Cp (Adelaide) & Ors v Hartford (Holdings) & Anor (No 6) No. DCCIV-01-617

[2002] SADC 12

CP (ADELAIDE) PTY LTD & OTHERS
v
HARTFORD (HOLDINGS) PTY LTD & ANOTHER (NO 6)
[2002] SADC 12

Judge Lunn
Civil

REASONS FOR RULING ON TENDER OF EXPERT’S REPORT

1. This action is, inter alia, a claim for damages for misleading and deceptive conduct and misrepresentation on the leasing of shops in a new food court in Adelaide.  One of the alleged representations by the leasing agent was that the food court would be the best and most successful in Adelaide.  The plaintiffs have pleaded that it was not the best and most successful in Adelaide, and that it was the worst.

2. In the course of the trial the 4^th plaintiff called Mr William Bullock, a valuer, and sought to tender a report dated 21 September 2001 from him.  The tender of substantial parts of it was opposed by the defendants.  They submitted that it did not comply with Rule 38.01A(2)(b) and (c).  They had given notice to the plaintiffs soon after they received the report that they would be objecting to its tender.  Objection was also taken on Mr Bullock not having sufficient expertise for some of the opinions he had expressed, but it was agreed that I would rule on that after I had heard all of his evidence.

3. The report deals with sixteen questions which were posed in Mr Bullock’s letter of instruction.  For the purposes of these reasons it is sufficient to refer to two only of the questions, namely:

   “15.Whether the food court has been the best and most successful food court in Adelaide?”, and

   “16.   Whether the food court has been a commercial success or failure?”

   In expressing his opinions on these topics Mr Bullock has set out the history of various other food courts in Adelaide, and made assertions about their set-out, trading, tenancy history, traffic flow, advertising, signage, promotion, customer perception and success factors.  He has also dealt with general trends in property sales and tenancies in the vicinity of Rundle Mall.  Generally his report does not identify the source of his information about these matters or show in respect of many of them that he can speak about them of his own knowledge.  (Subsequent evidence showed some of his sources were inadmissible hearsay.)  Much of the report is expressed in the third person.  An example is:

   “The Myer Centre Food Hall in Rundle Mall took some years to gain market acceptance and become financially successful.  It is now the largest Food Hall in the city and attracts a significant number of customers.  It has poor street exposure and signage but has become known.”

   Mr Bullock’s source of this information was not stated.  It is unclear what parts are based on his own observations and what may have been based on information given to him by others.  In essence the report is a general essay on the topics at large without any logical progression showing how the individual conclusions are reached.  Although Mr Bullock had been given Practice Direction No 46 he had not understood some of its requirements.

4. Rule 38.01A(2) provides:

   “Any report of an expert obtained by a party and which is to be delivered under Rule 38.01 is to: ..........

   (b)set out separately each of the factual findings or assumptions upon which the opinions are based;

   (c)set out separately from the factual findings or assumptions each of the opinions which the expert expresses ...........”

   This rule was introduced by Amendment No 72 as from 6 April 2000.  I am not aware of any judicial exposition about its meaning or operation.

5. Initially counsel for the 2^nd defendant outlined at some length his objections based on an alleged failure of Mr Bullock to set out the factual findings or assumptions upon which each of his opinions was specifically based.  Particularly in relation to his opinions on questions 15 and 16 Mr Bullock merely referred at large to earlier parts of his report dealing with other ancillary questions without expressly identifying what facts or assumptions he was relying upon for his opinions on questions 15 and 16.  The 4^th plaintiff contended that generally the facts or assumptions relied upon by Mr Bullock were contained in the report, and so the defendants were not taken by surprise, but he conceded were not always tied directly to the opinions expressed.  Accordingly, I gave him leave to adduce oral evidence from Mr Bullock to identify what facts or assumptions otherwise stated in the report he had relied upon for the opinions expressed, but it soon became apparent that Mr Bullock wanted to refer in support of various opinions to matters which were outside his report.  I then adjourned Mr Bullock’s evidence to enable him to prepare a supplementary report setting out all the facts and assumptions upon which he had relied.  He produced a revised report dated 8 February 2002 which was the original report which had been expanded to purportedly comply with subrules 38.01A(2)(b) and (c).  The defendants opposed the tender of similar parts of this further report on the grounds that it still did not contain sufficient particularity about the facts and assumptions relied upon to comply with the rule.  They did not take any point about the lateness of a supplementary report.  The 4^th plaintiff sought to justify the revised report and did not seek any dispensation from Rule 38 or leave to use the report notwithstanding non-compliance.  I ruled that I would allow the whole revised report to be tendered for limited purposes, and that I would subsequently deliver these reasons for my ruling.

6. Subrules 38.01A(2)(b) and (c) are based on what was laid down about the mode of adducing expert evidence in TPC v Arnotts Ltd (1990) 92 ALR 527 and Hillier v Lucas, Full Court, 24/10/00, Jud No [2000] SASC 331, unreported. It was there held that in adducing expert evidence at a trial it was necessary to have the expert identify the facts and assumptions upon which an expert opinion was based as part of the evidence-in-chief of the expert. The effect of subrules (2)(b) and (c) is merely to impose a similar requirement on the report from the expert which must be delivered before trial under Rule 38.01. It does not impose an obligation any greater than that which applies for adducing the evidence-in-chief of the expert. The rule does not require a quasi pleading to be constructed by the expert in the report. The report cannot be attacked by other parties as if it was a defective quasi pleading.

7. The defendant submitted that insofar as the report did disclose the facts or assumptions relied upon by the expert it did not do so with sufficient particularity to show that there was any proper factual basis for each opinion expressed.  I do not consider that it needed to do so.  Subrules (2)(b) and (c) do no more than require any factual findings or assumptions upon which the opinions are based to be set out in the report.  They do not mean that the expert has to have based his opinion on factual findings or assumptions, either at all or to a sufficient degree to justify the opinion expressed.  The evidence of the expert is admissible if his or her necessary expertise has been shown and an opinion within that expertise has been expressed.  In some cases it may be that the expert has not relied upon any factual findings or assumptions in arriving at the opinion.  If the witness fails to identify any factual finding or assumption upon which the opinion is based, presumably the Court will not look to that factual finding or assumption in deciding whether the opinion is to be accepted.  Because of the operation of subrule 38.01A(5), which is set out below, the expert can only get the factual finding or assumption as a basis for the opinion before the Court by including it in the report.  In deciding whether to allow the tender of the report, or in any prior interlocutory challenge to the report, the Court is not required to decide whether the facts or assumptions referred to in the report can be a sufficient basis for the opinion expressed.  It is not an equivalent of Rule 46.18(a) of the material not disclosing a proper basis for the opinion.  Likewise it is not for the Court in considering whether to accept the tender of the report, or in any prior interlocutory challenge to it, to decide whether the facts or assumptions as stated are set out with sufficient particularity.  As the 4^th plaintiff pointed out, subrule 38.01A(2)(a) lays down a requirement to set out details of the qualifications of the expert “with reasonable particularity”, but there is no equivalent phrase in (b) or (c).  Like particularity in pleading, the degree required in complying with Rule 38.01A(2)(b) and (c) will depend upon the circumstances, and what is fair notice to the other parties.  (As to particularity in pleading see Civil Procedure South Australia, volume 1, para [R46.04.65].)  However, any such lack of particularity would not usually be a non-compliance with the subrules (2)(b) and (c), or a basis to refuse its tender, although it may have other consequences in adjournments and costs.

8. Insofar as there is any non-compliance with subrules 38.01A(2)(b) and (c) the consequences which follow are not governed by Rule 38.02.  Rule 38.02 only relates to a failure to comply with Rule 38.01, and not Rule 38.01A.  The reference to “Rule 38.01” in the preamble to Rule 38.02 is not to be read as encompassing Rule 38.01A.  Rule 38.02(3) was amended by the same Amendment No 72, which introduced Rule 38.01A, but not so as to expand the operation of Rule 38.02 to encompass any non-compliance with Rule 38.01A.  Thus any breach of Rule 38.01A(2)(b) and (c) is merely an irregularity under Rule 3.05.  There has been no application to deal with it under Rule 3.05(2).  Any such irregularity does not preclude the Court from accepting the tender of the report.

9. In my view the only real prejudice to the defendants from this report flows from the effect of Rule 38.01A(5) which provides:

   “Unless the trial judge otherwise allows expert evidence-in-chief at the trial it is to be given only by tendering reports from the expert which comply with the Rules and the expert swearing that the reports are correct.”

   It was assumed in argument that if the report was tendered in its entirety it would be the evidence-in-chief of Mr Bullock of all of its contents, which comprise both expert and non-expert evidence. (This would result from s34c of the Evidence Act.) It is unclear on subrule (5) whether it operates only on a report containing expert evidence or whether it extends to non-expert, factual evidence also to be given by the witness which is contained within the report. Here there was both, although it was not shown whether admissible evidence of many of the non-expert matters could properly be given by Mr Bullock. I need not decide this point. The real prejudice to the defendants is that in any many instances in the report where Mr Bullock refers to facts he is putting them forward not only as a basis for his expert opinion, but also as his own evidence in proof of them. (It is not clear whether subrules 31.01(A)(2)(b) and (c) require the factual findings and the assumptions to be identified separately, but I have assumed here that insofar as Mr Bullock speaks of facts which he cannot prove of his own knowledge, they are assumptions.) There are virtually no foundations stated in the report to show which of the facts Mr Bullock can give evidence about of his own knowledge. If his evidence was to be adduced orally questions seeking to elicit such facts would be disallowed where it was not apparent that he could give admissible evidence himself of those facts. It is unfair to the defendants if the report is tendered as admissible evidence of facts where there is no other evidence that Mr Bullock can give admissible evidence of those facts. I consider that the statements of fact in the report, whether they be facts or assumptions, can stand as the factual basis for his opinions, albeit they could have been related more closely to the opinions. Thus subrules (2)(b) and (c) have been satisfied. Insofar as certain opinions may not seem to have a factual basis set out in the report that can be a ground for a subsequent challenge to the acceptance of the opinion, but it does not require rejection of that part of the report. Whether the factual bases for the opinions are proved will have to await the conclusion of all of the evidence. I do not comment on it at this stage of the trial.

10. Subrule (5) refers to “only by tendering reports from the expert which comply with the Rules.”  This does not mean that reports can only be tendered if they comply with the Rules,  It means that the expert evidence-in-chief cannot be given orally, but only by the tendering of a report which complies with the Rules unless the Judge otherwise allows.  The phrase “which comply with the Rules” in subrule (5) does not impose any greater restriction on the admissibility of the report than the considerations mentioned above.

11. I was satisfied that the justice of the case was met by the following orders which I then made:

    The tender of the report of 7 February 2002 is accepted.  Pursuant to Rule 38.01A(5)  I direct that this report is to be received only as the evidence-in-chief of Mr Bullock of his expert opinions and the identification of the facts or assumption on which they are based and it is not to constitute any evidence of facts.  Liberty to the plaintiffs to adduce oral evidence of facts from Mr Bullock, but no further expert evidence from him.