Hart & Hart v Geldart - [2009] SASC 291

SUPREME COURT OF SOUTH AUSTRALIA
(Appeal from a Master: Civil)
HART & HART v GELDART
[2009] SASC 291
Judgment of The Honourable Justice White
17 September 2009
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - OTHER MATTERS ARISING BEFORE TRIAL
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - EVIDENCE
Appeal against decision of a Master - Master dismissed application for an order that the plaintiff (respondent) deliver to the defendants (appellants) an expert's report which complied with r 160 of the Supreme Court Civil Rules 2006 and Practice Direction 5.4 of the Supreme Court Practice Directions 2006 - the appellants identified six respects in which the expert's report was said to be deficient.
Whether Master proceeded on erroneous basis that questions of admissibility of evidence and questions of non-compliance with r 160 and Practice Direction 5.4 were only for determination by the trial Judge - whether the alleged deficiencies in the report were significant - whether plaintiff in breach of a previous Court order.
Held: Master's conclusions reflected an opinion about which judicial officer was in the best position to determine questions of admissibility of evidence and did not constitute a determination about Master's power or functions - the alleged deficiencies in the expert's report appeared to be of a minor kind - plaintiff not in breach of previous order - appeal dismissed.
Inheritance (Family Provisions) Act 1972 (SA); Supreme Court Civil Rules 2006 (SA) r 116, r 117, r 160, r 213, r 214; Supreme Court Civil Rules 1987 (SA) r 38, referred to.
R v Apostilides (1984) 154 CLR 563, distinguished.
Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157; Taylor v Guttilla (1992) 59 SASR 361; Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (Reg) (No 9) [2002] SASC 118, considered.

HART & HART v GELDART
[2009] SASC 291
Appeal from a Master

WHITE J: On 25 June 2009, a Master of this Court dismissed the application by the defendants (the present appellants) for an order that the plaintiff (the present respondent) deliver to them “an expert’s report of Mr Shaun Mercer which complies with r 160 and Practice Direction 5.4”.[1] The defendants now appeal against that dismissal.
[1] Geldart v Hart (No 2) [2009] SASC 192.
In the underlying proceedings, the plaintiff seeks an order under the Inheritance (Family Provision) Act 1972 (SA) (the IFP Act). She was the domestic partner of Douglas Hart (the deceased) who died on 20 September 2006. The defendants are sons of the deceased. The first defendant, Graham Hart, has brought his own claim under the IFP Act.
The principal asset of the estate is the quarter share of the deceased in some farming land near Edithburgh on the Yorke Peninsula. It appears that there will be an issue at the trial concerning the value of that land. In September 2008, the plaintiff’s solicitors delivered to the defendants’ solicitors a valuation report from a certified practising valuer, Shaun Mercer, dated 1 September 2008 (the first Mercer report). Mr Mercer trades under the name “Yorke Peninsula Property Valuations”. He considered that the total value of the six blocks comprising the farming land was $1,240,000.
Earlier, a Mr Norris of Lindsay Wapper & Associates Valuation Services had provided a written valuation report to Mr Graham Hart, the first defendant. Mr Norris considered the total value of the land as at 21 May 2008 to be of the order of $750,000. Further, on 9 October 2008 the defendants obtained a six page draft report from a Mr Aschberger, a certified practising valuer in the firm of Savills. Mr Aschberger was critical of Mr Mercer’s valuation in some respects but did not himself state a value for the farming land.
Mr Mercer provided a written response to Mr Aschberger’s critique on 16 October 2008 (the second Mercer report).
The proceedings have been managed in the Masters’ List. On 13 February 2009, the Master made an order that the plaintiff deliver her experts’ reports by 13 March 2009 and that the defendants deliver their reports within 28 days of the service upon them of the plaintiff’s reports. Later, on 30 April 2009, the Master extended the time for delivery of the plaintiff’s reports to 7 May 2009.
Subsequently, on 8 May 2009, the plaintiff’s solicitors delivered a further report from Mr Mercer dated 2 May 2009 (the third Mercer report). In the third report, Mr Mercer confirmed the comments and opinions which he had made in each of the first and second Mercer reports, and added some additional remarks.
The defendants took the view that the Mercer reports do not comply with the requirements of r 160 of the Supreme Court Civil Rules 2006 (SA) (the 2006 Rules) and of the Supreme Court Practice Directions 2006 (SA) (the Practice Directions). Their solicitors wrote to the plaintiff’s solicitors on 15 May 2009 particularising the alleged deficiencies. When the plaintiff refused to obtain a further report, the defendants took out an application seeking to enforce the delivery of a “compliant” report.
The Master dismissed that application for a number of reasons, including that the plaintiff was not bound to call Mr Mercer at the trial; that if the plaintiff did seek to call him, she may be precluded from doing so under r 214(2); that it was for the trial Judge to determine whether the plaintiff should be permitted to adduce the evidence from Mr Mercer at trial; that it was possible that any prejudice which the defendants may suffer could be accommodated in other ways; and that it was, in any event, inappropriate to make the mandatory order sought by the defendants given the potential difficulties for the plaintiff in complying with it and for the Court in enforcing it.
For the reasons which follow, I consider that the decision of the Master was correct and that the appeal should be dismissed.
Rule Requirements
Rule 160 of the 2006 Rules provides (relevantly):
(1)     A party must, before the relevant time limit—
(a)     obtain all expert reports that the party intends to obtain for the purposes of the trial of the action; and
(b)     serve on every other party to the action a copy of each expert report in the party's
possession relevant to the subject matter of an action (whether the party intends to rely on it at the trial or not).
Exception—
This rule does not apply to reports obtained, or to be obtained from a shadow expert (see rule 161(1)).
Chapter 7 – Pre-trial procedures Page 7–16
(2) The relevant time limit is the end of a period of 60 days after the time limited for making an initial disclosure of documents.
(3)     An expert report should—
(a)     set out the expert's qualifications to make the report; and
(b)     set out the facts and factual assumptions on which the report is based; and
(c)     identify any documentary materials on which the report is based; and
(d)     distinguish between objectively verifiable facts and matters of opinion that cannot be (or have not been) objectively verified; and
(e)     comply with any requirements imposed by practice direction.
(4) However, if an expert has provided a previous expert report to a party, a report complies with subrule (3) if it refers to material contained in the previous report without repeating it.
…
The expression “expert report” is defined in r 4 to mean:
A report in written or electronic form by a medical or other expert on a question involved in an action (including a report by a medical or other expert on another expert report).
It can be seen that r 160(3) specifies certain matters which should be included in an expert report. However, r 160(4) qualifies that requirement with respect to later reports provided by the one expert by specifying, in effect, that the expert may satisfy r 160(3) by referring to, but without repeating, material contained in the earlier report.
Practice Direction 5.4 is also relevant as it contains guidelines with which there must be compliance in order for an expert report to satisfy the requirements of r 160(3). Practice Direction 5.4.3 emphasises that the paramount duty of the expert witness is to the Court, and not to the party by whom the expert witness is retained. Practice Direction 5.4.4. has a number of stipulations concerning the content of an expert report.
5.4.4 The Form of the Expert Report:
5.4.4.1If any tests or experiments are relied upon by the expert in compiling the report, the report should contain details of the qualifications of the person who carried out any such tests or experiments.
5.4.4.2Where an expert’s report refers to photographs, plans, calculations, analyses, measurements, survey reports or other extrinsic matter, these must be provided to the opposite party at the same time as the delivery of the report.
5.4.4.3The report should set out separately from the factual findings or assumptions each of the opinions which the expert expresses.
5.4.4.4The expert should give reasons for each opinion.
5.4.4.5If an expert opinion is not fully researched because the expert considers that insufficient data is available - or for any other reason, this must be stated with an indication that the opinion is no more than a provisional one. Where an expert witness who has prepared a report believes that it may be incomplete or inaccurate without some qualification, that qualification must be stated in the report.
5.4.4.6The expert should make it clear when a particular question or issue falls outside his/her field of expertise.
5.4.4.7The expert’s report will contain an acknowledgement at the commencement of the expert’s report that the expert has been provided with copies of Rule 160 and this Practice Direction prior to preparing the expert’s report and that the expert has read it and understood it.
5.4.4.8At the end of the report the expert should declare that (the expert) has made all the inquiries which “(the expert) believes are desirable and appropriate and that no matters of significance which (the expert) regards as relevant have, to (the expert’s) knowledge, been withheld from the Court.”
The Alleged Deficiencies
The defendants relied upon their particularisation of the alleged deficiencies contained in their solicitors’ letter of 15 May 2009. On a first reading of that letter, its main focus is on the third Mercer report. However, at the hearing of the appeal counsel said that the defendants’ concerns related to the first Mercer report and that their complaints concerning the second and third reports were that they did not redress the deficiencies in the first.
The Master did not consider it necessary to address the alleged deficiencies in detail. He was prepared to act on an assumption favourable to the defendants (and without deciding the issue) that there were at least some deficiencies in Mr Mercer’s reports.
At the hearing of the appeal, I invited counsel for the defendants to identify the respects in which the first Mercer report did not comply with the Rules and Practice Directions. Counsel identified six matters.
The first and second were that the first Mercer report did not contain the acknowledgement and declaration required by Practice Directions 5.4.4.7 and 5.4.4.8 respectively. It seems that Mr Mercer was not provided with a copy of r 160 or of Practice Direction 5.4 at the time he prepared his first report. This appears to explain the absence of the acknowledgement and declaration. Mr Mercer did give the required acknowledgement and made the appropriate declaration in his third report. In these circumstances, the defendants concerns are about form, and not substance. The trial Judge may well take the view that the three Mercer reports are to be read together so that the omission of the acknowledgement and declaration from the first report is immaterial.
Next, counsel drew attention to the fact that while Mr Mercer said in his first report that he had “made all enquiries that I believe are necessary and appropriate and to my knowledge there have not been any significant relevant matters omitted from this report”, that statement could not be regarded as correct because later Mr Mercer identified some enquiries which could be made but which he had not made. Rather than being a deficiency, that appears to evidence an attempt by Mr Mercer to discharge his obligations conscientiously. If the matter upon which Mr Mercer could have made further enquiries is material to his valuation, that may be a matter which undermines the utility of his opinion. It is a matter which counsel may wish to explore in cross-examination at the trial. The fact that Mr Mercer acknowledges that there may be some further enquiry which could be made does not, of itself, indicate that there has been non-compliance with the requirements of r 160 or Practice Direction 5.4.
The fourth complaint is that the first Mercer report did not set out the questions upon which Mr Mercer was asked to express an opinion. There does not appear to be any substance in this complaint. Neither the Rules nor the Practice Direction require such a statement. It is, in any event, quite apparent from the first Mercer report that Mr Mercer considered that he had been asked to determine the market value of the whole of the farming land. That is the subject matter of the report.
The fifth complaint is that the first Mercer report does not identify separately the factual assumptions upon which it is based. Counsel referred to r 160(3)(b) and Practice Direction 5.4.4.3. It is true that Mr Mercer does not, in a discrete section of the report, state his factual assumptions. However, the matters of fact, or assumed fact, upon which the opinion is based appear to be identified in some detail in the report. Mr Mercer gives a legal description of the land, details of its zoning, details of its location, a detailed description of each of the blocks, details of sales which may be regarded as comparable sales, a commentary on the market for farming land on the Yorke Peninsula, and a statement of his valuation rationale. In this respect, the report appears on its face to be of a kind conventionally prepared by valuers. In my opinion, it does not need the additional words “assumed facts” in order for it to be understood that the matters set out by Mr Mercer are the matters upon which his opinion is based. Again, it appears that the defendants’ concerns are about form and not substance.
Finally, counsel contended that the first Mercer report did not disclose Mr Mercer’s valuation methodology. There seems little merit in this submission. The first Mercer report contains a discrete section setting out Mr Mercer’s valuation rationale. He says that he has adopted the summation method of valuation and used as a cross-check the direct comparison method of valuation.
Counsel’s submissions in support of this alleged deficiency were put at a level of considerable generality. The submissions did not descend into detail or seek to indicate particular deficiencies in Mr Mercer’s statement of his valuation rationale or in his implementation of it. I note that Mr Aschberger was retained, amongst other things, to report upon the methodology used by Mr Mercer. Mr Aschberger said that he regarded the methodology adopted by Mr Mercer to be appropriate although he disagreed with the application of the methodology in the particular circumstances. It is significant for present purposes that Mr Aschberger does not, anywhere in his six-page report, indicate any impairment of his ability to critique Mr Mercer’s approach by reason of some deficiency in the disclosure within the first Mercer report of Mr Mercer’s methodology or valuation rationale.
In summary, some of the deficiencies alleged by the defendants appear to be matters of form and not substance, and have, in any event, been rectified by the later reports from Mr Mercer. Others are of little merit or, to the extent that there is an identified deficiency, appear to be of a minor kind only.
I am reluctant to express a final conclusion concerning the deficiencies alleged by the defendants. That is a matter which may have to be addressed by the trial Judge, whether on an objection by the defendants to the plaintiff adducing evidence from Mr Mercer, or on an application by the plaintiff under r 214(2). The appeal can be resolved without determining the question finally. In these circumstances I propose to proceed on the basis that such deficiencies, if any, as there are in the Mercer reports appear at this stage to be of a minor kind.
Consideration of Remaining Matters
The defendants submitted that the Master had made two errors in approach. First, it was said that he had proceeded on the basis that questions of admissibility of evidence were solely for the trial Judge and could not be addressed at the interlocutory stages. Counsel called this the “admissibility mistake”. Secondly, it was said that the Master had construed the 2006 Rules as requiring all questions arising from alleged non-compliance with r 160 and Practice Direction 5.4 to be determined by the trial Judge. Counsel called this the “interpretation error”. It can be seen that these two submissions are interrelated.
For the purpose of resolution of this appeal, it is not necessary, in my opinion, to address the question of whether one judicial officer in a court may determine questions concerning the admissibility of evidence, or make orders precluding the admission of evidence which is otherwise admissible, in relation to a trial to be conducted by another judicial officer. It is sufficient to state that if such a power exists, it is one which would be exercised with considerable restraint, and when exercised, made expressly subject to any contrary order of the trial judge.
In my opinion, the Master did not proceed on either of the two bases imputed to him. In the first passage relied upon by the defendants for each submission, the Master said no more than that when there is a failure to make proper disclosure of an expert’s evidence, any application for permission under r 214(2)(b)[2] to adduce evidence from the expert “is often a matter which is best left to the trial Judge to be determined in the circumstances which exist at the trial”. That is a conclusion about who is best placed to make the decision, not a conclusion about the Master’s power or function.
[2] Set out in [35 ] of these reasons.
Similarly, on the question of whether an order could be made at the interlocutory stages precluding the plaintiff from adducing evidence from Mr Mercer, the Master said:
It may be that any such order should only be made by the trial Judge as it is essentially an order about the admissibility of evidence at the trial. I do not need to pursue it further.
In my opinion, that is a conclusion by the Master about the appropriate judicial officer to make the decision, and not a conclusion about the interpretation of the Rules.
In my opinion, each of the passages in the Master’s reasons impugned by the defendants were quite unremarkable statements about the judicial officer who is best placed to determine these questions and expressions of the appropriate restraint to be exercised at the interlocutory level in making decisions about the evidence which may be led at a trial.
The defendants next contended that the order which they seek should be made as part of the enforcement by the Court of the order which it made on 13 February 2009. That order was expressed in the following terms:
Pltf to deliver expert reports by 13 March 2009 and Defts to deliver their reports within 28 days of service.
As noted earlier, the Master later extended the time for delivery of the plaintiff’s reports to 7 May 2009. The defendants submit that the delivery of a report which does not comply with r 160 and Practice Direction 5.4 is a breach of the order made on 13 February 2009 (as later varied) and that the Court should enforce its own order.

In my opinion, this submission misunderstands the effect of the order made on 13 February 2009. The gravamen of the order was not a requirement that the plaintiff must obtain and deliver an expert report (implicitly, a compliant expert report), but instead the fixing of a time, in lieu of that specified in r 160(2), within which the plaintiff was to deliver any further expert reports. The order is to be understood as a shorthand expression of an order along the following lines:
If the plaintiff proposes adducing evidence from an expert or experts at the trial, the date by which the plaintiff must obtain the reports from the experts is 13 March 2009.
In other words, the order left it to the plaintiff to decide whether or not she wished to obtain expert reports but, if that was her intention, limited the time within which she should do so. If the plaintiff did not intend adducing expert evidence at the trial, or to obtain any further reports, then there was no need for her to do anything in order to comply with the order.
Generally speaking, courts do not require parties to obtain or adduce evidence from particular witnesses. A decision as to the evidence to be adduced at trial is a matter for the parties. In criminal trials, it is the prosecutor alone who bears the responsibility of deciding whether a person should be called as a witness in the prosecution case.[3] In civil trials, it is for the party and the party’s lawyers to decide what evidence is to be called in support of the party’s case and the court does not become involved in that process.[4]
[3] R v Apostilides (1984) 154 CLR 563.
[4] Hospitality Group Pty Ltd v Australian Rugby Union Ltd [2001] FCA 1040 at [80]; (2001) 110 FCR 157 at 179.
The purposes of rules such as rr 160 and 214 (to which reference will be made shortly) should be remembered. These include ensuring the maximum degree of candour in the conduct of litigation and an avoidance of trial by ambush by late disclosure of relevant material;[5] ensuring that experts appreciate their obligations to the Court; and ensuring that expert evidence when presented will be in an appropriate form. It is not the purpose of the Rules to substitute the Court as the decision-maker concerning the evidence to be called at trial. This is confirmed by the terminology used in r 160(1) requiring a party to obtain, before a specified time, all expert reports “that the party intends to obtain” for the purposes of the trial of the action.
[5] Taylor v Guttilla (1992) 59 SASR 361 at 367.
In the respects just identified, the defendants’ application appears to rest on a misconception about the effect of the order made on 13 February 2009 and about the effect of the Rules. In particular, it is a misunderstanding of the Master’s order of 13 February 2009 to construe it as requiring the plaintiff, irrespective of her own views about the matter, to obtain a further expert report.
The 2006 Rules and the Practice Directions provide for the consequences of a party wishing to adduce expert evidence who does not observe the requirements of the Rules and the Practice Directions. Subrules (2) and (3) of r 214 provide:
(2) A party may only call a witness to give expert evidence at the trial of the action if—
(a) the expert evidence to be adduced from the witness has been disclosed to the other parties in the form of an expert report or an affidavit (or the Court has relieved the party from the obligation of disclosure); or
(b) the Court permits the party to call the witness despite non-disclosure of the evidence.
(3) If the Court grants permission under subrule (2)(b), the Court will, unless there is good reason for not doing so, make an order that the party in whose favour the permission is granted, or that party's lawyer, is to be liable for costs related to the non-disclosure.
Practice Direction 5.4.6 provides:
5.4.6 Consequences of Non Disclosure
If a party fails to comply with the Rules of Court or this Practice Direction in respect of an expert’s report:
5.4.6.1The Court may adjourn the hearing or trial at the cost of the party in default or his/her lawyer.
5.4.6.2The Court may direct that evidence from that expert not be adduced by that party at the trial in the action.
5.4.6.3The Trial Judge may award costs to the other parties or reduce costs otherwise to be awarded to the party in default.
The effect of r 214(2) is that a party who does not disclose the expert evidence to be adduced in the form of an expert report or an affidavit may adduce that evidence only with the permission of the Court. The effect of Practice Direction 5.4.6 is to give notice of the other steps which the Court may take in the event of non-compliance with r 160 or the Practice Directions. These are the kind of steps which the trial Judge may take in the present case if satisfied that there has been a material non-compliance with the requirements for expert reports.
Naturally, it is undesirable for a party who considers that there has been non-disclosure or non-compliance with r 160 and the Practice Directions to withhold notice of the objection until trial or until shortly before trial. Such a course can result in considerable inconvenience, disruption and expense. A party who considers that an opponent’s expert reports do not comply with the Rules and Practice Directions should give notice of the alleged deficiencies and, if appropriate, seek particulars. If the particulars are not provided the Court may, in an appropriate case, order the other party to provide them. This was the course of action suggested by Bleby J in Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (Reg) (No 9).[6]Although the decision in Southern Equities concerned r 38 of the Supreme Court Rules 1987 (SA) which was, in some respects, different from r 160, there is no reason to suppose that the same course of action is not available under the 2006 Rules. If particulars are appropriate, the Court could, in the exercise of its general powers under rr 116 and 117, require them to be provided. As Bleby J pointed out in Southern Equities, the failure by the party to seek additional particulars (or the failure of the other party to provide them) may well be a relevant factor to be considered by the trial Judge when determining whether a party should be permitted to adduce the expert evidence despite not having complied with r 160 or Practice Direction 5.4.
[6] [2002] SASC 118 at [29]-[30].
I do not wish to be understood as encouraging interlocutory applications seeking orders for particularisation of expert reports. This Court has taken a number of steps in recent times to reduce the interlocutory disputation about matters such as pleadings and document disclosure. Disputes about the provision of particulars of expert reports are not to become a new field of interlocutory endeavour. Generally, it will be appropriate for the consequences of non-compliance with r 160 and Practice Direction 5.4 to be left to the trial Judge. The Master appropriately took that approach in the present case.
The defendants assert that the absence of a compliant report will cause them “serious prejudice”. However, the submissions concerning the apprehended prejudice were put at a level of considerable generality and it is not easy to identify particular prejudice which will be suffered in the present case.
The Mercer reports do not deal with a difficult or unusual subject matter. Without intending any underestimation of the task involved, I note that the subject of the expert evidence is the valuation of land of a kind which seems to involve a reasonably routine application of a valuer’s expertise. Any shortcomings in the reports of Mr Mercer do not prevent the defendants obtaining their own expert report. Indeed, as noted, the defendants have already obtained two reports from valuers. The defendants can obtain a further report if they wish. If they do, it is likely that the valuer retained would carry out his or her own independent enquiries and apply his or her own skill and judgement to the task.
It is possible that the ability of an expert retained by the defendants to critique the valuation of Mr Mercer may be compromised. It is because parties sometimes wish an expert to respond to an earlier report from another that the Court will often permit a defendant some time after the provision of a plaintiff’s expert report in which to provide an answering report. However, that need not necessarily be the case and r 160 itself contemplates that all parties should obtain their expert reports by the same date. In any event, an expert retained by the defendants has been able to provide a detailed critique of Mr Mercer’s valuation.
It is also to be borne in mind that the Court has a wide range of powers with respect to the taking of expert evidence which can be invoked if necessary if particular issues arise. The Court can require the experts to confer in advance of the trial; or to identify the matters or issues about which they are in agreement and about which they are in disagreement; and it can direct one witness to review the opinion of another and to state whether he or she wishes to modify an opinion earlier expressed in the light of the opinion of the other expert.[7] This armoury of powers will be available to the Court in the present case.
[7] See r 213 of the 2006 Rules.
In summary, the defendants have not at this stage demonstrated that there is a prospect of serious prejudice to them if Mr Mercer does not produce a report which is, in every respect, compliant with r 160 and Practice Direction 5.4.
I observe that if the Court did make the order sought by the defendants, there may be some difficulties in its enforcement. Mr Mercer is not a litigant before the Court. There are limitations on the extent to which he can be made amenable to Court orders. I also note that the Court has not been informed of the terms of his retainer and, in particular, of the financial aspects of that retainer.
Finally, I think it pertinent to note that this is the kind of litigation to which Practice Direction 8.1 refers in which the Court and the parties should be particularly alert to the desirability of keeping the costs incurred by the parties to a minimum. Commonly, the costs of all parties are ordered to be paid by the estate. That can have the effect of depleting the amount available if the Court does consider it appropriate to make an order under the IFP Act. The additional costs which would be incurred by the plaintiff if the order sought by the defendants was made is an additional reason why the appeal should not succeed.
The effect of the defendants’ application and of the appeal has been to put the plaintiff on notice of the deficiencies in the Mercer reports alleged by the defendants. It is for the plaintiff to determine whether, in the light of the defendants’ critique, she wishes to proceed to trial with the reports in their present form. If the plaintiff does so, she will do so knowing of the deficiencies alleged by the defendants and knowing of the sanctions available to the Court.
Conclusion
For the reasons given above, I dismiss the appeal.