. He also knew, which Mr Moorhen would not have known, that the hours recorded were a gross underestimation of the hours actually worked by the chicken catchers, as the claimants’ evidence reveals. Given his understanding of the regulatory regime, therefore, D3 cannot rationally have assumed that a lack of any action on the part of the GLA, following Mr Moorhen’s visit, meant that D1 was complying with its legal financial obligations, as regards the claimants. Rather, I find that D3 believed that, at least for a while, he and D2 had succeeded in escaping the regulatory consequences of their actions. In common parlance, they had, for the moment, “got away with it”.
  24. Jackie Judge (D2) was also a thoroughly unsatisfactory witness. In oral evidence, she adopted the absurd position (not reflected anywhere else in the evidence – including her own) that chicken catchers would ask her, apparently unprompted, to deduct between £250 and £350 from their wages, at the rate of £50 a week, as an employment fee for Edikas. Her explanation that, as a woman, she did what she was told is entirely inconsistent with the rest of the evidence and with the impression she gave in the witness box. It is, I find, nonsense.
  25. Both D2 and D3 were at pains to say that D1 had not been put out of business, as a result of the raid and subsequent events. D2, however, disclosed how exiguous D1’s operations now are, compared with previously. She said they comprised D3 driving a minibus, although she said even this was not anticipated to last much longer.
  26. As I found with D3, D2 cannot rationally have assumed that the GLA had sanctioned the approach of D1 to the payments etc to wages; or have honestly believed that what was being done by them to the chicken catchers was morally or legally sound. As the claimants point out, this excuse was run before Judge Sage in the 2012 appeal. Judge Sage identified, in her decision, serious issues regarding the honesty of D2 and D3. Regrettably, nothing at all has changed.
  27. D2’s attempt to defend her conduct on the basis that the chicken-catching industry in general pays at piece work rates took her case nowhere. It is not being suggested, still less shown, that others in the industry operated a system of fictional hours, albeit that piecework applied.
  28. D2 was seriously evasive in her evidence relating to messages such as “speak Edikas”, written on payslips. Throughout the years of civil and regulatory litigation that preceded this hearing, D1, D2 and D3 have not asserted, as far as I can see, that this was not D2’s handwriting. In any event, the overwhelming inference is that it was her writing or that of her relatives who were doing her bidding. The suggestion that the messages had to do with Edikas’ own affairs, rather than anything to do with D1, D2 and D3, is refuted by the evidence of the claimants, which I find credible.
  29. So far as accommodation is concerned, I find the evidence of the claimants represents reality; namely that, as a general matter, chicken catchers recruited for D1 were, in effect, required to live in particular accommodation. A chicken catcher, as opposed to a supervisor, effectively had no choice in the matter. If he was to get regular work, he had to live in one of D2 or D3’s properties or one of the properties of Edikas
  30. D2’s claim in oral evidence that she had, at best, only a limited say over where the chicken catchers worked, is inconsistent with the pleaded defence and with the text message evidence; as well as being totally at odds with the credible evidence of the claimants.
  31. As with D3, D2’s evidence about deductions from wages was chronologically inconsistent. D2 also had no satisfactory explanation for the terms of the text message sent to Edikas in 2012, at a time when she asserted she was not on good terms with him. Whilst I accept, as the claimants confirmed, that difficulties arose in the relationship between Edikas and D2 and D3, it is plain that the economic aims of D2 and D3 meant their business relationship with Edikas nevertheless continued.

THE SUMMARY JUDGMENT APPLICATION

The judge had heard evidence which was clearly relevant to the summary judgment application, however that had to be disregarded.

  1. As is apparent, the terms of Master Yoxall’s order and the way in which the case has been presented on both sides mean that I have examined a good deal of oral and documentary evidence. To that extent, it would be wrong to deny that there has been some form of trial in respect of the summary judgment issues. I nevertheless keep firmly in mind the fact that, for the purposes of this part of my judgment, I am not merely deciding whose evidence I prefer but considering whether, by reference to that evidence and having regard to my findings in respect of it, D1 has a realistic as opposed to a fanciful prospect of succeeding in its defence to those elements of the claimants’ case that are within the ambit of the summary judgment. In other words, I must consider what a hypothetical judge might conclude on the basis of all the evidence before him or her, which may not be the same as is before me.

THE RESULT

The judge found that:

  1. On the preliminary issue that the defendant directors of the company were liable for the torts of the defendant company, committed at their direction (see paragraphs 108 onwards).
  2. Summary judgment was entered on a number of issues in relation to the defendants’s breaches, with damages to be assessed.