Kyabram Property Investments Pty Ltd v Murray; Murray v Duddy

[2003] NSWSC 1086

CITATION:	Kyabram Property Investments Pty Ltd v Murray; Murray v Duddy [2003] NSWSC 1086
HEARING DATE(S):	03/11/03; 04/11/03; 05/11/03; 06/11/03; 10/11/03; 12/11/03; 13/11/03; 14/11/03
JUDGMENT DATE:	12 November 2003
JUDGMENT OF:	Shaw J
DECISION:	Evidence admitted.
CATCHWORDS:	Evidence - expert opinion evidence - applicable principles
LEGISLATION CITED:	Evidence Act 1995 (NSW)
CASES CITED:	Makita (Aust) Ltd v Sprowles (2002) 52 NSWLR 705; Ocean Marine Mutual Insurance Association (Europe) v Jetopay Pty Ltd [2000] FCA 1463;
PARTIES :	Kyabram Property Investments Pty Limited - First plaintiff and cross defendant North Central Securities Limited - Second plaintiff Wendy Jill Murray - First defendant and cross claimant (Kyabram) and Plaintiff Robert Ormiston Murray - Second defendant (Kyabram) Eric Keith Duddy - Defendant (Murray)
FILE NUMBER(S):	SC 12184/01; 12555/01
COUNSEL:	Mr D Conti, SC with Mr P Bolster - Plaintiff Mr J Wilson, SC with Mr R Evans - Defendant/Plaintiff (Murray) Mr P Hamill - Defendant
SOLICITORS:	Kell Moore Solicitors - Plaintiffs (Kyabram) McKell's Solicitors - Defendants/Plaintiff (Murray) Duncan Maclean - Defendant (Duddy)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Shaw J

12 November 2003

12184 of 2001


KYABRAM PROPERTY INVESTMENTS PTY LIMITED (First plaintiff)

and

NORTH CENTRAL SECURITIES LIMITED (Second plaintiff)

v

WENDY JILL MURRAY (Defendant)

and

ROBERT ORMISTON MURRAY (Second defendant)
12555 of 2001


WENDY JILL MURRAY (Plaintiff)

v

ERIC KEITH DUDDY (Defendant)
EX TEMPORE JUDGMENT ON ADMISSIBILITY OF AFFIDAVIT AND REPORT OF RICHARD VICTOR IVEY

1 Shaw J: The matter concerns the admissibility of a report entitled, Appraisal of Rural Loans for the Purchase of West Garawan, dated 31 July 2003, which is annexed to the affidavit of Richard Victor Ivey sworn on 5 August 2003. Mr Ivey is undoubtedly an expert given his qualifications in both agricultural science and accounting, his experience as a consultant and accountant over twenty-two years in practise and his involvement in agriculture and accounting generally.

2 Certain portions of the report have not been pressed by counsel for the respondent to the claim in question and, of course, they will not be regarded as being admitted into evidence.

3 In terms of the authorities I obviously would give great weight to what was said by Heydon JA in Makita (Australia) Ltd v Sprowles (2002) 52 NSWLR 705, especially at 743-744. Although it is true that the other members of the Court of Appeal constituting that court did not expressly embrace that analysis, nonetheless it is to be accorded respect by a trial judge.

4 I have also had regard to what was said by the Full Court of the Federal Court in Ocean Marine Mutual Insurance Association (Europe) v Jetopay Pty Ltd [2000] FCA 1463 at [23] where their Honours said that the evidence of an expert should:

expose the reasoning of its author in a way that would demonstrate that the opinions were based on particular specialised knowledge.

5 I think there is considerable force in the fundamental submission put by Mr Conti, SC, for the plaintiff (Kyabram) when he identifies difficulties with the report, which says that:

The plaintiffs maybe overlooked the shortcomings of West Garawan’s past financial position because of the encouraging cash flow budgets.

And also when it says that:

The plaintiff were [sic] aware of conflicting valuations for West Garawan at the time they were considering the Murray finance application.

6 There is a clear element of speculation in this opinion. Moreover, the knowledge of the plaintiff as to valuations and profit and loss analyses will need to be demonstrated to the Court by evidence extraneous to this report for the conclusions of Mr Ivey to have any weight.

7 Indeed, I think it is fair to say that the persuasive theme of the objection, which Mr Conti has mounted, is that the expert has been instructed and accordingly assumed that the plaintiff was in possession of certain budgetary documents or profit and loss statements at the time of the granting the loan in relation to the property in question.

8 However, Mr Wilson, SC, for the defendant (Mrs Murray), says to the Court that, although there may not be any positive or direct evidence that the plaintiff did have possession of those documents, he will seek to make out an argument based, in large part, on the inference that the Court should so conclude from all of the circumstances. If Mr Wilson fails in that endeavour, and if the Court cannot ultimately form that opinion, then significant aspects of the report would have little or, perhaps, no weight whatsoever.

9 Some aspects of the report are, in my view, not tainted by the questionable assumption as to the plaintiff’s knowledge and rather fall within traditional categories of evidence which accountants give to courts, analysing net profits both past and projected.

10 At this stage, before submissions and before the evidence is concluded, I do not think it appropriate to exclude the report altogether and I think that the Court may be further enlightened by the cross-examination of the expert witness, submissions about whether the factual conclusions that Mr Wilson propounds as to the access of the plaintiff to the relevant documents are correct or not, and also submissions about the weight that should be given to any particular aspects of the report, if any.

11 I also add that insofar as the report contains portions that might be said to go to the ultimate issue in this case, I would apply the discretion in s 80 of the Evidence Act 1995 so as to allow that material, accepting the proposition of Mr Conti that there is no absolute rule that ultimate issue evidence must be admitted but is certainly not necessarily inadmissible as a result of that statutory provision.

12 With those significant reservations and with the deletions that have been effected by consent I would provisionally admit into evidence the affidavit of Richard Victor Ivey and the annexed report.

oOo

Last Modified: 11/25/2003