Hibbard v Playroom Pty Ltd

[1988] HCATrans 287

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B45 of 1988

B e t w e e n -

NORMAN KINGSLEY HIBBARD

Applicant

and

PLAYROOM PTY LTD

Respondent

Application for special

leave to appeal

WILSON J

DEANE J

DAWSON J

Hibbard

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA ON FRIDAY, 25 NOVEMBER 1988, AT 11.37 AM

Copyright in the High Court of Australia

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MS S.M. KIEFEL, QC:  May it please the Court, I appear with

my learned friend, MR M.M. STEWART, for the

applicant. (instructed by J. Davis & Associates)

MR P.J. LYONS, QC:  May it please the Court, I appear for

the respondent. (instructed by Morris, Fletcher

and Cross)

WILSON J:	Yes, thank you.
MS KIEFEL:	Your Honours, we have sent to the Court an outline

of our submissions.

WILSON J:	Yes, we have it, Ms Kiefel.
MS KIEFEL:	Thank you, Your Honours.  Your Honours, the issues

upon which an appeal would concern are really twofold;

firstly, the basis of admission into evidence of facts

referred to by an expert as forming the basis of his

opinion, and we add there, and the question of any

obligation or duty on the part of counsel tendering

such expert's evidence by report; and, secondly,

whether it is necessary to object to that evidence

when it appears that those facts will not otherwise

be proved by admissible evidence, and the consequences

if no objection is taken. As to the second of those

questions, Your Honours, we would say - and there is

an affidavit of Mr Bland before the Court - that

those matters were not argued in the Full Court.

We add that there is an affidavit to which our learned

friend will refer which suggests that there is a

dispute, at least in part, as to whether the question

was raised at all.

(Continued on page 3)

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MS KIEFEL (continuing):  On that point it would seem, having

regard to our learned friend's material, that we

would contend that the matter of failure to object

and the consequences was not argued on the Full Court

and there seems really to be no dispute about that.

Our learned friend appears to say that the matter

was mentioned in passing reference in the court.

The facts here which formed the basis, or

foundation, of the experts' opinions, Your Honours,
concerning the expert Crane, the valuer, were the

extent of adjustments necessary to about one half

of the operating expenses of a business; it being

necessary to show the true net profit of the business

upon which one would base the capitalization method

to find the true market value at the relevant date. The adjustments were in the order of some $226,000.

It was conceded in the Full Court, Your Honours,

that some of the items would result in being merely

deleted and we could not quibble - we could raise

no dispute about that, but others depended, and

they were the words of the Chief Justice in the

Full Court, upon information provided by the proprietor

of the business, Mrs Carnell. And that was the

view that the Chief Justice reached at about

page 60 of the transcript although there is some

dispute about the breadth, or the number of items

that would be thus affected by Mrs Carnell's -
it is clear that the Full Court at least recognised

that some of the items must necessarily depend

upon the information from Mrs Carnell. And as

we have mentioned in our outline, Your Honours,

Mrs Carnell was available in court and was never

called as a witness.

The approach of the Chief Justice to those

items thus affected, Your Honours, we would submit

was really to - that is, putting aside some of

the peripheral issues raised by the Chief Justice
as to whether or not a defendant ought to call

the plaintiff's witness to narrow the areas, the

Chief Justice appears to have found firstly that	there was sufficient evidence, and we infer from
that that His Honour found that there was properly
admissible evidence before the Court and, secondly,
that no objection was taken either to exhibit 8,
which was Mr Crane's valuation, or to Mr Fenton's
evidence. To clarify those matters of evidence,
Your Honours, the procedure which had taken place
in the court at first instance was that during
the opening counsel for the plaintiff tendered
Mr Crane's report, exhibit 8. That report contained in it figures which were clearly referable and said to be the figures of the accountant, Fenton.
There was no further explanation. Both Mr Crane
and Mr Fenton were said to be called.

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It did not appear until the cross-examination of

the bookkeeper, Watson, in part and the~ more clearly,

the cross-examination of Mr Fenton himself that the figures thus adjusted and set out by Fenton

giving them to Mr Crane had resulted from

information provided by Mrs Carnell.

DAWSON J:	What is wrong with that?
MS KIEFEL:	Your Honours, we would say that the requirement

posed by cases such as TED BROWN QUARRIES PTY LTD

V GENERAL QUARRIES (GILSTON) PTY LTD, (1977) 16 ALR 23,

is that where the issue of damages is one which

can be proved with certainty and precision, a party

is required to prove damage with certainty and

precision by admissible evidence.

(Continued on page 5)

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DAWSON J:  There is some confusion there, is there not?

The evidence by which the damages were proved here

was the valuation of Mr Crane. Now, he could have

just verified the valuation and left it at that, but

additional evidence was called, as is not uncommon,

to show the basis on which he made his valuation.

Now, that evidence may be an unsatisfactory basis for

the valuation, and that is a matter for comment,

but it does not make the evidence inadmissible.

MS KIEFEL:  Your Honour, in our submission, the fundamental

question here is, indeed, the basis upon which that

evidence is first admitted when it is tendered,

It would be our submission that following obiter

in RAMSAY V WATSON that when Mr Crane's report was

tendered showing the facts upon which he relied

it was tendered as direct evidence of his opinion,

but the facts referred to were only admitted as the

facts upon which he had relied, that is they did

not have the status of direct and original evidence

as to the truth of those facts. It was necessary

to call someone to prove those facts as an independent

matter.

Now, when Mr Fenton was called it became clear that

he in turn had no personal knowledge of a number of those

facts. All he could have in similar terms was an opinion and without those facts being independently

proved there was no basis for either - - -

DAWSON J:  At most that then makes Mr Crane's valuation

unreliable. But a valuer frequently, almost always,

relies upon hearsay in forming his opinion.

MS *IEFEL:  Your Honour, we would submit not in this type of

case where the foundation for his opinion is a matter

which can be arrived at with accuracy and, indeed, is

required to be.	There can only be one true position,
either true net profit or not in a business.	There
may, Your Honour, be cases where an exercise of
professional judgment in cases not requiring some
certainty allows a broader view to be taken and
inferences to be drawn from a number of known and

reported facts to an expert.

DAWSON J:  Well, all that means is, if your criticisms are

correct, that Mr Crane's valuation was not worth

much, and so be it.

MS KIEFEL:	We would say it was without value, Your Honour.
DAWSON J:	You are entitled to make that comment once the

evidence had been enlisted and it was shown what it

was that he relied on.

MS KIEFEL:  Indeed, Your Honour. The submission before the

master, and again raised in the Full Court, was that

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Mr Crane's valuation, which was the only proper valuation accepted both before the master and the

Full Court, that is it was the only one that had

used the correct methodology and the correct
financial years, so of course once Mr Crane's

valuation fell, then, of course, there was no

evidence upon which to assess damages, and the

submission was -

DEANE J:  What you really say is that his valuation was

hypothetical and the hypothesis was not established.

MS KIEFEL:  Yes, Your Honour. We do not take issue with the

methodology, or the principles by which his - - -

DEANE J:  But is not the problem of that that whether that

is so will always be determined by the way the case is

conducted? I mean, say, for example, you call a

medical expert, he says, "I examined the plaintiff and

saw this, this, this and this on ordinarily covered

parts of her body and from that examination I concluded

this", it may well be that that evidence could be

objected to until proof of the things he saw was

satisfactorily given, but if no objection were taken

there would be no need, as it were, to produce the

body and say, "There you are. That is the best

evidence". He was just giving evidence of what he

thought he saw.

MS KIEFEL:  Your Honour, we would not take point with the

evidence in that case because the expert would be

giving direct evidence of what he had observed and

he could be tested, no doubt, and evidence in rebuttal

called. But we would say that this case falls

squarely within that envisaged in RAMSAY V WATSON.

DEANE J:  Then say it was the doctor said, "The patient told

me this, this, this and this"?

(Continued on page 7)

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MS KIEFEL:	We would say then, Your Honour, it would be our
submission, that he can related and, indeed, ought
to - the English decisions tend to suggest he ought to - state the facts upon which his opinion is founded.
DEANE J:	But you would then say, if the plaintiff was not called

to prove the truth of what she had told him, his

expert opinion becomes irrelevant even though no

objection was taken.

MS KIEFEL: It is without value, in our submission, yes,

Your Honour, because there has not been admitted

evidence of the requisite kind. It is not a case of

the evidence having first gone in and a failure to

object then supervening - - -

DEANE J: What if counsel says you need not bother calling the

plaintiff?

MS KIEFEL:  Well, Your Honour, they would probably be caught

by either an election or an estoppel by their

conduct in the course of the litigation.

DEANE J:  In other words, it comes back to the way the case is

conducted.

MS KIEFEL: In that particular example, yes, Your Honour.

It may have been different, perhaps, in this case,
too, if the tenderer of the report had indicated

at the very outset who was giving evidence as to

what and who was to prove up the facts; that is,

when Mr Crane's report was tendered, it perhaps

should have been indicated that he relied on

Mr Fenton's figures. Mr Fenton would speak to the

figures and he would say that Mrs Carnell provided

him with the figures,of which only she knew,

relating to the business - - -

WILSON J:	But one would ordinarily expect that kind of detail
to be elicited in cross-examination of the witness and that was done, I take it, here.
MS KIEFEL: It was elicited - the source was elicited,

Your Honour. That was certainly the case. But we

would submit that it is the duty of counsel tendering

the expert's report to state the facts and the

witness's to prove those facts.

DAWSON J: Well now, have you got any authority for that

proposition? I have always understood the position
to be, at least in this country, that, strictly

speaking, a valuer, for instance a valuer of property,

can merely give his qualifications establishing his

expertise and then give his valuation without

reference to comparable sales or any other basis for
it although, of course, normally reference is made to

the method by which he arrived at his valuation.

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MS KEIFEL:	Yes, could I refer Your Honours to the decision of Justice Megarry, ENGLISH EXPORTERS V ELDONWALL LTD, (1973) 1 Ch 415. It was a case concerning the
valuation of rent, Your Honours. If I could refer
you to a passage at page 421, cormnencing at about
line F, where His Honour said:

That being so, it seems to be quite another

matter when it is asserted that a valuer

may give factual evidence of transactions

of which he has no direct knowledge, whether per se

or whether in the guise of giving reasons for

his opinion as to value. It is one ~hing to

say, "From my general experience of recent
transactions comparable with this one, I think
the proper rent should be .X pounds": it is

another thing to say, "Because I have been told

•	have an area of x square feet and were recently let on such-and-such terms for Y pounds a year,	by someone else that the premises next door Z pounds a year." What he has been told about
the premises next door may be inaccurate or
misleading as to the area, the rent, the terms
and much else besides. It makes it no better
when the witness expresses his confidence in the reliability of his source of information:
a transparently honest and careful witness
cannot make information reliable if, instead
of speaking of what he has seen and heard for himself, he is merely retailing what others
have told him.

(Continued on page 9)

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MS KIEFEL (continuing):

The other party to the litigation is entitled

to have a witness whom he can cross-examine

on oath as to the reliability of the facts

deposed to, and not merely as to the

witness's opinon as to the reliability of information which was given to him not on oath.

DAWSON J: This decision has been criticized, has it not,

saying that it is entirely impractical because
if you had to call direct evidence of every

comparable sale that a valuer relied upon,

you would have no end to the ligitgation?

MS KIEFEL:  Your Honour, I am not aware of that criticism,

but if that be so, could I also refer the

Court, apart from RAMSAY V WATSON, which I would appreciate an opportunity to refer to,

to the other English decision to which I

had referred to -

WILSON J: Before you leave ENGLISH EXPORTERS, I notice

the passage you read, Ms Kiefel, and the

phrase there that seems perhaps to stand in

some contrast to at least the Chief Justice's

view of the present case:

if, instead of speaking of what he has

seen and heard for himself, he is merely

retailing what others have told him.

As I recall the reasons of the Chief Justice, he

saw the evidence of Mr Fenton as that of an

accountant whose evidence re~lly. consisted of a complex

of matters in which the things that were said

by Mrs Carnell played, perhaps, only a minor

part in alerting him to adjustments which in his

professional expertise he should make.

MS KIEFEL:  Your Honour, in our submission, the Chief Justice

really found two areas of evidence. The first is

the kind to which you have referred, that is to say that Mrs Carnell in the first stage merely alerted him to the need, of course leading him

to make the decision to adjust as distinct from

providing him with the information as to the quantum

of those adjustments. At page 60 His Honour really	seems to accept that there must have been, with
respect to some items, information directly from
Mrs Carnell as to quantum. So there is, we would
say, an area always to be referred to.

Your Honours, in REG V TURNER, a decision

of the Court of Appeal, (1975) QB 834 at 840,

at about line E - this is a criminal case, but

we would submit that the principle ought to be the

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same. Just below line E, Your Honours, after

referring to GLINSKI V McIVER which was a

case, of course, concerned with the tender of

evidence - getting in original evidence under

the guise of an expert's report:

Before a court can assess the value

of an opinion it must know the facts

upon which it is based. If the expert

has been misinformed about the facts or
has taken irrelevant facts into

consideration or has omitted to consider
relevant ones, the opinion is likely
to be valueless. In our judgment, counsel

calling an expert should in examination in

chief ask his witness to state the facts

upon which his opinion is based. It is wrong

to leave the other side to elicit the facts

by cross-examination.

DEANE J:	But does it not all come back to the way the
case is conducted? I mean, if there is no
objection taken, the material goes in and
is allowed to stay in, why should one say, "Oh,
because it may have been objected, it . should not be accepted as evidence because
it was hypothetical" precludes it being .
treated as evidence?

(Continued on page 11)

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MS KIEFEL:  Your Honour, that really comes back to our

principal submission, and that is that it is never

merely, if one likes, the narrative which is put in to

evidence as to those facts when it first goes in unless

evidence is called to prove them in the proper way.

show what the expert has based his opinion on.

DEANE J: And was that submission made to Master Lee?

MS KIEFEL:  I am not sure, Your Honour, because certainly it

appears from the master's decision that the failure to

call direct evidence was certainly addressed to him.

But the master - - -

DEANE J:  Was it submitted that the valuation was not evidence of

value?

MS KIEFEL:  I am not sure whether the submission was couched

in that way, I could not satisfy Your Honour as to that.

DEANE J: Let us assume it was not?

MS KIEFEL:  It was certainly taken up in the Full Court,

Your Honour.

DEANE J: Yes, but it was submitted as evidence of value, it was accepted in evidence and it was never submitted

that. it was not evidence of value?

MS KIEFEL:	Your Honour, I suppose the better inference to draw, however, is that if submissions, as we know.were~made~
before the master, were to the effect that no proper
evidence was called to prove the facts, it really must follow that the master had clearly in his mind, or at
least was adverted, to the distinction in the expert's
report tendered; that is evidence of opinion and the
need for evidence as to the facts founding it.

DEANE J: All I am really suggesting to you is that the question

on the best approach, from your point of view, can only

be answered by reference to details of the way the

particular case was conducted?

MS KIEFEL:  Your Honour, we would say that that may be so with

respect to the question of objection or not, but with
respect to the general question we would submit that

the issue goes beyond the facts or the conduct of a

particular case because it raises a matter of general

importance in an area where experts are now commonly called in trials and it poses a question really only

addressed in obiter in RAMSAY V WATSON and left really

unresolved for the courts. The English authorities

seem to suggest that there is a duty upon counsel

when tendering expert's reports to state the basis

and perhaps if that duty were made - - -

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DAWSON J: State the basis, but you seem to be going further and

to say that there is an obligation to prove the facts which are the basis of the opinion. Do you say that?

MS KIEFEL:  Yes, Your Honour, we say that follows from

RAMSAY V WATSON.

DAWSON J: It would be impossible. You imagine any land

valuation case if each valuer had to call direct evidence

of each sale, of which there might be hundreds, on

which he based his valuation?

MS KIEFEL:  I suppose in that case the decision in TED BROWN

QUARRIES, Your Honour, would say that evidence when

reasonably available, as it was here - the person in
court- we do not have that particular factual problem

where the evidence cannot reasonably be obtained.

DAWSON J: The evidence might be reasonably available it is

just the length of time it would take to go through the

process.

MS KIEFEL:  Yes, Your Honour, although,! think in TED BROWN

QUARRIES the Court had rather more in mind - the position

where there was really no excuse for not calling it.

It may well be an excuse that the length of time

necessary to prove what is otherwise taken as more or

less public facts of land searches.

DAWSON J:  Does it mean in a personal injury claim that the

defendant has to call the plaintiff who will very often

be the. only person who can prove the facts on which

the doctor gives his opinion?

MS KIEFEL:  The plaintiff would usually have to be called to

prove their own case first, Your Honour, we would have

thought. I am sorry, I cannot really envisage a

situation where that would be a problem because the

plaintiff would have to first give evidence of their condition before the defendant addressed their case.

DAWSON J: But the question is not so much that as what the

plaintiff told the doctor?

(Continued on page 13)

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MS KIEFEL:  Yes, Your Honour.

DAWSON J: Which otherwise you would say was mere hearsay

and you would have to call the plaintiff then to

convert it from hearsay into fact.

MS KIEFEL:  Yes, Your Honour, and we would say that, indeed,

was what RAMSAY V WATSON addressed although it was not - as we have said, it was only obiter in

passing, at page 648.

DAWSON J:	The citation is?
MS KIEFEL:	I am sorry, Your Honour, (1961) 108 CLR 642 at

648 in the last paragraph, Your Honours; the

background being, Your Honours, that a government

medical officer gave evidence of what other persons

had told him and the Court said there:

A sounder argument for admitting evidence

of what the men had told thE. examining doctor

might have been that it was part of the material

on which he formed the opinion that he gave in

evidence. When a physician's diagnosis or

opinion concerning his patient's health or

illness is receivable, he is ordinarily

allowed to state the "history" he got from

the patient. This practice accords with what

seems to be ti.1e better opinion in the United

States:. see Wigmore on Evidence s. 688. It

matters not whether the person whose health is

in question was a regular patient of the doctor,

or whether the doctor saw him for the purpose of

qualifying as a witness. This, of course, is

quite a different matter from the rule last
discussed. That, in cases where it applies,

makes statements made to anyone concerning

present symptoms and sensations admissible

as evidence that those symptoms and sensations,

in fact, existed. This makes all statements

made to an expert ~itness admissible if they

are the foundation, or part of the foundation,

of the expert opinion to which he testifies;

but, except they be admissible under the first

rule, such statements are not evidence of the

existence in fact of past sensations, experiences

and symptoms of the patient. Hearsay evid~nce

does not become admissible to prove facts .

because the person who proposes to give it is

a physician. And, if the man whom the physician
examined refuses to confirm in the witness box

what he said in the consulting room, then the

physician's opinion may have little or no value,

for part of the basis of it has gone.

DEANE J: But that is all subject to the particular case.

I mean, take a case where the medical practitioner's

view is based partly on the fact that he pushed the

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patient above the navel and said, "Does that hurt?"

and the patient says, "Yes", it may well be that

in the conduct of the case counsel will say, "Well,

you need to lead evidence of that from the plaintiff".

But if nothing is said, it would be absurd at the

end of the case for counsel for the defendant to

get up and say, "Oh, you have got to disregard that

medical evidence because the plaintiff was not asked

did it hurt her when the doctor pushed her above the

navel".

MS KIEFEL:	Yes, Your Honour, there are no - - -
DEANE J:	It is all the way cases are conducted and objections
taken.
MS KIEFEL:	Yes, Your Honour, we would certainly agree that

there would be a large number of points in a case

where a decision is made not to really put the

other side to 100 per cent proof because it would

simply be inconvenient. However, Your Honour, in

this type of case, we would submit it is not the

type of peripheral and probably unimportant issue

that Your Honour was referring to in the case of

the patient being prodded to get a response. In

this case, and it cannot - - -

DEANE J:	But even if you be completely right in your legal
argument, one then comes to the question, "Well, now when the valuer's evidence of valuation was allowed
in without any objection, was the conduct of the
case such that that evidence evaluation was some
evidence upon which the master could act. Now,
the only way you can answer that is in the context of the conduct of the case.

(Continued on page 15)

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MS KIEFEL:  Certainly, Your Honour, the question of objection

or no~ if that cures the admissibility of the

evidence,that has to be seen in the conduct of

this particular case and we must rest our argument
there more strongly on the failure to be accorded
the opportunity to properly argue this in the

Full Court.

DEANE J:  Because did not your client, in effect, rely on

the valuation? ..... seek to detract from it but

the first step was to rely on the result.

MS KIEFEL:	Your Honour, we would submit to the contrary in full argument and we would submit that one of
the problems which has arisen out of the Chief Justice not hearing from the appellant on the question of failure to object was that His Honour was not
referred to the passage of evidence. That is to
say, when the evidence - the exhibit 8 - was first
referred to another witness, since His Honour made
much of the use of it in cross-examination, it
was never shown, it could never have been in the
appellant's counsel's mind that there was not going
to be properly admissible evidence brought. That
is to say if there was some election, as His Honour
seemed to think, on the part of the appellant's
counsel there was a distinct lack of the requisite
knowledge to make that election. But we would
say, in any event, that the conduct really did not amount to that. It was a very equivocal use
for other purposes with respect to another witness.

Those are our submissions, Your Honours.

WILSON J:  Thank you, Ms Kiefel. The Court does not require

to hear you,Mr Lyons.

MR LYONS:  Thank you, Your Honours.

WILSONJ: The Court is not persuaded that the case raises

any question of natural justice and that being

s~ having regard to the manner in which the trial

was conducted, the case does not raise any question

of general importance such as would warrant the

grant of special leave.

Special leave to appeal is therefore refused.

MR LYONS:	Your Honours, I would ask for costs.
WILSON J:	You cannot oppose that, Ms Kiefel?
MS KIEFEL:	No, Your Honours, I cannot.

WILSON J: Special leave is refused with costs.

AT 12.07 PM THE MATTER WAS ADJOURNED SINE DIE

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