The witnesses in the case
22Each party called a number of witnesses. Each witness gave evidence by affidavit, and most were cross-examined extensively on their affidavits. In most cases, as one might expect, the passage of time had diminished the power and quality of recollection.
23A number of the witnesses called remain in the employ of the party by whom they were called. I do not consider that this fact had any adverse impact on their truthfulness - that is to say, I do not think that any witness in this category sought consciously to shape his or her evidence to suit what might have been perceived to be the needs of his or her employer. Equally, however, it was a feature of the evidence that each party appeared to take the view that its subjective commercial policies were reflected in the ASAs; and to my mind, this tendency did have a subconscious and unintentional impact on the evidence of some of the witnesses.
24Likewise, I think that with the passage of time and the fading of actual recollection, some of the witnesses effectively sought to reconstruct events; and that in doing so, not unnaturally, the process of reconstruction was affected by the tendency to which I have just referred. Some of the witnesses came to reconstruct events, in my view subconsciously and unintentionally, in accordance with their understanding of the policies and interests of the party by whom they were called, and to claim that reconstruction as recollection.
25In some cases, the witnesses had made what they said were contemporaneous file or diary notes. In other cases, they had refreshed their recollection from other contemporaneous sources such as emails.
26Looking at the evidence at a reasonably high degree of abstraction, I have formed the view that the surest guides to finding the facts (to the extent that they are in dispute) are contemporaneous records, where they are available; and the probabilities as, objectively, they appear from the whole of the evidence. Having said that, there were very few direct challenges to credibility. Indeed, some of the witnesses were not required for cross-examination.
27One curious feature of the cross-examination of (in particular) Shield's witnesses was that in at least two cases, with which I shall deal in due course, there were direct and sustained credibility attacks. Those attacks extended to what were, or were said to be, contemporaneous file or diary notes made and kept by those witnesses. In each case, however, the zeal of the attack seemed to be somewhat misplaced. In each case, the relevant witnesses for Citigroup agreed, piece by piece, with the substantial accuracy of the greater part of the impugned notes.
28The first witness called for Shield was its founder and managing director, Mr Desmond Joseph Shields. He gave evidence at a reasonably high level of generality. That reflected in part his relative lack of involvement in the day to day operations of the company at the relevant times, and in part the passage of time since November 2006, when the relevant events occurred.
29I formed the view that Mr Shields was a witness who sought to tell the truth to the best of his ability, and who did not seek knowingly to mislead the court. To the extent that there are difficulties in his evidence (and there are few), I ascribe them to the factors just mentioned.
30I accept that Mr Shields, through his "ownership" of Shield, has an indirect financial interest in the outcome of the proceedings. Except to the limited extent indicated at [24], I do not think that this interest has had any impact on the reliability of Mr Shields' testimony.
31The next witness called for Shield was its client liaison manager, Mr Ian David Bolger. Mr Bolger was more directly involved in some of the relevant matters; or to put it another way, was not completely removed from the relevant action. With that exception, the comments that I have just made in relation to Mr Shield apply equally to Mr Bolger. I add that Mr Bolger was the author of a number of contemporaneous file notes. I accept that, in those files notes, he sought to make an accurate record of what he considered to be the relevant part of the events to which they referred.
32There was some relatively minor conflict between the evidence of Mr Shields and that of Mr Bolger, as to the date of a particular conversation. I do not think that anything turns on this. Whatever the date may have been, I accept Mr Bolger's note of the conversation (made at Mr Shield's direction) as substantially accurate so far as it goes.
33The next witness called by Shield was Ms Deborah Lynette Roddom. Ms Roddom is now no longer employed by Shield. At the relevant time, however, she was its director of operations.
34Ms Roddom was involved in a number of the key conversations in late October and early November 2006, which arose out of the discovery of what Shield claimed were misclassified assignments. In particular, Ms Roddom was involved in a telephone conference with representatives of Citigroup, in which, according to Shield, Citigroup repudiated the then current (2006) ASA.
35Ms Roddom made what she said was a contemporaneous handwritten note of that conversation, and a little later prepared a typed, and somewhat more expansive, file note. The veracity of, in particular, the handwritten file note was subjected to a sustained and aggressive challenge.
36In substance, Mr A A Henskens of Senior Counsel (who appeared with Mr A R Zahra of counsel for Citigroup) suggested, by reference to the form and content of the handwritten file note, that it was not, and could not have been, made (as Ms Roddom said it was) during the course of the telephone conference. Ms Roddom strenuously denied that suggestion.
37A finding that the file note in question was not made in the course of the conversation would, necessarily, involve the conclusion that Ms Roddom had lied deliberately on this topic. I am not prepared to find that she did. Ms Roddom impressed me as a witness who was concerned to tell the truth to the best of her ability. She was, it must be said, extremely defensive during (in particular) this passage of her cross-examination. But that, perhaps, is hardly surprising, having regard to the questions that were put and their necessary corollary.
38I do accept that there are aspects of the handwritten file note which raise doubts about its contemporaneity. For example, as Mr Henskens noted, it fluctuated between what appeared to be direct reporting of passages of discussion, and summaries or impressions of other passages. To some extent, I think, this is understandable, having regard to what was on any view the repetitive nature of the discussions in question.
39Again, the document does appear to be remarkably neat for one produced in the course of what must have been a heated discussion, in circumstances where at least one of the participants (Mr Vicente of Citigroup, to whom I refer below) undoubtedly spoke vehemently and (if his performance in the witness box is any guide) rapidly.
40Again, I note, a person from Shield who was present with Ms Roddom for part of the conversation (Mr Skelton) made a note, which appears in the notebook immediately before Ms Roddom's file note, suggesting to her that she should make a record of what was being discussed. That might not be significant of itself. But that written direction appears at the foot of a particular page; and higher up on the same page are references to what must have been aspects of the discussion. The handwriting of those references has not been identified. It certainly does not appear to be the same as Ms Roddom's handwriting.
41Mr Henskens wished to administer a dictation test to Ms Roddom in the witness box. I rejected that proposal. It seemed to me that it would be entirely unhelpful. When Ms Roddom made (or said she made) the file note in dispute, she was sitting in her own office. She was in familiar surroundings, speaking to people whom for the most part she knew (and had dealt with on many occasions), and dealing with a familiar subject matter. None of those factors could have applied to the exercise that Mr Henskens sought to undertake. In my view, both individually and together, those factors would have rendered the exercise useless in practical terms. Accordingly, I invoked s 135 of the Evidence Act (NSW) 1995 and rejected this line of cross-examination.
42The force of Mr Henskens' criticisms of the file note must be acknowledged. However, as I have said, I do not regard Ms Roddom as a liar (let alone a person prepared to lie, deliberately and on oath). Thus, I accept her evidence that she made the file note contemporaneously with - that is to say, in the course of - the telephone conference to which it related. I accept, also, that she sought to make an accurate record of the conversation to the extent that she thought it necessary to do so. I am comforted in this view of the evidence by the circumstance that Ms Jones of Citigroup, who was a party to the conversation, was cross-examined at length on, and accepted the substantial accuracy of much of, the typed file note. So, too, was Mr Vicente. I will deal with Ms Jones and her role below, as I have said I will with Mr Vicente.
43The striking feature of this aspect of Ms Jones' cross-examination is that in many cases she agreed that words to the effect of those set out in the typed file note were in fact said during the telephone conference. That applies, in particular, to the contentious parts of the conference. Again, to the extent that Ms Jones did not accept the accuracy of the file note, she nonetheless agreed as to some of the underlying facts.
44Likewise, Mr Vicente accepted the substance of, or did not deny, at least part of the typed file note.
45There are two final points to make. The first is that, to the extent there were denials that the file note was an accurate record, in many cases there is no dispute as to the underlying facts. Thus, it is not improbable that words to the effect of those recorded would have been said. On the contrary, in my view, having regard to the purpose and content of the conversation, it is likely that they were said. Secondly, to the extent that there are disputes that remain unresolved (for example, as to whether Mr Vicente said "stop, I am pulling rank now"), those disputes seem to be entirely incidental, and not to require resolution.
46I accept Ms Roddom's file notes as substantially accurate, at least in relation to the principal points of the conversation which they record.
47The next witness called by Shield was Mr Colin Douglas Skelton. At the time, he was Shield's marketing manager. He has since retired. Mr Skelton's recollection in the witness box was sketchy. That, no doubt, reflects both the passage of time and the fact of his retirement. Whilst I have no doubt that Mr Skelton sought to tell the truth, the disparity between his affidavit and his oral evidence leads me to the view that his testimony lacks persuasive force.
48The next witness called by Shield was Mr David Peter Wadick. He is Shield's national collections manager. His evidence did not go to any of the events in dispute in (or before) October/November 2006. It was concerned, rather, to provide a factual foundation for the quantification of an aspect of the damages claimed by Shield. There was no challenge to his credibility - indeed, his cross-examination was brief and, so far as I could see, entirely pointless - and I accept him as a witness of truth.
49The next witness called for Shield was Mr Scott Michael Colomb. Mr Colomb had been employed by Shield from about October 1994. At the times relevant to these proceedings, he was a director of operations. He became Shield's managing director, and held that position until he left its employ in October 2009. He is now employed as a bank manager.
50There was a sustained attack on Mr Colomb's credibility.
51In my view, there is substance to some of the challenges. I refer, by way of example only, to what I say at [112] to [123] below. Thus, whilst I do not find that Mr Colomb sought to give knowingly false evidence, I do think that his evidence should be scrutinised with extreme care, and that, in general, it is preferable to have regard to contemporaneous documents and the probabilities, objectively ascertained, in considering the events to which his evidence is relevant.
52In general, I am not prepared to accept as reliable Mr Colomb's evidence on matters in dispute, unless it is appropriately corroborated or is consistent with the probabilities, objectively ascertained. I have taken into account both the manner in which Mr Colomb gave evidence and specific problems with it, to some of which I refer later, in forming this view.
53Having said that, it is a feature of Mr Colomb's evidence (or more accurately, of what he said were contemporaneous file or diary notes) that witnesses called for Citigroup, when cross-examined, accepted the substantial accuracy of important aspects of those notes.
54Mr Henskens drew attention to aspects of some notes which Mr Colomb said he had made which, Mr Henskens submitted, were unsatisfactory. For example, in two cases, it appeared that the notes had been misdated and that the date had been corrected. Whilst I accept that this does raise a doubt as to either the accuracy of the file notes or the reliability of Mr Colomb as a note-taker, I note that aspects of what was recorded (or purportedly recorded) are either non-contentious or are supported by other evidence.
55In the result, I see no point in burdening the reader with an exhaustive analysis of the criticisms made of Mr Colomb's evidence. My approach to the assessment of his evidence is that set out at [51], [52] above.
56Shield relied on other witnesses of fact. Those witnesses gave evidence by affidavit. They were not required for cross-examination. It follows that I accept their evidence, so far as it goes.
57Shield also called an expert accountant, Mr Benjamin James Jennings. I accept that Mr Jennings was aware of, and sought to perform to the best of his ability, his duties to the Court. The same comments apply to his counterpart called by Citigroup, Mr Joseph Allan Box. To the extent that there remained differences in the evidence of those experts after they had conferred and produced two joint reports, those differences fall to be resolved by considering the inherent logic of what each says, not by reference to any question of credibility in the narrow sense.
58The first witness called by Citigroup was Ms Melissa Jones. She worked for Citigroup between May 2005 and March 2007. She held the position of Manager - Agency Management until her superior, Mr Shinghal, moved from Citigroup's Sydney office to another posting at the end of October or early November 2006. From then until March 2007, Ms Jones acted as head of recoveries.
59Ms Jones left Citigroup for a mercantile agency, known as Collection House Limited, in April 2007. She had worked for Collection House between 1997 and 2005. Collection House had had a commercial relationship with Citigroup at some times over the period 2003 to 2006 - it was one of the mercantile agents to whom, from time to time, Citigroup would assign recovery work. However, Ms Jones said (and I accept), there is now no commercial relationship between the two companies; and there has not been since Ms Jones returned to the employ of Collection House in April 2007.
60In the witness box, Ms Jones demonstrated very little actual recollection of the relevant events (including those covered in some detail in her affidavits). As I have observed already, this was not uncommon; it may be said equally of (for example) Mr Shields and Mr Skelton.
61It seemed to me that much of what Ms Jones said in her affidavits was based on reconstruction, from contemporaneous documents and her understanding of Citigroup's relevant policies and procedures at the time, rather than on any actual recollection. Thus, I think, it is necessary to scrutinise her evidence with some care.
62Having said that, I do not think that Ms Jones sought in any way to mislead the Court, or to give evidence that was knowingly false. On the contrary, I thought that, to the extent that her recollection allowed, she gave honest and reliable evidence. It may be noted that in many cases, when Ms Jones was taken through the detail of file diary notes prepared by employees of Shield, she accepted the substantial truth of substantial parts of what was recorded in those notes.
63However, my overall impression of Ms Jones' evidence - based, specifically, on her lack of recollection of relevant events when cross-examined - leads me to conclude that what she says must be assessed carefully against contemporaneous documents and the probabilities, objectively ascertained.
64There is one particular contemporaneous document created by Ms Jones that was the subject of some debate. That document is an email that Ms Jones prepared and sent to her superior, Mr Vicente, on 10 November 2006. That email was sent two days after the conversations of 8 November 2006, in and as a result of which (it is now common ground) the 2006 ASA was effectively terminated. The fact of termination was confirmed by a letter from Ms Jones to Ms Roddom and Mr Colomb of Shield on 10 November 2006, in which she said that as a result of those discussions "Citigroup believe the relationship with Shield Mercantile to have been terminated as of the 8th November 2006".
65In my view, there is no doubt that Ms Jones prepared the email in question in an attempt to report the relevant facts (as she then perceived them) to Mr Vicente, and to explain to him what had happened, and why.
66Mr Henskens submitted that the email should be regarded as an objective and relatively contemporaneous account of events, made at a time when Ms Jones might be thought to have had a good recollection of them. Thus, he submitted, it should be treated in effect as some form of file or diary note (indeed, he frequently referred to it by the latter phrase during his submissions).
67Mr M H Darke of counsel, who appeared with Ms T R Gordon of counsel for Shield, put to Ms Jones that the email was "a slightly sanitised version of events for Mr Vicente's consumption". Ms Jones did not agree (T490.12-.14).
68In assessing the factual accuracy of what is recorded in the email, one must bear in mind that, at the time, Shield was Citigroup's most successful debt collector. Thus, the loss to Citigroup of the benefit of Shield's services must have been substantial, as on any view it was (given the speed with which events developed) surprising. The evidence is clear that Citigroup had to scramble to appoint another mercantile agent to fill the role hitherto filled by Shield.
69In those circumstances, I think it is inherently likely that Ms Jones would have sought to put a positive "spin" on her account of events in the email. Thus, I think, one needs to take care in using it as an objective contemporaneous document on whose accuracy and reliability reliance can be placed. Having said that, it is again the case that many of the events recorded in the email are (apart from any "spin") hardly in dispute. Indeed, there is one aspect of the email on which Mr Darke relied to controvert an aspect of Mr Shinghal's evidence.
70There were occasional passages during Ms Jones' lengthy cross-examination where I had some concerns at what she had said. I gained the impression, both from what she said and from the manner of saying it, that Ms Jones was allowing her evidence to be influenced by her understanding of Citigroup's policies and procedures at the time. But, having reconsidered those aspects (and others) of Ms Jones' evidence, my overall assessment is that set out in [62], [63]. In those circumstances, I will not elaborate on the passages of evidence to which I have referred.
71The next witness called by Citigroup was Mr Peter Manuel Vicente. Mr Vicente was during 2006 (and later) the director of credit operations for Citigroup. He has now moved to another office in the Citigroup empire.
72Mr Vicente was several degrees removed from the day to day dealings between Shield and Citigroup. His only direct involvement in matters at issue in these proceedings came in late October or early November 2006, when Ms Jones brought to his attention the dispute that had arisen between Shield and Citigroup over commissions.
73Thereafter, Mr Vicente's direct involvement was limited to the telephone conference of 8 November 2006 involving Ms Roddom and, later, Mr Colomb from Shield (Mr Skelton was also present and in Ms Roddom's office for part of that conversation) and Ms Jones of Citigroup. Mr Vicente had a later conversation with Mr Colomb, in the course of which Mr Colomb said in effect (the precise words do not matter) that Shield regarded the relationship as at an end.
74Mr Vicente gave evidence at a significant level of generality. I formed the impression that his recollection was heavily influenced by his perception of what Citigroup's policies and procedures at the time required. I might add that this perception also seemed to me to underlie the approach that Mr Vicente took to dealing with the dispute, during the telephone conference of 8 November 2006.
75As will be clear already, there are differences as to what was and was not said during that telephone conference. However, the thrust of the discussion is reasonably clear, as is the thrust of the subsequent and short discussion between Messrs Colomb and Vicente.
76I do not think that Mr Vicente had any real present recollection of the events. Much of his evidence seemed to me to be reconstruction based on his understanding of Citigroup's policies and procedures.
77Nonetheless, there was no direct attack on Mr Vicente's credibility. Nor was there any dispute of substance as to the events of which he gave evidence. Finally, much of what he said appears to me to be consistent with contemporaneous documents and with the probabilities, viewed objectively. In those circumstances, it is unnecessary to subject Mr Vicente's evidence to detailed analysis.
78I should add however that my impression of Mr Vicente, during his cross-examination, was entirely consistent with the picture that emerges from the evidence (including that of Ms Jones) of the way he conducted himself during the telephone conference on 8 November 2006. I have no doubt that Mr Vicente behaved and spoke in a manner that was self-assured, confident perhaps to a fault, and that brooked no opposition. I have no doubt that, during the telephone conference, Mr Vicente put Citigroup's position, based on his understanding of its policies and procedures, forcefully and repeatedly.
79The next witness called by Citigroup was Mr Manu Shinghal. Mr Shinghal was, from May 2005 to October 2006, the head of Loss Recoveries. In that position, he was Ms Jones' immediate superior. As I have said, Mr Shinghal moved to another position within the Citigroup empire at the end of October 2006.
80It was clear, during Mr Shinghal's cross-examination, that he had no real recollection of the relevant events. I have great difficulty in understanding how he could have been as positive as he was in his affidavit affirmed 7 June 2012, compared to his uncertainty in the witness box some five months later.
81Mr Shinghal was forced to accept that there were passages in his affidavit which were incorrect, or which overstated the relevant facts. I suspect that this may have reflected the fact that Mr Shinghal's evidence was really reconstruction based on his understanding of what was required by Citigroup's policies and procedures at the time.
82In general, to the extent that there is a conflict between the evidence of Mr Shinghal and the evidence of witnesses called by Shield, I prefer the evidence of the witnesses called by Shield.
83For example: there is a question as to whether Mr Shield had a conversation with Mr Shinghal concerning the dispute. Mr Shield said that there was such a conversation. Mr Shinghal said that there was not, and thus disputed the particular conversation to which Mr Shields had deposed. However, in Ms Jones' email of 10 November 2006 to Mr Vicente, she recorded among other things that "...Des Shield [sic] phoned and spoke with Manu Shinghal...". It is clear that Ms Jones must have based this on something said to her by Mr Shinghal, probably before he left the Sydney office of Citigroup at the end of October 2006. This undermines the reliability of Mr Shinghal's denial, and disposes me to accept Mr Shields' evidence on the point.
84The next witness called by Citigroup was Ms Jennifer June Dunk. She was at the relevant time an agency liaison officer within the Agency Management Department of Citigroup's Debt Recovery unit. In that position, she reported to Ms Jones.
85By far the greater part of Ms Dunk's evidence was devoted to proving the records in respect of, and analysing, the various debt recovery files sent by Citigroup to Shield in respect of which there was a dispute as to commission. That evidence was essentially non-contentious.
86There were occasions, during Ms Dunk's cross-examination, where I thought that her evidence was heavily influenced by her perception of what might be consistent with Citigroup's policies and procedures, or Citigroup's interest more generally.
87There were some conflicts between the evidence of Ms Dunk and the evidence of Shield's witnesses, as to conversations and the like. In general, where there are such conflicts, I prefer the evidence given by Shields' witnesses (for example, Mr Bolger).
88Citigroup relied on the evidence of other witnesses, who gave their evidence by affidavit. Those witnesses were not required for cross-examination. In the circumstances, I accept the evidence of those witnesses so far as it goes.