THE DANGERS OF SELECTIVE WITNESS EVIDENCE: WITNESS EVIDENCE THAT WAS “UNSATISFACTORY” AND “SIMPLY NOT RELIABLE”

July 16, 2017 · by · in Civil evidence, Witness statements

I am returning for the third time (and not the last time) to the decision of Mr Justice Fraser in Imperial Chemical Industries Limited -v- Merit Merrell Technology Limited [2017] EWHC 1763 (TCC). We have already looked at the (relatively mild) criticisms of the form of the defendant’s witness statements and the relatively strong critique of the claimant’s failure to give proper disclosure.  Here we look at the judge’s comments on the evidence called on behalf of the claimant.   This judgment underlines the fact that the use “selective” witness evidence is usually a mistake.  The selective use of evidence not only undermines the case of the party calling the witness, it often provides support for the other side.

“His witness statement simply repeated as matters of fact, though in vague and unparticularised terms, allegations that were pleaded by ICI against MMT in its Particulars of Claim. Close attention to these allegations in cross-examination by Mr Mort QC, by reference to the disclosed documents, showed the reality of the situation to be very different to that initially presented …in his written evidence”

THE CASE

The action was part of a long-running dispute about the construction of steelworks in a paint manufacturing plant, in particular the welding carried out by the defendant. The judge made robust findings of fact in relation to the quality of the statements given by some of the witnesses for the claimant.

THE JUDGMENT ON THE CLAIMANT’S WITNESS EVIDENCE

Evidence of fact
    1. ICI called three witnesses of fact. They were (in the order in which they were called) Mr Greg Brownlee, Mr Theo Brugman and Mr Henk Boerboom. No witnesses of fact were called who had been members of Steer Co. It was the members of Steer Co who had been involved in discussing whether to accept what are said to have been the repudiatory breach or breaches by MMT, although it transpired that it had been Ms Schoolenberg who actually took the decision.
Greg Brownlee
    1. Mr Brownlee is a quantity surveyor and works for Blake Newport, a company that provides quantity surveying services. Blake Newport was engaged in February 2015, following the termination of MMT’s contract, the role being (as Mr Brownlee described it in his witness statement) “to support the Project Manager”. By this he meant perform a valuation of MMT’s works for Mr Boerboom. His role was as the lead of a team of consultant quantity surveyors. He was involved in the production of a Final Assessment upon which ICI relied, seeking to demonstrate that MMT had been overpaid. In fact, Blake Newport were originally engaged on 5 February 2015 “to consider the events surrounding a potential dispute with MMT”, to quote from his witness statement. Whether and to what extent that involved any advice to ICI is not clear, nor is it in my judgment important for current purposes. This is because on 11 February 2015 Blake Newport had their “remit…. adapted such that the primary focus was the independent assessment of the works undertaken by MMT”. This was following the referral by MMT to adjudication of a dispute regarding its November 2014 application for payment, which is what evolved into the decision in Adjudication No.1. Mr Brownlee therefore had no contemporaneous involvement in events before February 2015.
    2. This independent assessment became what was entitled the Final Assessment, and it is a document upon which ICI relied in its claim against MMT in these proceedings to demonstrate that MMT had been overpaid. Mr Brownlee, as one might expect from a quantity surveyor (or the lead of a team of quantity surveyors), provided a witness statement that was substantially concerned with quantum. Given both that the Order of Coulson J that there be a split trial of liability and quantum, and that Mr Brownlee had not come to the project until February 2015, his evidence was not therefore of the foremost relevance to the issues in this case. In particular, the parties were agreed that the question of overpayment (the amount of which is disputed) should be assumed for the trial of liability, as one of the issues (Issue 10) poses the question of whether overpayment by ICI to MMT (if there is any) could in principle be recovered. Mr Mort QC adopted a very sensible course and, given the agreement on this assumption of overpayment, chose not to cross examine Mr Brownlee on the detail of his quantum exercise. In any event, that detailed quantum evidence was not relevant. Only certain passages of Mr Brownlee’s evidence were adduced in chief by ICI in any event (identified in Appendix 2 to ICI’s Opening Submissions). His evidence did not therefore, with one exception, in my judgment, impact upon the issues before the court on this liability trial. The single exception is the extent to which Mr Brownlee could not differentiate between Mr Boerboom as the ICI project manager, Mr Boerboom as the Project Manager (in terms of being PROJEN’s replacement as the Project Manager under the contract) and/or Mr Boerboom as being in overall charge of the project for AkzoNobel, the entity who was ultimately paying the bills. This inability to differentiate Mr Boerboom in his various guises should not be taken as criticism of Mr Brownlee. Nobody, least of all Mr Boerboom himself, made any differentiation in terms of his role(s) at any time contemporaneously. I find that there was no such differentiation during the project either. It was simply not possible for MMT to know what “hat” Mr Boerboom was wearing at any particular time, or when he gave any particular instruction.
Mr Brugman
    1. Mr Brugman worked for AkzoNobel for over 30 years, and left in July 2015. He now lives and works in Thailand. He is a Dutch national; although Mr Bowdery QC for ICI identified at the beginning of his evidence that English is not his mother tongue, he works using the English language generally, both on this project and the others in which he has been involved around the world. There were no difficulties arising from this during his evidence, and his spoken English (and written English too, judging from his e mails and witness statement) is excellent. He was brought to the project in September 2014 to act as the construction manager for ICI, taking over from Mr Mike Hird. He told me that he does not know what had happened to Mr Hird – whether he had been moved elsewhere, or had left the company – but he did not have the benefit of any handover period with, or handover from, Mr Hird. Mr Hird had left the project before Mr Brugman started. Mr Brugman told me that this lack of handover was unusual, and he did not know why this had happened. This change of personnel, and the way it was done, is however consistent with the theme of MMT’s case that the whole of Project Fresco was seen by the hierarchy at AkzoNobel as being off track, and AkzoNobel personnel were simply inserted into it to achieve certain objectives to suit that company’s commercial interests. The predecessors to the AkzoNobel team simply disappear from view, and I have been given no explanation about where they went, or why they were removed. This disappearance includes Mr Blythe.
    2. Mr Brugman as a witness was, in my judgment, highly unsatisfactory. His evidence, both as contained in his two witness statements and his cross-examination, was simply not reliable. I did not find him to be a useful or reliable witness as to what had actually happened. I came to this conclusion for the following main reasons.
(1) The period between November 2014 and February 2015 was a highly material, and most important, period in the dispute between these two parties that led to this litigation. It is the crucial period. A highly material step during this period was the attempt by those higher up the chain of command in AkzoNobel and MMT to broker a supplementary or settlement agreement, or “a deal” (as it was referred to during the proceedings) to move matters forwards and resolve the dispute between the parties. A meeting was held on 12 or 13 November 2014, followed by a letter dated 19 November 2014 (“the 10 Point Letter”) from AkzoNobel/ICI to MMT. It was the 10 Point Letter that contained certain aspects of the proposed agreement, and was the origin of important matters such as the involvement of a third party welding inspector to inspect welds and consider defects. This period was not only skated over by Mr Brugman in his written evidence, but he entirely failed to refer to the existence of the 10 Point Letter at all. His explanation for this in cross-examination was that the deal was not agreed; although correct, in legal terms, the terms of the 10 Point Letter governed certainly MMT’s behaviour for months afterwards. Mr Brugman’s explanation, that it was not agreed, does not even come close to an adequate reason for such a glaring omission in his evidence. The appointment of the third party inspector, which did happen, was inextricably bound in with the 10 Point Letter. To deal with simply part of the 10 Point Letter, and to give written evidence about the third party inspector (which he did) but choose entirely to ignore its origin and context is simply misleading. His written evidence did not come close even to an approximation of the whole story, or even the part of the story in which he was involved personally.
(2) On 21 November 2014 MMT served an Interim Payment Notice in the sum of £7,559,514.76, which was Application for Payment No.22. This was not paid by ICI; it seems simply to have been ignored in the sense that little if any attempt was made to justify any non-payment. In January 2015 there was a further serious development in the relations between these two parties when MMT, as was its statutory right, commenced an adjudication (Adjudication No.1) against ICI for this sum, on the basis that no valid payment notice (and/or payless notice) had been served. £7,500,000 is a sizeable sum, even for a major company like ICI. Mr Brugman plainly must have known about this adjudication at the time. In the second adjudication he actually provided witness evidence for ICI. This is referred to by Edwards-Stuart J in his judgment concerning enforcement of that adjudication in the following terms:
“A further point raised by Mr. Matthew McGrady, MMT’s financial director, in a witness statement dated 15 July 2015, was that in Adjudication No. 2 ICI relied on a witness statement of a Mr. Brugman….”. This passage is at [64] in Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd [2015] EWHC 2915 (TCC). The date of Mr Brugman’s first witness statement in these proceedings is 18 November 2016 and clearly post-dates his involvement in that adjudication. Mr Brugman did not refer to the development in January 2015 when MMT sought to enforce its right to an interim payment of over £7.5 million. This is another glaring omission.
(3) His witness statement simply repeated as matters of fact, though in vague and unparticularised terms, allegations that were pleaded by ICI against MMT in its Particulars of Claim. Close attention to these allegations in cross-examination by Mr Mort QC, by reference to the disclosed documents, showed the reality of the situation to be very different to that initially presented by Mr Brugman in his written evidence (and by extension the pleading, although there is nothing to suggest Mr Brugman was involved in that document). In paragraph 51 of his first witness statement Mr Brugman had stated:

“MMT failed to produce when requested any adequate plan for further testing or rectification of the defective welding. MMT also failed to produce any evidence or proposals for ensuring that the welders were appropriately qualified. MMT refused PROJEN access to its fabrication shop.”

These are bald assertions. The reality of the situation concerning these complaints turned out, during cross-examination of Mr Brugman, to be very different. MMT was never asked for any plan for further testing, and therefore could not have “failed to produce when requested” such plans as originally stated. MMT, save for one single instance where a welder was not qualified for the type of welding he was performing, did have appropriately qualified welders (the experts are agreed that such qualifications are evidenced; there is an entire file of them in the trial bundle). In any event Mr Brugman was not even involved at the stage of the project when such matters were dealt with, namely at the beginning. The contract was signed in December 2012 and he did not come to the project until the middle of 2014. Further, PROJEN were never denied access to the MMT fabrication shop, and that sentence of his evidence was simply untrue. In fact, his statement turned out to be related to a delay of 30 minutes (not a denial of access at all) in Mr Brugman himself being given access on the single occasion he attended. This lack of accuracy simply cannot be excused, in my judgment. His written witness statement was simply wrong.
(4) He sought to give the impression that Project Fresco was on budget when he arrived, and that the only element of it that became over-budget was the work package or packages let to MMT. This again is factually not correct, as shown by the different internal documents prepared by AkzoNobel at the time. Mr Brugman must have known this both at the time, and when he signed his witness statements. He also sought to give the impression that he was only involved in completion of the works, and had no involvement in commercial matters. However, e mails he was shown in re-examination, both to and from him, show considerable discussion between him and Mr Wells of MMT about rates for work. Mr Brugman’s position at that time was that the Employer would not pay the contractually agreed rates. Mr Wells’ position was that MMT were contractually entitled to these rates, even though they were higher than the rates that Mr Brugman wanted to pay. These are plainly commercial matters. His explanation for this (which I find unconvincing) was that these related to “new work”. In my judgment, they show he was intimately involved in commercial matters, yet he had told the court he was not.
(5) Mr Brugman had worked with Mr Boerboom before and was moved to this project as part of the AkzoNobel strategy to complete the project. I find as a fact that his involvement was specifically because the project was late and over budget, and Mr Brugman knew this. In order to bring the overall financial total down to one at (or below) what had been approved by Steer Co, namely Capex, cost reductions had to be achieved. Mr Brugman knew this, and his attempts to portray his involvement otherwise to the court were part of an approach of selective evidence giving on his part. MMT were a major component of expenditure on this project and Mr Brugman plainly knew this; part of his role at the time was to reduce that expenditure.
    1. Mr Brugman no longer works for AkzoNobel, and despite what he said in his written evidence about being “a former employee of ICI”, was not employed by ICI but was sent there on a short-term consultancy basis from AkzoNobel. He now lives and works in Thailand. The time available for him to prepare a comprehensive witness statement therefore is likely to have been more limited than if he had been still at AkzoNobel, and I have made due allowance for this. However, the points in the preceding paragraph are not fine points of detail, they are substantial and important factual elements of what was going on at the time, upon matters in which Mr Brugman was involved. There can be no excuse for either failing to refer to them at all, or getting them wrong. The 10 Point Letter in particular is crucial to what was going on between the parties during the period mid-November 2014 to February 2015, and in my judgment is central to the entire dispute. Paragraph 51 of Mr Brugman’s 1st witness statement is similarly crucial to the pleaded allegations of repudiatory breach in paragraph 64(iii), 64(iv) and 64(v) of the Particulars of Claim.
    2. There were other examples of his answers shifting under correctly applied and proportionate pressure from Mr Mort QC, and he seemed very keen always to bring the topic back to his main themes, regardless of the content of the question. A good example of this is the “worst welding I have ever seen” approach to criticism of the work performed by MMT. At face value, such an approach has a certain amount of dramatic impact. However, what transpired is that this comment was aimed at welding internal to the pipework, which the expert evidence (to which I will come in more detail below) effectively agrees could only be seen by radiographic means or inspection by boroscope. Indeed, one of the legal issues is how Table 5 of BS4677 should be approached, if it were agreed by the parties that radiographic NDT would not be done, because some aspects of Table 5 can only be discovered by these means. The “worst I’ve ever seen” approach to the welding is rather put into context by that, and can be seen to be wholly exaggerated.
    3. Mr Brugman was obviously called as one of the factual witnesses for ICI, in order to provide evidential support for the main allegations against MMT. He adopted this role with gusto, regardless of the reality of the situation, and I find that he chose to ignore important aspects of the factual background that did not match ICI’s case. I find that such evidential support as he could provide, so far as the defective welds was concerned, to be flimsy at best, and for the three specific pleaded allegations I have identified, non-existent.
Mr Boerboom
    1. He is a Director of Engineering Excellence for AkzoNobel Advanced Manufacturing Projects & Engineering based in Arnhem in the Netherlands. Project Fresco had commenced in January 2011 and was supposed to be fully operational by December 2014. Mr Boerboom was brought to the project in July 2014. He was appointed Project Manager in October 2014 after PROJEN resigned, although the validity of that appointment is challenged by MMT. In his first witness statement he stated in paragraph 3 that he became Project Manager “shortly after” July 2014. If that is correct, then no notification was given to MMT of this at that stage, and indeed until Mr Barton of PROJEN resigned three months later he was still, on the face of it, the Project Manager. Indeed, part of MMT’s theme concerning the second half of 2014 is that PROJEN resigned because they were unable to deal with the level of interference or pressure being brought to bear by Mr Boerboom who was acting solely in ICI’s interests. PROJEN were specifically instructed that they could only certify payments to MMT if the AkzoNobel personnel expressly agreed to this in writing. Such an instruction is plainly at odds with how a third-party certifier, or decision maker (to use the phrase of Jackson J as he then was in Scheldebouw BV v St James Homes [2006] EWHC 89 (TCC)) is supposed to behave. The unavoidable inference is that PROJEN decided, for professional reasons, that they could not continue to act as Project Manager in these circumstances and Mr Barton resigned, even though he remained involved behind the scenes assisting Mr Boerboom and his team with the administration side in terms of paper work and so on. For the avoidance of doubt, I find as a fact that this is why PROJEN resigned. Mr Boerboom’s evidence makes clear that this interference by him must have started very shortly after he arrived, and he must have purported to act as Project Manager behind the scenes even before PROJEN resigned.
    2. In paragraph 15 of the same statement Mr Boerboom explained that he “took over as Project Manager for the purposes of the Contract in October 2014” but states that he is “not aware of why Andy Barton and/or PROJEN decided to no longer act….however it seemed sensible for me to take over that role given my project involvement and my position as the internal project manager for ICI”. I deal with the legal issue of an employer-appointed employee seeking to be appointed or act in this role further in the section of this judgment headed “The Project Manager”. Further, given the identity of interest between ICI and AkzoNobel, its parent, I find that there is no difference between an employer-appointed employee here, and an employer-appointed employee of AkzoNobel on the facts of this case.
    3. Further, in my judgment, it is simply not credible that Mr Boerboom did not at the time, and does not know now, why PROJEN resigned as Project Manager. He is a highly experienced person – Director of Engineering Excellence – and was brought on to this project specifically to be the project manager for ICI. The entire project was late and seriously over budget. The notion that the Project Manager under the Contract with MMT could resign, yet the reasons for that neither be discussed nor brought to the attention of Mr Boerboom by others within ICI and/or by PROJEN personnel at the time, is verging on the absurd. It cannot seriously be thought that the reason or reasons would not be discussed directly then, and at a high level. This is even more compelling when one considers that Mr Barton remained working on the project; his resignation was plainly not due to his availability. I conclude that Mr Boerboom dealt with this in his evidence in the way that he did because the real reason would be detrimental to ICI’s case in this litigation. He chose to keep his knowledge of this to himself.
    4. Mr Boerboom was also directly involved in ensuring that the 10 Point Letter did not result in an agreement between ICI and MMT. I deal with the detail of this further in the section “Relations between ICI and MMT”, but not only did Mr Boerboom take the lead role in undermining the agreement that had been reached in principle between MMT and ICI, but he must have known that no-one ever informed MMT that the promised sum of £2.75 million would not be paid. This is because he knew that Steer Co had decided in early December 2014 to withdraw the previous authorisation for this payment. I find as a fact that part of the strategy adopted by AkzoNobel/ICI – perhaps from November 2014, but certainly from December 2014 onwards – was one aimed at driving MMT from site. I use the term AkzoNobel/ICI because at the time there were no separate ICI personnel in any decision making roles. All decisions on ICI’s behalf were being made by personnel and senior management at AkzoNobel. The hope was clearly that MMT would simply leave; the fact that MMT’s expectation of a sizeable payment of £2.75 million to MMT (and its non-payment) was potentially going to push MMT close to insolvency was seen as a commercial benefit. MMT thought it had been agreed a payment of £2.75 million would be paid to it after certain steps were taken; Mr Boerboom and the members of Steer Co knew MMT thought this, knew this sum had been offered, and knew it would not be paid. It was known that Steer Co had disavowed or de-authorised any such payment. MMT were ignorant of this fact.
    5. There is nothing wrong with having one’s own company’s commercial interests at the forefront of one’s mind. Modern business can be fairly ruthless commercially, and it may be that the founders of the modern industrialised world were the same. However, Mr Boerboom came into a project that was towards the end of its completion, with a simple remit – finish it and reduce the cost. He chose to achieve that remit by revisiting almost everything that MMT had done in the lengthy period prior to his involvement. Inconvenient matters such as the £7.5 million due on Interim Application No.22, the cost-saving expressly agreed for the PMI03 works on the NDT by not using radiographic testing, and ICI’s contractual obligations, were simply ignored or glossed over. He embarked upon his own course, which paid no attention to the contract and no attention to the legal rights of MMT.
    6. Mr Boerboom effectively accepted this in one part of his cross-examination (Day 4/47), which is self-explanatory:
Q: There’s then a meeting on 9th February at page 4234.
A. Yes.
Q. You are shown as attending this meeting on 9th February. This is the next Steer Co meeting following the decision on 21st January to terminate. Do you see that?
A. Mm.
Q. The document is said to have been prepared by Martin Westerlund, but do you see at 4234:
“Lowlights”?
Do you see that heading at the bottom of that page?
A. Mm.
Q. “Merit contract still not terminated. Adjudication started. We have no legal grounds still to declare breach.”
Do you see that passage there?
A. Yes.
Q. Do you remember a discussion to that effect at this meeting?
A. Yes.
Q. And the view was that there were no grounds for asserting breach of contract on my client’s side?
A. Yes.”
The meeting to which these questions relate was but eight days before Mr Boerboom wrote a letter asserting a variety of different repudiatory breaches by MMT. Nothing happened in that period to justify those two points of view, one on 9 February 2015 and one on 17 February 2015, being so very different.
    1. As this passage of evidence shows, when confronted with the stark evidence in e mails at the time of what was being done by the AkzoNobel team, Mr Boerboom would sensibly concede ground. His evidence was therefore more subtle in its partisanship than that of Mr Brugman. However, although the manner and style of his evidence was superficially persuasive, when the content of what he had to say was examined objectively and by reference to the contemporaneous documents, Mr Boerboom’s evidence did not assist ICI’s case overall. It rather demonstrated, in my judgment, that what MMT had long complained of, was in fact what had occurred.”
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