Chaina v The Presbyterian Church (NSW) Property Trust (No 16) - [2013] NSWSC 1494

Supreme Court

New South Wales

Medium Neutral Citation: Chaina v Presbyterian Church (NSW) Property Trust (No. 16) [2013] NSWSC 1494
Hearing dates: 8, 9, 14, 15 and 16 October 2013
Decision date: 25 October 2013
Jurisdiction: Common Law
Before: Davies J
Decision:
On the Plaintiffs' Notice of Motion filed 8 October 2013 I make these orders:
1. The report of Professor Graham Dowling dated 4 August 2006 be admitted as evidence in the proceedings;
(2) The Plaintiffs are permitted to serve and rely upon the following reports in reply:
(a) Report of Dr Van Dyke 8 October 2013;
(b) Report of David Redfern of 26 September 2013;
(3) The Plaintiffs are not permitted to serve or rely upon the following reports in reply:
(c) Professor Roger Layton;
(d) Professor Graeme Dowling 12 August 2013;
(4) In relation to the following reports in reply the Plaintiffs are only permitted to rely on those parts of the reports which respond to the Defendant's 2013 reports from Dr McDonald and Dr Wynn-Hatton:
(e) Sam Daniel dated 7 October 2013;
(f) Dafta Pty Ltd dated October 2013;
(g) Dr Peter Richardt dated 27 September 2013
(5) Reserve consideration of prayer 4;
(6) Otherwise dismiss the Plaintiffs' Notice of Motion.
On the Defendant's Notice of Motion filed 3 September 2013 I make this order:
The following reports not be admitted into evidence:
(a) Dr Fong report dated 2 May 2012;
(b) Dr Eduard Smulders reports dated 24 February 2010 and January 2012;
(c) Kuo-Rann Lai report dated 2 March 2010;
(d) Dr Lothar Motitschke report dated 18 March 2010;
(e) Dr Peter Richardt report dated 19 December 2011;
(f) The balance of the report of John Matheson dated 7 October 2005;
(g) Ralph Moyle report dated 25 July 2012;
(h) Dafta Pty Limited undated report.
(i) Section 5.0 paragraphs 175 to 235 of the report of Pitcher Partners dated 31 August 2012

Catchwords: EVIDENCE - expert evidence - early determination - application to reinstate rejected evidence - need to reconsider earlier judgment - power to re-open and re-hear - whether misapprehension of fact or law
PROCEDURE - application to serve further expert reports after trial well advanced - whether a re-casting of the case - case management principles - no explanation for delay in serving reports
DAMAGES - loss of chance - absence of evidence of value of chance - whether court must do its best to assess damages
Legislation Cited: Civil Procedure Act 2005
Evidence Act 1995
Uniform Civil Procedure Rules
Cases Cited: Aon Risk Services Aust Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
BestCare Foods Ltd v Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) [2013] NSWSC 1287
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Browne v Dunn (1893) 6 R 67 (HL)
Chaina & Ors v The Presbyterian Church (NSW) Property Trust & Ors (No 3) [2009] NSWSC 1243
Chaina v Presbyterian Church (NSW) Property Trust (No. 6) [2012] NSWSC 1476
Chaina v Presbyterian Church (NSW) Property Trust (No. 7) [2013] NSWSC 139
Chaina v Presbyterian Church (NSW) Property Trust (No. 13) [2013] NSWSC 1057
Chen v Karandonis [2002] NSWCA 412
Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588
General Steel Industries Inc v Commissioner for Railways (NSW) (1965) 112 CLR 125
Gould v Vaggelas (1985) 157 CLR 215
Hillston v Bar-Mordecai [2002] NSWSC 477
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] 1 Ch 204
Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
Sydney Attractions Group Pty Ltd v Fredrick Schulman (No 2) 2013 NSWSC 1153
Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153
Category: Interlocutory applications
Parties: Mathew Chaina (First Plaintiff) and ors
Presbyterian Church (NSW) Property Trust (First Defendant) and ors
Representation: Counsel:
Mr A Dawson (Plaintiffs)
R Stitt QC, G L Turner & H Stitt (Defendants)
Solicitors:
In person (Plaintiffs)
Curwoods Lawyers (Defendants)

File Number(s): 2002/69354

Judgment

This judgment concerns two related Motions one brought by the Defendant and one by the Plaintiffs, both consequent upon my judgment in Chaina v Presbyterian Church (NSW) Property Trust (No. 13) [2013] NSWSC 1057.

The Defendant's Motion seeks an order pursuant to s 192A Evidence Act 1995 that the evidence of the following witnesses of the Plaintiffs not be adduced:

(a) Dr Fong report dated 2 May 2012;

(b) Dr Eduard Smulders reports dated 24 February 2010 and January 2012;

(d) Dr Lothar Motitschke report dated 18 March 2010;

(e) Dr Peter Richardt reports dated 19 December 2011 and 9 August 2012;

(f) Dr Jim Van Dyke report dated 26 January 2010 and undated report served June 2012;

(g) The balance of the report of John Matheson dated 7 October 2005;

(h) Associate Professor David Trende report dated 25 October 2006;

(i) Ralph Moyle report dated 25 July 2012;

(j) Rick Millar report dated 27 July 2012;

(k) Sam Daniel report dated 5 June 2012; and

(I) Dafta Pty Limited undated report.

By a letter dated 19 September 2013 the Defendant gave notice that it wished to add the report of Deborah Cartwright of Pitcher Partners dated 31 August 2012 to the above list of reports.

The Plaintiffs' Motion asks for leave for the Plaintiffs to serve and rely upon supplementary reports from:

(a) Dr Jim Van Dyke;

(b) Professor Roger Layton;

(d) Dr Eduard J Smulders; and

(e) Ms Deborah Cartwright of Pitcher Partners.

It further seeks that the report of Professor Dowling of 4 August 2006 be admitted into evidence.

The Motion also seeks that the Plaintiffs be granted leave to serve expert reports in reply from the following persons:

(a) Dr Jim Van Dyke;

(b) Professor Roger Layton;

(d) Mr Sam Daniel;

(e) Dafta Pty Ltd;

(f) Mr David Redfern of BASF Australia Ltd; and

(g) Dr Peter Richardt.

A further order for leave to rely on an affidavit of Dr Dennis Fong sworn 2 November 2009 was not pursued. Finally, the Plaintiffs sought an order that the expert evidence by the parties' witnesses be given current concurrently in accordance with r 31.35 UCPR and Practice Note SC CL5.

The Plaintiffs' Motion was supported by an affidavit sworn by Mrs Chaina which annexed a number of supplementary reports she had obtained from various of the Plaintiffs' expert witnesses. I shall refer to these reports when dealing with the issues for which they were put forward.

The Plaintiffs were represented on the hearing of these Motions by Mr Dawson of counsel.

In my judgment in Chaina (No. 13) I determined that the evidence the Plaintiffs intended to read concerning the testing of the proposed new products to be marketed by Proton did not justify the assumptions made by Professor Layton and Professor Dowling in their reports. Similarly, I found that the conclusions of a number of other experts were based on the correctness of the same assumptions with the result that the evidence of Professors Layton and Dowling and the other experts identified should be rejected. The result of that determination, as I noted at [212], was that the Plaintiffs were seemingly confined to proving losses based only on the historical trading of Proton and Deluxe and that there was no evidence to support a loss of opportunity case beyond historical projections.

The present Motion by the Defendant assumes the correctness of my judgment in Chaina (No. 13). The Defendant submits that the rejection of the reports and parts of the reports dealt with in Chaina (No. 13) necessarily leads to the conclusion that the evidence which I have described as the testing evidence is no longer relevant to any issue in the proceedings. That is because the effect of the rejection of the reports dealt with in Chaina (No. 13) results in the Plaintiffs no longer having a loss of opportunity case based upon the new formulae developed by Mr Chaina. Similarly, the opinions expressed in the reports of Mr Matheson, Associate Professor Trende, Ralph Moyle, Rick Miller, Sam Daniel, Dafta Pty Ltd and Pitcher Partners no longer have relevance because they are all concerned with a loss of opportunity case based upon those formulae.

The Plaintiffs' Motion does not accept the correctness of Chaina (No. 13). In the first instance the Plaintiffs wish to argue that I fell into error in reaching the views I did about Professor Dowling's and Professor Layton's evidence. Professor Dowling dealt with the industrial products and Professor Layton dealt with the domestic products. The Plaintiffs, in any event, want to lead further evidence in chief by the experts as well as evidence in reply.

By reason of what is sought in each of the Motions it is convenient to deal with the Plaintiffs' Motion first. If that Motion is successful in permitting either a review of Chaina (No. 13) or by the provision of supplementary reports or both it would be likely to be unnecessary to consider the Defendant's Motion.

There are three substantive questions to be answered to determine the Plaintiffs' Motion. They are these:

(1) Should the Plaintiffs be permitted to argue for the readmission of Professor Dowling's report of 4 August 2006 and the whole or parts of Professor Layton's reports?

(2) Should the Plaintiffs be permitted to serve supplementary reports from the experts specified in prayer one of the Motion?

(3) Should the Plaintiffs be permitted to serve expert reports in reply?

Legal principles

In Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 the High Court was dealing with an application to vacate a judgment given and orders made on the grounds that, without fault on their part, the applicants were afforded no opportunity of being heard on three stated questions. Mason CJ said (at 301 - 303):

The exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant's part, he or she has not been heard. It is true that the jurisdiction is to be exercised with great caution having regard to the importance of the public interest in the finality of litigation. It is equally true, as this Court said in Wentworth v. Woollahra Municipal Council that "(g)enerally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard."

But these statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders. So much was acknowledged by Brennan, Dawson, Toohey and Gaudron JJ. in Smith v. N.S.W. Bar Association when their Honours said "if reasons for judgment have been given, the power is only exercised if there is some matter calling for review". It is sufficient to give three examples. In In re Harrison's Share under a Settlement orders were set aside following a decision of the House of Lords which overruled authorities on the basis of which the orders had been made. In New South Wales Bar Association v. Smith the New South Wales Court of Appeal reconsidered orders previously made in view of an argument that the Court had mistakenly assumed that particular evidence had not been given at earlier hearings. And, in Pittalis v. Sherefettin a judge recalled orders the day after they were made upon determining that he had "erred in a material matter in his approach to the case".

These examples indicate that the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law. As this Court is a final court of appeal, there is no reason for it to confine the exercise of its jurisdiction in a way that would inhibit its capacity to rectify what it perceives to be an apparent error arising from some miscarriage in its judgment. However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases.

At 307 Mason CJ reiterated what appears at the end of the above passage as follows:

As I have said, the jurisdiction to reopen is not to be exercised simply for the purpose of giving a party the opportunity to present a case to better advantage.

It is to be noted that no application has been made by the Plaintiffs that I should vary or set aside my judgment in Chaina (No. 13). The principal reason for that appears to be the submission by the Plaintiffs that all that Chaina (No.13) did was to provide an evidentiary ruling, and that such evidentiary rulings can be reconsidered at any time in a trial in the light of changed circumstances.

However, the judgment in Chaina (No. 13) was more than "just an evidentiary ruling". It arose out of a contested hearing lasting a day. I reserved my judgment.

In Chaina v Presbyterian Church (NSW) Property Trust (No. 6) [2012] NSWSC 1476 I set out some principles associated with the exercise of the power under s 192A at [7]-[11]. Those principles are relevant when considering both of the present applications.

Further, in paragraphs 16.108 to 16.109 of ALRC 102 (which led to the enactment of s 192A) the following appeared:

The power to give advance rulings carries significant benefits in relation to the efficiency of trials. It allows counsel to select witnesses and prepare for trial with greater certainty. Without such a power, tactical decisions, particularly in relation to character evidence are based on speculation ... It is therefore recommended that the uniform Evidence Acts should be amended so as to provide the court with the express power, in civil and criminal proceedings, to give advance rulings in relation to the admissibility of evidence and other evidentiary questions. This power should extend to evidentiary questions arising out (sic) uniform Evidence Acts and other laws affecting the admissibility of evidence.

The Explanatory Memorandum to the Commonwealth amending Act said at para 242:

The power to give advance rulings carries significant benefits in promoting the efficiency of trials. It allows counsel to select witnesses and prepare for trial with greater certainty. Without such a power, tactical decisions, particularly in relation to character evidence, are based on speculation.

I endorse the sentiments in those extracts.

It may be accepted that what was determined by Chaina (No. 13) were evidentiary rulings. The rulings form part of a formal judgment of this Court albeit that judgment is an interlocutory one. I accept, in the light of Mason CJ's judgment in Autodesk, that even a final judgment may be reviewed or re-opened if the Court proceeded on a misapprehension as to the facts or the law and that the misapprehension cannot be attributed solely to the neglect or the fault of the party seeking the rehearing. On the other hand, I also accept that the jurisdiction to reopen is not to provide an unsuccessful litigant with the opportunity to reargue the case.

In Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 McLelland J discussed applications to set aside and re-litigate issues leading to both final and interlocutory orders.

Having noted that interlocutory orders create no res judicata or estoppel and that the court retains jurisdiction to set aside, vary or discharge an interlocutory order, his Honour said that the rationale of the principles associated with res judicata, issue estoppel and abuse of process apply even in the case of interlocutory orders. He went on to say (at 46):

It would be conducive to great injustice and enormous waste of judicial time and resources if there were no limit on the power of a party to have any interlocutory application or order relitigated at will.

The overriding principle governing the approach of the court to interlocutory applications is that the court should do whatever the interests of justice require in the particular circumstances of the case. In giving effect to that general principle, and in recognition of the public and private interests earlier referred to, rules of practice have been developed in accordance with which the discretionary power of the court to set aside, vary or discharge interlocutory orders will ordinarily be exercised. Not all kinds of interlocutory orders attract the same considerations. For present purposes one may put to one side orders of a merely procedural nature (as to which see for example Wilkshire & Coffey v Commonwealth (1976) 9 ALR 325) and injunctions (or undertakings) made or given by agreement and without contest "until further order" (as to which see for example Warringah Shire Council v Industrial Acceptance Corp (unreported, SC (NSW), McLelland J, 22 November 1979).

In the present case I am dealing with an interlocutory order of a substantive nature made after a contested hearing in contemplation that it would operate until the final disposition of the proceedings. In such a case the ordinary rule of practice is that an application to set aside, vary or discharge the order must be founded on a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the court on the hearing of the original application: see Woods v Sheriff of Queensland (1895) 6 QLJ 163 at 164-5; Hutchinson v Nominal Defendant [1972] 1 NSWLR 443 at 447-8; Chanel Ltd v F W Woolworth & Co [1981] 1 All ER 745 ; [1981] 1 WLR 485; Adam P Brown Male Fashions v Philip Morris (1981) 148 CLR 170 at 177-8 ; 35 ALR 625 at 629-30; Butt v Butt [1987] 1 WLR 1351 at 1353; Gordano Building Contractors Ltd v Burgess [1988] 1 WLR 890 at 894.

In Hillston v Bar-Mordecai [2002] NSWSC 477 Bryson J said at [13] that Brimaud was a decision which had often been followed and had shaped the court's practice.

It may be noted that the ability to re-open the case (or here, adduce further expert evidence) rests on a discretion in the Court.

In Aon Risk Services Aust Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 the issue concerned the right to amend and the effect that that would have upon the trial of the proceedings. However, what flows from the decision has a wider impact on the way litigation is conducted and the decisions which parties make in the course of the proceedings. That in turn involves consideration of case management principles.

In that regard the Court considered the authority of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146. French CJ said in Aon:

[30] It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502 [of the ACTSC Rules]. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.

The joint judgment noted at [53] that the solicitor for the party applying to amend did not offer any explanation for the need to amend.

The joint judgment said this:

[103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.

[104] The salient features of the application for leave to amend in this case were, as Lander J pointed out in his dissent, that the amendments sought to introduce new and substantial claims; they were so substantial as to require Aon, in effect, to defend again, as from the beginning; the application was brought during the time set for the trial of the action and would result in the abandonment of the trial if granted; and there was a question whether costs, even indemnity costs, would overcome the prejudicial effects on Aon if the litigation to this point was not productive of an outcome.

[105] The primary judge was in error in failing to recognise the extent of the new claims and the effect that amendment would have upon Aon. His Honour was in error in failing to recognise the extent to which the objectives of r 21 would not be met if the amendments were allowed. The known ill-effects of a delayed determination, which informed the purposes and objectives of the Rule, were present. Rule 502(1) read with r 21 did not provide an unfettered discretion to grant leave to amend. The objectives of r 21 were to be pursued in the exercise of the power conferred by r 502(1). The fact that ANU's new claims were arguable was not itself sufficient to permit amendment and could not prevail over the objectives of r 21. A "just" resolution of the proceedings between ANU and Aon required those objectives to be taken into account.

...

[109] Whatever was the reason for the delay in applying for the amendment, none was provided. There was no mistake of judgment, such as that to which Bowen LJ referred [in Cropper v Smith (1884) 26 Ch D 700], which might be weighed against the effects of the delay, effects which r 21 required to be taken seriously into account.

[110] The primary judge was mistaken as to the extent of the new claims and what would be required of Aon if they were permitted and the matter effectively re-litigated. His Honour incorrectly elevated the fact that the claim was arguable to a level of importance it did not have. His Honour failed to recognise the importance of the objective stated in r 21, of the timely disposal of the proceedings. The exercise of the power conferred by r 502(1) miscarried. The application should have been refused.

[111] An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

[112] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

[113] In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

[114] Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.

What is made clear in those paragraphs is the significance of the Act and Rules which govern the procedure of the Court. In this Court it is sections 56 to 58 Civil Procedure Act 2005 which govern decision-making. I have particular regard to the matters set out in s 58(2).

It is, of course, necessary to apply what is said in Aon by analogy because what is sought here is not leave to amend but leave to serve further expert reports including reply reports and leave to re-visit various matters including the way the Defendant's application that I determined in Chaina (No. 13) was argued by the Plaintiffs.

(1) Re-tender of Professor Dowling's and Professor Layton's reports

(a) Professor Dowling

The Plaintiffs sought to re-tender Professor Dowling's report of 4 August 2006 in two ways. First, they argued that without receiving any further evidence I should reconsider the determination I made by reason of submissions now put forward by them about Professor Dowling's report. Secondly and alternatively, the Plaintiffs said that I should receive a supplementary report of Professor Dowling of 3 October 2013 and a report of Dr Van Dyke of 1 October 2013. Each of those reports seeks to explain the earlier one by the same expert and, in the case of Professor Dowling, seeks to point out how I formed the wrong view of Professor Dowling's earlier report.

This second method of challenge necessarily involves the need for the Plaintiffs to obtain leave to rely on further expert reports. I deal later in this judgment with the reasons for concluding further reports should not be permitted.

For those reasons and other reasons more particular to the new report of Professor Dowling (to which I will come) I do not consider that I should have regard to Professor Dowling's report of 3 October 2013. The issue of whether Professor Dowling's original report should be re-admitted should be determined only by an examination of that report alone in the light of the submissions made about it.

In support of their submissions that I should simply re-visit my earlier determination on the admissibility of Professor Dowling's reports the Plaintiffs say that on a proper analysis of the report of 4 August 2006 he did not proceed on an assumption of the superiority of all of the Plaintiffs' products. Rather, he was concerned with the overall package of industrial products, and his conclusions were supported by the report of Dr Van Dyke, particularly Dr Van Dyke's conclusion that the product range as a whole was the best product range that he had seen around: Chaina (No. 13) at [101].

The Plaintiffs took me to various parts of Professor Dowling's report to submit that I misconstrued what he was saying. In particular, my attention was drawn to what appears in paragraphs 17(e) and (g), 31, 45 and the four scenarios in paragraphs 46 to 49 of that report. I note in that regard that I specifically considered paragraphs and 31 and 45 in Chaina (No. 13) at [34]-[36].

Paragraph 17 relevantly provides:

(e) Purchasing in these markets is often more "professional" than in consumer markets (e.g., via requests for tenders and contracts for supply), and it is evaluated by performance reviews of the function and efficiency of products and services.

...

(g) Competition among suppliers in industrial markets is based primarily on the functional superiority and value for money of their products. A service component often accompanies this mix. Its role can be to 'fit' the products to the unique requirements of the customer (pre-sale) and/or to help to evaluate and fine-tune product performance (post-sale). The combination of 'product and service' relative to 'price' is often referred to as the supplier's customer value proposition. Innovation (both in the products and the process of their application and use) can be a driver of a strong customer value proposition.

Mr Dawson argued that a reading of Professor Dowling's report makes clear that he does not isolate the products and assume their superiority. Instead he treats product and service together and relates it to price to speak of what he calls the "customer value proposition" (see at paragraph 17(g)).

In paragraph 44 Professor Dowling says that to estimate the likely sales he describes four different business scenarios. These scenarios use as their starting point Professor Dowling's table of what he calls his 4Ps and 3Cs. The first such P is "Product (incl service)". I made specific reference to two entries in this column in Chaina (No. 13) at [35] and [36]. From those entries I concluded that Professor Dowling had assumed superiority for the products.

Mr Dawson drew my attention in particular to what appears in paragraph 46 which says this:

Scenario 1 is based on circumstances where implementation of the growth strategy is plagued by a significant problem with any of the factors identified in the column of the table labelled "Product" in paragraph 45. This would result in either product or service quality problems for existing customers and result in a temporary decline in sales. After service to existing customers is returned to its previous level, the business would then continue on as before.

He submitted that this demonstrates that, at least for this scenario, Professor Dowling has not assumed that the products are superior but rather has assumed that the products may not be superior at least for a temporary period until what he describes as "service to existing customers" is returned to its previous level.

The Defendant submitted that a proper reading of scenario 1 still involves an assumption of general superiority of the products over the whole of the range. Reference was made to paragraphs 17(e) and (g), 21, 30, 31, 40, 41 and 45 of his report. The Defendant further submitted that a reading of Professor Dowling's new report of 3 October 2013 demonstrates that Professor Dowling is endeavouring to change the approach to superiority he adopted in his first report which, the Defendant said, assumed simply the superiority of the products.

I have carefully re-read Professor Dowling's report in the light of the submissions made. Although I read the whole report for the purpose of the judgment in Chaina (No. 13) my attention was not drawn particularly to some of the paragraphs to which I have now been taken. Nor had the distinction been made between what is required for a successful domestic line of products and a successful line of industrial products.

Issues of service, distribution and price are said to be of much greater significance for industrial products as well as the need to meet the particular requirements of a customer. Further, service cannot be divorced from the product. The overall quality of the range is important rather than whether each and every product in the range is superior to those of the competitors. That was said to highlight the significance of Dr Van Dyke's conclusion (in his original report) that the product range as a whole was the best product range he had seen around.

I do not find Professor Dowling's report easy to understand. There is a certain ambiguity in what appears in the table at paragraph 45 and the four scenarios he discusses at paragraphs 46 to 49 especially scenario 1. What scenario 1 seems to suggest is that the product itself may not be superior for a short time but at some point it achieves (or resumes) superiority. That does appear to assume the superiority of the products as the starting point.

Further, to the extent that "Product" is said to include service it is not immediately apparent how any assumption about superiority of service can ever be proved. Testing to show superiority of a product is one thing, proving that service is superior is necessarily subjective. The Plaintiffs say that the issue of service is a factual matter and that it is not appropriate to determine that issue until the end of the case when all the evidence is in and final submissions have been made about the evidence. In that regard the Defendant had drawn attention to all of the evidence about dissatisfied customers prior to 1999. That, however, adds weight to the Plaintiffs' submission that proof of service superiority must await the end of the trial.

Whilst the difficulty with Professor Dowling's report has been brought about to some extent by the manner in which Professor Dowling has expressed himself, because I am left with a doubt about whether he did make the superiority assumption I consider that my conclusion in Chaina (No. 13) at [37] that the proof of assumption rule had not been satisfied by Professor Dowling was, for the purposes of the s 192A application, not justified. That does not, however, lead necessarily to the conclusion that that part of my earlier judgment should be altered to re-admit Professor Dowling's report. Discretionary considerations must be dealt with. I will consider those later in this judgment.

I do not consider it is appropriate to have regard to the supplementary report of Professor Dowling of 3 October 2013 to decide whether or not I erred in reaching the view I did in Chaina (No. 13) concerning his report and I have not done so. There are a number of reasons for this. First, the October 2013 report undoubtedly contains additional material that was not available in Professor Dowling's report of August 2006. That aspect runs up against a problem I will deal with at greater length later in the judgment concerning the receiving of further expert evidence.

Secondly, the report responds to reports of Anne Lenagan dated 20 December 2012, Dr McDonald dated 21 December 2012 and Bruce Dunbar dated 20 December 2012 which are not currently before the Court (except for a very limited purpose which I will discuss) and which, significantly, had no part to play in the determination in Chaina (No. 13). Thirdly, and associated with each of the two earlier matters, Professor Dowling links the new material in his October 2013 report and the material in the Defendant's reports to explain why he says my analysis and construction of his earlier report is wrong.

Fourthly, it is not the role of an expert witness to critique a judgment concerning a report that witness has prepared with a view to getting the Court to change its mind about the earlier report. The approach taken by Professor Dowling in this report is clearly demonstrated by paragraph 2 of the report under the heading "Instructions" which says:

The Plaintiffs have asked me to review the determination of Justice Davies as to the effects of the assumption that I made in my original and first supplementary reports about the superiority of Proton's products in my estimate of economic loss.

The expert's role is simply to present the expert's opinion in the manner required by principles in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 and the Expert Witness Code. If there is to be a critique of a judgment, whether in an appropriate application to vary an earlier judgment or on an appeal from the judgment, that role is peculiarly that of counsel based upon evidence which may include evidence, but not submissions, from the expert.

Accordingly, I have not taken into account what appears in the supplementary report of Professor Dowling of 3 October 2013.

(b) Professor Layton

In relation to the domestic products, the way the Plaintiffs argued the matter shifted somewhat from the first time Mr Dawson addressed me to the final position that was put. Initially the Plaintiffs accepted that proof of the domestic products claim involved "not simply moving forward with the case as it is presently articulated". They submitted that what would be sought would be that Professor Layton would be asked to prepare a supplementary report which would proceed on the basis that some but not all of the products had been found to be superior. Their fallback position was that, as far as the laundry and dishwashing products were concerned, there was other evidence (both material already in evidence at the trial, and also supplementary reports from Dr Smulders) which demonstrated the superiority of those products.

However, when Mr Dawson came to address in what was supposed to be his submissions in reply to Mr Stitt he put forward two further bases upon which he said the superiority assumption was made out. What had been put earlier were, at this point, said to be fallback positions.

Mr Dawson said that his principal approach was that I should simply readmit Professor Layton's evidence because of what Professor Layton said in his third report of 11 July 2012, prepared after he had seen the reports of the testing experts. Professor Layton said this at paragraph 9:

In my opinion the information contained in the documents listed in paragraph 13 provided by Drs Smulders, Fong, Richardt and Lai confirms the initial assumption noted in paragraph 5 above in regard to the laundry, dishwashing and household cleaning products. The information contained in the documents, provided by Drs Lai and Motitschke confirms a similar assumption of superior or equal performance in comparison with competing products in the toiletries, and cosmetics market. The expert Report provided by Mr. Ben Wheaton confirms that the higher concentrations, specialised packaging, and use of natural resources would have created substantial advantages in terms of reduced costs and increased margins. He went on to note that "the products contain strong environmental features and these would have contributed to increased sales, particularly from 2007 onwards." Taken as a whole, these Reports confirm the initial assumption contained in paragraph 5 above with respect to each of the four markets considered, and the conclusions reached in my first and supplementary reports remain unchanged.

The Plaintiffs submitted that a rejection of that opinion "is getting very dangerously close to a credit finding".

I disagree. The issue is not one of credit concerning Professor Layton's belief. The issue remains as being whether the testing evidence proved that the products were superior. That is for objective determination by the Court - not based on the belief of an expert who initially assumed its correctness. Professor Layton is a marketing expert, not a chemist. His third report simply confirms, contrary to the Plaintiffs' submission, that Professor Layton's opinion was given on the basis of the superiority assumption. That assumption has not been proved or supported by anything contained in this third report. He does not have the expertise to do that.

The Plaintiffs accepted that, if I did not determine that Professor Layton's third report brought about the result that all of his reports should be readmitted (based on the submission that the third report affirmed the validity of the superiority assumption), the testing evidence did not demonstrate that the cleaning products were superior and that the superiority assumption could not be supported for that category of product.

Mr Dawson's second basis for arguing that Professor Layton's reports (except that part dealing with the cleaning products) should be re-admitted was that Professor Layton had not made the superiority assumption in relation to dishwashing products and toiletries, and that there was other evidence to demonstrate the superiority of the laundry products.

As far as the dishwashing products are concerned the Plaintiffs pointed to what appears in paragraph 142 of Professor Layton's first report where he said this:

While the cleaning superiority of the Proton Technology dishwashing detergent range would have been asserted in the marketing and advertising (Assumption no.2), in my opinion, it is likely that this would have been perceived by consumers as matching similar claims made by existing entrants.

Mr Dawson submitted that Professor Layton was testing the receipt of the dishwashing products by the way they were perceived by consumers and not by virtue of any assumption of superiority.

Attention was also drawn to part of paragraph 143 which said:

Assuming that the Proton Technology product would have offered one or more significant consumer benefits compared to Finish and Morning Fresh, possibly in effectiveness (Assumption no.2), convenience, safety or environmental concerns (Domestic Business Plan p8), in my opinion, Proton Technology with continued advertising and promotional support might have achieved around 10% of the concentrated powder tablet market, falling to 6% after one or two years, or around 2% initially falling to 1.2% of the total market.

It seems likely that "Assumption no.2" is what is contained in paragraph 20 of his report because it is the second of the assumptions that Professor Layton sets out and it was the second assumption he was instructed to make. Paragraph 20 reads:

The chemical composition of the products in the Product List was such that the products were superior at cleaning the goods to which they were applied when compared with products with which they would have been in competition in 2001.

However, the perception by consumers says nothing about whether the products were, in fact, superior or not as the case may be. Professor Layton made it clear (paragraph 20) that he made the superiority assumption. If there were any doubt that he may have been modifying that assumption by what appears in paragraph 142 he reaffirmed the assumption expressly in relation to dishwashing products in his third report. At paragraph 5 he set out the assumption as follows:

The chemical composition of the laundry, dishwashing and household cleaner products in the Product List was such that the products were superior at cleaning the goods to which they were applied when compared with products with which they would have been in competition in 2001. (emphasis added)

I have set out at [56] above Professor Layton's general conclusion in this third report. In addition he said this in paragraph 13 headed Dishwashing products:

Taken as a whole these findings support the initial assumption that I was asked to make in paragraph 5 above. Timing would have been critical as noted in my first report in paragraphs 142 and 143 as the innovative technologies envisaged by Proton Technology entered the marketing (sic) 2001 and later.

That paragraph makes clear that paragraphs 142 and 143 were concerned with timing. It is also the case, of course, that Proton would not have been able (legally) to make the superiority claims in marketing and advertising unless they were true. That reinforces the view that Professor Layton was indeed proceeding on the superiority assumption in paragraphs 142 and 143.

The position with regard to toiletries is not so clear. Professor Layton dealt with toiletries in his second report of 4 August 2006. Under the heading "ASSUMPTIONS" he said this:

4. With the letters of instructions, you provided me with a number of assumptions that I am to assume as facts for the purposes of this Report. I have also made a number of my own assumptions in undertaking the analysis and reaching my conclusions and opinions set out in this Report. Where these assumptions are in addition to those set out in the letters of instructions, I have stated these assumptions at the relevant points in this Report.

The assumptions provided with the letters of instructions and upon which I rely in this Report are set out below. The assumptions relate to the following product category:

Toiletry and cosmetics (liquid hand soap, shampoo, conditioner, shower gel and skin care products).

5. Proton Technology's new toiletries and cosmetics products are the toiletries and cosmetics range of products listed on pages 6, 7 and 8 of the March 1999 "New domestic enzyme products" product list ("Product List").

6. The launch of the toiletries and cosmetics products in the Product List would have followed the launch of the laundry, dishwashing and household cleaning products.

7. The toiletries and cosmetics products would be sold through retail grocery (supermarket) and pharmaceutical outlets throughout Australia.

8. There would have been sufficient production facilities and supplies of raw materials to produce the toiletries and cosmetics products and production of sufficient volumes of those products to meet anticipated sales.

9. The toiletry and cosmetics products would be priced so as to fall within a premium price range, but remain ''-competitive" with main competitors in that premium price range.

It is necessary, at this point, to say something about the history of the instructions provided to Professor Layton. He was first engaged by Malleson Stephen Jacques. His instructions were contained in a letter dated 10 February 2005. He was asked to express his opinion in respect of the following question:

Taking into account the enclosed factual assumptions and other materials you consider relevant, what is your opinion of the likely annual sales volume and/or, if possible, the equivalent market share (in percentage terms) that probably would have been achieved by Proton had it proceeded with its proposed domestic product launch, in the following categories:

(a) laundry (liquids, powders, tablets, capsules);

(b) kitchen products (concentrated dishwashing - hand and

machine, oven cleaner);

(c) household general (concentrated window cleaner, concentrated surface cleaners)

Annexed to the letter of instructions was a document entitled "ASSUMPTIONS TO BE MADE BY PROFESSOR R LAYTON". That document relevantly read:

The assumptions relate to the following product categories:

· laundry products (liquids, powders, capsules, tablets, fabric softener)

· kitchen products (concentrated dishwashing (hand and machine), oven cleaners)

· general household cleaning products (concentrated surface cleaners, window cleaners)

Assumptions

1 By March 1999 Proton Technology had developed a new product range which were listed in the enclosed March 1999 "New domestic enzyme products" product list ("Product List").

2. The chemical composition of the products in the Product List was such that the products were superior at cleaning the goods to which they were applied when compared with products with which they would have been in competition in 2001.

...

I have not set out all of the assumptions Professor Layton was asked to make but I note that they consisted of nine paragraphs. Those assumptions were set out in Professor Layton's first report in paragraphs 19 to 25. In some cases he has modified the wording of the assumptions but assumption 2 in the above extract was reproduced precisely as paragraph 20 in his first report. It may be noted that the assumptions were said to relate to the three categories of laundry products, kitchen products and general household cleaning products.

Subsequently the Plaintiffs instructed Sarvaas Ciappara. On 16 August 2005 they wrote to Professor Layton referring to his engagement by Mallesons. The letter went on to say:

Would you please also provide the requested opinion in respect of the following additional category of products:

(d) Toiletry and cosmetics (liquid hand soap, shampoo, conditioner, shower gel and skincare products).

...

We remind you of the Expert Witness Code of Conduct previously provided to you. In particular, if you rely on any facts, matters or assumptions informing your opinion, please ensure that these are clearly stated in your report. (emphasis added)

The "requested opinion" was that set out in [68] above which took account of the assumptions provided to him with that letter.

Subsequently, Sarvaas Ciappara sent a further letter to Professor Layton on 10 January 2006. This letter was not available to me at the hearing of the Defendant's August s 192A application nor was it put into evidence until the third day of hearing of the present Motions. Mr Stitt QC said, and I accept unreservedly, that this letter had never before been produced to the Defendant's lawyers in the matter.

The letter relevantly said this:

We refer to our letter dated 16 August 2005 which requests your opinion of the likely annual sales, volume and/or, if possible, the equivalent market share (in percentage terms) that probably would have been achieved by Proton Technology had it proceeded with its proposed domestic product launch in respect of the additional category pf products, being the toiletry and cosmetics (liquid hand soap, shampoo, conditioner, shower gel and skin care products) category.

In providing your opinion, please make the following assumptions regarding the toiletry and cosmetics product category:

1. The new products are the toiletries, arid cosmetics range: of products listed on pages 6, 7 and 8, of the enclosed document entitled "New domestic enzyme products" dated March 1999.

2. The launch, of the toiletries and cosmetics products in the Product List would have followed the launch of the laundry, dishwashing and household cleaning products.

3. The toiletries and cosmetics products would be sold through retail grocery (supermarket) and pharmaceutical outlets throughout Australia.

4. There would have been sufficient production and distribution facilities and supplies of raw materials to produce the toiletries arid cosmetics products and production of sufficient volumes of those products to meet anticipated sales.

5. The toiletry and cosmetics products would be priced so as to fall within a premium price range, but remain competitive with main competitors in the premium price range.

The letter was never annexed to the second report of Professor Layton as the letter of 16 August 2005 had been.

It can been seen that paragraphs 5 to 9 in the second report reproduce exactly the five assumptions set out in the letter of 10 January 2006 ([67] above).

The Plaintiffs submitted that nowhere in this report does Professor Layton set out the superiority assumption.

It may be accepted that what appears in paragraph 4 of this second report ([67] above) is ambiguous. First of all Professor Layton refers to the letters of instructions containing assumptions. The letter of 16 August 2005 from Sarvaas Ciappara asked him to prepare "the requested opinion" in relation to the fourth category (toiletries and cosmetics) and made reference to the letter of Mallesons which annexed assumptions including the superiority assumption.

Then Professor Layton makes a distinction between assumptions given to him and his own assumptions and says:

Where these assumptions are in addition to those set out in the letters of instructions, I have stated these assumptions at the relevant points in this report.

Somewhat inconsistently he then says:

The assumptions provided with the letters of instructions and upon which I rely in this report are set out below

and he then goes on to set out only the five assumptions contained in the letter of 10 January 2006.

The Plaintiffs pointed to that last statement and to the setting out of the five assumptions from the 10 January 2006 letter to submit that the superiority assumption was not made by Professor Layton when preparing this report. However, Professor Layton's conclusion in his third report ([56] above) makes it clear that he did make the superiority assumption in relation to the toiletries and cosmetic products. This is reinforced by the letter of instructions for this third report which, having noted the earlier report and the testing reports received, said this:

3.4 Accordingly, you are briefed to provide a Supplementary Expert Report that revisits the findings of your report in light of the Further Expert Reports and confirms whether the assumptions that you originally relied on are valid or invalid. Once this is done, you are then briefed to assess whether the findings of your existing Expert Reports have changed or not, in light of your findings as to the assumptions.

Professor Layton then provided the conclusion ([56] above) and, in relation to toiletries and cosmetic products, the conclusion is further reinforced by paragraph 15 in that third report headed "Toiletries and Cosmetics" where Professor Layton says this:

Dr Motitschke agrees [with Dr Lai], noting that the ingredients are still used today, and the proposed formulations will have been premium products in 1999. In my view the assessments noted above confirm the validity of the assumption made in paragraph 5 above [the superiority assumption] and I do not wish to change my findings regarding overall sales and share.

The Plaintiffs submitted that that statement of Professor Layton's was made in error because paragraph 5 does not in terms refer to the toiletries and cosmetics. I do not agree that Professor Layton has made an error in that regard particularly in the context of his references to Dr Lai's and Dr Motitschke's findings and in the light of what appears in paragraph 9 of the third report. In my opinion Professor Layton made the superiority assumption in respect of the toiletries.

The Plaintiffs' third basis for the re-admission of Professor Layton's reports in relation to the laundry products, the dishwashing products and the toiletries was that there was existing evidence that validated the superiority assumption. That testing evidence was largely from Mr Chaina as found in exhibits 102 and 103 but also included testing by CIBA, AAFS testing and Clariant testing.

Mr Chaina's expertise

The evidence involving Mr Chaina related to testing and utilising what were described as EMPA swatches. What appears in exhibits 102 and 103 were said to be the results of the testing using EMPA swatches.

Whilst it is true that exhibits 102 and 103 contain the results of Mr Chaina's EMPA swatch testing, understanding what was involved in the testing as well as the test results involves accepting Mr Chaina as an expert witness. Ultimately, Mr Dawson appeared to accept that it would be necessary to demonstrate that Mr Chaina had the necessary expertise if this evidence was to be accepted. This was evident from the terms of a draft affidavit of Mr Chaina that Mr Dawson initially tendered in support of this basis for the admissibility of Professor Layton's report on the laundry products. (Mr Dawson subsequently submitted that a further affidavit from Mr Chaina was not necessary.) It is also evident from evidence in parts of Mr Chaina's Statements such as paragraph 64 of his Statement of 8 February 2010 (exhibit C1).

In Chaina v Presbyterian Church (NSW) Property Trust (No. 7) [2013] NSWSC 139 I gave evidentiary rulings pursuant to s 192A Evidence Act in relation to the Statements of Mr and Mrs Chaina.

In relation to the evidence of Mr Chaina I rejected portions of his Statements because it had not been established that he was an expert, particularly in light of the concession made that he did not have the qualifications that he had earlier claimed. I held that there were three problems with the expert evidence. First, his expertise had not been established on the evidence. Secondly, he had not acknowledged the Expert Witness Code nor agreed that he was bound by it. Thirdly, he had not complied with the requirements of r 31.27 UCPR which, following Makita, sets out what it is expected will be found in an expert report.

As a result of submissions made to me on the hearing of the present Motions I consider that I was in error to the extent that his evidence would have been rejected simply because he had not acknowledged the Expert Witness Code and agreed to be bound by it. I note in passing that submissions were never made by the legal advisors acting on behalf of the Plaintiffs at the time I considered the s 192A application in relation to these Statements that there was no necessity for acknowledgment of the Expert Witness Code. Nevertheless, I consider that it is not necessary for Mr Chaina to acknowledge that Code by reason of the definitions in r 31.18 and the provisions of r 31.23(3).

Rule 31.18 provides that an expert:

in relation to any issue, means a person who has such knowledge or experience of, or in connection with, that issue, or issues of the character of that issue, that his or her opinion on that issue would be admissible in evidence.

On the other hand, an expert witness:

means an expert engaged or appointed for the purpose of:

(a) providing an expert's report for use as evidence in proceedings or proposed proceedings, or

(b) giving opinion evidence in proceedings or proposed proceedings.

In that regard, whilst it is asserted that Mr Chaina is an expert he is not an expert witness because he was not engaged or appointed for the purpose of providing an expert's report or giving opinion evidence.

The definition of expert's report is:

a written statement by an expert (whether or not an expert witness in the proceedings concerned) that sets out the expert's opinion and the facts, and assumptions of fact, on which the opinion is based.

By that definition expert evidence contained in a Statement of Mr Chaina would be an expert's report.

However, r 31.23 requires only an expert witness to comply with the Code of Conduct but subrule (3) allows the Court to admit the report even if the Code has not been complied with. On the other hand, r 31.27 applies to an expert's report and not only to the report of an expert witness.

There is no doubt that an interested party can give expert testimony: Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 at [17]-[47] and [200]-[225]. The precise distinction between expert and expert witness in r 31.18 was not adverted to in that case. However, the view appears to have been that a person who is an expert that is giving evidence in his own case would ordinarily be expected to comply with the duties arising from an acknowledgement of the Code - see particularly at [46]-[47] and [211].

Hence, a failure to acknowledge the Code by Mr Chaina would not necessarily mean his expert evidence was inadmissible.

On the other hand, r 31.27 sets out what must be contained in an expert's report (and an expert's report includes a written statement giving expert opinion such as is contained in Mr Chaina's Statements if he is an expert). What is contained in Mr Chaina's Statements about the carrying out of the tests would not appear to comply with r 31.27 particularly paragraphs (b) and (c).

As mentioned above, in Chaina (No. 7) I rejected various parts of Mr Chaina's statement on the basis that he was giving expert evidence and his expertise had not been established. I said in respect of a number of paragraphs or portions of paragraphs that they were rejected with leave to the Plaintiffs to apply for them to be reinstated if Mr Chaina's expertise was established. In particular, in paras [32] and [35] I noted that Mr Chaina's expertise had not been established and that I would consider the admissibility of evidence if he was found to be an expert.

That judgment was delivered on 1 March 2013. The hearing commenced on 4 March 2013. For the whole of the first tranche of the hearing during which Mr and Mrs Chaina gave their evidence the Plaintiffs were represented by Mr Maconachie QC and Mr J Sharpe of counsel instructed by Berrigan Doube solicitors.

At no time was any attempt made to have Mr Chaina determined to be an expert, nor was any attempt made to re-tender the parts of his evidence rejected on the basis that he was not an expert. Significantly, on the second day of the hearing Mr Maconachie QC tendered the various statements of Mr Chaina which I had ruled on in Chaina (No. 7). He also tendered a fresh statement of Mr Chaina dated 1 March 2013 that became exhibit E in the proceedings. There was no attempt in exhibit E to demonstrate Mr Chaina's expertise.

I also consider it is relevant to have regard to exhibit AA1 on the Motion which was the transcript of Mr Chaina's academic record at the Sydney Institute as at 1 March 2013. That transcript shows that Mr Chaina had failures against ten subjects including two failures for Analytical Chemistry 1, two failures for Organic Chemistry 1, two failures for Unit Operations, two failures for Applied Physical Chemistry and a failure for each of Laboratory Techniques 1 and Mathematics 1.

Mr Chaina's evidence about this is found in paragraph 46 of his Statement of 8 February 2010 where he said:

I enrolled in a certificate in chemistry at the Sydney Institute, Ultimo in about 1980. I attended courses at that facility from about 1980 to 1984. These courses were paid for by Colgate Palmolive. While I continued to learn a great deal from the study that I underwent at this time my examination results were not impressive as it was often case that I did not attend examinations.

It is difficult not to infer from that course of events that a forensic decision was taken by experienced counsel acting on behalf of the Plaintiffs not, in the circumstances, to put forward Mr Chaina as an expert witness. The circumstances included most significantly the fact that Mr Chaina had dishonestly maintained until August 2009 that he had qualifications that would otherwise have made him an expert but that at that time he acknowledged that he did not have those qualifications. A forensic decision not to have him determined to be an expert witness is readily available in those circumstances.

The fact that the Plaintiffs obtained the Sydney Institute transcript on or about 1 March 2013, that the hearing commenced on 4 March 2013 and that no attempt was made to have Mr Chaina accepted as an expert witness considerably strengthens the inference that a forensic decision was taken not to do so.

Mr Chaina was cross-examined at length but he was not cross-examined about his expertise. Mr Stitt QC says, and I accept, that he did not do so because Mr Chaina was not put forward as an expert. The decision not to put him forward as an expert is precisely the sort of decision that the High Court was dealing with in Aon. It would not be in the interests of justice at this stage of the trial now to permit the Plaintiffs to change their approach. I am reinforced in that view by the absence of any explanation for the failure to have him accepted as an expert at an earlier time.

In any event, I am not satisfied in all the circumstances that the evidence now sought to be put forward by the Plaintiffs justifies the conclusion that Mr Chaina has the expertise necessary to conclude that exhibits 102 and 103 demonstrate that the laundry products are superior.

Mr Dawson relied upon paragraphs 24 - 226 of Mr Chaina's statement of 8 February 2010 to show that there was "an extraordinary amount of evidence" about Mr Chaina's scientific ability and experience". In fact, I dealt with a large portion of these paragraphs in Chaina (No. 7). In particular, some of this evidence was allowed to enable Mr Chaina to demonstrate his expertise - see at [25]-[26]. Various other parts of these paragraphs were rejected as expert evidence but leave was given to reinstate them if Mr Chaina's expertise was demonstrated.

What appears on the Sydney Institute transcript is a strong indication that Mr Chaina does not possess the expertise he claims. He may have worked for long periods in industries involving the sort of products his companies have produced but the evidence is not sufficient to reach a conclusion that he has the expertise he claims.

In all the circumstances, I would not determine that Mr Chaina should be accepted as an expert even if I considered it appropriate to allow the Plaintiffs to make such an application at this late stage of the proceedings.

I do not consider that what appears in Exhibits 102 and 103 speaks for itself. The information contained in those exhibits does not, without expert evidence to explain the testing and the results, demonstrate that the laundry products concerned are superior. What is contained in paragraph 64 of Mr Chaina's Statement of 8 February 2010 and paragraph 19(b) of Mrs Chaina's Statement of 29 January 2010 does not fill the gap. There is no explanation, for example, of how a spectrophotometer works or what the readings are that are spoken about.

The other documents sought to be relied upon (CIBA testing, AAFS testing and Clariant testing) are not in evidence except on the present motion. If the documents are put forward as expert evidence they do not in any sense comply with Makita nor the Expert Witness Code. In the case of the CIBA documents it is not even apparent from the document who performed the test let alone their qualifications to do so and to express the opinion in the document.

There is a further difficulty in the Plaintiffs relying on testing carried out by Mr Chaina that became Exhibits 102 and 103. The Plaintiffs say that Exhibits 102 and 103 demonstrate that all of the products there tested are superior to the competitors' products against which they were tested. That is not what the testing experts retained by the Plaintiffs say. I have set out their evidence in detail in Chaina (No. 13). My conclusions on that evidence are at [126] and [127] of the judgment. In putting forward Exhibits 102 and 103 the Plaintiffs are effectively saying that the evidence of those experts should be disregarded to the extent that it does not match

the results Mr Chaina achieved. It is inappropriate for a party, having put forward these experts, to impugn their evidence in that way.

That is particularly so in these proceedings. Until August 2009, when the Plaintiffs acknowledged that Mr Chaina did not have the qualifications he claimed, the case was largely being run on the strength of his evidence to prove the superiority of the products. It was only after that acknowledgement that the testing experts were engaged to provide the evidence that it was recognised could not be given by Mr Chaina. Not only would it be inappropriate for the Plaintiffs to impugn their own expert witnesses in this way, it would amount to re-casting of their case from what was served in the testing experts' reports from 2010 onwards.

The Plaintiffs are therefore obliged to fall back on the obtaining of further reports from Dr Smulders (as was apprehended by Mr Dawson) or some other expert to show that the laundry and dishwashing products and the toiletries are superior. Thereafter, it would be necessary to obtain a supplementary report from Professor Layton which dealt only with the products that were found to be superior.

(2) Should further reports be allowed?

(a) Domestic products

The Plaintiffs' proposal is that Professor Layton will prepare a report that works on the assumption that some but not all of the products are superior and will then provide his opinion concerning market share in a similar fashion to what he previously did on the assumption that all products were superior. The Plaintiffs say that this is not a recasting of their case because all of the products now found to be superior fell within the larger group of products that Professor Layton had earlier dealt with.

The Plaintiffs drew attention in particular to what was said by Heydon J in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 at [124] to justify why they should be able to serve further material in the light of Chaina (No. 13). Heydon J said:

[124] From the point of view of the tendering party, it is desirable that the admissibility of expert opinion evidence tendered by that party be clear by the moment when the case for that party closes. It is undesirable that expert opinion evidence admitted in that party's case should later be held - perhaps as late as the time of judgment - to be subject to such doubts about its weight that it lacks utility. It is undesirable that its admissibility be in suspense until a time after the tendering party's case has closed. If the admissibility of expert opinion evidence which is tendered and conditionally admitted is not finally ruled on until after the case for the tendering party is closed, and the evidence is then rejected, or its weight has become so questionable that it is useless, the tendering party may have lost an opportunity to repair the position before its case closed, either by calling further witnesses or tendering further documents, or by recalling witnesses who had already been in the box. The capacity of tendering parties who are the prosecution or the plaintiff to reopen their cases rests on a discretion in the court which may not be favourably exercised; their capacity to tender evidence in reply is constricted by fairly strict rules, particularly in criminal cases. (emphasis added)

The Plaintiffs submitted that the timing of the application by the Defendant leading to the judgment in Chaina (No. 13) was important in that regard. If the Defendant had brought its application some time after all the Plaintiffs' expert reports had been served but before the trial commenced there would have been ample time for the Plaintiffs to seek to supplement its case in the way it now seek to do. In that way, it is said, the lateness of the Plaintiffs' Motion should not be held against them.

In my opinion, what the Plaintiffs are seeking to do, despite their assertions to the contrary, is to recast their case to limit the evidence in relation to superiority to some but not all of the domestic products. Moreover, the limiting exercise is not carried out by reliance only on existing evidence concerning the testing of the products. It is also reliant on what are said to be reports that will be prepared.

The Plaintiffs sought to support the more limited case by reliance on some additional material, including a supplementary report from Dr Smulders dated 30 September 2013, and by what is contained in exhibits 102 and 103.

Dr Smulders' supplementary report commences by saying this:

Results of a series of laundry and cleaning detergency performance tests of different product samples based on formulations developed by Proton Technology (referred to as PT hereafter) in 1999 were made available to me by the Plaintiffs Mr and Mrs Chaina from Sydney, NSW, Australia in September 2013. The tests I will refer to were conducted by various persons and institutes in Australia and Germany. The results were obtained from testing the detergency and cleaning performance of PT products versus different laundry and cleaning products available on the competitive market in Australia. The tests were conducted following Australian Standards.

In the following I will provide my opinion on the outcome of these test results (as submitted to me) with special view on the comparison of the detergency and cleaning performance of PT products vs. that of competitor market products and with special regard to the superiority of PT products as derived and judged from the performance test results.

Also, supplementary to my Expert Report of 2010, I will take a closer look at the market chances of those individual PT formulations from the file "Domestic Product Formulations and Manufacturing Documentation" showing their superiority of performance versus competitor products.

A little later on in the introduction to this report he says this:

The report is based exclusively on the test results submitted and statements made therein. For the purposes of this report, I have assumed these results and statements to be correct.

Dr Smulders does not identify in his report by which persons and by which institutes in Australia and Germany the tests were conducted. When I adverted to that difficulty during the hearing Mr Dawson accepted that it would be necessary to obtain a further report from Dr Smulders.

A comparison of what Dr Smulders found in his report of 24 February 2010 and his conclusions in the supplementary report suggests that his conclusions of superiority in the supplementary report are entirely based upon the unspecified testing that he refers to in the introduction to that report. In a few cases the superiority was said to be able to be claimed because the product was unique in 1999. It is also apparent that Dr Smulders has changed his opinion so that, on the basis of this unspecified testing, he now considers products to be superior that he had not so considered in his original report.

It appears that some of the testing relied upon by Dr Smulders in his supplementary report was testing conducted by Mr Chaina that became exhibits 102 and 103. The Plaintiffs also wish to rely (as I have noted) on testing by CIBA, AAFS and Clariant. I have already held that that evidence is not in admissible form.

The position is, therefore, that the Plaintiffs wish to rely on a report from Dr Smulders (not yet completed) which in turn relies upon other expert evidence, not in proper form, including what amounts to expert evidence from Mr Chaina who I have determined is not an expert. In turn, that report of Dr Smulders will be sent to Professor Layton who will then prepare a report on the assumption of the superiority of the products enumerated by Dr Smulders. This will involve three of the four categories (laundry products, dishwashing products and toiletries) and there will be some products in each category that are not judged to be superior.

It is difficult to see in those circumstances how what the Plaintiffs intend to do is not an attempt to recast their case. Previously that case was that all products were superior which would result in the Plaintiffs achieving a certain percentage share of the market. A case based on the superiority of some but not all of the products must be a different case. One can reasonably infer that the percentage share of the market that Professor Layton will say could be achieved will differ from his previous conclusions.

Mr Dawson's submission that the need for the Plaintiffs to obtain further reports by reason of the timing of the Defendant's August s 192A application must be seen in the context of the whole hearing. The first tranche of the hearing (a six week period) commencing 4 March 2013 was for the purpose of hearing the lay evidence. As it transpired the whole of that time was taken up with the evidence of Mr and Mrs Chaina.

At the time the second tranche was fixed (19 March 2013) it was thought that all the expert evidence would be dealt with in that tranche with a break before addresses. By the time the first tranche finished it had become clear that more time would be needed to accommodate the expert evidence that was unlikely to be completed in the second tranche. It seemed likely that the second tranche would consist of the remaining lay witnesses (and efforts were being made to limit those) and the psychiatrists.

At a directions hearing on 10 July 2013 before Hoeben CJ at CL Mr Stitt QC said that what he proposed "when we sort out the argument about these lay witnesses, is to raise a point about the expert witnesses". Mr Stitt produced a schedule which formed the basis of the s 192A application that resulted in Chaina (No. 13). This schedule was served on the lawyers then acting for the Plaintiffs.

When the second tranche commenced on 15 July 2103 Mr Stitt QC raised with the Court the schedule concerning the expert witnesses. He said he wished to flag the matter and at an appropriate time have it dealt with. He handed a copy of it to Mrs Chaina and he said (T 1597):

Your Honour, the relevance of raising it at this stage is to indicate clearly that the plaintiffs' own case and the plaintiffs' own evidence does not rise to the level necessary to establish the assumptions which were made by the witnesses. (emphasis added)

I then explained the nature of the application to the Plaintiffs and asked them to respond to the schedule. They asked for "as long as possible" to do so but I directed that any response be provided by 9 August 2013. Subsequently Mrs Chaina asked if she could simply address matters orally without preparing a written response and I agreed to that course. The application was then heard on 8 August as soon as the remaining lay evidence and the psychiatric evidence (except the evidence of Dr Phillips who was not then available) had concluded.

It does not seem to me that the Defendant's application with respect to the expert evidence could have been made before the completion of the Plaintiffs' evidence. The superiority of the Plaintiffs' products was asserted by the Plaintiffs in their evidence and, as Mr Chaina made perfectly clear on a number of occasions during the argument on the application, he instructed the lawyers to instruct the experts that the assumption to be made was that the products were superior.

The approach of the Defendant that the application had to await completion of the Plaintiffs' lay evidence is entirely consistent with the present practice of the Court that, ordinarily lay evidence will be given first so that experts can, if required, modify their evidence and particularly any assumptions they have made in advance of that evidence.

The criticism of the timing of the application has no basis. I note further that if the Defendant had not made the s 192A application and had simply addressed the matter of the assumptions in final submissions it would then have been too late for further evidence to be led to support the Plaintiffs' case. In that way the Plaintiffs have not been disadvantaged by the way the matter has proceeded.

The issue is not the "holding of the lateness of the Plaintiffs' motion against them" as Mr Dawson put it. The issue is whether the time has now passed for the Plaintiffs to serve further evidence. That depends upon the history of the matter and the stage the proceedings have reached. It may be noted that in the passage from Dasreef to which the Plaintiffs referred (at [114] above) Heydon J said that the capacity of tendering parties to re-open their case rests on a discretion of the court which may not be favourably exercised.

It is at this point that discretionary aspects must be considered.

Discretionary considerations

Up until August 2009 (as I have noted) the proceedings were conducted based on the supposed qualifications possessed by George Chaina in science and in business.

The disclosure in August 2009 that Mr Chaina did not have those qualifications resulted in an application by the Plaintiffs to change the way the Plaintiffs proved their case. The matter is conveniently summarised in the judgment of Hoeben J in Chaina & Ors v The Presbyterian Church (NSW) Property Trust & Ors (No 3) [2009] NSWSC 1243:

No detailed submissions were addressed to me about this report. It was simply submitted that the report contained reply material in addition to the 16 raw materials issue. The parties should address me further to identify which parts of this report, if any, are admissible as being a reply only to the reports of Dr McDonald and Dr Wynn-Hatton of 2013.

(f) David Redfern

I note that Mr Redfern has already given evidence in the proceedings. His statements are exhibits T1 and T2. He was cross-examined on 22 July 2013.

In his affidavit of 6 July 2006 Mr Redfern acknowledged the Expert Witness Code and provided his qualifications that justified his giving expert evidence. In his affidavit he discussed his employment at Huntsman Corporation Pty Ltd, a raw materials supplier supplying pre-mixed chemicals to companies engaged in the cleaning industry. He detailed his dealings with Mr Chaina including the fact that Mr Chaina obtained some chemicals from Huntsman.

I note that the Defendant's expert reports prepared in response to Mr Chaina's cross-examination are these:

(a) Report of Dr Paul Wynn-Hatton dated 10 April 2013;

(b) Report of Dr Paul Wynn-Hatton dated 9 May 2013;

(d) Report of Dr Frank McDonald dated 2 July 2013.

These reports were all filed and served before Mr Redfern gave evidence. No attempt was made to lead from him the evidence that is now sought to be led in the proposed report. Even if the proposed report is in response to the Defendant's 2013 reports (and that is not immediately apparent from a reading of the report) no explanation is provided about why this evidence has not been put forward at an earlier time.

On 16 July 2013 during the second tranche of the hearing Mr Stitt QC raised the issue of his obligations under the rule in Browne v Dunn. He said that his side had put on expert evidence directed to the chemical or science issue and nothing had been filed in reply. Shortly afterwards this exchange occurred (T1735:35 - T1736:28):

THIRD PLAINTIFF: Your Honour, Mr Stitt was saying about our experts replying to their experts and the process I believe was started by the lawyers. Do I have to ask them to put statements on or just to reply or do I have to do anything for that?

STITT: It's too late.

HIS HONOUR: I think we are past the time for that now. I understood that all of the experts' reports were on. That means served.

THIRD PLAINTIFF: We served them by last year and then they put their reports on as far as a couple of weeks ago, McDonald's was put in this July.

HIS HONOUR: That's specifically in response to the evidence Mr Chaina gave.

THIRD PLAINTIFF: Okay. Do - do I have to ask them to put any statements or reports on at all for any of them?

HIS HONOUR: Well, that is a matter for you, Mrs Chaina, but I think there might be some difficulty because all of this expert evidence was supposed to have been completed.

THIRD PLAINTIFF: Okay. I - I just don't know. That's why I am asking. Okay, so I don't have to do anything with that?

HIS HONOUR: Well, I am not saying that you don't but I think you will have to take some advice about that. I haven't read the reports of those involved in the chemistry side of this because we haven't got to that yet. My understanding is you put your reports on, the defendants put their reports on and that's where it was left, except that Dr McDonald, I think, prepared the report specifically to answer Mr Chaina's evidence that was given.

THIRD PLAINTIFF: And there was another one from Dr Wynn-Hatton as well.

HIS HONOUR: Is that right? Yes.

THIRD PLAINTIFF: Okay.

HIS HONOUR: Mr Stitt, if there was to be some answer to those reports, I think it would be difficult for you to resist that.

STITT: If it is confined to that, of course, your Honour, yes. I wouldn't argue to the contrary.

It may be noted that that was the week before Mr Redfern gave his evidence.

On 23 July 2013 the following exchange occurred (T1990:42 - 1991:22):

THIRD PLAINTIFF: The other thing is, your Honour, Mr Stitt earlier on said that we did not - our lawyers did not put reports on in reply to their expert reports. And I wasn't aware that you know, about that because the lawyers were taking care of it at the time. And I don't know whether it's a time finish that we can't put any more regarding the expert reports from December; is that correct, that they put on?

HIS HONOUR: All of the reports are supposed to be on by now.

THIRD PLAINTIFF: Well, some of them, your Honour, were put on after we gave evidence like Dr McDonald and Dr Wynn Hatton and a couple of expert reports.

HIS HONOUR: And you can respond to those.

THIRD PLAINTIFF: Okay. So, if I get an expert, one of my experts to respond to those, I can do that?

HIS HONOUR: Yes. Well, I think that was agreed, wasn't it?

STITT: Yes, it was, your Honour.

THIRD PLAINTIFF: So, I can write to the expert, or I can telephone the expert and ask them to do a report in a similar manner to what they did beforehand?

HIS HONOUR: Yes; in answer to those two recent reports.

THIRD PLAINTIFF: So, I can provide them with that report and say, "Comment on it"?

HIS HONOUR: Yes.

No explanation has been provided about the late provision of this report of Mr Redfern. However, it seems only to deal with the availability of chemicals in 1999 - a matter that arises from the cross-examination of Mr Chaina. It is relatively confined in its substance. I will give leave to the Plaintiffs to rely upon it.

(g) Dr Peter Richardt

Parts of this report respond to reports of Dr McDonald of 21 December 2012 and Dr Wynn-Hatton of December 2012. For reasons given in [188] to [200] above those parts of this report should not be permitted to be relied upon. Another section comments upon Dr McDonald's report of 2 July 2013. Although no explanation has been provided for why this report has only just been served I consider that it should be permitted to the extent that it responds to Dr McDonald's July 2013 report.

A further section provides comment on 18 raw materials unavailable in 1999. it is likely that that section of the report arises out of the cross-examination of Mr Chaina. No detailed submissions were made in respect of this report. I will hear the parties further in relation to that section of the report but I can indicate that if that section is in response to Mr Chaina's cross-examination and the Defendant's 2013 reports it will be permitted to be relied upon.

The further section of the report (section 12) is entitled "Comment on Performance Comparisons of Proton Products Compared to Competitors". It is apparent from reading this section of the report that this is fresh material that amounts to evidence in chief. It is not permitted to be relied upon.

Defendant's Motion

The outcome of the Plaintiffs' Motion, dealt with above, is that the Plaintiffs' case in respect of the industrial products will proceed with Professor Dowling's report of 4 August 2006 being re-admitted. It follows that the report of Dr Jim Van Dyke dated 26 January 2010 will be relevant because the Plaintiffs will use it as support for the conclusions reached by Professor Dowling.

The Defendant seeks also that an undated report of Dr Van Dyke's served June 2012 not be adduced. This report has never been placed before the Court.

As far as the domestic products are concerned the outcome of the Plaintiffs' Motion is that the reports of Professor Layton of 21 October 2005, 10 February 2006 and 11 July 2012 remain inadmissible. Further, the Plaintiffs are not permitted to recast their case to serve reports consistent with some but not all of the domestic products being found to be superior. The issue is then which of the other reports that are set out in [2] and [3] above should also not be adduced in evidence.

In support of its submission that the remaining expert evidence should not be adduced the Defendant relied upon Sydney Attractions Group Pty Ltd v Fredrick Schulman (No. 2) [2013] NSWSC 1153. The Defendant submitted, following that decision, that there was simply no evidence remaining which would enable the Court to assess the damages based on a loss of opportunity case.

In that case, Sackar J said:

[48] Even if the plaintiff is correct that the defendant has made a submission from which, on the basis of some legal principle, he cannot now resile, it remains necessary to articulate precisely what it is to which the defendant is bound. In this case, the defendant was certainly not in my view asserting that the figure for Skywalk Capital Expenditure should be taken to be $3,798,820. The defendant was simply stating that, of all the evidence available, the Rider Hunt estimate was the "best evidence", albeit also inadequate. For the reasons which follow, even if the court accepts the defendant's submission that the Rider Hunt estimate of $3,798,820 is the "best evidence" available, that does not assist the plaintiff.

[49] The defendant submits that this is not a case where the court should simply "do the best it can" to estimate Skywalk Capital Expenditure, for the reasons that the nature of the amount to be proven permits precise calculation (unlike for example a foregone commercial opportunity which involves speculation), and the material on which such proof would be based is exclusively within the plaintiff's camp. The principle articulated in cases such as Paino v Paino (2008) 40 Fam LR 96 and McCrohon v Harith [2010] NSWCA 67 would not apply where there is a paucity of evidence which it was in the power of the plaintiff to supply.

[50] The plaintiff could have, but failed to, call relevant employees of the major contractors or of the subcontractors who physically undertook or supervised the construction of Skywalk, or to tender contract documents specifying in some detail the scope of works undertaken, or to even brief a quantity surveyor after the event of construction to provide an estimate of the value of the actual work undertaken, provided it could be sufficiently accurately identified, which was another problem the plaintiff confronted. Clearly, there is significantly better evidence that could have been, but was not, obtained. The comments made in McCrohon v Harith [2010] NSWCA 67 by McColl JA (Campbell JA and Handley AJA agreeing) are particularly relevant (at [118]-[124], some citations omitted):

[118] There are cases in which courts will estimate damages despite a dearth of evidence. The basic principle was explained in Commonwealth v Amann by Mason and Dawson JJ as follows:

[M]ere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can ... Where precise evidence is not available the court must do the best it can: Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422, per Devlin J at 438.

[119] Devlin J's complete statement was: "[W]here precise evidence is obtainable, the court naturally expects to have it. Where it is not, the court must do the best it can." After referring to this statement with apparent approval in New South Wales v Moss (2000) 54 NSWLR 536 (at [72]) Heydon JA added:

As McPherson J said in Nilon v Bezzina [1988] 2 Qd R 420 at 424: "The degree of precision with which damages are to be proved is proportionate to the proof reasonably available". The courts on occasion cite in related contexts Bowen LJ's related but stricter observation in Ratcliffe v Evans [1892] 2 QB 524 at 532-3, an injurious falsehood case:

'... As much certainty and particularity must be insisted on ... in ... proof of damage, as is reasonable, having regard to the circumstances and the nature of the acts themselves by which the damage is done.'

...

[120] In JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 (a claim for damages for alleged misleading representation inducing entry into a lease) Brooking J reviewed the principles concerning the circumstances in which a court may assess damages notwithstanding a lack of evidence. His Honour [accepted] "the amount of the damage must be proved with certainty, but this only means as much "certainty" as is reasonable in the circumstances". His Honour distinguished cases ... where "[t]he nature of the damage may be such that the assessment of damages will really be a matter of [permissible] guesswork" from cases where "precise evidence is obtainable", where guesswork is not permissible...

[122] In Troulis v Vamvoukakis [1998] NSWCA 237 Gleeson CJ (Mason P and Stein JA agreeing) referred to Tsiloglou with approval as setting out the principles governing the approach a court should take when there had been a failure by a party carrying the onus to establish the extent of damage suffered as a result of a breach of contract or tort... Gleeson CJ held that in such circumstances there were "limits to the lengths to which a court may properly go in 'doing the best it can' to assess damages". His Honour observed that the case did not involve damages which were "inherently difficult to quantify, or which involve[d] estimating a risk, or measuring a chance, or predicting future uncertain events." ...

[123] Gleeson CJ concluded in substance, that where the damages were susceptible of evidentiary proof, and there was "an absence of the raw material to which good sense may be applied ... [j]ustice does not dictate that ... a figure should be plucked out of the air."

[124] In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 ... Hayne J (Gleeson CJ, McHugh, and Kirby JJ agreeing) postulated that there may be a distinction between cases where a plaintiff cannot adduce precise evidence of what has been lost (in which "estimation, if not guesswork, may be necessary in assessing the damages to be allowed") and cases where, although apparently able to do so, the plaintiff has not adduced such evidence. His Honour suggested that references to "mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can" might be more apt in the former rather than the latter class of case.

[51] I do not think this is a case where more precise evidence is not available. Precise evidence, or at least better evidence, as I see it, should have been available before the court, given the monetary nature of the sum sought to be proven. The plaintiff is seeking to prove a certain type of expenditure it incurred, and therefore the evidence by which the relevant monetary sum is to be proven is entirely in the camp of the plaintiff. The exercise of determining the amount of Skywalk Capital Expenditure should not, in my view, involve proof of something which is inherently difficult to quantify, or estimating a risk, or measuring a chance, or predicting future uncertain events. What has been provided is an estimate, prepared prior to construction, providing a projection, and which is unverified by any follow-up materials. In these circumstances, I am unable to make a finding that the Skywalk Capital Expenditure should be taken to be the figure estimated in the Rider Hunt estimate.

The Plaintiffs submitted that what was said in Sydney Attractions is distinguishable because that was not a case involving a loss of a chance or opportunity. Indeed the Plaintiffs drew attention to what Sackar J said at [51]:

The exercise of determining the amount of Skywalk Capital Expenditure should not, in my view, involve proof of something which is inherently difficult to quantify, or estimating a risk, or measuring a chance, or predicting future uncertain events.

The Plaintiffs pointed to what was said by Stevenson J in BestCare Foods Ltd v Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) [2013] NSWSC 1287 at [43]-[47] where he reiterates the two-stage process involved in assessing a loss of opportunity claim. The Plaintiffs submitted that the evidence in the present case demonstrates that there is a chance or opportunity of "not speculative" or "not negligible" or "real" value. At that point the second stage is reached and, as Stevenson J said at [47]:

If I find that, probably, BestCare has lost a commercial opportunity or chance (of "some", "not negligible" or "real" value), I must then make an assessment of that value. I must do that by "having regard to the possibility that such an opportunity would have matured" (the April CofA Judgment at [97] per Ward JA).

In making an assessment of the value the Plaintiffs submitted that the top of the range was represented by what is contained in the report (relevantly) of Professor Layton and the bottom of the range is zero. On that basis the Plaintiffs submitted that the Court must do the best it can to value the loss of the chance even though there may be some uncertainty involved.

This submission appears to ignore what Stevenson J went on to say at [47]:

But there must be a basis in the evidence for me to arrive at a figure for the lost opportunity. What I cannot do is take a stab in the dark; "justice does not dictate that in such a case, a figure should be plucked out of the air" (Troulis v Vamvoukakis [1998] NSWCA 237 at [29] per Gleeson CJ).

Nevertheless, the Plaintiffs submitted that the second stage of the process was one which should not be undertaken on the present application by the Defendant but at the end of the hearing after all the evidence and submissions are completed. That, the Plaintiffs submitted, meant that the testing evidence and the reports from the other experts should not now be excluded.

In my opinion it is appropriate to determine at this stage of the proceedings and in the context of the present Motions if there is any evidence relating to the domestic products which could enable the second stage of the process to result in a figure. If there is not, then evidence concerned with the domestic products would have no relevance to any issue remaining in the case.

What the Plaintiffs' testing evidence shows is that the Plaintiffs had developed a number of products, some of which were superior to, some of which were on parity with, and some of which were inferior to, the products of competitors. In other cases, some of the products were at least unique for various reasons. Some of the other Plaintiffs' experts show that the Plaintiffs could have developed and manufactured the products and raised some money to launch them. In those respects it could be said that the Plaintiffs had lost a chance or opportunity to make money from these products.

To make money from the products the Plaintiffs needed to break into the market. They had never been in the market for domestic products. There needs to be evidence that they would be able to do that. The only evidence that they could break into the market and of the share they would achieve was found in the reports of Professor Layton that have been rejected. How the share of the market would translate into sales figures is to be found in the report of Pitcher Partners which works on the assumption of the correctness of Professor Layton's reports (see report of Pitcher Partners paragraphs 180 to 185).

Without the evidence of Professor Layton there is simply no evidence of what market share could be achieved nor how that would translate into sales figures so that a figure or range of figures could be placed on the loss to the Plaintiffs. Even if the range is that suggested by the Plaintiffs (the top being what is contained in Professor Layton's report and, presumably, Pitcher Partners report with the bottom being zero) it is not suggested how a figure would be calculated within that range. There would need to be expert evidence of what the lower market share (if any) was achievable before sales figures were even considered. Such expert evidence is not be allowed because it involves a recasting of the Plaintiffs' case.

When the Plaintiffs were proceeding on their case based upon the superiority assumption they produced precise evidence of what they say the chance or opportunity was worth. This is not a case where the Plaintiffs cannot produce the evidence and so the Court must simply do the best it can. The reason there is now no evidence is because the Plaintiffs are in the position where they would need to recast their case and obtain further evidence.

In those circumstances placing a figure on the lost opportunity would be a stab in the dark or plucking a figure from the air where the evidence was capable of being produced.

The reports under consideration now fall largely into two categories. The first is testing evidence of domestic products. The second category is evidence that relates to the market share evidence contained in Professor Layton's reports.

(a) The testing evidence

This evidence would appear to comprise the following reports:

(i) Dr Fong dated 2 May 2012;

(ii) Dr Eduard Smulders dated 24 February 2010 and January 2012;

(iii) Dr Kuo-Yann Lai dated 2 March 2010;

(iv) Dr Lothar Motitschke dated 18 March 2010; and

(v) Dr Peter Richardt dated 19 December 2011.

There was said to be a further report of Dr Richardt of 9 August 2012. Some reference was made to that report during the course of submissions but the report was never before the Court.

All of these reports were obtained to support the superiority assumption that Professor Layton made in his reports. I have held that they did not support that assumption. I have also held that the Plaintiffs were not entitled to recast their case. There is no evidence to justify a loss of opportunity case put on the basis that the Plaintiffs products are superior.

Accordingly, the evidence in these testing reports is irrelevant to any issue remaining in the case. They should therefore be rejected.

(b) Reports dealing with related matters

It is necessary to consider these reports individually.

(i) Report of John Matheson dated 7 October 2005

In Chaina (No. 13) I rejected paragraph 13 of this report because it was based on the superiority assumption. The Defendant now seeks that the remainder of the report not be adduced.

As I noted at [135] of Chaina (No. 13) Mr Matheson was asked to express an opinion on whether or not the new domestic products proposed to be supplied by the Plaintiffs would have gained distribution with major Australian supermarkets and the likely costs which would be incurred in that regard.

The whole of Mr Matheson's report is based on the superiority assumption as well as other matters. In those circumstances the whole of the report is irrelevant to any remaining issue in the proceedings.

(ii) Associate Professor David Trende dated 25 October 2006

This is one of a number of reports which straddles the proposed industrial products relaunch and the domestic products launch. Professor Trende sets out his instructions as follows:

6. I am instructed to prepare a report containing my opinion on whether or not the Plaintiffs could have obtained finance of up to $25 million in the period from October 1999 to mid 2000 and, if so, the form/s in which the finance would been available.

It is apparent that the raising of the money is not linked to one or other of the launches. However, it is apparent from his report that the domestic launch was relevant to his conclusions. He said:

[68] The Chaina family had already successfully established and run a chemicals business for many years prior to the events of October 1999. Their proposed expansion into the domestic market was a natural next step, particularly in conjunction with the development of a new range of cleaning products particularly suited to the domestic market. This background would be a major advantage in Proton's search for capital. ...

...

[70] The track record of successful product development, production and marketing is a major plus in the plaintiffs' search for capital.

In addition, he said:

76. The second important element is whether the new business would be able to earn its cost of equity capital. I understand that at the time of the event giving rise to this matter the Chainas had received a contract for purchase of a property, including buildings and equipment, for use in the domestic business.

There are two possible approaches to this report and reports which fall into this category. The first approach is to say that the report deals with the two launches that were proposed and that since the case will not be proceeding for the loss of opportunity in relation to the domestic launch the whole of the report should be rejected. The alternative approach is to allow the report into evidence so that the Plaintiffs might be able to salvage some material from it to support their case in the loss of opportunity for the industrial relaunch.

Since it is not possible to say at the present stage of the proceedings that the Plaintiffs would have no chance of salvaging material from this report for the loss of opportunity case and the relaunch of the industrial products I do not consider it is appropriate to reject the whole of the report. Whilst I accept that it will be difficult for the evidence in the report to support only the industrial relaunch further evidence may emerge when the relevant experts give evidence. In that way, it cannot be said that the proposition is unarguable.

(iii) Ralph Moyle dated 25 July 2012

In Chaina (No. 13) I set out at [148] part of the instructions given to Mr Moyle. As paragraph 5.4 of those instructions shows, reference was made to the industrial launch as well as the domestic launch. Further, the documents provided to Mr Moyle included the report of Professor Dowling.

However, a reading of Mr Moyle's report gives a very clear indication that what he is discussing are only the domestic products. That appears particularly in the lengthy table set out at pages 4 - 6 as well as the spreadsheet attached to the report and referred to on page 10 which is said to be for laundry and dishwashing powders and liquids.

It is apparent, therefore, that the report is referable only to the domestic launch and the loss of opportunity case in that regard. In the circumstances it is no longer relevant to any issue in the proceedings.

(iv) Rick Millar dated 27 July 2012

This report falls into the same category as the report of Associate Professor David Trende. It straddles both the domestic products and the industrial products.

On one level this report may remain relevant because an inference is open that if the Plaintiffs were only to pursue the industrial launch they would have a greater capability of doing that alone than producing the products for both domestic and industrial use.

I do not consider that this report should be rejected at this stage.

(v) Sam Daniel dated 5 January 2012

This report is also in a similar category to that of Associate Professor Trende and Mr Millar. It deals with the cost of ingredients for both domestic and industrial products.

For similar reasons it should not be rejected at this stage.

(vi) Dafta Pty Ltd

This report, as I noted in Chaina (No. 13) at [167], is concerned with the raw materials for the domestic products only.

Accordingly, the report has no relevance to the remaining issues in the case and should be rejected.

(vii) Pitcher Partners dated 31 August 2012

The objections to this report can be grouped as follows:

(i) The calculation of the loss of chance from the inability to launch the domestic products and relaunch the industrial products;

(ii) The claims for loss in relation to the Strathfield and Ingleburn properties;

(iii) The heads of damage set out on pages 3 - 5 of the covering letter;

(iv) The claim based on projection of profits from the existing business;

(v) Loss of value of the shares.

(1) Loss of opportunity case

Ms Cartwright deals separately with the relaunch of the industrial products and the launch of the domestic products. The industrial products are dealt with in section 4 of her report, paragraphs 120 - 174. The domestic products are dealt with in section 5 paragraphs 175 - 235.

There seems no relevant issue to which section 5 of the report can now go because the evidence of Professor Layton has been rejected. It is clear that Ms Cartwright was dependent upon Professor Layton for her conclusions - see for example paragraphs 180 - 185.

Accordingly, paragraphs 175 - 235 of this report should be rejected.

Since the loss of opportunity case for the industrial products is proceeding section 4 of the report is admissible.

(2) Loss in relation to the Strathfield and Ingleburn properties

The particular paragraphs objected to are paragraphs 243 - 248 of the report.

The Defendant provided written submissions in relation to the claim relating to these properties. Whilst there is force in the submissions made it seems to me that the question of whether these losses is made out is a matter to be determined when all of the evidence and addresses are completed.

(3) Additional heads of damage

Ms Cartwright says in her covering letter:

I have been instructed to include the following additional heads of damage in my report. I have been provided with this information by Berrigan Doube and have had no involvement in its preparation.

What follows is a schedule of what appears to be out of pocket expenses.

It goes without saying that unless there is proof that these amounts have been paid and that they are causally related (as a matter of law) to the breach of duty by the Defendant they will not be recoverable. At the present time the table on pages 3 - 5 represents a convenient summary of what appears to be the Plaintiffs' claim. I do not consider that the table is proof of those matters but I will not reject it at this stage.

(4) The claim based on the existing business

The Defendant submits that the evidence of George and Rita Chaina does not disclose that they intended to maintain and develop the existing business. Rather, all of the evidence was to the effect that new products were being developed both in a domestic and industrial market.

I accept that the weight of the evidence tends to suggest that the Plaintiffs did not intend to continue with the business as it had been carried on from 1993 to 1999. However, a final determination of that matter needs to await the completion of the evidence and addresses in the matter. It is open to me to find that, despite what the Plaintiffs say was their intention, it would only have been the existing business that continued. In that way it is a matter of fact to be determined in the final judgment. It cannot be said at this stage that the part of the report dealing with the existing business is therefore irrelevant to any issue.

(5) Devaluation of shares

Ms Cartwright deals with the devaluation of the shares held by Mr and Mrs Chaina in the three companies in section 6 of the report at paragraphs 236 - 242. This section of the report is difficult to understand particularly as there is a blank figure against the total Ms Cartwright says she has calculated in paragraph 239.

The Defendant in its written submissions said that I ruled in my judgment in Chaina (No. 13) on 14 August 2013 that this claim by the natural Plaintiffs was not recoverable as a matter of law. I made no such ruling. There is certainly strong authority for the proposition: Gould v Vaggelas (1985) 157 CLR 215 at 219-220; Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] 1 Ch 204; Chen v Karandonis [2002] NSWCA 412. However, I consider that I should not determine this claim on a preliminary basis. Rather, it will be dealt with at the completion of evidence and addresses in the final judgment.

Conclusion

On the Plaintiffs' Notice of Motion filed 8 October 2013 I make these orders:

(1) The report of Professor Graham Dowling dated 4 August 2006 be admitted as evidence in the proceedings;

(2) The Plaintiffs are permitted to serve and rely upon the following reports in reply:

(a) Report of Dr Van Dyke 8 October 2013;

(b) Report of David Redfern of 26 September 2013;

(3) The Plaintiffs are not permitted to serve or rely upon the following reports in reply:

(d) Professor Graeme Dowling 12 August 2013;

(4) In relation to the following reports in reply the Plaintiffs are only permitted to rely on those parts of the reports which respond to the Defendant's 2013 reports from Dr McDonald and Dr Wynn-Hatton:

(e) Sam Daniel dated 7 October 2013;

(f) Dafta Pty Ltd dated October 2013;

(g) Dr Peter Richardt dated 27 September 2013

(5) Reserve consideration of prayer 4;

(6) Otherwise dismiss the Plaintiffs' Notice of Motion.

On the Defendant's Notice of Motion filed 3 September 2013 I make this order:

The following reports not be admitted into evidence:

(a) Dr Fong report dated 2 May 2012;

(b) Dr Eduard Smulders reports dated 24 February 2010 and January 2012;

(d) Dr Lothar Motitschke report dated 18 March 2010;

(e) Dr Peter Richardt report dated 19 December 2011;

(f) The balance of the report of John Matheson dated 7 October 2005;

(g) Ralph Moyle report dated 25 July 2012;

(h) Dafta Pty Limited undated report.

(i) Section 5.0 paragraphs 175 to 235 of the report of Pitcher Partners dated 31 August 2012

I have reserved consideration of the matter of concurrent evidence until the parties have had an opportunity to consider this judgment and determine which of the experts will now be called to give evidence.

As noted earlier in the judgment it will be necessary for the parties to address me further on the reports in reply of Sam Daniel dated 7 October 2013, Dafta Pty Ltd dated October 2013 and Dr Peter Richardt dated 27 September 2013.

On the Plaintiffs' application I have made no order for costs until the parties have had the opportunity to consider this judgment and make further submissions on costs.

**********

Decision last updated: 25 October 2013

Medium Neutral Citation:	Chaina v Presbyterian Church (NSW) Property Trust (No. 16) [2013] NSWSC 1494
Hearing dates:	8, 9, 14, 15 and 16 October 2013
Decision date:	25 October 2013
Jurisdiction:	Common Law
Before:	Davies J
Decision:	On the Plaintiffs' Notice of Motion filed 8 October 2013 I make these orders: 1. The report of Professor Graham Dowling dated 4 August 2006 be admitted as evidence in the proceedings; (2) The Plaintiffs are permitted to serve and rely upon the following reports in reply: (a) Report of Dr Van Dyke 8 October 2013; (b) Report of David Redfern of 26 September 2013; (3) The Plaintiffs are not permitted to serve or rely upon the following reports in reply: (c) Professor Roger Layton; (d) Professor Graeme Dowling 12 August 2013; (4) In relation to the following reports in reply the Plaintiffs are only permitted to rely on those parts of the reports which respond to the Defendant's 2013 reports from Dr McDonald and Dr Wynn-Hatton: (e) Sam Daniel dated 7 October 2013; (f) Dafta Pty Ltd dated October 2013; (g) Dr Peter Richardt dated 27 September 2013 (5) Reserve consideration of prayer 4; (6) Otherwise dismiss the Plaintiffs' Notice of Motion. On the Defendant's Notice of Motion filed 3 September 2013 I make this order: The following reports not be admitted into evidence: (a) Dr Fong report dated 2 May 2012; (b) Dr Eduard Smulders reports dated 24 February 2010 and January 2012; (c) Kuo-Rann Lai report dated 2 March 2010; (d) Dr Lothar Motitschke report dated 18 March 2010; (e) Dr Peter Richardt report dated 19 December 2011; (f) The balance of the report of John Matheson dated 7 October 2005; (g) Ralph Moyle report dated 25 July 2012; (h) Dafta Pty Limited undated report. (i) Section 5.0 paragraphs 175 to 235 of the report of Pitcher Partners dated 31 August 2012
Catchwords:	EVIDENCE - expert evidence - early determination - application to reinstate rejected evidence - need to reconsider earlier judgment - power to re-open and re-hear - whether misapprehension of fact or law PROCEDURE - application to serve further expert reports after trial well advanced - whether a re-casting of the case - case management principles - no explanation for delay in serving reports DAMAGES - loss of chance - absence of evidence of value of chance - whether court must do its best to assess damages
Legislation Cited:	Civil Procedure Act 2005 Evidence Act 1995 Uniform Civil Procedure Rules
Cases Cited:	Aon Risk Services Aust Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 BestCare Foods Ltd v Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) [2013] NSWSC 1287 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 Browne v Dunn (1893) 6 R 67 (HL) Chaina & Ors v The Presbyterian Church (NSW) Property Trust & Ors (No 3) [2009] NSWSC 1243 Chaina v Presbyterian Church (NSW) Property Trust (No. 6) [2012] NSWSC 1476 Chaina v Presbyterian Church (NSW) Property Trust (No. 7) [2013] NSWSC 139 Chaina v Presbyterian Church (NSW) Property Trust (No. 13) [2013] NSWSC 1057 Chen v Karandonis [2002] NSWCA 412 Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 General Steel Industries Inc v Commissioner for Railways (NSW) (1965) 112 CLR 125 Gould v Vaggelas (1985) 157 CLR 215 Hillston v Bar-Mordecai [2002] NSWSC 477 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] 1 Ch 204 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Sydney Attractions Group Pty Ltd v Fredrick Schulman (No 2) 2013 NSWSC 1153 Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153
Category:	Interlocutory applications
Parties:	Mathew Chaina (First Plaintiff) and ors Presbyterian Church (NSW) Property Trust (First Defendant) and ors
Representation:	Counsel: Mr A Dawson (Plaintiffs) R Stitt QC, G L Turner & H Stitt (Defendants) Solicitors: In person (Plaintiffs) Curwoods Lawyers (Defendants)
File Number(s):	2002/69354