Ahern v Aon Risk Services Australia Ltd

[2014] NSWSC 1697

Supreme Court

New South Wales

Case Title:	Ahern v Aon Risk Services Australia Ltd
Medium Neutral Citation:	[2014] NSWSC 1697
Hearing Date(s):	24 November 2014
Decision Date:	28 November 2014
Jurisdiction:	Common Law
Before:	Button J
Decision:	(1) Dismiss the notice of motion of the plaintiffs of 10 October 2014. (2) Vacate the direction of Registrar Bradford of 30 April 2014 concerning the meeting of experts and provision of their report. (3) The plaintiffs must pay the costs of the defendants of the hearing of the motion before me.
Catchwords:	EVIDENCE - pre-trial application for exclusion of expert evidence - whether admissibility should be dealt with on an interlocutory basis by judge who may not be the trial judge - whether evidence complies with test for admissibility of expert opinion evidence - whether general discretion to exclude evidence should be exercised - pre-trial application for directions with regard to expert evidence - consideration of the role a judge should play in determining what evidence is presented
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Evidence Act 1995 (NSW) ss 76, 79, 135, 192A Uniform Civil Procedure Rules 2005 (NSW), r 31.20
Cases Cited:	Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 TKWJ v R [2002] HCA 46; 212 CLR 124
Category:	Interlocutory applications
Parties:	Marshall Ahern (First Plaintiff) Estelle Therese Clancy (Second Plaintiff) Aon Risk Services Australia Ltd (First Defendant) Trent Uno Pty Ltd (Second Defendant) Leo Di Paolo (Third Defendant)
Representation
- Counsel:	Counsel: A J McInerney SC (Plaintiffs) J Watson (Plaintiffs) D L Williams SC (Defendants)
- Solicitors:	Solicitors: Fraser Clancy Lawyers (Plaintiffs) James Tuite & Associates Lawyers (Defendants)
File Number(s):	2012/203106

JUDGMENT

1. Before the Court is a notice of motion of the plaintiffs seeking a number of orders. It is convenient to set them out in their entirety:

   (1)Pursuant to s192A of the Evidence Act 1995 (NSW) the Court give a ruling, or make a finding, that the expert report of Mr Lyndon Parnell dated 12 July 2013 in whole, or in part, is inadmissible;

   (2)The Court vary the orders made by the Supreme Court on 14 March 2014 and varied on 30 April 2014 with respect to the expert evidence of the competent practice of insurance brokers, concerning Mr Brock Halliday - the expert for the plaintiff, and Mr Lyndon Parnell -the expert for the defendant, be varied to provide that the parties' experts are not required to meet and prepare a joint expert's report until the defendant's expert, Mr Lyndon Parnell, complies with the Expert Code of Conduct and the Practice Note SC Gen No. 11 by preparing an expert's report identifying:

   (a)That Mr Lyndon Parnell has specialised knowledge by reason of training, study or experience to express an opinion on the competent practice of insurance brokers as at 29 March 2006;

   (b)That Mr Lyndon Parnell identify, and explain his reasoning by reference to specialised knowledge, the competent practice of insurance brokers as at 29 March 2006 premised on the following alternative assumptions:

   (i)The evidence of Mr Marshall Ahern is correct;

   (ii)The evidence of Mr Leo Di Paolo is correct;

   (iii)The facts admitted on the face of the Further Amended Statement of Claim and Defence to Further Amended Statement of Claim (identified in the expert report of Mr Brock Halliday 21 February 2014, at paragraphs 64 to 121 (inclusive));

   (c)That Mr Lyndon Parnell express an opinion as to whether the defendants departed from the competent practice of insurance brokers as at 29 March 2006 premised on the following alternative assumptions:

   (i)The evidence of Mr Marshall Ahern is correct;

   (ii)The evidence of Mr Leo Di Paolo is correct;

   (iii)The facts admitted on the face of the Further Amended Statement of Claim and Defence to Further Amended Statement of Claim (identified in the expert report of Mr Brock Halliday 21 February 2014, at paragraphs 64 to 121 (inclusive));

   (3)Pursuant to Pt 31 rule 31.20 [of the Uniform Civil Procedure Rules] the liability experts, Mr Brock Halliday and Mr Lyndon Parnell, be provided with the letter of instruction for the purpose of preparing their joint report to the following effect:

   (a)That each expert identify, and explain his reasoning by reference to specialized knowledge, the competent practice of insurance brokers as at 29 March 2006, premised on the following alternative assumptions:

   (i)The evidence of Mr Marshall Ahern is correct;

   (ii)The evidence of Mr Leo Di Paolo is correct;

   (iii)The facts admitted on the face of the Further Amended Statement of Claim and Defence to Further Amended Statement of Claim (identified in the expert report of Mr Brock Halliday 21 February 2014, at paragraphs 64 to 121 (inclusive));

   (b)That each expert express an opinion as to whether the defendants departed from the competent practice of insurance brokers as at 29 March 2006 premised on the following alternative assumptions:

   (i)The evidence of Mr Marshall Ahern is correct;

   (ii)The evidence of Mr Leo Di Paolo is correct;

   (iii)The facts admitted on the face of the Further Amended Statement of Claim and Defence to Further Amended Statement of Claim (identified in the expert report of Mr Brock Halliday 21 February 2014, at paragraphs 64 to 121 (inclusive));

   (c)That each expert identify each matter in respect of which he agrees with the other expert, and provide his reasons for such agreement;

   (d)That each expert identify each matter in respect of which he disagrees with the other expert, and provide his reasons for such disagreement;

   (4)The experts be provided with any additional or alternative questions that the Court thinks fit.

   (5)Any other such order as this honourable Court deems fit.

   (6)Costs.

2. The defendants resist the motion in its entirety, though at the hearing senior counsel expressed a degree of flexibility with regard to proposed order three.

3. A very brief background of the dispute between the parties is as follows. The first plaintiff was the owner of a home in Mosman, and both plaintiffs were the owners of its contents. The home burned down, and the contents lost. At the time the home was insured for something in the order of $100,000, and the contents were insured for about $39,000. The contention of the plaintiffs is that that was grossly inadequate. They also contend that that inadequacy was due to the professional negligence, breach of contract and misleading and deceptive conduct of an insurance broker, Mr Leo Di Paolo ("the insurance broker"), and associated corporations (collectively, "the defendants"). The contention of the defendants is that it was not the responsibility of the insurance broker or any other defendant to ensure that the premises were adequately insured.

4. Although a great deal of documentary evidence was placed before me on the hearing of the motion, the parties were content for me to focus upon the following aspects of the evidence.

5. The defendants have qualified Mr Lyndon Parnell, who has, by way of a report of 12 July 2013, along with an "Insurance Industry Career Profile" of March 2014, expressed the general opinion that the conduct of the insurance broker was consonant with that of a reasonably competent professional.

6. The plaintiffs have qualified Mr Robert Halliday. By way of two reports of 15 July 2013 and 21 February 2014, Mr Halliday has expressed the contrary opinion. Mr Halliday has expressed his opinion based upon a number of different assumptions, themselves based upon different versions of events derived from affidavits filed in the proceedings. In contrast, Mr Parnell has provided an opinion based upon one set of assumptions only, derived from a version of events given by the insurance broker.

7. On 14 March 2014, Registrar Bradford directed that the experts were to confer by 30 June 2014, and issue a joint report by 31 July 2014. On 30 April 2014 that direction was altered. Registrar Bradford directed that the experts should meet and confer by 26 August 2014, and issue their report by 26 September 2014. In fact, this varied direction has not been the subject of compliance. That is because the parties have reached a stalemate due to their inability to find a constructive way forward with regard to a joint report that meets the interests of all parties.

8. I was taken to a document setting out a list of questions of 2 September 2014 that the defendants have proposed would be appropriate to form the foundation of a joint report from Mr Halliday and Mr Parnell. The plaintiffs do not agree with that proposal; their alternative proposal is contained in the orders sought in the motion.

9. Finally, I was told that the matter is listed for hearing on 2 February 2015.

10. I turn to discuss proposed order one.

11. In support of that order, the plaintiffs submitted that I was in just as good a position as the trial judge to determine all aspects of the admissibility of the report of Mr Parnell. They submitted that I am empowered to do so pursuant to s 192A of the Evidence Act 1995 (NSW), which was designed to overcome the effect of TKWJ v R [2002] HCA 46; 212 CLR 124. They further submitted that it would be conducive to the orderly preparation of the trial for me to do so. It was made clear in written submissions that there were two bases for the proposition that the foreshadowed evidence of Mr Parnell is inadmissible: first, its alleged failure to comply with the test contained in s 79 of the Evidence Act, and, secondly, the contention that I should exercise the discretion contained in s 135 of the Evidence Act to exclude it.

12. I respectfully reject the threshold proposition of the plaintiffs. I do not see any sound reason why I should embark upon that task, unaided by the deep understanding of the real issues and the other evidence that will inevitably be vouchsafed to the trial judge. Nor do I see any great advantage in a discrete question of admissibility being determined well before the trial and on an interlocutory basis. If it be the case that, having been put firmly on notice of the objections of the plaintiffs, senior counsel for the defendants maintains his reliance on the report and suffers adverse forensic consequences at the hearing as a result, so be it. To my mind, that is not a sound reason for me to embark upon this interlocutory determination now. And that is especially the case when one of the bases of "objection" is exclusion pursuant to s 135 of the Evidence Act. That basis in particular will require an appreciation of the actual conduct of the trial in practice, not a predictive exercise undertaken by me on the basis of folders of documents.

13. It follows that, on the threshold basis that it is not appropriate for me to determine this question of admissibility before the trial pursuant to s 192A of the Evidence Act, I would decline to make order one in the motion.

14. As against the possibility that I am wrong in that determination, I consider that I should make a brief contingent analysis of the objection to the evidence.

15. The primary objection was founded on s 79 of the Evidence Act, as informed by decisions such as Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705. The plaintiff submitted that the report provides insufficient explanation of the true nature of the asserted "specialised knowledge based on [Mr Parnell]'s training, study or experience"; that it fails to show how the opinions expressed by Mr Parnell are "wholly or substantially based on that knowledge"; that the report makes bald statements about what one would expect of a competent insurer broker without explaining the basis for those statements; and, finally, that the report does not set out the analysis or reasoning whereby the purported expert witness comes to his opinions.

16. Again, I respectfully disagree. To my mind, read as a whole, the report amply demonstrates the expertise of the witness with regard to insurance brokerage and the practice of insurance brokers. It also expresses opinions that one is well entitled to infer are wholly or substantially based on that knowledge. And it does so with a sufficient degree of analysis and reasoning for one to understand why the expert holds those opinions, and to permit one to be satisfied that the evidence is derived, at the least substantially, from that specialised knowledge.

17. Turning to the alternative basis of exclusion, s 135 of the Evidence Act, it is not easy to see how that section could often be engaged in circumstances in which the tribunal of fact is a judge of this Court and what is under discussion is expert evidence with regard to the competent conduct of professionals. To my mind, on the material placed before me, s 135 of the Evidence Act does not provide a basis for exclusion of any part of the report of Mr Parnell.

18. It follows that, even if I am wrong in my evaluation that it is not appropriate for me to determine objections to the evidence of Mr Parnell at an interlocutory stage, I would not reject any aspect of the report of Mr Parnell, either on the basis that it does not comply with the statutory exception contained in s 79 of the Evidence Act to the rule against the admission of opinion evidence contained in s 76 of that Act, or in the exercise of my discretion.

19. Turning to proposed order two, the plaintiffs confirmed in oral submissions that the intent of the order would be for me effectively to order the defendants to present their expert evidence in a certain way; namely, by having their expert witness provide an opinion based on various differing assumptions, as the expert witness for the plaintiffs has done.

20. I respectfully consider that it is enough to say in response that in our system of justice, whether the proceedings be civil or criminal, it is not the role of the trial judge to order parties to present certain evidence, on pain of adverse consequences. When sitting as the judge of the law, it is one of the roles of the judge to determine the admissibility of evidence that a party choses to tender and that has been the subject of objection by an opponent. When sitting as the judge of the facts, it is the role of the judge to determine whether the elements of civil causes of action or criminal offences have been established by the party bearing the onus of proof to the applicable standard of proof.

21. It is a matter within the professional remit of senior counsel for the defendants whether he tenders any expert evidence in the proceedings; if so, its subject matter, and what form it takes; and furthermore what, if any, assumptions any expert witness will be asked to make in founding his or her opinions. Determination of those matters on behalf of the defendants is not my role. And if senior counsel for the defendants makes forensic choices in that regard that redound on him adversely at the trial, so be it: determination of the wisdom of his choices is not my role either.

22. It follows that, because I respectfully do not consider it within my role, I do not propose to make order two in the motion.

23. As for proposed order three, as I have said, senior counsel for the defendants expressed himself to be reasonably content with it in discussions between Bench and Bar table. He explained that he would be content if a joint report were created, and conclave evidence given, based upon the many assumptions set out in the proposed order, or, in the alternative, based only upon the assumption upon which his expert had already provided a report.

24. During further discussions, however, senior counsel for the plaintiffs made it clear that, if order two were not to be made, he would not seek order three. That was because, he submitted, if Mr Parnell were permitted to express his opinions by way of a joint report founded upon all assumptions, senior counsel for the plaintiffs would be prejudiced by having been served with a report of Mr Parnell that dealt with only one assumption. Senior counsel for the plaintiffs submitted that, if I were not prepared to make order two, it would be preferable for the extant (but expired) direction of Registrar Bradford calling for a joint report to be vacated and not replicated with fresh dates by me.

25. Speaking generally, I have no doubt that joint reports and conclave evidence pursuant to Practice Note SC Gen 11 can very often play a valuable role in clarifying with precision the points of agreement and dispute between expert witnesses, thereby assisting the tribunal of fact and giving effect to the well-known overriding purpose of the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW), contained in s 56 of the former instrument. But there will be cases in which joint reports and conclave evidence do not serve that purpose. Regrettably, I have come to the view that this is such a case.

26. The motion was argued before me for two hours. It required the involvement of two members of the Inner Bar. Extensive written submissions were filed. I received a great many documents into evidence. They include correspondence between the two firms of solicitors that shows that disputes about the topic of expert evidence have been ongoing for months, and have expended a great deal of time, money, and paper. Before me the parties could not agree on the topics (in the form of assumptions) about which the expert should be asked, let alone the appropriate questions with regard to those topics.

27. To my mind, the situation has reached a stage at which the usefulness of a joint report, and conclave evidence based upon it, in achieving the "just, quick and cheap" determination of this legislation, has dwindled very substantially. Although at one stage I considered that it could be appropriate for me to draft highly generic questions that could form the basis of a joint report, I think that the dispute between the parties about this whole procedure demonstrates that things have moved past that point. And it is to be recalled that, once one takes into account the intervening long vacation, the trial date is looming.

28. I consider that this relatively simple dispute between experts should be resolved in the usual way: by the plaintiffs presenting their evidence at trial first, including admissible expert opinion evidence, and thereafter the defendants presenting theirs.

29. For those reasons, although I decline to make order three in the notice of motion, I shall respectfully make an order vacating the direction of Registrar Bradford of 30 April 2014, and shall not make any further order to similar effect.

30. Finally, turning to costs, each party sought costs of the motion if successful. The motion of the plaintiffs has failed. Whilst it is true that I have made the order that senior counsel for the plaintiffs sought by the end of the hearing, that was very much an ancillary position adopted by him. In the circumstances, I consider that the plaintiffs should pay the costs of the defendants of the proceedings before me.

    Orders

31. I make the following orders:

    (1)Dismiss the notice of motion of the plaintiffs of 10 October 2014.

    (2)Vacate the direction of Registrar Bradford of 30 April 2014 concerning the meeting of experts and provision of their report.

    (3)The plaintiffs must pay the costs of the defendants of the hearing of the motion before me.

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