ASSESSING WITNESS CREDIBILITY: THE CENTRAL BANK OF ECUADOR CASE REVISITED: THE OCEAN FROST APPROACH
I have already posted an article on the Privy Council decision in Central Bank of Ecuador -v- Conticort CA [2015] UKPC 11. It was a remarkable case in that the Privy Council overturned findings of fact of the trial judge. In essence replacing findings of honesty with findings of dishonesty. Here I want to look at the “Ocean Frost” approach to the assessment of credibility of witnesses. It had a major impact on the decision in the Central Bank case and has been considered, expressly, in many High Court decisions.
THE ERROR OF THE TRIAL JUDGE
In the Central Bank case the Privy Council reviewed the factual findings of the judge and the documentary evidence in detail, considering the approach of the trial judge and the Court of Appeal.
“164. Both courts below therefore erred in law by relying on points which they wrongly viewed as significant, and erred as a matter of process in failing properly to address the factors and issues which were really significant. Further, the judge failed to adopt the salutary approach advised by Robert Goff LJ in The Ocean Frost of testing the witnesses’ account against objective facts proved independently of their testimony, particularly by reference to the documented history. It would be wrong in the circumstances to treat the judge’s very general exoneration of the respondents’ conduct as conclusive of the probity of the transactions. The Board has found itself compelled to undertake its own review of all the material before it in order that, for the first time, the central issues in the case should be directly addressed and analysed. It has been conscious in doing this of the need to give full weight to the advantage which the trial judge enjoyed of observing the witnesses give oral evidence, and, further, that it is only on the clearest grounds that it could and should disturb findings of fact or a conclusion that any or all three of the transactions in issue could be and was undertaken honestly in IAMF’s interests.
165. Having undertaken the exercise identified in the previous paragraph, the Board is however fully satisfied that this is one of the very rare cases where it must interfere with the decisions reached below. It has come to the conclusion that all three transactions were, as and when entered into, not transactions which persons in the respondents’ position could in the light of what they knew honestly have considered to be in IAMF’s interests”.
THE FROST JUDGMENT
This is a reference to the judgment of Robert Goff LJ Armagas Ltd v. Mundogas S.A. (The Ocean Frost), [1985] 1 Lloyd’s Rep. 1, when he said 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.”
WITNESS EVIDENCE AND COLD SORES: VIRULITE -v- VIRULITE
Mr Justice Stuart-Smith in Virulite LLC -v- Virulite Distribution Ltd [2014] EWHC 366 (QB):
Factual Background: Liability
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The central issue on liability is whether the effect of the DLA was modified by subsequent communications that were either oral or contained or evidenced in emails. Most of the witnesses of fact have an interest in the outcome of the litigation and have had a long time to consider their evidence. As explained in greater detail below, it is possible to trace shifts in the positions being adopted by the parties from time to time. I therefore approach the evidence of the witnesses bearing in mind the importance of the documentary evidence: see The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 43 per Dunn LJ at 57 per Robert Goff LJ and the recent observations of Leggatt J in
Gestmin 
SGPS S.A. v Credit Suisse [2013] EWHC 3560 (Comm) at [15-24]. The Ocean Frost was a case involving allegations of fraud. No allegations of fraud are made in the present case, but the approach outlined by the Court of Appeal has general application when attempting to assess the reliability of witnesses of fact. I offer two additional observations in the light of these authorities. The first is that the nature of the documents that are being considered needs to be taken into account. At one end of the spectrum, formal contractual documents negotiated with the benefit of legal advice are given special primacy; but this case typically involves communications by email sent by business associates without prior vetting by lawyers and without attempting to achieve full precision or formality. I shall bear that in mind at all times, and particularly when assessing whether or not LLC has proved that a sufficient degree of certainty (contractual or otherwise) was achieved in late 2008/early 2009 so as to affect the position clearly set out in the DLA. The second is that if, having had due regard to all of the evidence (including relevant documentation), the Court considers that a witness’ evidence is reliable despite being in apparent conflict with other evidence, it should not shrink from making such a finding.
TESTING THE EVIDENCE AGAINST THE DOCUMENTS: EAST ENGLAND SCHOOLS -v- PALMER
The issue of the reliability of witness evidence was considered by Mr Richard Salter QC (sitting as a High Court Judge) in East Midlands School CIC -v- Palmer [2013] EWHC 4138 (QB)
The witnesses
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The nature of this dispute was amplified and clarified in the evidence given before me. Although (as one might expect) there was a considerable degree of common ground in the descriptions given by all of the witnesses of how business is done by companies like 4myschools and Sugarman Education, there were some (at least apparent) conflicts in the relevant factual evidence which I must resolve.
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I therefore begin my consideration of that evidence by setting out my impressions of the witnesses. I have, of course, paid close attention to the demeanour of each witness when he or she has been giving their evidence. However, I must also test their evidence against all the other materials available to me. In that regard, I bear in mind the helpful observations of Robert Goff LJ (as he then was) in The Ocean Frost:
.. 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 …”
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4. The witnesses say the other side is lying: What does the judge do?
5. Assessing the reliability of witnesses: How does the judge decide?
6. Which witness is going to be believed? A High Court case.
7. The Mitchell case and witness evidence: credibility, strong views and reliability.
8. Witness statements and witness credibility: getting back to basics
9. Witness credibility: what factors does the Court look at?
10. That “difficult second statement”: its hardly ever going to be a hit.
11. Assessing the credibility of a witness: it is a matter of communication.