In the Matter of Enviro Energy Australia Pty Ltd (in liquidation)

[2010] NSWSC 1217

CITATION:	In the Matter of Enviro Energy Australia Pty Ltd (in liquidation) [2010] NSWSC 1217 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	23 September 2010
JUDGMENT DATE :	23 September 2010
JURISDICTION:	Equity
JUDGMENT OF:	White J
EX TEMPORE JUDGMENT DATE:	23 September 2010
DECISION:	Annexure A rejected.
CATCHWORDS:	EVIDENCE – admissibility of market assessment as to property value – whether admissible under business records exception in Evidence Act 1995 (NSW), s 69 –whether business record admissible under s 69 subject to opinion rule – evidence excluded under opinion rule – no evidence of author’s qualifications, compliance with Expert Witness Code of Conduct, or assumptions for opinion – alternatively, evidence excluded under s 135
LEGISLATION CITED:	Evidence Act 1995 (NSW)
CATEGORY:	Procedural and other rulings
CASES CITED:	Ringrow Pty Ltd v BP Australia Ltd [2003] FCA 933 Young v Coupe [2004] NSWSC 546 Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320 Hadid v Australis Media Ltd (Supreme Court of New South Wales, Sperling J, 28 October 1996, unreported) Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379) Jackson v Lithgow City Council [2010] NSWCA 136 Quick v Stoland Pty Ltd (1998) 87 FCR 371 Jackson v Lithgow City Council [2008] NSWCA 312 R v Whyte [2006] NSWCCA 75 Roach v Page (No 15) [2003] NSWSC 939
PARTIES:	Applicant: Michael Ayoub 1st Respondent: Chief Commissioner of State Revenue 2nd Respondent: Bruce Gleeson (Liquidator of defendant) Interested Parties: Perpetual Trustee Company Limited and Challenger Managed Investments Limited
FILE NUMBER(S):	SC 2009/290836
COUNSEL:	Applicant: J R Young 1st Respondent: n/a 2nd Respondent: M Hayter Interested parties: D Gasic
SOLICITORS:	Applicant: Good Legal Pty Ltd 1st Respondent: Matthews Folbigg 2nd Respondent: Gillis Delaney Lawyers Interested Parties: Norton Rose

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Thursday, 23 September 2010

2009/290836 In the Matter of Enviro Energy Australia Pty Ltd (in liquidation)

JUDGMENT - (re admissibility of annexure A to report of Mr Cachia)

1 HIS HONOUR: The liquidator objects to annexure A to Mr Cachia's report. In his report Mr Cachia assumes that the company's real property is to be valued at between $5,500,000 and $6,000,000. He does so on the basis of what he calls a valuation prepared by Laing & Simmons in April 2010 which he says places a value of that range on the property.

2 The document described by Mr Cachia as a valuation of Laing & Simmons is the annexure to which objection is taken. It is not expressed by Laing & Simmons to be a valuation. It is expressed to be a market assessment. Mr Shalala, who describes himself as principal of Laing & Simmons of Wollongong, states his opinion of the range of prices within which the property could be expected to sell. There is no evidence of Mr Shalala's qualifications. There is no evidence that he is a qualified valuer.

3 If the opinion rule applies to the document, then s 76 of the Evidence Act 1995 (NSW) makes the evidence of Mr Shalala's opinion not admissible to prove the existence of a fact about the existence of which the opinion is expressed. That is so unless s 79 applies. That section allows the admission of opinion evidence from persons with suitable training, study or experience provided that the opinions are based wholly or substantially on knowledge so derived. It was not contended that if the opinion rule applies, s 78 would be relevant.

4 It is clear that if the opinion rule applies, the opinion would not be admissible under s 79. There is no evidence at all of Mr Shalala's training, study or experience. There is for example no material showing what Mr Shalala's experience or training or study may have been in relation to commercial properties of the kind in question. The process of reasoning is not exposed in the document. The assumptions upon which Mr Shalala’s opinion is based are not exposed.

5 Mr Young, who appears for the applicant, Mr Ayoub, submits that the document is admissible as a business record and on that basis the opinion rule does not apply. In my view that approach does not accord with the structure of the Evidence Act by which relevant evidence is prima facie admissible, but may be excluded if any of a number of exclusionary rules, such as the hearsay rule, opinion rule, tendency rule, or credibility rule, applies.

6 Section 69 is an exception to the hearsay rule. If it is satisfied the hearsay rule does not exclude the admissibility of a document. There is nothing in the language of s 69 which directly addresses the opinion rule, and it is clear from s 111 that the hearsay rule can apply to evidence of an opinion. How it can apply is illustrated by cases such as Ringrow Pty Ltd v BP Australia Ltd [2003] FCA 933 and Young v Coupe [2004] NSWSC 546.

7 It is true that in Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320, Austin J held (at [212]-[216]) that the opinion rule did not apply to documents admitted as business records pursuant to s 69. His Honour said that the better view was that the opinion rule in ss 76-79 applied only to testimonial evidence, that is, evidence given in court, and not to out of the court opinions. That view does not accord with earlier decisions (e.g. Hadid v Australis Media Ltd (Supreme Court of New South Wales, Sperling J, 28 October 1996, unreported); Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379). As Basten JA said in Jackson v Lithgow City Council [2010] NSWCA 136 at [59] the statutory basis may be doubted for his Honour's conclusion that financial records admitted pursuant to the business records exception to the hearsay rule are not subject to the opinion rule. In Quick v Stoland Pty Ltd (1998) 87 FCR 371, Branson J, when speaking of the admission of financial records pursuant to s 69, observed they were admissible as evidence as proof of the matters of fact conveyed by the accounts (at 377). (See also Jackson v Lithgow City Council [2008] NSWCA 312 at [37], [44]-[47]; R v Whyte [2006] NSWCCA 75 at [29]-[36].)

8 In my view whether or not the annexure A to Mr Cachia’s report is admissible as a business record, it is excluded by the opinion rule. In any event I would exclude it pursuant to s 135 of the Evidence Act on the grounds that its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party and might be misleading. That is because, as I have said, Mr Shalala's qualifications do not appear. The matters stated are not described as an expert's opinion. There is no reason to think that Mr Shalala expressed the opinion having regard to the requirements of the Expert Witness Code of Conduct. The assumptions upon which his opinion is based are not properly exposed.

9 I should also add that I doubt that in any event the document is admissible as a business record. It appears to be more a product of Laing & Simmons’ business rather than a record of its business or a record of the defendant company's business (see Roach v Page (No 15) [2003] NSWSC 939).

10 For these reasons I reject annexure A.

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22/10/2010 - Corrections to "Solicitors" field - Paragraph(s) 0