Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8)
[2014] VSC 567
•20 NOVEMBER 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2009 09222
| LINDA HUDSPETH | Plaintiff |
| v | |
| SCHOLASTIC CLEANING AND CONSULTANCY SERVICES PTY LTD & ORS | Defendants |
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JUDGE: | DIXON J | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 20, 21 MAY 2013 | |
DATE OF RULING: | 20 NOVEMBER 2014 | |
CASE MAY BE CITED AS: | HUDSPETH v SCHOLASTIC CLEANING AND CONSULTANCY SERVICES PTY LTD & ORS (No 8) | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 567 | |
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PRACTICE AND PROCEDURE – Overarching obligations - Duties of experts to court– Expert Code of Conduct – Duties of legal practitioners to court – Overarching obligation to disclose existence of documents – Overarching obligation not to mislead or deceive - Whether breach of overarching obligations by expert witness and by legal practitioners instructing that expert in preparation of report and giving evidence - Sections 16, 17, 21, 26 and 29 Civil Procedure Act 2010 (Vic).
LEGAL PRACTITIONERS – Overarching obligations – Duties of legal practitioners to court - Whether breach of overarching obligations by legal practitioners instructing an expert and leading evidence from that expert – Overarching obligation to disclose existence of documents – Overarching obligation not to mislead or deceive - Sections 16, 17, 21, 26 and 29 Civil Procedure Act 2010 (Vic).
EXPERT WITNESS – Overarching obligations – Duties of experts to court– Expert Code of Conduct – Whether breach of overarching obligations by expert witness when preparing report giving evidence – Overarching obligation not to mislead or deceive - Sections 16, 17, 21, 26 and 29 Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No appearance | Slater & Gordon Ltd |
| For the First Defendant | Mr J Gleeson SC and Ms C M Symons of counsel | Minter Ellison |
| For the Second Defendant | Mr D Masel SC of counsel | Wotton & Kearney Lawyers |
| For ISS Hygiene Services Pty Ltd formerly the Third Defendant | Mr C Madder of counsel | Lander & Rogers |
| For Clark, Toop & Taylor and Patricia F.Y. Toop | Mr G A Worth of counsel | Moray & Agnew |
| For Mark Francis Dohrmann | Mr D Williams SC and Mr S Wooley of counsel | Law 554 |
| For John B. Richards SC | Mr J W S Peters SC and Ms J M Frederico | DLA Piper |
| For Andrew D.B. Ingram | Mr DV Aghion | Colin, Biggers & Paisley |
TABLE OF CONTENTS
Introduction
Issues
Findings
Procedural developments
The statutory scheme
The regulation of experts other than by the Civil Procedure Act
The evidence
Issues for explanation
Instructions to Mr Dohrmann
Mr Dohrmann’s first version of his report
Mr Dohrmann’s second version of his report
Service of reports
ISS joins the proceeding
Events before Mr Dohrmann’s evidence at the trial
The application to exclude Mr Dohrmann’s evidence
Mr Dohrmann’s evidence at trial
Unsatisfactory features of the report
Mr Ingram
Relevant background to the civil procedure reforms in 2010
Experts
Lawyers
Overarching obligation not to mislead or deceive
Statement of the obligation
Finding – Mr Richards SC
Finding – Mr Dohrmann
Finding – Clark Toop & Taylor
Overarching obligation to disclose existence of documents
Statement of the obligation
The requirement of knowledge
Mr Richards SC
Clark Toop & Taylor
Finding – s 26 obligation
The application by ISS
ISS submissions
Analysis
Background observations concerning remedies
Non-party Costs orders
Sanctions for contravening the overarching obligations
Developments since submissions were made
Conclusion and orders
HIS HONOUR:
Introduction
The first defendant employed the plaintiff as a cleaner. Her cleaning duties included a boys’ toilet at the second defendant’s school. On 27 April 2005, the plaintiff was confronted with a mess of liquid soap that had emanated from the soap dispensers in the toilet, which appeared to her to have been vandalised. When cleaning up the spill, the plaintiff slipped, which she contended was a cause of her injuries. The various events related to her injury played out over three days; 27-29 April 2005.
The plaintiff commenced proceedings against her employer and the school on 24 September 2009. Her proceeding included claims, in summary, against the plaintiff’s employer for failing to provide her with a safe system of work as a cleaner, against the school as the occupier of the premises where the accident occurred and against the supplier and maintainer of a soap dispenser that was vandalised, whom I shall refer to as ‘ISS’. There were cross claims between defendants. The VWA commenced recovery proceedings against the school on 26 October 2009.
Following a trial that commenced on 13 November 2012, a jury of six returned verdicts of no negligence. In the proceeding, the plaintiff claimed damages for personal injury following a slip when cleaning a mess of liquid hand washing soap on the floor and walls of a boy’s toilet at a secondary school. At the trial, the plaintiff called evidence from Mr Mark Dohrmann, a professional consulting engineer, with qualifications in mechanical engineering who had a forensic practice in the field of occupational health and safety since 1976. Mr Dohrmann signed, and sent out before the trial commenced, three differing versions of his report. The first and second versions of the report were each dated 9 April 2010 and the third version was dated 12 November 2012. The plaintiff’s evidence about the accident varied significantly from what Mr Dohrmann reported. The existence of different versions of his report emerged during his evidence.
During the trial, all claims against, and by, ISS were compromised. On 30 November 2012, such claims were dismissed with no order as to costs. On 12 December 2012 in this proceeding, I entered judgment for the remaining defendants.
Clark, Toop & Taylor Lawyers (a firm) were the plaintiff’s solicitors in the proceeding.[1] I was concerned that there were circumstances surrounding the third version of Mr Dohrmann’s report that required explanation, in the context of whether Mr Dohrmann and the plaintiff’s solicitors had discharged their paramount duty to the court. I was concerned that the solicitors and the expert may not have properly discharged their overarching obligations to the court to act honestly at all times, not to engage in conduct that was deceptive or misleading and to disclose the existence of documents.
[1]The plaintiff is now represented by Slater & Gordon Ltd, which apparently acquired the practice of Clark, Toop & Taylor.
When pronouncing judgment, I noted in ‘Other Matters’, amongst other things, that:
C.The court considers there are prima facie grounds in this proceeding on which the court might be satisfied that Mark Francis Dohrmann of 200 Mount Alexander Road, Flemington, 3031 Victoria and Clark, Toop & Taylor Lawyers (a firm), 67 Jeffcott Street, West Melbourne, 3003, Victoria (Ms Patsy Toop) have contravened an overarching obligation under any or all of ss 16, 17, 21 or 26 of the Civil Procedure Act 2010 (Vic) in relation to the circumstances surrounding a third version of a report of Mark Francis Dohrmann that are identified in the evidence transcribed at pages 601-626, 664-686, 687-786, the file marked D1I(MFI), the submissions transcribed at 1481-1493, 1519-1534, 1590-1609 and the ruling at 1609-1615.
D.Pursuant to s 29(2)(b) of the Civil Procedure Act 2010 (Vic) the court proposes, on its own motion to consider whether any order under s 29(1) of the Act should now be made in the interests of justice.
I ordered and directed that:
3Mark Francis Dohrmann and Clark, Toop & Taylor, a firm, attend before the court at 9.30 am on Wednesday 30 January, 2013 for directions to be given for the hearing and determination of the court’s motion that an order under s 29(1) of the Civil Procedure Act 2010 be made against them or either of them.
4The solicitors for the second defendant shall by 15 January serve a copy of this judgment on Mark Francis Dohrmann and Clark, Toop & Taylor.
5Any application by any party pursuant to s 29 of the Civil Procedure Act 2010 shall be made returnable before me at 9.30 am on 30 January 2013.
In summary, when the solicitors explained that all of the dealings that appeared to concern the court had occurred between counsel retained to conduct the trial and Mr Dohrmann, it became clear that for the court to properly appreciate the relevant circumstances, counsel should also explain their conduct. Mr J Richards SC, senior counsel for the plaintiff at trial, volunteered a frank affidavit of explanation. I then directed that Mr J Richards SC and Mr A Ingram of counsel also attend before the court in relation to the matter and I further directed that Mr Ingram file an affidavit of explanation.
There are two matters that I will deal with at the outset. Once I had the opportunity to determine the content of the applications being made by parties and the evidence admitted on those applications and in respect of the court’s own motion, based on Mr Ingram’s unchallenged explanation of his limited involvement and role in the subject circumstances, which I will later explain, I was not persuaded that there was a basis to make any finding that Mr Ingram had breached his paramount duty to the court or any overarching obligations under the Civil Procedure Act2010 (Vic). During the hearing, I informed Mr Ingram’s counsel that I would make this finding and excused Mr Ingram from further attendance.
At the same time, I was also satisfied that there was no basis remaining for the court to be concerned about any contravention by any person of s 17 of the Civil Procedure Act, the overarching obligation to act honestly at all times in relation to a civil proceeding. As I will later explain, in the absence of further explanation, the evidence before the jury could have supported an inference that the third version of Mr Dohrmann’s report had been backdated, as although dated 12 November 2013 it may have been created during the trial which had commenced on 13 November 2013. During the hearing, I informed counsel that I would make the finding that the report was not backdated, and was created prior to the commencement of the trial, and that it was not necessary to address any issue of possible breach of s 17 of the Civil Procedure Act.
Issues
The following eight issues remain to be resolved. Issues one to three arise inter partes, on ISS’s application, and issues four to eight arise on the court’s own motion.
1.Did Mr Dohrmann’s conduct, in relation to the first and second versions of his report, breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding, under s 21 of the Civil Procedure Act.
2.Did Clark, Toop & Taylor’s conduct, in relation to the first and second versions of Mr Dohrmann’s report, breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding.
3.Did Clark, Toop & Taylor in relation to the first and second versions of Mr Dohrmann’s report, breach the overarching obligation to disclose the existence of documents under s 26 of the Civil Procedure Act.
4.Did Mr Richards in relation to the third version of Mr Dohrmann’s report, breach the overarching obligation to disclose the existence of documents.
5.Did Mr Richards, in relation to the third version of Mr Dohrmann’s report and in leading evidence from Mr Dohrmann, by his conduct breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding.
6.Did Mr Dohrmann, in relation to the third version of his report, by his conduct when preparing his report and giving his evidence, breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding, whether by failing to adhere to the Expert Code of Conduct or otherwise?
7.Did Clark, Toop & Taylor, by Ms Toop’s conduct in relation to the third version of Mr Dohrmann’s report, breach the overarching obligation to disclose the existence of documents under s 26 of the Civil Procedure Act.
8.Did Clark, Toop & Taylor, concerning Mr Dohrmann’s evidence, by Ms Toop’s conduct in relation to the third version of Mr Dohrmann’s report, breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding.
Findings
I will first summarise my conclusions on each of these issues before setting out relevant procedural matters, the evidence, my findings on the evidence and explaining my reasons for the conclusions I have reached.
It is not necessary to decide whether Mr Dohrmann, in relation to the first and second versions of his report, owed or breached the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding under s 21 of the Civil Procedure Act.
It is not necessary to decide whether Clark, Toop & Taylor in relation to the first and second versions of Mr Dohrmann’s report, owed or breached the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding under s 21 of the Civil Procedure Act.
It is not necessary to decide whether Clark, Toop & Taylor in relation to the first and second versions of Mr Dohrmann’s report, owed or breached the overarching obligation to disclose the existence of documents under s 26 of the Civil Procedure Act.
Mr Richards, in relation to the third version of Mr Dohrmann’s report, breached his paramount duty to the court, in particular the overarching obligation to disclose the existence of documents under s 26 of the Civil Procedure Act and the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding under s 21 of the Civil Procedure Act, concerning Mr Dohrmann’s evidence.
Mr Dohrmann, in relation to the third version of his report, breached the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding, and he failed to adhere to the Expert Code of Conduct.
Clark, Toop & Taylor, by Ms Toop’s conduct in relation to the third version of Mr Dohrmann’s report, breached the overarching obligation to disclose the existence of documents under s 26 of the Civil Procedure Act, but did not breach the overarching obligation not to engage in misleading or deceptive conduct in respect of a civil proceeding under s 21 of the Civil Procedure Act.
Procedural developments
On 1 January 2011, the relevant provisions of the Civil Procedure Act 2010 (Vic) commenced operation. The Act affected both the content of the duties owed by legal practitioners and expert witnesses to the court and to others involved in a civil proceeding, and the remedies available on breach of such duties, including the principles concerning non-party costs orders.[2]
[2]Compare Modra v Victoria [2012] FCA 240; (2012) 205 FCR 445, 455 [31]; Mijac Investments Pty Ltd v Graham [2013] FCA 296, [45] –[49]; Kuek [2012] FCA 494, [12] – [18].
Of its own motion, the court called the matter on for directions and ordered that –
(a)any party to the proceeding contending for an order under s 29(1) of the Act in her or its favour, file and serve any application and affidavit in support;
(b)Mr Dohrmann and Clark, Toop & Taylor positively depose to the circumstances that they contend demonstrate compliance with their paramount duty to the court, particularly the overarching obligations arising under ss 17 and 21, and additionally for the solicitors s 26 of the CPA, the rules of civil procedure, particularly r 44.03(3), and the expert witness code of conduct.
I gave reasons for making these directions[3] that need not be repeated in full. I would now emphasise my view that the paramount duty that is owed to the court by legal practitioners and expert witnesses entitles the court, in the first instance, to an explanation of circumstances that, if not explained, raise a serious question whether there has been a failure to discharge the paramount duty to the court.[4] At the same time, procedural fairness requires that the responding persons have proper notice of the complaint made and a full and sufficient opportunity to answer it.
[3]Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors (No 4) [2013] VSC 14 (4 February 2013).
[4]Compare, in the context of disciplinary proceedings the observation of Tobias JA, with Bryson JA agreeing in NSW Bar Association v Meakes [2006] NSWCA 340, [70]-[78], (6 December 2006).
To address these concerns, I set out in my reasons a summary of relevant matters about which findings could be drawn by a finder of fact from the evidence before the jury.[5] I then set out, in summary form, the topics or specific matters that should be addressed in providing an explanation to the court.[6] Further, I stated[7] -
Thereafter, once all participants have explained what occurred, the court will be in a position to give notice of the type of order being contemplated and the relevant aspects of the conduct of Mr Dohrmann and Clark, Toop & Taylor that might constitute a contravention of an overarching obligation. If further clarification then be needed, the court can then inform Mr Dohrmann and Clark, Toop & Taylor of the grounds on which it appears to the Court that costs have been incurred or wasted arising from a contravention of an overarching obligation. In the circumstances of this proceeding, it is at this next stage that the guidance afforded by Shire of Gisborne v King becomes important.
[5]Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors (No 4) [2013] VSC 14 (4 February 2013), [27]–[31].
[6]Ibid, [33].
[7]Ibid, [26] [citations omitted].
The application proceeded on two bases; the court’s own motion originated by the judgment of 12 December 2012, and two inter partes summons. The employer filed a summons on 24 January 2013 that sought ‘remedies under the Civil Procedure Act pursuant to Section 29’ and ‘orders as the court considers appropriate’. On this application on 17 May 2013 orders, by consent, were made withdrawing it with no order as to costs. ISS filed a summons on 22 February 2013 that was directed to the parties, Mr Dohrmann and Clark, Toop & Taylor. ISS did not join Mr Richards or Mr Ingram to its summons. ISS sought orders[8] that:
[8]At trial ISS made clear that it did not contend any breach of overarching obligations under ss 16 and 17 of the Civil Procedure Act, which were referred to in the summons but were abandoned.
1.Should the Court make a finding that the plaintiff’s lawyers, Clark Toop & Taylor and/or the plaintiff’s expert, Mark Dohrmann have contravened any or all of sections 21 or 26 of the Civil Procedure Act 2010 (Vic) (Act), then the third defendant and third party seeks remedies pursuant to s 29(1) of the Act that those persons, to the extent of such contravention or contraventions.
(a)pay some or all of the third defendant and third party’s legal costs or other costs or expenses arising from the contravention or contraventions; and/or
(b)compensate the third defendant and third party for any financial loss or other loss which was materially contributed to by the contravention or contraventions.
2. Such further or other Orders as the Court may think fit.
The ISS application extended the scope of the inquiry. Of its own motion, the court directed inquiry into the circumstances surrounding the third version of Mr Dohrmann’s report and proposed that its inquiry would be within the parameters outlined in the ruling of 4 February 2013, recognising that the circumstances surrounding the preparation of the first and second versions of the report relevantly informed the circumstances of the preparation of the third version of the report. However, ISS’s application was limited to matters arising out of the first and second versions of the report.
The school did not seek any specific order in its favour other than costs in connection with this inquiry.
The other person with an interest in this matter was the plaintiff herself. At a directions hearing on 30 January 2013, Mr Worth of counsel, for Clark, Toop & Taylor, undertook to the court to inform Clark, Toop & Taylor that I required that the plaintiff be informed of this application and of her right to have separate legal representation in case she has an interest that she wished to pursue. At a directions hearing on 28 March 2013, Mr Gillies QC, who then appeared with Mr Worth, informed me that the plaintiff had been given a full set of documents by his client, and advice as to the nature of the application. The plaintiff was advised to seek independent legal advice if at all troubled by any part of the information she had received. Clark, Toop & Taylor, now Slater & Gordon Ltd, still acted for the plaintiff, who had appealed the judgment at trial. Mrs Hudspeth has not appeared or made any application and Clark, Toop & Taylor filed and relied on an affidavit that she provided to them. I accept counsel’s assurances that Mrs Hudspeth was informed of the nature of the application and of her right to independent advice, but I was not informed as to whether she elected not to participate in this application on the basis of independent advice.
On reflection, I was not persuaded that the procedure adopted by Clark, Toop & Taylor was sufficient in the circumstances. However, subsequent developments have avoided any need to inquire whether Mrs Hudspeth’s failure to participate in this application was consequent on proper independent advice.
The statutory scheme
The main purposes of the Civil Procedure Act 2010 include providing for an overarching purpose in relation to the conduct of civil proceedings, to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. The Act provides, inter alia, for overarching obligations for participants in civil proceedings to improve standards of conduct in litigation.
The Act has its origins in a reference given by the Victorian Government to the Victorian Law Reform Commission in September 2006 to undertake a review of the civil justice system and the Commission presented its Civil Justice Review Report[9] in March 2008.
[9][2008] VLRC 14.
The participants in a civil proceeding, which means any proceeding in a court other than a criminal proceeding or quasi-criminal proceeding and includes an action for damages before a judge and a jury of six, are determined by reference to s 10 of the Act. That section states:
(1) The overarching obligations apply to—
…
(b)any legal practitioner or other representative acting for or on behalf of a party;
(c) any law practice acting for or on behalf of a party;
…
(3)The overarching obligations (other than the overarching obligations specified in sections 18, 19, 22 and 26) apply to any expert witness in a civil proceeding.
Expert witness is a defined term.[10] Section 16 provides that each person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to any civil proceeding in which that person is involved.
[10]S 3 of the Civil Procedure Act.
The overarching obligations that are presently relevant are stated by ss 21 and 26, which are in the following terms:
21 Overarching obligation not to mislead or deceive
A person to whom the overarching obligations apply must not, in respect of a civil proceeding, engage in conduct which is—
(a) misleading or deceptive; or
(b) likely to mislead or deceive.
26 Overarching obligation to disclose existence of documents
(1)Subject to subsection (3), a person to whom the overarching obligations apply must disclose to each party the existence of all documents that are, or have been, in that person's possession, custody or control—
(a) of which the person is aware; and
(b)which the person considers, or ought reasonably consider, are critical to the resolution of the dispute.
(2) Disclosure under subsection (1) must occur at—
(a)the earliest reasonable time after the person becomes aware of the existence of the document; or
(b) such other time as a court may direct.
(3) [Not relevant for present purposes]
This application concerns contravention of overarching obligations.
Part 2.4—Sanctions for Contravening the Overarching Obligations
28 Court may take contravention of overarching obligations into account
(1)In exercising any power in relation to a civil proceeding, a court may take into account any contravention of the overarching obligations.
(2)Without limiting subsection (1), in exercising its discretion as to costs, a court may take into account any contravention of the overarching obligations.
29 Court may make certain orders
(1)If a court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, the court may make any order it considers appropriate in the interests of justice including, but not limited to—
(a)an order that the person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of the overarching obligation;
(b)an order that the legal costs or other costs or expenses of any person be payable immediately and be enforceable immediately;
(c)an order that the person compensate any person for any financial loss or other loss which was materially contributed to by the contravention of the overarching obligation, including—
(i)an order for penalty interest in accordance with the penalty interest rate in respect of any delay in the payment of an amount claimed in the civil proceeding; or
(ii) an order for no interest or reduced interest;
(d)an order that the person take any steps specified in the order which are reasonably necessary to remedy any contravention of the overarching obligations by the person;
(e)an order that the person not be permitted to take specified steps in the civil proceeding;
(f)any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations.
(2) An order under this section may be made—
(a) on the application of—
(i) any party to the civil proceeding; or
(ii)any other person who, in the opinion of the court, has a sufficient interest in the proceeding; or
(b) on the court's own motion.
(3)This section does not limit any other power of a court to make any order, including any order as to costs.
There are issues concerning the application of the Act to conduct that occurred in early stages of the proceeding. Chapter 2 of the Act commenced operation on 1 January 2011.[11] The relevant transitional provisions are found in ss 72 and 73. Section 72 provides that if a civil proceeding has commenced before the commencement of Part 2.1 of Chapter 2, on and from the commencement of that Part, the overarching purpose applies in relation to that proceeding. Section 73 provides that if a civil proceeding has commenced before the commencement of Parts 2.2 to 2.4 of Chapter 2 but the court has not begun to hear and determine that proceeding, on and from the commencement of that Part, the overarching obligations apply in relation to that proceeding.
[11]The Civil Procedure Act 2010 was assented to on 24 August 2010 and came into operation on 1 January 2011: Government Gazette, 14 October 2010, page 2404.
This proceeding commenced before 1 January 2011 but the court had not begun to hear and determine the proceeding on that date. The overarching purpose and the overarching obligations apply in relation to the proceeding on and from 1 January 2011.
Each of Mr Richards SC, Ms Toop, and Clark Toop & Taylor had a paramount duty to the court to further the administration of justice in this proceeding on and from 1 January 2011 as persons to whom the overarching obligations applied, which required that they each observe the normative standards of conduct prescribed by the overarching obligation not to mislead or deceive, and the overarching obligation to disclose the existence of documents.
Mr Dohrmann, as an expert witness, had a paramount duty to the court to further the administration of justice in this proceeding on and from 1 January 2011 as a person to whom the overarching obligations applied, which required that he observe the normative standard of conduct prescribed by the overarching obligation not to mislead or deceive.
The regulation of experts other than by the Civil Procedure Act
When the first and second versions of the report were prepared, the relevant rules governing the preparation and use of expert evidence in civil proceedings were set out in Order 44 of the Supreme Court (General Civil Procedure) Rules 2005 and the Expert Code of Conduct. The Code is found in Form 44A to the Rules. The Rules are now supplemented by the Civil Procedure Act. Order 44 defines ‘expert’ in the same terms as the Act.[12] It prohibits a party, save with the leave of the court or by consent of the parties affected, except in cross-examination, from adducing any expert evidence at the trial of a proceeding unless the substance of the evidence is contained within a report or reports which the party has served under the Order. The relevant procedural requirements are that the engaging party, as soon as practicable after the engagement of the expert and before the expert makes a report under this Rule, provide the expert with a copy of the Code. The expert’s report, prepared in accordance with r 44.03(2), must be served on each other party not later than 30 days before the day fixed for trial. I might add that it is now commonplace for the court to direct that the parties exchange experts reports at an earlier time, particularly to assist with alternative dispute resolution.[13]
[12]See r 44.01 and s 3 of the Civil Procedure Act, 2010.
[13] Since these events, amendments to the Civil Procedure Act2010 now provide that a party must seek direction from the court as soon as practicable if the party intends to adduce expert evidence at trial or becomes aware that the party may adduce expert evidence at trial. (s 65G of the Act commenced operation on 24 December 2012).
The report, which must be signed by the expert, must state the opinion of the expert and must state, specify or provide inter alia, an acknowledgement that the expert has read the Code and agreed to be bound by it and a declaration that the expert has made all the enquiries which the expert believes are desirable and appropriate; and that no matters of significance which the expert regards as relevant have, to the knowledge of the expert, been withheld from the Court. Rule 44.03(3) is relevant and I shall set it out:
(3)If the expert provides to a party a supplementary report, including a report indicating that the expert has changed his or her opinion on a material matter expressed in an earlier report -
(a)that party shall forthwith serve the supplementary report on all other parties; and
(b)in default of such service, the party and any other party having a like interest shall not use the earlier report or the supplementary report at trial without the leave of the Court.
The Code is in the following terms:
Expert Witness Code of Conduct
1.A person engaged as an expert witness has an overriding duty to assist the Court impartially on matters relevant to the area of expertise of the witness.
2. An expert witness is not an advocate for a party.
3.Every report prepared by an expert witness for the use of the Court shall state the opinion or opinions of the expert and shall state, specify or provide … [the matters set out in r 44.03(2), the relevant parts of which have been referred to in the preceding paragraph].
4.Where an expert witness has provided to a party (or that party's legal representative) a report for the use of the Court, and the expert thereafter changes his or her opinion on a material matter, the expert shall forthwith provide to the party (or that party's legal representative) a supplementary report which shall state, specify or provide the information referred to in paragraphs (a), (d), (e), (g), (h), (i) and (j) of clause 3 of this code and, if applicable, paragraph (f) of that clause.
5. If directed to do so by the Court, an expert witness shall—
(a) confer with any other expert witness; and
(b)provide the Court with a joint report specifying (as the case requires) matters agreed and matters not agreed and the reasons for the experts not agreeing.
6.Each expert witness shall exercise his or her independent judgment in relation to every conference in which the expert participates pursuant to a direction of the Court and in relation to each report thereafter provided, and shall not act on any instruction or request to withhold or avoid agreement.
The evidence
Issues for explanation
The issues raised for explanation, and on which I proposed to consider making findings, were identified in the following sources:
(a)In paragraph C of ‘Other Matters’ in the judgment of 12 December 2013 referring to the evidence transcribed at pages 601-626, 664-686, 687-786, the file marked D1I(MFI),[14] the submissions transcribed at 1481-1493, 1519-1534, 1590-1609 and the ruling at 1609-1615 of the transcript;
(b)my rulings of 4 February and 9 April 2013;[15]
(c)the ISS summons filed on 22 February 2013; and,
(d)various affidavits, which I will shortly identify.
[14]Mr Dohrmann’s file.
[15][2013] VSC 14 and Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd & Ors (No. 6) [2013] VSC 159.
Mr Dohrmann’s applications previously made at directions hearings, for a statement of claim, or points of claim, or detailed particulars, which were supported by the solicitors, were not renewed at the hearing. No such application was made at the hearing for Mr Richards SC. No application was made to cross-examine any deponent, save that Mr Dohrmann’s counsel cross-examined Mr Michael Kavanagh, a solicitor, who gave evidence on behalf of ISS. That evidence, and the cross-examination, did not concern the nature, or particulars, of the allegations and addressed causation issues. The responding parties each submitted that the scope of the court’s inquiry of its own motion not extend beyond the matters referred to in the earlier rulings. No responding party contended that he or it did not understand, for the purposes of filing explanatory material, cross-examining the deponents of affidavits filed by others, or making submissions to the court, the contentions made against him or her or the issues on which I proposed to consider making findings.
The following affidavits were read.
(a)Affidavits of Michael Montegu Kavanagh, sworn 22 February 2013, 27 February 2013 and 16 May 2013.
(b)Affidavit of John Bennett Richards, sworn 13 March 2013.
(c)Affidavits of Mark Francis Dohrmann, sworn 22 March 2013 and 6 May 2013.
(d)Affidavits of Patricia Faye Westray Toop, sworn 22 March 2013 and 6 May 2013.
(e)Affidavit of Linda Hudspeth, sworn 27 March 2013 (and filed on behalf of the solicitors).
(f)Affidavit of Martin Alan Gannoni, sworn 19 April 2013.
(g)Affidavit of Andrew Reiner Seiter, sworn 22 April 2013.
(h)Affidavit of Andrew Donald Beardsworth Ingram, sworn 3 May 2013.
Further, it was agreed that in addition to those parts of the transcript of proceedings at trial that are referred to above, I would have regard to the whole of the evidence of Mr Dohrmann at transcript pages 601-626 and 664-786. I will refer to the evidence given by Mr Kavanagh before me in its proper context in due course.
On this material, I will now state my findings about the relevant events and the explanation proffered for them.
Instructions to Mr Dohrmann
Mr Dohrmann was engaged to express expert opinion about the human factors in design, work and movement, including the actions and effects of forces, with particular reference to the employer’s system of work and, also, on the functioning of machines and structures, including the actions and effects of forces, with particular reference to the condition of the premises. An important aspect of the latter was the presence of soap dispensers on the walls above the hand troughs that were the source of the spill of liquid soap.
In February 2010, Mr Travis Fewster, a solicitor then employed by Clark Toop & Taylor, instructed Mr Dohrmann to prepare an expert report providing an assessment of the workplace and the circumstances in which the plaintiff was injured. Mr Dohrmann was instructed that the plaintiff’s accident had occurred on the afternoon of 27 April 2005 when cleaning up a spill of liquid soap from a vandalised soap container. Mr Dohrmann was invited to consider that ‘the school was in fact aware of previous incidents of vandalism in the toilet block and in particular to the dispensers’. The materials provided to Mr Dohrmann included ‘affidavits’.
Both Mr Fewster and the plaintiff attended a site inspection with Mr Dohrmann, during which Mr Dohrmann obtained further instructions directly from the plaintiff, and he recorded some brief handwritten notes on the outside of a manila folder. The plaintiff, in her affidavit for this hearing, recalled instructing Mr Dohrmann about prior acts of vandalism at the school and previous attempts to vandalise the soap dispensers, which included trying to set them on fire. At trial, the plaintiff’s evidence about vandalised soap dispensers was ‘they had burnt one of the soap dispensers’ about which the plaintiff explained:
I think it was the day of the fall that I saw the soap dispenser had a burn mark on it and in the trough itself there was a pile of burnt tissues and a box.
Following the site inspection, Mr Dohrmann prepared a report.
Mr Dohrmann’s first version of his report
Mr Dohrmann’s report dated 9 April 2010, (‘the first report’), was emailed to Mr Fewster. His report identified the sources of information from which it was compiled; including Mr Fewster’s letter of instructions, the plaintiff’s affidavit sworn 11 December 2008 and an interview with the plaintiff on site on 15 February 2010. Section 4 of the report recited assumed facts upon which Mr Dohrmann’s opinion was based. Two aspects of the assumed facts are now significant. First, the timeline of the assumed facts (in terms of what had occurred on which of the three days) was both confused and inaccurate. Second, Mr Dohrmann made the following statements:
4.23It is understood that the soap dispensers had been fitted to the walls in this toilet perhaps six months before the date of the accident, in response to a request from the student council, who had complained at the lack of availability of soap in the toilets.
4.24Ms Hudspeth said that she had not previously seen any evidence of vandalism or missing soap dispensers during the few months over which they had been installed.
There were obvious discrepancies between the recitals of the timeline and content of the events in the assumed facts and the timeline and content of the events set out in the information with which Mr Dohrmann had been instructed. Further, his statement that Mrs Hudspeth had not previously seen any evidence of vandalism or missing soap dispensers was inconsistent with the assumption that Mr Fewster had specifically instructed him to make in that regard. I pause to observe that if he looked at Mr Dohrmann’s first report at all, Mr Fewster did not notice these discrepancies or Mr Dohrmann’s failure to acknowledge the instruction he received. There was neither an affidavit from Mr Fewster, nor an explanation from any party, about his contemplation of Mr Dohrmann’s report when he received it, or any other matter.
Mr Fewster immediately on 9 April 2010 provided a copy of the first report to the solicitors for the employer and for the school. On 10 May 2010, a copy of the first report was provided to the solicitors for the VWA.
Mr Dohrmann’s second version of his report
The VWA’s solicitor, Mr Siedal, observed an inconsistency in Mr Dohrmann’s report, referring to the statement ‘no previous incidence of vandalism in toilet block’ in paragraph 4.24, and telephoned Mr Fewster on 30 June 2010 to inform him. The following day, Mr Fewster called Mr Dohrmann’s office. His diary note suggests that Mr Fewster spoke to ‘Gay’ and then received an amended version of the report (the second version).
Mr Dohrmann was not consulted on the amendments made to the first version of the report. He established that Ms Gainore Atkins of his office made those changes after speaking with Mr Fewster. On the mistaken assumption that the only change made was the deletion of the words ‘not’ and ‘any’ from cl 4.24, Mr Dohrmann suggested that it was common practice for members of his staff to liaise with solicitors in correcting typographical and other minor errors.
In fact, in the second version of the report, cl 4.24 read, with changes tracked:
Ms Hudspeth said that she had
notpreviously seenanyevidence of vandalism on theor missingsoap dispensers during the few months over which they had been installed, to which she had advised her employer.
Either Mr Fewster dictated this statement or Ms Atkins composed it. Without further explanation, I consider it probable that Mr Fewster dictated the changes he wanted and I do not accept that such changes could be regarded as correcting typographical and other minor errors.
Mr Dohrmann filed a second affidavit on this application to confront the fact that the changes made to cl 4.24 were more extensive than he had initially suggested. In this affidavit he stated that he was informed by Ms Atkins and believed that her recollection was that she called the document up on the computer, typed in the amendments as requested by Mr Fewster and then saved the revised document. In the process, the original form of the report was overwritten.
Five observations can be made about this process. First, Mr Dohrmann accepts that Ms Atkins acted with his authority and he accepts responsibility for the second version of his report. Second, the date of the report was not changed and no note was added informing the reader that the report was revised on 1 July 2010. Third, section 3 of the report where Mr Dohrmann’s sources were recorded, was not amended to record that additional instructions were provided orally by the solicitors on 1 July 2010. Fourth, the changes that were made to the text of the report were not tracked or otherwise identified. Fifth, the fact that the report was amended was disguised by the overwriting process, by which an electronic copy of the first version was lost.
Upon receipt of the second report, Mr Fewster again immediately served a copy on the solicitors for the employer, the school and the VWA, baldly stating ‘We enclose, by way of service, updated report of Mark Dohrmann & Partners dated 9 April 2010’. At this stage, an Order 44 statement of an intention by the plaintiff to adduce that evidence at trial did not accompany the reports.
In her affidavit[16], Ms Toop stated:
Although I was the supervising partner responsible for the file at the time of the service of the two reports bearing the date 9 April 2010, Mr Fewster had the day-to-day conduct of the file and I was unaware, and Mr Fewster did not communicate to me, that the two reports dated 9 April 2010 had a difference at paragraph 4.24, and thereafter in the management of the file, and until the events that took place during Mr Dohrmann’s evidence in chief, I was unaware that there were in fact two different reports dated 9 April 2010.
[16]Sworn 22 March 2013.
Ms Toop’s usual practice was to send Mr Dohrmann’s reports to her clients for comment and on occasions a client would communicate that there were errors, usually pertaining to the ‘assumed facts’. In those circumstances, Ms Toop would ordinarily write to Mr Dohrmann and ask that he consider amending the assumed facts in his report. Mr Dohrmann gave evidence of his practice of receiving information from his instructors about basic factual errors, typos and the like after publishing a report. His usual practice in such instances was to consider the requested amendments and, if appropriate, adopt them into a revised or final report.
The plaintiff specifically recalled instructing Mr Fewster that Mr Dohrmann’s first report was incorrect, because it recorded that she had not seen any evidence of prior vandalism at the second defendant’s premises, which was untrue. Around June of 2010, she told Mr Fewster that she had seen evidence of prior vandalism and Mr Dohrmann’s report would need to be amended.
Notwithstanding this evidence of ‘usual practice’, I find it probable that the circumstances in which the second version of the report came into existence were as I have described at [50]-[53]. The file of Clarke Toop & Taylor reveals no note of Mrs Hudspeth’s specific instructions to Mr Fewster and there is no note or communication evidencing the ‘usual practice’ that was deposed to by Ms Toop, apart from the diary note of Mr Fewster’s attendance on Mr Siedal on 30 June 2010 and his attendance on Gay at Mr Dohrmann’s office on 1 July 2010.
Service of reports
The proceeding was listed for trial on 14 October 2010. On 5 October 2010, the plaintiff’s solicitors served an Order 44 statement notifying the plaintiff’s intention to call expert evidence from Mr Dohrmann, the substance of which was as set out in his report dated 9 April 2010, as attached to the Order 44 notice. The first version of his report was attached to that notice. The trial did not proceed on that date.
Prior the first trial date, the employer was served with the first version of the report by letter dated 12 April 2010 and the second version of the report by letter dated 1 July 2010. Its solicitors were also served with the Order 44 statement attaching the first version of the report on 6 October 2010 and a copy of the Court Book prepared by the plaintiff’s solicitors containing that Order 44 statement and report was served on 12 October 2010.
The solicitors for the school also received the first and second versions of Mr Dohrmann’s report on 13 April and 2 July 2010 respectively. However, the solicitors were also served as follows:
(a)In the recovery proceeding, the VWA served an Order 44 statement attaching Mr Dohrmann’s second version report on 5 July 2010.
(b)The plaintiff’s solicitors served a bundle of reports on 31 August 2010 that included a copy of Mr Dohrmann’s second version report
Mr Andrew Reiner Seiter, the solicitor with the conduct of the proceeding for the school, said that the differences between the two versions of the reports were neither known nor detected by the school or its legal team. The Court Book that was served for the October 2010 trial contained the first version of Mr Dohrmann’s report, but that Court Book was not copied and provided to counsel. Both the Court Book and counsel’s briefs for the November 2012 trial contained only the second version of Mr Dohrmann’s report. Mr Seiter believed, and I accept, that none of the legal representatives for the school were aware that two different versions of Mr Dohrmann’s 9 April report existed until Mr Dohrmann’s evidence in chief at trial.
ISS joins the proceeding
After the first trial date was vacated, ISS was joined into the proceeding, initially by the school as a third party and then by the plaintiff, as the third defendant.
ISS was joined into the proceeding in the following circumstances. On 19 October 2011, the school’s solicitors wrote to the plaintiff’s solicitors noting Mr Dohrmann’s criticism of the fastening and installation of the soap dispensers in the school. It was likely that the focus of the solicitor’s concern was section 7 of Mr Dohrmann’s report, ‘Discussion and Analysis’, which remained unchanged through the different versions. The school’s solicitors observed that the school had relied on the skill and judgment of ISS, which had installed, and was responsible for maintaining, the soap dispersers. The school’s solicitors stated that, despite serving Mr Dohrmann’s report, the plaintiff made no allegations against the school in respect of the installation of soap dispensers and had not joined ISS into the proceeding. The school contended that part of Mr Dohrmann’s opinion was irrelevant. Further, if allegations were made by the plaintiff that made such an opinion relevant, the school would issue a third party proceeding against ISS, noting that the relevant limitation period would soon expire.
On 8 November 2011, the plaintiff’s solicitors rejected the contention that any part of Mr Dohrmann’s report was irrelevant but, that said, ISS ‘probably should be a party to this proceeding … our view is that clearly your client is in a better position than our client to formulate the required pleadings and once we have reviewed a Third Party Notice we will be in a position to obtain instructions’. In December 2011, third party proceedings were duly issued and served and the plaintiff joined ISS as third defendant in the proceeding in January 2012.
That Mr Dohrmann’s opinions were the basis for this joinder was further explained in Calderbank correspondence in October 2012.[17] In that correspondence, the school’s solicitors stated to ISS’s solicitors:
As you are aware, we joined your client to the proceeding as a third party on the basis of a report relied on by the plaintiff, namely the report of Mr Mark Dohrmann, dated 9 April 2010. Relying on Mr Dohrmann’s report, the plaintiff alleged our client, the Roman Catholic Trust Corporation for the Archdiocese of Melbourne, was negligent. The plaintiff’s lawyers would not agreed (sic) not to rely on Mr Dohrmann’s opinions in its claim against our client.
[17]No party suggested that any issue of ‘without prejudice’ privilege arose in connection with the disclosure of that correspondence on this application.
The crux of Mr Dohrmann’s opinion affecting this issue was his criticism of the fastening and installation of the soap dispensers in the school by ISS, which the school contended was not its responsibility but that of ISS. Mr Dohrmann’s criticisms of the methods of installation and fastening of the soap dispensers are unchanged between the first and second versions of his report. While the school’s solicitors did not appreciate that there was any difference between the two versions of Mr Dohrmann’s report, ISS’s solicitors were only served with the second version by the school’s solicitors. Paragraph 7.7 of Mr Dohrmann’s report notes, curiously in the first version because of the form of paragraph 4.24, that the school was on notice, by the plaintiff’s prior report, that a soap dispenser had disappeared from the wall and had possibly been torn off.
Following its joinder as a third defendant, ISS was not served with any Order 44 statements or reports in respect of Mr Dohrmann’s evidence by the plaintiff’s solicitors. Ms Toop did not dispute ISS’s claim that the plaintiff served no Order 44 statements, or reports in respect of Mr Dohrmann’s evidence. Rather she argumentatively set out a basis to draw an inference that the school’s solicitors were in possession of both versions of Mr Dohrmann’s report, effectively inviting an inference that responsibility for the failure to provide ISS with the first version of Mr Dohrmann’s report lay with the school’s solicitors.
The plaintiff’s further, further amended further amended statement of claim (sic), dated 8 December 2011, included in the particulars of negligence against ISS the method of installation of the soap dispensers, the failure to recommend soap dispensers that would not be pulled from the wall, the supply of soap dispensers that could be pulled from the wall, the failure to install soap dispensers that were designed to be tamper-proof and the failure to respond adequately or at all to previous damage to soap dispensers and resultant mess. Although in opening to the jury, the plaintiff’s counsel referred to the duty of ISS to use reasonable care in affixing the dispensers, it was clear that the issues raised in the pleadings remained relevant.[18]
[18]An application was made during the trial that the plaintiff could not establish a duty of care against ISS and that such claims should be withdrawn from the jury and dismissed. This application was argued in part, pending the completion of evidence, but not ruled on because the proceeding against ISS was compromised.
I accept Mr Kavanagh’s unchallenged statement that Clark, Toop & Taylor served none of the three versions of the report on ISS, and the school’s solicitors only served the second version on it. I am satisfied that at no stage prior to Mr Dohrmann’s evidence in chief, was ISS aware of the first version of Mr Dohrmann’s report.
Events before Mr Dohrmann’s evidence at the trial
Mr Richards SC was briefed, with Mr Ingram, to appear for the plaintiff at the trial that commenced on 13 November 2012. In preparing for the trial, Mr Richards foresaw a forensic difficulty arising from a variance between the assumed facts that were set out in Mr Dohrmann’s report dated 9 April 2010 (the second version) and the plaintiff’s instructions. Mr Richards decided that one way of addressing the forensic difficulty was to ask Mr Dohrmann to assume facts in keeping with the plaintiff’s statement dated 7 June 2005 and see what effect, if any, this had upon his opinion.
In the afternoon of 12 November 2012, Mr Richards contacted Mr Dohrmann who was not available to take his call. He told Mr Dohrmann’s secretary that he wished Mr Dohrmann to consider a different set of assumed facts from those set out in his report of 9 April 2010, and he explained the changes that he wished Mr Dohrmann to make to the assumed facts. Mr Richards identified his requested changes in both a post-it note, apparently made by Mr Dohrmann’s secretary and found in Mr Dohrmann’s file during cross-examination at trial, and in Mr Dohrmann’s third version of the report dated 12 November 2012.
Mr Dohrmann identified Ms Jasmine Morris as the member of his staff with whom Mr Richards spoke and who took the note on a post-it note of the changes required in the assumed facts. Ms Morris made the changes, as requested by Mr Richards, to the copy of the report then saved on the computer system, the second version, and saved the amended report as a new document, which became the third version. Ms Morris marked the date as 12 November 2012, amended the office reference number on the front of the report cover (to include her initials) and left it for Mr Dohrmann to check on his return to the office.
Mr Dohrmann reviewed Ms Morris’ note and considered the requested amendments. His opinions with respect to the incident did not change on the altered assumed facts. Mr Dohrmann then rang Mr Richards. The two men agreed on the content of this conversation. Mr Richards explained that the new assumptions came from the plaintiff’s statement made several years ago which should have been provided to him. I pause to note that the plaintiff’s affidavit of 11 December 2008, but not the plaintiff’s statement of 7 June 2005, was originally provided to Mr Dohrmann in 2010. Mr Dohrmann said he had examined the changes that had been phoned through and that they did not affect any opinions he had previously expressed. Mr Richards asked Mr Dohrmann to send to Mr Richards a revised report incorporating these factual changes. Mr Richards also said he would forward a copy of the June 2005 statement to Mr Dohrmann prior to him giving evidence.
Although the statement deals with the circumstances of the incident in which the plaintiff was injured in greater detail than the affidavit, there are obvious inconsistencies in the plaintiff’s version of the incident between the affidavit and Mr Dohrmann’s assumed facts in the April 2010 versions of his report. Either Mr Dohrmann did not carefully consider his instructions or did not exercise appropriate care in setting out the assumptions on which is opinion was based. The plaintiff’s June 2005 statement, made some six weeks after the incident, was the basis for the revision of the assumed facts for the third version of the report, but Mr Dohrmann had not seen it when he signed off and published that third version. Mr Richards sent a copy of that statement to Mr Dohrmann early in the afternoon of 15 November 2012. During the morning session in court that day, counsel for the employer had completed their cross-examination of the plaintiff.
At 6.28 pm on 12 November 2012, the third version of the report was emailed by Mr Dohrmann to Mr Richards. The email is addressed solely to Mr Richards and contains the message, ‘Here it is, John’, but it contains a curious postscript.
Ps – Gary – I don’t know who currently has carriage of Linda Hudspeth’s matter (it had been Travis Fewster). I have just got back this afternoon from a trip, and learnt that John Richards needed the attached amended report immediately (he’s opening in the morning) – so I took the liberty of sending this update directly. Hope that is ok? Perhaps you could also on forward this communication to whoever is looking after the matter at CCT.
Mr Dohrmann stated, and I accept, that he intended to also include Mr Gary Clark, a partner of Clark Toop & Taylor, in the email communication but did not do so. Clark Toop & Taylor never received the email or a copy of the third version of the report from Mr Dohrmann, but he presumed that the third version would be duly served on the other parties to the proceeding by the solicitors before Mr Dohrmann gave his evidence.
After Mr Richards had spoken to Mr Dohrmann he telephoned Ms Toop and informed her of that conversation. Mr Richards informed Ms Toop that he had asked Mr Dohrmann to prepare a further report. Ms Toop’s recall of this conversation was that ‘Mr Richards said words to the effect “Mr Dohrmann may prepare another report”’.
Having carefully considered what is said by each of Mr Richards and Ms Toop about this conversation, the terms of the exhibited documents and the circumstances surrounding the preparation of the affidavits, I prefer Mr Richards’ evidence that he told Ms Toop that Mr Dohrmann had been asked to prepare a further report and, later that evening, he assumed that it had been sent by Mr Dohrmann to Clark, Toop & Taylor. It is improbable that Mr Richards would not have done so, because, apart from the postscript to the email, giving instructions to expert witnesses and then dealing administratively with the report fall within the province of the solicitor.
Between instructing Mr Dohrmann to amend his report and receiving the third version, Mr Richards began to doubt his forensic decision. On the basis of Mr Dohrmann’s indication that the different assumed facts did not change his opinions, Mr Richards decided to lead Mr Dohrmann’s evidence of those opinions by putting the plaintiff’s evidence to him as his assumed facts and not leading evidence of the assumptions set out in the report. Mr Richards admitted that he was proceeding on what he called a mistaken reading of r 44.03(3). Mr Richards considered that a supplementary report need only be served where an expert changed his opinion on a material matter expressed in an earlier report. Mr Richards believed that he had an option as to whether or not to serve the third version of the report. I am not inclined to accept those untested statements of belief.
I am not persuaded that the full substance of conversations between Mr Richards and Ms Toop concerning the third version of Mr Dohrmann’s report were revealed. Mr Richards believed that Ms Toop knew he had sought the report from Mr Dohrmann and that she had received a copy of it. Mr Richards, when he opened his client’s case, was in two minds as to whether or not to serve the third version of the report and he continued to consider that matter as the trial progressed. On the other hand, believing that Ms Toop had received Mr Dohrmann’s third version, and that she was aware that leave would be required to rely upon a late produced report and that the sooner the report was served on other parties the better the prospects of obtaining leave, some further communication between Ms Toop and Mr Richards seems probable.
No extension of time was sought. Had an extension of time been sought, I may have refused to extend time, because ISS was aware of the material facts on which its claim that there had been a breach of an overarching obligation was founded, when it compromised the proceeding.
For these reasons, ISS’s application will be dismissed. I add that, in these circumstances, it is unnecessary to determine whether the conduct identified by ISS surrounding the second report is conduct in contravention of the Civil Procedure Act, which commenced operation on 1 January 2011, or whether there is a causal nexus between that conduct and the claim for costs.
Background observations concerning remedies
Non-party Costs orders
This is an exceptional jurisdiction in that a non-party costs order will only be made where the interests of justice justify a departure from the general rule that only parties to proceedings may be subject to costs orders.[122] In most cases, it will be prima facie unjust to award costs against a non-party and as a matter of discretion[123] the circumstances in which an order will be made are confined. Confinement has been expressed using a variety of epithets[124] to the effect that the jurisdiction is exceptional, but exceptional in this context may mean no more than outside the ordinary run of cases.[125]
[122]Naomi Marble & Granite Pty Ltd v FAI General Insurance Co Ltd [1991] Qd R 518, 544; Vestris v Cashman (1998) 72 SASR 449, 468.
[123]As opposed to a matter of jurisdiction - see Knight v F P Special Assets Ltd (1992) 174 CLR 178, 203.
[124]They include ‘with considerable caution’ (Symphony Group Plc v Hodgson [1994] QB 179, 193), ‘sparingly’ (Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26, (2001) 179 ALR 406, 413), ‘when exceptional circumstances make such an order reasonable and just’ (Murphy v Young & Co’s Brewery plc [1997] 1 All ER 518, 531), ‘special circumstances’ (Knight v F P Special Assets Ltd (1992) 174 CLR 178, 203), ‘exceptional circumstances’ (Flinn v Flinn [1999] VSCA 134, [24]) and ‘rarely appropriate’ (Metalloy Supplies Ltd (in liq) v MA (UK) Ltd [1997] 1 All ER 418, 424). See Professor Dal Pont’s discussion of the nature of the discretion in Law of Costs, 2nd ed, Lexis Nexis Butterworths, [22.16].
[125]Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807, [25] (Lord Brown); Globe Equities Ltd v Globe Legal Services Ltd [1999] BLR 232, 239–240 (Morritt LJ).
The factors identified in the cases as relevant to the exercise of the discretion include –
(a)The non-party’s connection both with the proceeding and with the incurrence of the costs. As Gobbo J explained in Bischof v Adams,[126] this involves an inquiry into the connection between both the non-party and the proceeding, which is a necessary but not a sufficient condition for the exercise of the discretion, and the causal connection between the non-party and the costs. A non-party will not ordinarily be held liable for costs that would have been incurred without the non-party’s involvement. That connection must be real and direct.
(b)Whether the non-party could have been joined as a party to the proceedings. A costs order against a non-party who could have been joined will only be made in exceptional circumstances, because of the failure of the party seeking the costs order to have afforded to the non-party the protections conferred by rules of court.[127] Similarly, whether the non-party was warned that costs might be sought against it may be relevant.
(c)Whether the conduct of the non-party was unnecessary or unreasonable. Plainly, improper conduct may influence the discretion but proof of a want of good faith or of improper conduct is not a necessary condition for exercise of the jurisdiction.[128]
(d)Whether the party that would ordinarily be liable for costs can meet a costs order and, possibly, the reasons for any inability to do so. This in turn may raise the question of whether security for costs was, or ought to have been sought at an early stage in the proceeding.[129]
[126][1992] 2 VR 198, 205.
[127]Symphony Group Plc v Hodgson [1994] QB 179, 193; Vestris v Cashman (1998) 72 SASR 449, 468.
[128]Vestris v Cashman, ibid, 467; Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807, [33]; Re Bonlac Foods Ltd [2001] VSC 75, (2001) ACSR 457, 463; Health & Life Care Ltdv SA Asset Management Corp (1995) 18 ACSR 153, 163–164.
[129]Vestris v Cashman, ibid, 457-458, 468, 472.
Where the costs liability of a legal practitioner is in issue, r 63.23 is relevant. The rule provides that where a solicitor (or a barrister) for a party has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the court may order that costs as between solicitor and client be disallowed or that the practitioner repay to the client the whole or part of any money paid on account of costs. The court may also order that the practitioner pay to his or her client all or any of the costs which the client has been ordered to pay to any party, or that the practitioner pay all or any of the costs payable by any party other than the client.
It is plain enough from the Victorian Law Reform Commission’s Civil Justice Review Report that it was against the background[130] that the legislature enacted s 29 of the Civil Procedure Act.[131] The Commission noted that existing sanctions included criticism by a court that might result in a loss of credibility and a reduced prospect of further work as an expert witness, costs orders against an expert, disciplinary proceedings by a relevant professional body, charges for contempt or perjury and/or the expert’s costs might be disallowed either as between party and party, or between expert and client.[132] The Commission recommended that the availability of these alternative sanctions, or the traditional rationale for witness immunity, should not prevent its recommended overarching obligations and sanctions for breach of those obligations applying to expert witnesses.
[130]Save for the abolition of a witness’s immunity from suit in the UK by Jones v Kaney, which was in 2011.
[131]See chapter 3 of the Report.
[132]Ibid, [3.5.2].
The position of lawyers and experts at common law has been significantly affected by the enactment of the Civil Procedure Act in 2010. Section 29 of the Act has effected a significant statutory change to the law through the power to sanction breaches of the overarching obligations, including by compensation orders.
Sanctions for contravening the overarching obligations
The jurisdiction to impose sanctions for contravening overarching obligations is broadly exercised in three ways. Any contravention of the overarching obligations may be taken into account by a court, first, exercising any power[133] in relation to a civil proceeding and, second, in exercising its discretion as to costs.[134] Third, s 29, which is set out above, empowers the court with a wide discretion to make any order it considers appropriate in the interests of justice.
[133]Consistently with s 8 of the Civil Procedure Act.
[134]S 28 of the Civil Procedure Act.
Counsel contended, and I agree, that even if the discretion is enlivened by a finding that on the balance of probabilities, a person has contravened an overarching obligation, the court is not required if in a proper exercise of its discretion the course is not warranted, to make any order or any of the particular orders specified in s 29 of the Civil Procedure Act. There are two stages in the exercise of the discretion. Should any order be made and, if so, what order should be made?
The court’s jurisdiction to make orders, being undefined in terms, is as broad, wide and deep as the statutory context and the particular circumstances demand. I commence with the caveat noted by LJ in Gardner v Jay:[135]
... when a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view of indicating the particular grooves in which the discretion should run, for if the Act or the Rules did not fetter the discretion of the Judge why should the Court do so?
[135](1885) 29 Ch D 50, 58.
The statutory framework in which it sits primarily conditions the discretion. Section 8 is important as it expressly emphasises the question: will the making of an order under s 29 of the Civil Procedure Act give effect to the overarching purpose? Section 29(1) then sets out the orders that may be made to further the overarching purpose in making an order and s 29(2) sets out the matters to which the court may have regard, although s 29(3) provides that the statutory list is not an exclusive list. The court may, in my view, take account of any matter that arises out of the circumstances of the application, whether that is arising out of the proceeding, or is a matter personal to the person who is subject to the overarching obligation.
The particular types of order identified by s 29 are:
(a)costs orders – s 29(1)(a) & (b);
(b)compensation orders – s 29(1)(c);
(c)directive orders that persons take, or not take, specified steps in a proceeding – s 29(1)(d) and (e);
(d)orders ‘in the interests of’ prejudicially affected persons – s 29(1)(f).
Apart from ISS, whose application will be dismissed, the defendants have not sought any particular order for costs, compensation, directive orders, or orders ‘in the interests of’ prejudicially affected persons. The employer withdrew its summons. The school made no application for any such order. There was no direct evidence of what costs arising from Mr Dohrmann’s evidence have been incurred by the employer and the school, either in the proceeding generally or more specifically arising from the presentation of his evidence in court. Inferences may reasonably be drawn.
No defendant called evidence from an expert to contradict Mr Dohrmann’s evidence, and each can be taken to have intended to deal with the substance of his evidence by cross-examination. Preparation of that cross-examination was a necessary step in the trial and the extent of preparation does not appear to have been affected by these events. The conduct of the cross-examination was protracted by the breaches of the overarching obligation and the costs court could quantify the extent to which the costs can be attributed to the breaches.
Developments since submissions were made
There have been a number of significant developments since this matter was argued and I held back my reasons for judgment in anticipation that the plaintiff’s appeal might affect the proper orders to be made on this application. First, the plaintiff succeeded in her appeal and the judgment in favour of the defendants was set aside. Orders for the costs of the proceeding made after the conclusion of the jury trial in favour of the employer and the school were set aside. When the appeal succeeded, the plaintiff ceased to be the person most plainly affected by the breaches of overarching obligations.
Secondly, the plaintiff settled with the school on undisclosed terms shortly before the remitted proceeding being heard, and all claims against, and by, the school were dismissed with no order as to costs. Only claims against the employer remained.
Thirdly, the Court of Appeal made the following orders in respect of costs.[136]
[136]Hudspeth v Scholastic Cleaning & Ors [2014] VSCA 78 (16 April 2014).
(a)The costs of the trial already held were to be determined by me.
(b)The School was to pay the appellant’s costs of the appeal on a party/party basis up to 1 April 2013 and thereafter on a standard basis.
(c)The employer was to bear its own costs of the appeal.
(d)Mr J B Richards SC and Clark, Toop and Taylor:
(i)were to each indemnify the school for 40%, making 80% in total, of the school’s liability under order (b);
(ii)were disallowed any costs and disbursements to which they would otherwise be entitled in relation to this appeal; and
(iii)were to pay equally any legal costs and disbursements incurred by the appellant in relation to this appeal which she does not recover under order (b).
Whelan JA, with whom the other members of the court agreed, said;[137]
As to the position of the lawyers, r 63.23 of the Rules empowers the court to make orders against a solicitor or barrister in relation to costs which were improperly incurred, incurred without reasonable cause, or wasted by a failure to act with reasonable competence; s 29 of the Civil Procedure Act empowers the Court to make orders as to costs against a lawyer who contravenes any of the overarching obligations provided for in that Act. Amongst other things, there are overarching obligations to disclose critical documents and not to mislead. The rules applied at all relevant times. The Civil Procedure Act commenced on 1 January 2011. It was in operation during the trial. It was not in operation when the dealings which led to the two versions of the 9 April 2010 report occurred. In Yara, this Court emphasised the significant changes in approach to civil litigation which the Civil Procedure Act requires, particularly in relation to costs.
Each of the parties here bears responsibility for the mistrial. The second respondent’s senior counsel made statements to the jury in the course of his final address which went beyond what was justified by the evidence as it then stood. It is impossible to assess with any confidence what would have occurred if the explanation now given in relation to the 12 November 2012 report had been given at the trial. As to the appellant, in my view the fundamental cause of what went wrong in this trial, of which the unjustified statements by senior counsel for the second respondent were the culmination, was the manner in which the appellant’s lawyers dealt with the expert, Mr Dohrmann, and his reports. That would have been my conclusion had the issue been confined to what happened in relation to the 12 November 2012 report, but it is now fortified by what happened in relation to the two versions of the 9 April 2010 report. The first respondent is not ‘blameless’. It supported the second respondent on the discharge application and it also supported the second respondent on the appeal.
Tate JA added:[138]
It is important that Mrs Hudspeth herself not have to bear any costs of the appeal, including disbursements. The attribution of responsibility for the miscarriage of the first trial lies primarily with the second respondent, senior counsel for Mrs Hudspeth, and Mrs Hudspeth’s instructing solicitors. Given that Mrs Hudspeth succeeded on the appeal, it is only appropriate that in effect they each pay a proportion of Mrs Hudspeth’s costs.
[137]Ibid, [65]-[70].
[138]Ibid, [3].
Fourthly, I have determined in the remitted proceeding that the plaintiff is entitled to judgment against the defendant, her employer, for damages and my ruling in respect of the costs of the proceeding, including the jury trial, will shortly be known.
In an earlier ruling, I stated my view that the jurisdiction under s 29 is primarily compensatory, although I acknowledged that findings of breach of overarching obligations and orders under s 29 could have a punitive effect regardless of the object of the jurisdiction. That punitive effect can be significant.
In view of these further developments, and having now stated my findings, I will hear further argument from Clark, Toop & Taylor, Mr Dohrmann, Mr Richards SC, and the plaintiff should she choose to participate in the application, as to the appropriate orders to be made in the interests of justice pursuant to s 29 of the Act.
Without limiting the scope of orders that any party may wish to seek, those parties should address whether one or more of the following orders may be appropriate.
(a)an order that Clark, Toop & Taylor, Mr Dohrmann and/or Mr Richards SC compensate the plaintiff or the defendant for any financial loss or other loss which was materially contributed to by a contravention.
(b)an order that the fees, costs, and expenses to which Mr Richards SC, or Clark Toop & Taylor, or Mr Dohrmann might otherwise be entitled in the proceeding be disallowed in whole or in part.
(c)an order that Mr Dohrmann indemnify in whole or in part, Mr Richards SC, or Clark Toop & Taylor or the plaintiff in respect of costs ordered by the Court of Appeal to be paid by each of them.
(d)an order that Mr Richards SC, or Clark Toop & Taylor, or Mr Dohrmann pay any and if so what costs of the defendant or a former defendant.
(e)an order referring the matter to the Legal Services Board and the Institute of Engineers Australia.
Conclusion and orders
Nothing in this judgment should, or I believe will, deflect legal representatives, on instructions, from vigorously pursuing and arguing the most difficult cases. Further, nothing I say should be taken as discouraging legal representatives from acting for plaintiffs on a ‘no win no fee’ basis provided only, and always, that the absence of definite or certain remuneration for work being done never compromises the paramount duty nor the performance of overarching obligations, or, for that matter, the legal representative’s duty to his or her client. On the other hand, expert witnesses are encouraged to fearlessly accept that their fundamental role when giving evidence, and in preparation for doing so, is that described by their overarching obligations under the Act as complemented by the Expert Code of Conduct. Expert witnesses should discharge their duties to the court in that fashion, cognisant of the right and obligation and thus the protection afforded to them by s 12 of the Act.
I will order that the application by ISS Hygiene Services Pty Ltd be dismissed and will hear from counsel in respect of the costs of that application. I will also hear from the defendant and former parties that appeared on the application in respect of their costs on the s 29 motion.
I will make the following directions.
(a) I will adjourn the application for further argument in respect of the appropriate orders to be made under s 29 of the Civil Procedure Act against Ms Toop (Clark, Toop & Taylor Lawyers (a firm)), Mr Dohrmann and Mr Richards SC, to 1 December 2014 at 10:00am.
(b) Any outline of contentions by, or on behalf of, Ms Toop (Clark, Toop & Taylor Lawyers (a firm)), Mr Dohrmann, Mr Richards SC, or any other party that has appeared on the application, must be delivered to my chambers and served on other parties by 27 November 2014.
(c) Costs are reserved.
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