Byrd and Byrd (Conditional Admission of Expert’s Evidence)
[2011] FamCA 810
•29 September 2011
FAMILY COURT OF AUSTRALIA
| BYRD & BYRD (CONDITIONAL ADMISSION OF EXPERT’S EVIDENCE) | [2011] FamCA 810 |
| FAMILY LAW – EVIDENCE - expert opinion evidence – whether the expert opinion evidence tendered by one party should be struck out before any supporting evidence can be produced – where expert opinion partly based on evidence struck out – the basis rule – the court’s power to reserve judgment on the admission of documentary evidence in a trial until all the evidence is tendered |
| Family Law Rules (2004) (Cth) Evidence Act (1995) (Cth) |
| Adler v Australian Securities and Investments Commission (2003) NSWCA 131 Australian Securities and Investments Commission v Rich and Others [2005] NSWCA 152 Bodney v Bennell (2008) FCAFC 63 Carpenter & Lunn (2008) FamCAFC 125 Clarke v Ryan (1960) 103 CLR 486 Daniel and Others (for the Ngarluma, Yindjibarndi, Yaburara, Mardudhunera and Wong-goo-tt-oo Peoples) v Western Australia and Others (2000) 178 ALR 542 Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Noetel and Quealy [2005] FamCA 677 Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370 Quick v Stoland Pty Ltd (1998) 157 ALR 615 Rhodin v Wingate [2002] NSWCA 165 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 |
| APPLICANT: | Mr Byrd |
| RESPONDENT: | Ms Byrd |
| FILE NUMBER: | SYC | 767 | of | 2009 |
| DATE DELIVERED: | 29 September 2011 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 29 September 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richardson SC Mr Campton |
| SOLICITOR FOR THE APPLICANT: | Gibsons Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Rees |
| SOLICITOR FOR THE RESPONDENT: | Watts McCray |
Orders
The report of Ms D attached to her affidavit filed in court on 27 December 2011 is conditionally admitted to evidence with the admissibility of the report and the weight to be given to it to be determined at the conclusion of the taking of evidence in the case as a whole.
IT IS NOTED that publication of this judgment under the pseudonym Byrd & Byrd (conditional admission of expert’s evidence) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 767 of 2009
| Mr Byrd |
Applicant
And
| Ms Byrd |
Respondent
REASONS FOR JUDGMENT
The wife seeks to read the Affidavit of Ms D sworn 26 September 2011. This contains the valuation evidence which the wife seeks to rely upon in relation to the husband’s business, S Company. The single expert, Mr P, has valued the business at $2.398 million, whereas the valuation of Ms D, if accepted, would contend for a value of $6.516 million.
The parties caused a joint balance sheet to be tendered, which has been marked as exhibit X4. That document illustrates the impact of the different values attributed to this particular asset. With agreement as to the values of all other assets, liabilities and superannuation, the wife contends for a total asset value of $17.739 million, whilst the husband says $13.619 million is the value of the assets collectively. The parties have agreed liabilities of $733,000, and superannuation of $664,000.
The husband’s case is that the affidavit of Ms D should be rejected for the following reasons:
a)The report contravenes rule 15.54(2) of the Family Law Rules 2004 (Cth) (“the Rules”). That rule requires mandatory compliance, it is submitted.
b)There is an implied concession by Ms D that she lacks the particular expertise necessary to value S Company.
c)Ms D has conceded she is not an expert on employment remuneration and has adopted the supposed opinion of another expert whose evidence cannot be tested.
I will expand on each of these grounds shortly as I deal with the objections.
The wife, for her part, submits there is nothing unusual or exceptional about the approach of Ms D to the valuation that the Court should confine itself to only considering the evidence now before the Court. The wife submits that it is premature to strike out Ms D’s affidavit at this time rather than provisionally admitting the evidence, and then, after all the evidence, in affidavit form, orally, or otherwise, is before the Court, determine whether the facts relied upon or assumed by Ms D as a basis for her professional opinion are available.
The wife’s case is that there is no rule of law or authority which requires the expert to prove the facts upon which she or he relies for the basis for the opinion within the report or evidence-in-chief of that expert.
In relation to the failure to comply with the Rules, the wife claims that, in the circumstances in which Ms D was required to produce an alternative valuation report during this trial, the requirement for compliance with rule 15.54(2) should be dispensed with, particularly as the oral instructions given to Ms D are now in evidence before the Court (see the Affidavit of Ms D sworn and filed 28 September 2011). I will expand upon the wife’s argument later in these reasons.
The Husband’s Case
The husband submits the evidence of Ms D contained in her Affidavit filed in court on 27 September 2011 should be rejected by the Court as evidence in the case for the following reasons.
Firstly, the mandatory requirements of rule 15.54(2) have not been complied with. The rule states as follows, and I note that contextually, it needs to be read with rule 15.54(1).
Rule 15.54
Instructions to expert witness
(1) A party who instructs an expert witness to give an opinion for a case or an anticipated case must:
(a) ensure the expert witness has a copy of the most recent version of, and has read, Divisions 15.5.4, 15.5.5 and 15.5.6 of these Rules; and
(b) obtain a written report from the expert witness.
(2) All instructions to an expert witness must be in writing and must include:
(a) a request for a written report;
(b) advice that the report may be used in an anticipated or actual case;
(c) the issues about which the opinion is sought;
(d) a description of any matter to be investigated, or any experiment to be undertaken or issue to be reported on; and
(e) full and frank disclosure of information and documents that will help the expert witness to perform the expert witness's function
It is acknowledged by the wife that rule 15.54(2) has not been complied with for the preparation of Ms D’s report, annexed to her affidavit. However, the wife says that compliance is not necessary, as the principal instructions provided to Ms D related to the preparation of her report dated 11 May 2011, and the 27 September 2011 report is said to be only an update of the earlier report. Further, as stated earlier, the wife says she should be relieved of compliance with the subject rule as it only became apparent that the valuation would be required when the evidence sought to be relied upon by the wife, namely, the valuation of Ms D annexed to her Affidavit sworn 15 September 2011, was struck out on the application of the husband. The wife relies upon the provisions of rule 1.12 which permits the Court to dispense with the requirements for a party to comply with a particular rule.
I note rule 1.12(3) sets out the matters the Court may consider when determining whether to make an order pursuant to rule 1.12(2). That rule is as follows:
1.12 Court may dispense with Rules
(3)In considering whether to make an order under this rule, the court may consider:
(a) the main purpose of these Rules (see rule 1.04);
(b) the administration of justice;
(c) whether the application has been promptly made;
(d) whether non-compliance was intentional; and
(e)the effect that granting relief would have on each party and parties to other cases in the court.
It is inherent in the submission of the husband that the Rules should not be simply ignored. The husband says that the wife has sought a considerable indulgence from the Court by being permitted to file fresh valuation evidence in relation to the most significant fact issue in the case, and at the very least, compliance with the Rules in relation to that evidence ought to be expected by the Court. He submits the wife should not be provided with any more indulgences in relation to this aspect of the case. The husband’s case is that the accumulated prejudice to the husband is now at a point where the Court would conclude that the balance falls against the wife.
The husband submits that the evidence of Ms D contravenes Rule 15.54(2). The husband relies upon the evidence of the expert witness which states the instructions for the preparation of the evidence (valuation), now under consideration, was given orally.
The wife submits that although the instruction for the subject report was given orally for the subject valuation report, the instruction was for the updating of an earlier report for which the instruction had been given in writing. The wife submits that no prejudice can be seen to accrue to the husband resulting from the wife failing to give the instruction for an update in writing and thus the compliance with the said rule should be waived as provided for in rule 1.12.
It is further submitted that the circumstances in which the instruction was given need to be considered by the Court in determining whether to relieve the wife of compliance with rule 15.54. In this case the wife submits the circumstance arose out of the Court refusing to admit the evidence of value prepared by Ms D and filed on the second day of the trial set for this matter. That evidence was rejected because Ms D had relied upon the evidence of Mr K. Mr K’s evidence of value had earlier (on the first day of the trial) been rejected by the Court because the basis of the opinion expressed could not be proved. Ms D then prepared the subject valuation on the instruction of the wife to prepare that valuation without referring to and/or relying upon any evidence from Mr K.
In the circumstances I consider compliance with rule 15.54 should be dispensed with. I can see no prejudice flowing to the husband of the failure of the wife to put the particular instructions to Ms D in writing.
The husband further submits that Ms D was not qualified to value S Company. The husband points to an implied concession by Ms D as to a deficiency in her expertise to value S Company. The valuation of S Company by Ms D, which was attached to her Affidavit sworn 15 September 2011, was struck out by the Court because (amongst other reasons) she had adopted evidence from another valuer, namely Mr K, where Mr K’s evidence, upon which Ms D relied, was itself struck out. In her report of 15 September 2011, Ms D adopted a number of key determinations of Mr K as her own for the purpose of the valuation. My determination given 27 September 2011 in relation to Ms D’s evidence sworn on 15 September 2011 needs to be read in conjunction with these reasons in order to fully comprehend the circumstances which have unfolded in this case and also to see the extent to which Ms D had adopted the opinions of Mr K in the development of her own opinion as to the value of S Company.
The husband’s case is that Ms D’s deference to the expertise and opinion of Mr K was so far-reaching as to lead an objective observer to conclude that she did not have the personal expertise to value this particular business. Further, it is submitted there is no evidence that Ms D was instructed by the wife to not apply her own expertise in relation to particular aspects of the valuation, but rather, to adopt Mr K’s.
The husband says it is not uncommon for experts engaged in one field to ask to rely on the opinions of another expert in another field in the preparation of their own expert opinion. An example of this is seen frequently in the court, when a valuer commissioned to value a corporation is asked to accept that the real estate and chattels of the company have a value which has been attributed by another expert. In such a circumstance, there will be a clear instruction given to that effect.
The husband further submits that if Ms D had been instructed to adopt the opinion of Mr K, she would have been obliged by rule 15.63(c)(iii) to disclose that.
Rule 15.63 is as follows:
15.63 Contents of expert’s report
An expert’s report must:
(a) state the reasons for the expert witness’s conclusions;
(b) include a statement about the methodology used in the production of the report; and
(c) include the following in support of the expert witness’s conclusions:
(i) the expert witness’s qualifications;
(ii) the literature or other material used in making the report;
(iii) the relevant facts, matters and assumptions on which the opinions in the report are based;
(iv) a statement about the facts in the report that are within the expert witness’s knowledge;
(v) details about any tests, experiments, examinations or investigations relied on by the expert witness and, if they were carried out by another person, details of that person’s qualifications and experience;
(vi) if there is a range of opinion on the matters dealt with in the report — a summary of the range of opinion and the basis for the expert witness’s opinion;
(vii) a summary of the conclusions reached;
(viii) if necessary, a disclosure that:
(A) a particular question or issue falls outside the expert witness’s expertise;
(B) the report may be incomplete or inaccurate without some qualification and the details of any qualification; or
(C) the expert witness’s opinion is not a concluded opinion because further research or data is required or because of any other reason.
I note that rule 15.63(c)(viii) requires the expert to disclose if a particular question or issue falls outside the expert’s expertise. I also note Ms D did not make any such disclosure in either her 15 September or 27 September 2011 reports, other than in relation to expertise in respect of “remuneration”. The husband submits that, notwithstanding her report of 15 September 2011 was rejected by the Court, Ms D has not explained in her evidence why it was necessary to rely upon Mr K’s expertise for that report and not necessary in the subject report. The husband submits that knowing there was no instruction to Ms D to adopt Mr K’s opinion in the 15 September report, it tips the balance of probability such that it is established she lacks the requisite expertise, and therefore her opinion becomes inadmissible.
The wife submits there is no implied admission as to lack of competence. The reference by one expert to the evidence of another does not abandon expertise in the first. Ms D’s CV establishes her expertise. In relation to the instructions given to Ms D for the report which has been rejected, it will be her evidence that she was specifically instructed to adopt the opinion of Mr K.
The husband points to a number of specific portions of the report. He says that paragraph 2.4 on page 5 states the following: “Consistent with my earlier report, I have determined the value of the financial planning business conducted by the husband using a capitalised earnings basis of valuation only.” The earlier report appears to be a combination of her report of 11 May 2011, and a correction contained in a letter dated 25 May 2011. In paragraph 2.9 on page 5, Ms D says, “I note that in determining the earnings generated by [Mr Byrd], [S Company], I have allowed an annual notional salary for the husband of 175,000, inclusive of superannuation. I have determined this salary by reference to survey reports prepared by [Z Financial Recruitment Company].”
On page 15 of the report, Ms D sets out appendix “D”. In that appendix, she calculates the “enterprise value” of S Company as $5,144,000. To reach that figure, she made adjustments to the reported results of the business in the 2009, 2010 and 2011 financial years. One of the adjustments was for “commercial salary package – related parties.” This is directed solely to the husband’s remuneration. Note 8 to appendix “D” appears on page 17 of the report and includes the basis for her adjustment of the husband’s remuneration package for the purpose of valuation. In that section of the report, she says, inter alia, “I note that I am not an expert in remuneration.” She also says, “I understand that [X] adopted a notional advisor salary of $120,000 per annum when considering the valuation of an [X]-based financial planning business on a capitalised earning basis.” In note 8, she again cites, “[Z Financial Recruitment Company] – Australian consolidated salary guide and market report 2011-2012.” She said, “A commercial salary package for the husband has been considered by reference to that publication.” The husband says that adopting the decision in Clark v Ryan (1960) 103 CLR 486, her opinion based on the above is inadmissible unless Mr Z, the author of the service, is in evidence.
The husband also points to note 9 on page 17 of the report. That note states as follows:
An analysis of the wages and superannuation paid to employees in the three years ended 30 June 2011 reveals that salary packages have increased in the year ended 30 June 2011, disproportionately to the increase in net commission income. For the purpose of my report, I have assumed that the material increase in salary package paid in 2011 as a percentage of net commission income is surplus to the needs of the business and have adjusted the level of salary and superannuation paid to 40 per cent, consistent with the expenditure incurred in 2009 and 2010.
In this exercise, the husband says Ms D has relied upon an unauthorised (that is, there was no instruction on this point) and unsupported assumption. No evidence is provided of any inquiry made of the husband about the reason for the increase in the 2011 expenditure, consequently, none was considered by Ms D and, accordingly, she concluded that it was disproportionate. For that reason, the husband says the evidence is inadmissible.
In appendix “G” on page 22 of the report, Ms D sets out a “summary of [X] buyout agreement for the 26 fortnights to 12 June 2011.” In that table, the following is set out: “Recurring practice revenue – $3,440,362.” Next to that entry is note 4. Note 4 then appears as follows:
Multiple of recurring commission per my report dated 11 May 2011. I note that in view of the [X] recurring revenue representing less than 50 per cent of the total commission income derived by the business, the resulting valuation cannot be considered to be representative of the value of the business as a whole.
The husband submits that the reliance upon the May report by Ms D is problematic for her, given her specific instructions, evidence of which is contained in her Affidavit sworn 28 September 2011. In particular, she inquired, “Can I rely on any published material by [Mr K]?” The answer provided was “No”.
Further, her instructions included the words:
You should not rely on any information you have from the [K] report.
The husband submits that in the May report at page 35, Ms D sets out appendix “G”. The table in its form is identical to the appendix “G” in the subject valuation except that it relates to the 26 fortnights prior to 17 April 2011 and so there is some difference in the figures in the two documents.
Next to the entry “Recurring Practice Revenues,” is note 5. That note is as follows:
The value derived by application of the multiple of recurring revenue stream, per [K Pty Ltd] of 3.27 results in a value of only the [X] recurring commission income.
The husband submits the clear reference to K Pty Ltd illustrates that Ms D has departed from her clear instructions.
The husband also complains that the expert effectively instructed herself to form an assumption that the increase in salaries in the 2011 year were “surplus to requirement” and should, therefore, be adjusted. Given that she can not prove or establish that such an assumption was appropriate, her valuation, the husband says, should be rejected.
The Court notes the contrast between the way in which Ms D informed herself as to an appropriate wage/remuneration for the adjustment to the husband’s drawings on the business in each of the 2009 to 2011 financial years to the way in which Mr P informed himself in relation to the same matter. It is implicit in the case put by the husband that Ms D should have followed the same methodology.
In relation to the expert relying upon the information from Z Financial Recruitment Company, the wife directs the Court’s attention to the discussion in Australian Securities and Investment Commission v Rich (2005) NSWCA 152 and in particular the judgment of Spigelman CJ between paragraphs 92 and 107. She submits that what flows from those paragraphs is that the methodology and facts and assumptions utilised to establish the opinion are not matters material to the application of section 79 of the Evidence Act but rather those matters affect the weight the Court might ultimately give to the opinion.
The wife’s counsel also referred the court to the decision in Rhodin v Wingate [2002] NSWCA 165, in particular, to paragraph 86. That paragraph is as follows:
When assessing the admissibility of expert opinions it is not the case that an opinion is only admissible if, at the close of the case of the party relying on it, the evidence establishes each of the assumptions on which it is based on the balance of probabilities. The primary evidence relating to those assumptions might be controversial. Which parts of the primary evidence are to be accepted and what the correct conclusions from the primary evidence are, are matters for the trier of fact at the end of the trial. The opinion evidence may be admitted if there is evidence which, if accepted, is capable of establishing the truth of the assumptions. On the appeal the defendant put no submissions suggesting that the test was more onerous for the plaintiff in this case. For present purposes let it be assumed that it is not less onerous.
Ms Rees referred me to paragraph 85 of Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705:
[85] In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be “wholly or substantially based on the witness's expert knowledge”; so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v The Queen (at 428 [41]), on “a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise”.
Ms Rees says that what later flowed from the decision of Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 was the application of a less stringent test. Counsel for the wife submitted that the application of the Makita principle will involve questions of degree and that, at trial, objections relating to expertise and methodology should be dealt with as arguments as to weight and not arguments as to admissibility. Ms Rees referred the Court to the decision in Adler v Australia Securities and Investment Commission (2003) NSWCA 131. I was specifically referred to paragraphs 631 and 632:
[631] Whether an opinion has been shown to be based on the specialised knowledge is a question of fact, and s79 provides that it is sufficient that it is substantially based on that knowledge. What is required by way of the explanation of which Heydon JA spoke in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at [85] will depend on the circumstances. The disconformity in HG v The Queen (1999) 197 CLR 414 to which his Honour referred was gross, in that the psychologist's evidence went to when the complainant was abused and who abused her, outside a psychologist's expertise and based on matters other than a psychologist's expertise. Other circumstances will be quite different. And, as was said in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157, absolute certainty that the opinion is based on the specialised knowledge is not required (at [14]) and many of the stated qualities of the opinion evidence by Heydon JA 'involve questions of degree, requiring the exercise of judgment" (at [87]).
[632] A solicitor shown to have specialised knowledge of conveyancing practice can give opinion evidence of general conveyancing practice without spelling out the links between his training, study and experience and his opinion. The links are apparent from the nature of the specialised knowledge. If an exotic matter of conveyancing practice were in issue, it may be necessary for a satisfactory link to be made apparent. Mr Cameron's opinions and the reasons for them were not of an exotic kind, and the trial judge was entitled to take the view that they were based in his experience as a company director and auditor; no doubt more the former, but the later could contribute. I do not think that error has been shown in the admission of Mr Cameron's evidence.
The wife’s counsel referred the Court to the decision in Carpenter & Lunn (2008) FamCAFC 128, in particular to paragraph 215. Whilst I was only referred to paragraph 215, paragraphs 216 and 217 also appear to be of assistance in this matter:
[215] Whilst the "Makita principles" have been frequently adopted, we respectfully agree with the following observations of Weinberg and Dowsett JJ in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd(2002) 55 IPR 354:
[87] The use of the phrase "strictly speaking" in the last sentence [of the above citation from Makita] should not be overlooked. It may well be correct to say that such evidence is not strictly admissible unless it is shown to have all of the qualities discussed by Heydon JA However, many of those qualities involve questions of degree, requiring the exercise of judgment. For this reason it would be very rare indeed for a court at first instance to reach a decision as to whether tendered expert evidence satisfied all of his Honour's requirements before receiving it as evidence in the proceedings. More commonly, once the witness's claim to expertise is made out and the relevance and admissibility of opinion evidence demonstrated, such evidence is received. The various qualities described by Heydon JA are then assessed in the course of determining the weight to be given to the evidence. There will be cases in which it would be technically correct to rule, at the end of the trial, that the evidence in question was not admissible because it lacked one or other of those qualities, but there would be little utility in so doing. It would probably lead to further difficulties in the appellate process.
[88] We should add one rider to these observations. As Heydon JA pointed out in his reasons at [62], there are difficulties in cross-examining upon a report which does not provide detail as to the way in which particular opinions have been formed. Increasingly, courts seek to facilitate cross-examination by practice directions and other devices designed to ensure that expert evidence is presented in the most effective way, having regard to the purpose for which it is presented. However such procedures are not designed to avoid the testing of expert evidence in cross-examination, nor is it expected that they will obviate the need for evaluation of the evidence, having regard to qualities such as those discussed by Heydon JA …
[216] In Sydneywide Distributors Pty Ltd, Branson J described the statements of Heydon JA in Makita as "a counsel of perfection" and noted that, in practice, evidence of an expert ruled as being admissible at an early stage in the proceedings:
“will later be found by the trial judge to be without weight for reasons that, strictly speaking, might be thought to go to the issue of admissibility (eg that the witness's opinion is expressed with respect to a matter outside his or her area of expertise or is not wholly or substantially based on that expertise).”
[217] Bryant CJ and Boland J discussed these authorities and their application to family law matters in Noetel and Quealey (2005) FLC 93-230.
The wife also relied upon Daniel and Others (for the Ngarluma, Yindjibarndi, Yaburara, Mardudhunera and Wong-goo-tt-oo Peoples) v Western Australia and Others (2000) 178 ALR 542 and in particular paragraphs 34 and 37 of the judgment of Nicholson J:
[34] In my opinion the hearsay evidence should first be considered for limited admission under section 136. When it has been utilised for the purpose of the court finding whether the opinion of the expert has or has not qualified under section 79, it would then be necessary for the court to determine whether each particular piece of hearsay evidence could be excluded under section 135. I consider it would be more helpful to the court to approach that with the benefit of the examination and cross-examination in relation to the particular items of hearsay evidence, a ruling on the application of section 135 should, therefore, be held over.
[37] Hearsay evidence from which the opinion is inferred will (subject to the application of sections 135 and 136) qualify for admission pursuant to section 56 as relevant to the purpose of the basis upon which the expert holds the opinion so that its weight can be assessed. It could then be used for a hearsay purpose as a consequence of the application of section 60.
The submission of Ms Rees following her citation of those authorities is that I should admit the report and assess the matters complained of by the husband at the conclusion of the cross-examination of the expert. I note some of the authorities cited refer to a determination of admissibility at the conclusion of the tendering party’s case. In this matter it would be the wife’s case. The decision in Rhodin v Wingate says the place for conclusion in relation to evidence is at the end of the trial.
With the leave of the Court Mr Richardson gave further submissions on the matter today, 29 September 2011. He referred to the wife’s submissions and her reliance on the Red Bull case, insofar as she submitted it was authority for the proposition that aspects of admission of expert evidence should abide the completion of all the evidence in the case. The husband referred the Court to Noetel & Quealy (2005) FamCA 677. In that case the expert’s report was rejected because part of the basic facts relied upon by the expert could not be proved. The husband argued that Noetel & Quealy is authority for the proposition that the expert’s report should be conditionally admitted to evidence at the commencement of the trial. The condition is that it will be capable of being given weight if the facts upon which the expert relies to form the opinion are ultimately proved. The husband says that can not happen here as Mr Z is not called to give evidence. Thus the husband submits the condition of admissibility can never be achieved and therefore the evidence should be excluded now.
In reply to those submissions, Ms Rees for the wife referred the Court to paragraph 217 of the Full Court in Carpenter & Lunn (which recites a passage adopted from Red Bull paragraphs 87 and 88). She also relied on the Full Court decision in Bodney v Bennell (2008) FCAFC 63 at paragraphs 92 and 93. Those paragraphs are as follows:
[92] Before the Evidence Act it was well established that experts are entitled to rely upon reputable articles, publications and material produced by others in the area in which they have expertise as a basis for their opinions. In Borowski v Quayle (1966) VR 382 at paragraph 386 Gowans J quoting Wigmore on evidence said that to reject expert opinion because some facts to which the witness testifies are known only upon the authority of others would be to ignore the accepted methods of professionals work and to insist on finical and impossible standards. Experts may not only base their opinions on such sources but may give evidence of fact which is based on them. They may do this although the data on which they base their opinion or evidence of fact will usually be hearsay information. In that sense they rely for such data not on their own knowledge but on the knowledge of someone else. The weight to be accorded to such evidence is a matter for the court.
[93] There is nothing in the Evidence Act that displaces this body of law. The Australian Law Reform Commission, on whose report the Act was based, said:
Under existing law hearsay evidence that is admissible for a non-hearsay purpose is not excluded, but may not be used by the court as evidence of the facts stated. This involves the drawing of unrealistic distinctions. The issue is resolved by defining the hearsay rule as preventing the admissibility of hearsay evidence where it is relevant by reason only that it would affect the court’s assessment of the facts intended to be asserted. This would have the effect that evidence relevant for a non-hearsay purpose — eg to prove a prior consistent or inconsistent statement, or to prove the basis of the expert’s opinion — will be admissible also as evidence of the facts stated.
See Interim Report No 26, Evidence (1985) vol 1 at para 685.
Review of the Law
To fully understand what follows, it is necessary to set out relevant sections of the Evidence Act 1995:
79 Exception: opinions based on specialised knowledge
(1) If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.
(2) To avoid doubt, and without limiting subsection (1):
(a)a reference in that subsection to specialised knowledge includes a reference to specialised knowledge of child development and child behaviour (including specialised knowledge of the impact of sexual abuse on children and their development and behaviour during and following the abuse); and
(b) a reference in that subsection to an opinion of a person includes, if the person has specialised knowledge of the kind referred to in paragraph (a), a reference to an opinion relating to either or both of the following:
(i) the development and behaviour of children generally;
(ii) the development and behaviour of children who have been victims of sexual offences, or offences similar to sexual offences.
135 General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time.
136 General discretion to limit use of evidence
The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing.
The “Basis rule” (otherwise known as the “assumption rule”) is a term which refers to the common law principle that the opinion evidence of an expert witness is only admissible if the factual basis of that opinion is disclosed and admitted into evidence. It was set out in Makita at paragraph 85 (see paragraph 36 of this judgment)
This principle has not been codified. A decision, not to codify, was based on the ALRC’s incorrect finding that such a principle did not exist, following which finding no provision relating to the principle was included in the bill which became the Evidence Act (1995). The ALRC proposed instead to leave such matters to the discretionary powers of the judiciary. This has caused a great deal of discussion in the case law on this topic as to whether the principle exists or not. In Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611, Heydon J, in a dissenting judgment, sets out an extensive explanation of the ALRC’s decision as to whether the basis rule exists or not. He concluded that in spite of the lack of provision for the principle in section 79 of the Evidence Act, case law shows the rule still exists. It is important to note Heydon J’s judgment was not dissenting in relation to the argument as to the admission by the trier of expert evidence, in that case, the evidence of a Dr Basden. His honour stated:
[109] While the respondent submitted that the commission was wrong to conclude that there is no proof of assumption rule at common law, he also submitted that it followed from the commission’s decision “to refrain from including a [proof of assumption] rule” in its draft Bill that the legislature had abolished that rule. The conclusion does not follow. The commission’s reasoning has misled both itself and some of its readers. A decision to refrain from including what was thought to be a rule which does not exist at common law does not demonstrate abolition of a rule which does in fact exist at common law. The commission wrongly thought that there is no proof of assumption rule at common law. On that hypothesis, as the commission correctly saw, the question was whether it should recommend that the legislature should enact one, and it decided not to make that recommendation. In fact there is a proof of assumption rule at common law, and the question for the commission thus should have been whether to recommend that it be abolished by legislation. To abolish it by legislation would have called for specific language. The commission’s misapprehension of the common law, and hence of its task, has resulted in a failure to have enacted specific language ensuring that s 79 tenders need not comply with a proof of assumption rule.
[110] The respondent asked: “Does s 79 provide for the common law proof of assumption rule?” That was not the correct question. The correct question was: “Does s 79 abolish that rule?” The Act is far from being a complete code. It often deals with complex and important subjects, like expert evidence, in very general words. Sometimes the Act changes the previous law. Sometimes it repeats it. At many points it assumes the continuance of the common law. An example is the common law exception to the hearsay rule permitting experts to rely on the writings of others in the relevant area of expertise as a basis for their opinion. Although s 79 says nothing about that rule, the Full Federal Court, correctly, did not approach the issue by asking whether s 79 provided for the permissible reliance of experts on other expert works, but simply held that nothing in s 79 has abolished it. Similarly, s 79 does not in express terms state that experts must articulate the factual assumptions on which their opinions are based. But the vast bulk of authority holds that that principle applies in relation to tenders under s 79. (emphasis added)
While Heydon J’s judgment in Dasreef appears to take a stricter approach to the basis rule principle, previous case law on the principle has sought to back away from the strict Makita proposition, adopting instead, to an extent, the ALRC’s position that judicial discretion is sufficient to determine whether the expert opinion evidence is to be admitted. In Red Bull it was held that the basis, or assumption, rule rested on the evidence and that decisions relating to admissibility go to the exercise of judgment of the court. In Red Bull, the following is set out in the judgment of Branson J:
[14] However, if Heydon JA, in the paragraph set out in [6] above, intended to use the word “sure” in its usual sense of subjectively certain, I respectfully disagree with the view that when determining the admissibility of evidence of an expert opinion (perhaps more accurately, a purported expert opinion), it is necessary for the court to be “sure whether the opinion is based wholly or substantially on the expert's specialised knowledge”. The test is whether the court is satisfied on the balance of probabilities that the opinion is based wholly or substantially on that knowledge: s 142 of the Evidence Act. However, as identified in [12] above, satisfaction of that test is not sufficient to render the evidence of the expert opinion admissible. To be admissible the evidence must also be relevant. It is the requirement of relevance, rather than the requirement that the opinion be based wholly or substantially on the expert's specialist knowledge, that, as it seems to me, most immediately makes proof of the facts on which the opinion is based necessary. If those facts are not at the close of trial proved, or substantially proved (see Paric v John Holland (Constructions) Pty Ltd (1985) 59 ALJR 844 at 846), it is unlikely that the evidence, if accepted, could rationally affect the assessment of the probability of the existence of the fact in issue in the proceeding to which the evidence is directed. (emphasis added)
Further in the same decision, in the judgment of Weinberg and Dowsett JJ, the following is set out:
[87] The use of the phrase "strictly speaking" in the last sentence should not be overlooked. It may well be correct to say that such evidence is not strictly admissible unless it is shown to have all of the qualities discussed by Heydon JA. However many of those qualities involve questions of degree, requiring the exercise of judgment. For this reason it would be very rare indeed for a court at first instance to reach a decision as to whether tendered expert evidence satisfied all of his Honour's requirements before receiving it as evidence in the proceedings. More commonly, once the witness's claim to expertise is made out and the relevance and admissibility of opinion evidence demonstrated, such evidence is received. The various qualities described by Heydon JA are then assessed in the course of determining the weight to be given to the evidence. There will be cases in which it would be technically correct to rule, at the end of the trial, that the evidence in question was not admissible because it lacked one or other of those qualities, but there would be little utility in so doing. It would probably lead to further difficulties in the appellate process. (emphasis added)
[88] We should add one rider to these observations. As Heydon JA pointed out in his reasons at [62], there are difficulties in cross-examining upon a report which does not provide detail as to the way in which particular opinions have been formed. Increasingly, courts seek to facilitate cross-examination by practice directions and other devices designed to ensure that expert evidence is presented in the most effective way, having regard to the purpose for which it is presented. However such procedures are not designed to avoid the testing of expert evidence in cross-examination, nor is it expected that they will obviate the need for evaluation of the evidence, having regard to qualities such as those discussed by Heydon JA. The decisions in Ocean Marine and Henschke take the matter no further.
The last portion of the above extract was, of course, a reference to what Heydon J had said in Makita. In Australian Securities and Investments Commission v Rich and Others [2005] NSWCA 152, the court relied on the prime duty of the expert, which is to aid the court to a position where it can assess the evidence for itself, to move away from the strict requirement of proof of all facts relied upon by the expert witness.
[105] Although expressed in terms of “usefulness”, the starting point for Heydon JA’s detailed analysis of the case law on admissibility does not suggest any focus on the true historical process by which the expert first formed the relevant opinion. The focus of attention — the “prime duty” — is to ensure that the court, as the tribunal of fact, is placed in a position where it can examine and assess the evidence presented to it. That can occur without adopting the true factual basis approach. What Heydon JA identified as the expert’s “prime duty” is fully satisfied if the expert identifies the facts and reasoning process which he or she asserts justify the opinion. That is sufficient to enable the tribunal of fact to evaluate the opinions expressed. (emphasis added)
[106] My conclusion is reinforced by the reasoning of Heydon JA, after the detailed analysis of the cases, when his Honour came to apply the principles to the particular evidence before the court. In Makita his Honour said at 745:
[87] There is no doubt about Professor Morton’s authority, experience, qualifications and skill. It is also the case that Professor Morton’s report is quite lengthy and detailed. But, given that the court is not obliged to take the opinion of an expert as conclusive even though no other expert is called to contradict it, can it be said that Professor Morton’s report goes beyond a series of oracular pronouncements? Does it usurp the function of the trier of fact? More vitally, did it furnish the trial judge with the necessary scientific criteria for testing the accuracy of its conclusions? Did it enable him to form his own independent judgment by applying the criteria furnished to the facts proved? Was it intelligible, convincing and tested? Did it go beyond a bare ipse dixit? Did it contain within itself materials which could have convinced the trial judge of its fundamental soundness?
There is nothing in this which supports the true factual basis approach.
In Daniel v Western Australia, Nicholson J stated that section 79 of the Evidence Act does not provide for the basis rule principle, and it need not be applied. In that judgment his Honour referred to Quick v Stoland:
[16] in Quick v Stoland Pty Ltd (1998) 157 ALR 615 at 617-18 Branson J, with whom Emmett J relevantly agreed, said that unlike the common law as set out in Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370 at 375, the Evidence Act and s 79 do not require that the admissibility of expert opinion depend upon proper disclosure and proof of the factual basis of the opinion. This is because it was intended that the general discretion of the court to refuse to admit evidence was sufficient to deal with problems that might arise in respect of expert opinion the basis of which was not disclosed: ALRC Report No 26, vol 1, para 750. Section 79 was therefore to be seen as concerned with the view, estimation or judgment inherent in the inference drawn by the expert from that factual basis. Her honour said, “it is the expert’s inference, in this sense, which s 79 requires to be wholly or substantially based on his or her specialised knowledge.” (emphasis added)
As illustrated earlier in these reasons, lack of requirement under the legislation is due to the fact that it was intended that the general discretion of the court to refuse to admit evidence would be sufficient to deal with any issues which might arise in respect of expert opinion where the basis for that opinion is not disclosed. In the ALRC Report number 26 at paragraph 750, it says:
750. The Basis Rule. It has been implied in some cases and asserted in some academic writing that there is a rule of evidence that for expert opinion testimony to be admissible it must have as its basis admitted evidence.[83] The better view is that there is no such rule. Were it to exist, it would not be possible to have opinion evidence which had as a significant component the opinions or the statements of others. This would preclude the tendering of evidence whose value is dependent upon material not before the court and, therefore, difficult for it to assess. While this would have its advantages, it would fail in its inflexibility to take account of the normal means by which experts generally form their opinions—by means of reports of technicians and assistants, consultation with colleagues and reliance upon a host of extrinsic material and information that it would be an endless and unfruitful task with which to burden the courts. It is proposed to refrain from including a basis rule in the legislation, thus allowing opinion evidence whose basis is not proved by admitted evidence prima facie to be brought before the court. Under these circumstances the weight to be accorded to it will be left to be determined by the tribunal of fact. Areas of doubt however must be addressed. These include:
• whether evidence by the expert of the hearsay foundation of his opinion may be excluded and, if so, on what grounds; and
• whether an opinion based upon hearsay material should be open to exclusion and, if it is excluded, the grounds for its exclusion.
Such material will be able to be excluded by the operation of a relevance discretion. Thus, if it appears to the court that excessive time will be expended upon the reception of the evidence, or that its prejudicial effect substantially outweighs its probative value, the court not being able to assess the weight to be accorded to it, the testimony can be excluded. The same approach is proposed to control the admissibility of the expert’s testimony of the facts on which his opinion is based where a party does not propose to, or does not, call direct evidence of the truth of the statements of fact relied upon by the expert. Tactical considerations will demand that under most circumstances the bases of expert opinion testimony are established by other admissible evidence.
In relation to expert evidence and the basis upon which an expert forms his or her opinion, the basic question to be asked in relation to “the basis rule” is set out by Heydon J in Dasreef. In paragraph 102, he says:
[102] Is an opinion tendered under s 79 inadmissible unless there was evidence, admitted or to be admitted before the end of the tendering party’s case, - 138#138 capable of proving matters sufficiently similar to the assumptions to render the opinion of value? The correct answer is in the affirmative.
The key phrase here is:
…before the end of the tendering party’s case.
The consensus on the issue in case law seems to be that findings of admissibility relating to expert opinion evidence need only to be determined before the end of the trial. There is, as a general rule, no requirement that there be a final ruling on the admissibility of expert opinion evidence at the time the evidence is tendered. There will clearly be cases where it is proper to exclude expert evidence at the time it is first tendered, although, as seen in the authority cited, this may be in a rare and exceptional case. Those cases will be very clear.
The learned authors of LexisNexis’ Cross on Evidence state at [29070] (Omitting all but one footnote):
First, the High Court did not see it as a barrier to the admissibility of the evidence about the employees' histories that they had not given evidence of them before the expert witness entered the witness box. In an ideal world, expert evidence will always be called after primary evidence, because it will be clearer at that point what is truly in dispute factually, and it will be possible to put hypothetical questions to witnesses in relation to which they can state opinions based on the factual case preferred by the party calling them, and say how, if at all, their opinions would be modified if that case were not fully accepted or rejected.
But, particularly nowadays in cases of a routine and non-elaborate kind, expert witnesses, who are often busy people with many pressing responsibilities to clients or employers other than giving expert evidence, may be fitted in whenever it is convenient to call them, even if further primary evidence is to be given after their evidence is over. The case makes it plain that the admissibility of expert evidence, the basis for which depends on as yet uncalled primary evidence, is unaffected by the fact that it has not yet been given. The admissibility of the expert evidence can be secured by counsel undertaking to call the primary evidence later. It is not an argument against the "basis rule" that it cramps the way the party calling the expert witness conducts that party's case by imposing an impracticably rigid order of witnesses, for it does not do so.
A second point made by the High Court is that no absolute rule can be enunciated about the precise impact of an absence of primary evidence on the admissibility or weight of expert evidence based on it. "Each case depends on its own facts." This is a reminder that there are innumerable ways in which there may be a disparity between the facts assumed by the expert as the basis for his or her opinion, and the facts actually accepted by the trier of fact. If the party tendering the expert opinion has called primary evidence which, if accepted, would correspond substantially with the factual basis assumed, but the trier of fact rejects the primary evidence, in whole or in part, the question is not one of admissibility, but only of weight. That is because, ex hypothesi, strictly speaking, questions of admissibility cannot arise once the evidence is closed: by the time it is closed, all evidence that is to be considered by the trier of fact will have been admitted, and any other evidence tendered will have been rejected. The High Court said in another case25, in something of an understatement, that: "Parties should know, before addresses are taken, the final state of the evidence, whether the trial be by judge and jury or judge alone." Rulings on admissibility must thus be made before the evidence closes. There is much to be said for the traditional view that, subject to the judge's entitlement to take time to consider objections, "a party is entitled to have questions of admissibility determined as they arise".
25 - Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 at [77]; 194 ALR 385; [2002] HCA 59; BC200207518, discussing Firebelt Pty Ltd v Brambles Australia Ltd(2002) 188 ALR 280 at [42]; [2002] HCA 21; BC200202569.
In a range of cases, judges have concurred in finding the determination of admissibility of expert evidence is not required immediately on tender of the evidence, or within the evidence in chief of the expert, rather it needs to be following the finality of all the evidence. In Red Bull, the court said:
[15] A ruling on the admissibility of the evidence of the expert opinion is, however, likely to be required before the end of the trial. The possibility that a determination of relevance might need to be made before the court has made other relevant findings is recognised by s 57 of the Evidence Act. Section 57(1) provides:
(1) If the determination of the question whether evidence adduced by a party is relevant depends on the court making another finding (including a finding that the evidence is what the party claims it to be), the court may find that the evidence is relevant:
(a) if it is reasonably open to make that finding; or
(b) subject to further evidence being admitted at a later stage of the proceeding that will make it reasonably open to make that finding.
Section 57(1)(b) would appear to authorise the admission unconditionally of provisionally admitted evidence on a standard of proof concerning relevance (ie where it is reasonably open to make the finding) which is even lower than the balance of probabilities.
In Rhodin v Wingate, the court set out the same principle, stating:
[86] When assessing the admissibility of expert opinions, it is not the case that an opinion is only admissible if at the close of the case of the party relying on it the evidence establishes each of the assumptions on which it is based on the balance of probabilities. The primary evidence relating to those assumptions might be controversial. Which parts of the primary evidence are to be accepted, and what the correct conclusions from the primary evidence are, are matters for the trier of fact at the end of the trial. The opinion evidence may be admitted if there is evidence which, if accepted, is capable of establishing the truth of the assumptions. On the appeal the defendant put no submission suggesting that the test was more onerous for the plaintiff in this case. For present purposes let it be assumed that it is not less onerous.
In Daniel v Western Australia, Nicholson J concurred with the consensus, stating:
[34] In my opinion, the hearsay evidence should first be considered for limited admission under s 136. When it has been utilised for the purpose of the court finding, whether the opinion of the expert has or has not qualified under s 79, it would then be necessary for the court to determine whether each particular piece of hearsay evidence should be excluded under s 135. I consider it would be more helpful to the court to approach that with the benefit of the examination and cross-examination in relation to the particular items of hearsay evidence. A ruling on the application of s 135 should therefore be held over.
Counsel for the husband submitted that the judgment of Noetel & Quealy (2005) FamCA 677 distinguished between the types of factual scenarios in a matter, a distinction which may, the husband submitted, be applied to the current case. The husband submitted that Noetel was a case which, if applied, argued for the striking out of the report in this case of Ms D. Counsel argued that the case distinguished itself from Red Bull, in that the Red Bull judgment dealt with a situation where there was an extensive factual scenario on which the opinion was formed which may or may not form part of the factual matrix as a whole at the end of the hearing. The husband argued that in Noetel, on the other hand, the judgment dealt with a situation where the expert opinion evidence relied on specific inadmissible documents which were the basis of a fundamental step in the expert’s calculation of capital gains tax for the properties in question, and thus underpinned the expert’s opinion. The husband argued that the distinction drawn between the facts in Noetel and the facts in other cases cited as authority on the topic, is such that in Noetel the court was able to determine at a stage prior to the close of all the evidence in the trial, that the basis for the experts opinion was not capable of being proved. Thus the decision in Noetel is capable of being distinguished on its particular facts. It was not necessary in that case for the trial judge to abide the conclusion of the trial to determine either admissibility or weight.
In Noetel, Full Court stated:
[106] We agree with the views expressed by Branson J, and also by Weinberg and Dowsett JJ in Sydneywide Distributors, above, that in the context of trials in courts such as this court when such evidence must be adduced in accordance with the principles and duties laid down in the Rules, that generally questions of admissibility of expert evidence, based on conclusions in written reports or affidavits, should not be the prime determinant of the admissibility of that evidence, but rather the relevance of the evidence to the issue in dispute, the specialised skill and knowledge of the expert and whether the report is based on such skill and knowledge. Often the answer to those questions will not be readily apparent at the commencement of the hearing, but will require careful assessment after the testing of the expert’s evidence in cross-examination. Special circumstances may require evidence to be admitted conditionally. The problems associated with failure to admit or reject evidence, unless conditionally admitted, is comprehensively dealt with by the NSW Court of Appeal in Rhodin v Wingate(2002) 36 MVR 499 ; [2002] NSWCA 165 and particularly by Heydon JA at [60] where his Honour said:
[60] In at least civil cases tried without juries, if one puts aside evidence admitted only conditionally or de bene esse, or evidence admitted subject to relevance, or evidence admitted subject to specific objection, evidence which has been admitted will generally remain admitted however much subsequent events may damage its weight. That is why debates about admissibility take place at the moment a document is tendered or a question is asked. If it were not so, the court and the parties would be confronted by an ever-changing sea in which items of evidence slither about indecisively with questions about ultimate admissibility hanging over their heads. That would lead to even more uncertainty and confusion, in difficult trials, than that which is inevitably generated by conflicting bodies of evidence the weight of which is hard to evaluate.
The Noetel & Quealy judgment does not run contrary to the consensus of other judgments. The judgment advises caution in respect of which evidence ought to be admitted or, rather, treatment of evidence which the Court fails to strike out (from Rhodin v Wingate), but does not address whether the Court ought to reserve a decision as to admissibility. The judgment deals with the Court’s power to strike out opinion evidence should it be based on inadmissible evidence. The issue in this case is whether the decision to strike out or admit expert evidence should be taken before all the evidence of the wife is tendered, and on that point, Noetel does not contradict the other case law.
The one significant aspect which the judgment in Noetel does not address is whether the expert evidence in question was adduced before or after the inadmissible documents were tendered. The only information disclosed on this subject exists at paragraph 91 of the judgment, which states that the inadmissible documents were tendered and struck out on the second day of the hearing. Whether the expert evidence at issue was adduced before or after this tendering is not made clear, and as the question in this case goes to whether expert evidence ought to be struck out before the tendering party can produce the balance of its evidence, Noetel does not distinguish itself from other cases on this principle.
Conclusion
The weight of binding authority in relation to the issue of when a court should determine objections made by a party to the proffered expert evidence of the other party appears to me to urge caution. There will clearly be cases where the challenge is to the expertise of the putative expert where it is clear the requisite expertise is not evident, and such objections can be dealt with instantia. There will be other challenges where objection is taken to clearly erroneous and inadequate methodology which can be dealt with instantia. Examples of both those circumstances are evident in this case. I have, on the objections raised by the husband, rejected the evidence of Mr K, an adversarial witness sought to be relied upon by the wife.
I rejected the evidence of Mr K because the basis of his expert opinion was incapable of being tendered to the Court as the evidence was said to be “commercial in confidence”. I have refused to admit the evidence in a report of Ms D which relied upon the expertise of Mr K in formulating a value for the husband’s business. As I have said, those are examples of objections raised to expert evidence relied upon by a party which are capable of being dealt with at the time the objection is made, because the fault in the expert’s report is incapable of being cured by any further evidence.
Where an objection is not clear cut, and where further evidence in the case may support an assumption made or a fact relied upon by the expert but which has not, as yet, been established, then the Court needs to take another path. The path which emerges from the authorities as the best path is that the expert evidence be conditionally admitted, that is, admitted on the condition that meaningful weight can only be given to that opinion if its fact basis is properly established by the evidence provided to the Court.
The time to determine when the condition has been met or otherwise is when all the evidence is before the court and each party have closed their case. Again, in practice, at that time the trial judge will probably not deliver a determination on the objection to the expert opinion, but rather invite submissions from the parties on the admissibility of the evidence or, alternatively, the weight to be applied to it and then invite submissions on the balance of the case on two bases; namely, that the expert evidence is capable of being given meaningful weight, and the other on the opposite conclusion.
I propose to take the approach of provisionally admitting the expert evidence and then testing it for admissibility and weight to be afforded to the evidence.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on Thursday, 29 September 2011.
Associate:
Date: 25 October 2011
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