ASSESSING WITNESSES: A UNIVERSAL ISSUE IN LITIGATION
The judge’s assessment of witnesses is often the crucial element in most cases that go to trial. This applies at every level, from the small claims arbitration to the most complex commercial dispute (and, of course, high profile defamation actions). An example can be seen in the judgment of Mr Justice Flaux in Atlasnavios – Navegavao, LDA -v- Navigators Insurance Company Limited  EWHC 4133 (Comm).
The action was a dispute between shipowners and their insurers. A ship was detained in Venezuela after drugs were found in it (the drugs were placed by smugglers and not the shipowners). The ship was subsequently confiscated by the Venezuelan authorities. The issue (in essence) was whether the confiscation was covered by the insurance policy or was excluded. The sums involved were U.S. $14,135.00 for the vessel and equipment and $5,782,392 other expenses.
THE JUDGE’S ASSESSMENT OF THE WITNESS EVIDENCE
The witness evidence
- Before considering the detailed chronological history of the dispute, I will set out my findings about the various witnesses who gave evidence. Before dealing with the individual witnesses, there is a general point which is of some significance, which is that all the factual witnesses called by the owners were giving evidence about events which took place between four and seven years ago, with the benefit of hindsight, specifically that, at the end of the day, the two officers had been convicted and the vessel confiscated. Inevitably, that hindsight coloured the evidence they gave and in addition, the length of time since the events in question meant that to an extent they were reconstructing events from the contemporaneous documents, the email correspondence and the court files. Save for specific instances which I identify in my detailed analysis, I found that what individual witnesses were saying at the time was a better guide to what was going on and their state of mind than their reconstruction in evidence with the benefit of hindsight.
- The owners’ principal witness was Mr Aurelio Fernandez-Concheso, a Venezuelan lawyer who was the Practice Manager of the Clyde & Co LLP office in Caracas. Clydes were the principal lawyers for the owners in the proceedings in Venezuela in which the owners sought the release of the vessel. As might be expected, he had considerable maritime law experience, but limited experience of criminal law. He was an engaging witness but there was a fundamental problem with his evidence. This was that he had a very strong personal belief that the two officers were innocent and that the detention of the vessel was politically motivated, which to a very large extent coloured his recollection of events. It also emerged that on occasion the evidence he purported to give was multiple hearsay, garnered from what others had told him and from the gossip amongst the legal community in Venezuela, which was simply exaggerated and unreliable. A striking example of that was the colourful evidence he gave in his witness statement about the meeting of the drug prosecutors in a resort hotel at Puerto La Cruz, where the case was discussed with the senior drug prosecutor Mr Leoncio Guerra over dinner and he ordered the prosecution of the two officers, to set a standard for future cases. In cross-examination it emerged that this may have been what he was told by others but the truth was less colourful and not in any sense sinister: the meeting was at the twenty third drug prosecutors’ offices and involved the senior prosecutor overruling the reluctance of his juniors to prosecute, something which could and no doubt does happen with the Crown Prosecution Service in our own country. In the end, Mr Fernandez-Concheso was not in a position to criticise Mr Guerra’s decision or to suggest that it was an improper one.
- I was left with the overwhelming impression that, although Mr Fernandez-Concheso genuinely believed that this whole incident was politically motivated and was part of a conspiracy by the Venezuelan executive to steal the vessel and cargo, his evidence and the trenchant opinions he expressed to that effect really lacked all objectivity. As the insurers pointed out, neither the owners nor Mr Fernandez-Concheso on their behalf could put forward any sensible explanation as to why the Venezuelan authorities would want to steal a twenty four year old bulk carrier, let alone a perfectly standard and unexceptionable cargo of coal. In the circumstances, I have approached the evidence of Mr Fernandez-Concheso with considerable caution and have preferred the picture which emerges from the contemporaneous correspondence. Even then, I consider that some of the contemporaneous opinions he expressed that unfolding events had a political motivation have to be regarded with a degree of scepticism.
- Mr Idemaro Gonzalez is a criminal lawyer practising in Maracaibo who acted for the crew in the criminal proceedings in Venezuela. He gave his evidence in Spanish through an interpreter, which presented some difficulties, particularly on the first afternoon of his evidence when the interpreter used was simply not equal to the task and either mistranslated or failed to translate much of what he was trying to convey in his evidence. However, making every allowance for those difficulties, he was still an unsatisfactory witness, in the sense that he had a tendency to argue the owners’ case and make speeches to that effect, rather than answer the questions he was asked in cross-examination. Overall, as with Mr Fernandez-Concheso, although for slightly different reasons, I had considerable doubts as Mr Gonzalez’s objectivity.
- The other aspect of his evidence which I should record is that, just before he started giving evidence, he indicated a reluctance to do so unless his evidence was heard in private or otherwise subject to some form of anonymity order, because of concerns as to political reprisals against him and his family in Venezuela for having spoken out about the political interference in this case. I made an order that although the proceedings should continue in public, there should be no reporting of the evidence of Mr Gonzalez (or of a subsequent witness Mr Urdaneta who had similar concerns) without a further order of the court. That order was made on the express understanding that if, at the end of the trial, I was not satisfied about the owners’ case on political interference, their evidence would become public and could be reported. For reasons elaborated below, I do not consider that the owners have made out their case on political interference. It follows that I also consider that the evidence of Mr Gonzalez and Mr Urdaneta can be made public but since I have not heard any further submissions from the parties I will defer any revocation of my earlier order until the parties have had an opportunity to make further submissions if they wish on the hand down of the judgment.
- Dr Parra Saluzzo was another Venezuelan lawyer, who acted for the owners at the time that assurances were being sought from the Venezuelan authorities that Judge Villalobos would be free to decide the case in relation to the vessel on the merits at the preliminary hearing. He gave evidence by videolink which had limitations, not least because he did not have the trial bundles. Like Mr Fernandez-Concheso and Mr Gonzalez, he had a tendency to argue the owners’ case and I did not consider him an objective witness. For example in his witness statement he said that Colonel Reverol, the head of the ONA, the Venezuelan National Anti-Drug Agency, was part of a conspiracy to steal the vessel, a conclusion he apparently reached because Colonel Reverol had refused to meet him face to face. However, as Mr Simon Rainey QC for the insurers pointed out to him in cross-examination, this completely ignored that the Colonel had met with Mr Fernandez-Concheso and another lawyer, Mr Hector Flores and the meeting went well.
- Dr Vergara Pena was one of the other lawyers instructed by the owners at the appellate stage in the Venezuelan proceedings. He also gave evidence by video link from Venezuela with the same limitations as with Dr Parra. I considered him to be an unsatisfactory witness, who was prepared to say whatever he thought would assist the owners’ case, both in relation to his dealings with Judge Finol and in his suggestion that the change in the constitution of the Court of Appeal was politically motivated whereas contemporaneously he was telling Mr Fernandez-Concheso that it was simply a matter of vacation arrangements.
- The owners called two of the judges who were involved in the case. Alvaro Finol Parra was the judge who was responsible for ordering the release of the vessel in March 2008. However, the circumstances in which he did so were clearly irregular and in disregard of the principles of due process, for the reasons elaborated below. Although he began his evidence with a statement on his behalf by the owners’ counsel saying that he had come to tell the truth, not to assist the owners’ case, I am afraid that I was left with the abiding impression that both at the time in 2008 and in his evidence before the court, Mr Finol wanted to do what he could to assist the owners, perhaps because he genuinely believed that they had been wronged by the Venezuelan legal system. However, as a consequence, I found much of his evidence unreliable, including the suggestion that he had opposed the release of the vessel against a bond and the political persecution he alleged he had sustained since reaching the decision to release the vessel.
- Andres Urdaneta Casanova was the judge who conducted the eventual criminal trial at which the two officers, the Master and the Second Officer, were convicted. On any view he was a problematic witness, given that on his own version of events he had perverted his judicial oath. He had produced a witness statement dated 24 January 2013 in which he alleged that when the case was first assigned to him, he was ordered by Dr Arteaga, the head of the Zulia Judicial Circuit, to act quickly and be harsh and to ensure that the vessel passed to the Venezuelan state. At the outset of his oral evidence he withdrew that statement and produced an amended statement dated 14 October 2014, just before he gave evidence, in which he recanted any suggestion that when he was first assigned the case he was told to seize the vessel. In the amended statement, he now alleged that towards the end of the trial, he received a call from Colonel Aponte the Supreme Court Justice who was Dr Arteaga’s predecessor as the head of the Zulia Judicial Circuit (and who has now fallen out of favour with the government and fled abroad), telling him to guarantee that the vessel passed to the state.
- His explanation for this change of evidence was that the person who took down his evidence (in other words presumably a junior solicitor or a transcriber) had made a mistake. That explanation was wholly implausible and it is inconceivable that if the person taking down his evidence had made such an important mistake as to when any instructions were given to confiscate the vessel and by whom, that would not have been picked up by Mr Urdaneta, who must surely have read through his statement carefully before signing it. In my judgment, what happened was that, when it came to giving oral evidence before this Court, Mr Urdaneta simply could not bring himself to make an untrue allegation about what was ordered by Dr Arteaga, so he simply ascribed the relevant blame to Dr Aponte at a later stage, in circumstances where Dr Aponte was out of favour and had fled the country, so that repercussions were unlikely to be visited on Mr Urdaneta for blaming him.
- There were other changes between his original statement and this amended statement. In the original statement he had said; “I exerted significant pressure on the jurors to convict the officers”. In the amended statement that was deleted and he said he felt under pressure to convict because of a general fear that if he did not he would lose his job, which he explained. He then said that the decision by the jurors to convict might have been influenced by him given the magnitude of the case because it was a drugs case, which is a very different thing from saying he put pressure on them to convict. Overall, I consider that Mr Urdaneta’s evidence is inherently unreliable. Furthermore, I was not convinced that the fear of persecution which he claimed if his evidence became public in Venezuela was genuine. It seemed to me highly unlikely that anyone in authority in Venezuela would have a concern about his evidence, particularly since, before me, he maintained that the order to confiscate the vessel had come from Colonel Aponte who is now out of favour. However, I will hear any submissions the parties wish to make before revoking the order I made during the trial.
- The owners called two witnesses from the managers of the vessel, BCM. Mr Stefano Magnelli was an engaging witness with strong views about people and a sharp wit, much given to colourful Italian metaphors. As with other witnesses, he had a continuing outrage about what had happened in Venezuela. Whilst this was understandable in the circumstances, it meant that both at the time and in his oral evidence, he tended towards the conspiracy theory that the Venezuelan authorities were intent on stealing the vessel and the cargo. However, apart from his brief visit to Venezuela in late October 2007, what he could say about events on the ground was very much dependent on information obtained from the owners’ lawyers and P&I correspondents in Venezuela, who were scarcely objective. His evidence was thus often multiple hearsay, which is inherently unreliable, particularly so in this case.
- One aspect of his evidence which was not impressive was his tendency to downplay his contemporaneous concerns about the risk of spontaneous combustion of the coal cargo, with potentially disastrous consequences for the vessel, the cargo and the environment. He sought to claim those concerns were not real, but part of a tactic to persuade the Venezuelan authorities to release the vessel and the cargo, going so far as to say that his only concern was about damage to the coatings of the holds. However, I am satisfied that, although the contemporaneous concern had a tactical element, there was a genuine concern on the part of Mr Magnelli and the owners at the time about the risk of spontaneous combustion and the disastrous effect that could have on the vessel, the cargo and the environment.
- Miss Alessia Sebastianelli was an assistant manager with BCM. She gave evidence about matters concerning the owners’ sue and labour claim. She was an engaging witness who gave her evidence in a straightforward manner. I have no doubt that she was an entirely honest witness and I accept her evidence about the reasonableness of the expenses incurred by the owners.
- Mr Matteo Stasio was an Italian maritime lawyer who was head of claims at the P&I brokers. He gave some unconvincing evidence about the attempts to put up security. He insisted in evidence that he and the owners had always been advised that putting up a bond to release the vessel would not be possible, but it is clear that before the preliminary hearing, Mr Fernandez-Concheso was saying this was a possibility. Mr Stasio claimed at one point that there had been an application to put up security at the preliminary hearing, but I am satisfied there was no such application, because Gard did not want to put up security.
- So far as the experts on Venezuelan law are concerned, the owners called Dr Cabrera Romero, an eminent retired Supreme Court Justice with many years of experience of dealing with and trying criminal cases. The insurers called Professor Luiz Ortiz Alvarez, a distinguished academic who had no experience in his law practice of presenting or arguing criminal cases, but who was able to provide the court with the benefit of his academic study and analysis of the relevant law. However, despite their eminence, I did not regard either of them as entirely satisfactory witnesses, in the sense that they both had a tendency to argue the case of the respective party by whom they had been called. This was more true of Professor Ortiz than of Dr Cabrera. With Professor Ortiz, I had the impression on occasion that his evidence was not so much about what Venezuelan law on any particular point is as what he wanted it to be. However at the end of the day, the impression I formed of the two experts was of marginal significance in determining the issues of Venezuelan law because by the end of the trial, the issues in dispute were limited and it was essentially possible to determine those issues from my own analysis of the Venezuelan statutes and case law.
DESPITE (BUT PROBABLY NOT BECAUSE) OF THIS THE OWNERS STILL SUCCEEDED
(1) The owners’ claim for a constructive total loss succeeds on the basis that there was cover under the policy for the malicious acts of the third parties who strapped the drugs to the hull of the vessel and the exclusion for infringement of customs regulations does not as a matter of construction apply to exclude cover in the circumstances of this case.(2) If that conclusion were wrong, the exclusion for infringement of customs regulations would apply to exclude the claim because there was no break in the chain of causation between the infringement and the detainment of the vessel. The decisions of the Venezuelan courts ordering such detainment were not perverse or wrong and were not procured by unwarranted political interference.
(3) The exclusion for failure to put up security does not apply.
(4) The owners are entitled to recover sue and labour expenses including after the writ agreement on 18 June 2008.
(5) The owners are entitled to recover as sue and labour expenses: (a) the legal expenses incurred in seeking the release of the vessel and defence of the crew; (b) the running costs during the detainment of the vessel until her actual abandonment, less the U.S. $ 1,182,630.69 agreed cost of a skeleton crew and U.S. $ 46,175.02 expenses incurred before the vessel was first detained and (c) the U.S. $70,000 paid to Nowake.
OTHER POSTS ON WITNESS CREDIBILITY
This issue is also discussed in a number of other posts.