There are many reasons why lawyers should read the decision in Thomas -v- Triodos Bank NV [2017] EWHC 314 (QB).  There is an interesting consideration of the duty of care a bank owes a customer and the Hedley Byrne principles.   However, this being Civil Litigation Brief,   we are looking at  the judge’s careful approach to fact finding in very challenging circumstances.

“…any assessment of the evidence of what was said in the critical conversations must be made against the background in which those conversations took place. Context is almost always of considerable importance. One must not examine evidence of conversations given in the cold analytical atmosphere of a trial, without having regard to the situation in which the parties found themselves when those conversations occurred.”


His Honour Judge Havelock-Allan Q.C. was considering an action brought against the bank by its customers. It was alleged that the bank breached its duty of care in arranging a fixed term loan for a period of 10 years without first explaining the penalties for early redemption.  (The claimants were successful in this).


The judge had to consider the issues in a case where all witnesses were totally honest; there were few written records and the key witness for the defendant suffered from memory loss.

  1. My second preliminary observation is that the misrepresentation case rests largely on what is alleged to have been said by the bank’s personnel in telephone conversations. The critical conversations are those between Mr Thomas and Mr Price on 28 May 2008 and 5 June 2008 and between Mrs Thomas and Mr Roylance on 17 June 2008. It is salutary to bear in mind what Leggatt J recently had to say about the reliability of the recollection of witnesses of what was said in conversations (see Gestmin SGPS S.A. v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at paras. 15-22). His view was that “… 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’ recollection of what was said … and to base factual findings on inferences drawn from the documentary evidence and known probable facts”. It is not altogether easy to adopt that approach in this case because the bank kept no log or notes of its conversations with the claimants. The contemporaneous written record from the bank’s side consists of the emails and periodical Credit Reports written by Mr Price when he was the claimants’ Relationship Manager. These Reports were based on his understanding of information he had gleaned from the claimants at meetings with them. They contain a narrative history of the claimants’ business, their future plans, present borrowing and future borrowing requirements. They do not address the decision to fix the rates. Moreover, when updating the narrative in later Reports, Mr Price did not always delete earlier history which was no longer relevant because it had been overtaken by subsequent events. The result is that the Credit Reports need to be read with some care, because they were not always a wholly accurate reflection of the claimants’ current thinking. On the claimants’ side it has to be said that none of the misrepresentations now alleged, in particular that they were given to understand that any redemption penalty would not be more than £10,000 to £20,000, is referred to in any of their emails or letters to the bank before the formal complaint was written in November 2012. The manuscript note which the claimants made sometime after the phone call on 5 June 2008 is therefore an important document.
  2. Against this background it is inevitable that I will have to place some weight on the oral evidence. This leads me to say something, briefly, about the fact witnesses. Mr and Mrs Thomas are both industrious and immensely hard working individuals who are dedicated, in the best sense of that word, to the business of organic farming. They deserve admiration for what they have achieved at Linscombe Farm and Bidwell Barton. I am in no doubt that both were trying to be as honest as they could in giving their recollection at the trial of events of more than 8 years ago but I take into account that there will have been a tendency for their memory to have polarised over time and in the preparation of this case. I also have in mind that a very great deal hangs on the outcome of this case for the claimants. The stress caused Mrs Thomas to become emotional at several points during her cross-examination. I do not, however, think that this was a factor which distorted or coloured the evidence which she or her husband gave. Mrs Thomas was an entirely straightforward witness. Mr Thomas was inclined to be more careful in his answers and to answer at greater length but I do not find that his evidence was less reliable on that account. Mrs Thomas kept the books of the business and produced the cashflow spreadsheets. These displayed a good deal of financial sophistication. But I am satisfied that Mrs Thomas had no grasp of the implications of fixed rate borrowing beyond the fact that the rate was fixed for the chosen period unless the capital was repaid early. Mr Tho mas’ understanding was a little greater only because he had done some internet research about fixed rates before raising the question of fixing with Mr Price. He had gathered from that research that there was usually a redemption charge or penalty for earl y repayment of a fixed rate loan, but the examples he had seen on the internet led him to believe that the charge was a fixed percentage of the amount being repaid which was calculable up front. This is indeed how some high street lenders levy a redemption charge: but it is far from being the general practice. Both Mr and Mrs Thomas wanted to understand how clause 2.11 of the bank’s terms and conditions worked. Their level of sophistication was such that I have no difficulty accepting that, if they were not given a clear explanation, they would be likely to misunderstand.
  3. Mr Price, Mr Roylance and Mr Crichton gave evidence for the bank. Their integrity is not in question. There is one significant difference between Mrs Thomas and Mr Roylance about the telephone conversation on 17 June and some differences of recollection between the claimants and Mr Crichton about events after May 2009 which are of less importance. It is not suggested that Mr Roylance and Mr Crichton were being anything other than genuine in giving their version of events. The same is true of Mr Price, who was, or ought to have been, the bank’s essential witness. It was not difficult to form a good opinion of him. He was patently honest. He had never before suffered a complaint about his conduct in a long career in banking. He developed a warm relationship with the claimants and their family and stuck his neck out on their behalf when he wrote his Reports to the Credit Committee. The claimants later included in their complaint to the bank that they could not afford the borrowing for which he secured approval. This part of the complaint has a hollow ring. It is true that by May 2008 the claimants’ level of borrowing was not affordable even at the bank’s variable rate: but they were not misled into it. The claimants could do (and did do) the calculations for themselves. There is no valid criticism to be made of Mr Price or of the bank for the fact that the claimants were able to borrow as much as they did. It is simply a relevant part of the background to fixing of the rates and the claimants’ desire to know the potential break costs. Mr Price must have been an engaging character to have as Relationship Manager (he once described one of his Credit Reports, urging the bank’s support for the claimants, as “funky and tight“). But the man in the witness box was not the man who the claimants knew as their Relationship Manager. Mr Price is now retired and is suffering from significant memory loss which is physical in cause and most certainly not a case of diplomatic amnesia. When he came to give oral evidence, it was soon apparent that he could remember nothing of the critical conversations or of the sequence of events between May 2008 and May 2009. Even the contemporaneous documents did not jog his memory.


  1. The third preliminary observation is that any assessment of the evidence of what was said in the critical conversations must be made against the background in which those conversations took place. Context is almost always of considerable importance. One must not examine evidence of conversations given in the cold analytical atmosphere of a trial, without having regard to the situation in which the parties found themselves when those conversations occurred.”

The judge went on to consider the background and the context and to find that the bank had made misrepresentations and breached their “information duty”, although not on every point that the claimants contended.


The litigation & memory series

Key posts of witness evidence and memory