Mackie & Staff Pty Ltd v Glengollan Village for Aged People
[2007] VSC 201
•15 June 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 5760 of 2001
| MACKIE & STAFF PTY LTD (ACN 005 653 378) | Plaintiff |
| v | |
| GLENGOLLAN VILLAGE FOR AGED PEOPLE (ACN 006 179 906) | First Defendant |
| and | |
| JOHN ALLEN | Second Defendant |
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JUDGE: | HABERSBERGER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 13 AND 14 MARCH 2007 | |
DATE OF JUDGMENT: | 15 JUNE 2007 | |
CASE MAY BE CITED AS: | MACKIE & STAFF PTY LTD v GLENGOLLAN VILLAGE FOR AGED PEOPLE | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 201 | |
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Evidence – Admissibility of expert evidence – Application of relevant principles.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr GJ Digby QC with Mr P Bingham and Mr B Reid | Khor & Burr |
| For the First Defendant | Mr MG Roberts with Ms P Neskovcin | Deacons |
| For the Second Defendant | Mr CJ Delany SC with Mr R Andrew | DLA Phillips Fox |
HIS HONOUR:
This is an application by the first and second defendants to have all or part of six expert witness statements filed on behalf of the plaintiff ruled inadmissible.
The proceeding itself is a complicated building case in which the plaintiff, Mackie & Staff Pty Ltd (“Mackie”), sued the first defendant, Glengollan Village for Aged People (“Glengollan”), for a variety of causes of action arising out of a contract made on or about 4 October 1999 whereby Mackie agreed to construct certain additions and alterations to the existing aged care facilities on Glengollan’s property in Ferntree Gully and Glengollan agreed to pay Mackie the contract sum of $3,073,961. The causes of action included damages for wrongful termination/repudiation of the contract in July 2001; damages for breach of the contract in failing to provide drawings and other contract documents which were free of errors and omissions and prepared in accordance with the standards of a reasonably competent architect and which were reasonably necessary to enable Mackie to carry out and complete the works as required by the contract; extensions of time to the date for practical completion under the contract; a declaration that, by reason of numerous matters the fault of Glengollan or its architect, the nature and extent of the works differed fundamentally from that which was or could have been contemplated by the parties at the time when they entered into the contract and payment of a reasonable sum for Mackie’s costs of performing the works; and damages for false and misleading representations about the drawings to be provided to Mackie. The claim by Mackie against the second defendant, John Allen (“the Architect”) was also for damages for false and misleading representations about the the drawings to be provided to Mackie.
Glengollan counterclaimed against Mackie for damages for the cost of completing and rectifying the additions and alterations and for the delay in completing the work. Glengollan also claimed damages from the Architect in the event that it was found liable to Mackie.
Initially, the application related only to three expert witness statements which had been filed by the plaintiff prior to the delivery of lay witness statements. Whilst both defendants joined in the attack on each expert witness statement, they sensibly divided the primary responsibility between them. Thus, by a summons filed 21 March 2006 the second defendant sought an order that “the plaintiff’s expert witness statement of Stephen Lechner dated 29 October 2003 be struck out and removed from the Court file”, and by a summons filed 23 March 2006 the first defendant sought orders that the plaintiff’s expert witness statements of Bryan Gordon Eakins Miller and William Herbert Clarence Degenhardt “be struck out in whole or in part”.
At the hearing on 31 March 2006, counsel for the plaintiff argued that the applications were premature and should only be heard shortly prior to the witnesses giving evidence at the trial. Counsel for Glengollan submitted that it was appropriate to make the applications at this stage so that, if they were successful, Mackie would have time to mend its hand. Given the age and health of some of Glengollan’s witnesses, counsel was concerned to avoid any disruption to, or adjournment of, the trial. Counsel for the plaintiff submitted that, at the very least, the hearing of the two summonses should be adjourned to later in the year, after the lay witness statements had been exchanged. I upheld that submission on the ground that it was inappropriate to consider the question of whether or not the expert witness statements should be struck out in a vacuum, as it were. Regrettably, however, the plaintiff took considerably longer than anticipated to prepare its numerous lay witness statements, with the result that the further hearing of the two summonses did not occur until March 2007. By that time three additional expert witness statements had been filed by Mackie. They were the witness statements of John William Pinkerton, Steven Dickson and John Ronald Coghlan, all filed 1 November 2006. Notice was given by both defendants that orders would be sought that they also should “be struck out in whole or in part”. Again, the defendants divided the primary responsibility for each witness statement between them.
Once again, Mr Digby QC, who appeared with Mr Bingham of counsel and Mr Reid of counsel on behalf of the plaintiff, objected to the procedure adopted by the defendants. He submitted that it was still premature and that it involved the defendants being given two opportunities to criticise the plaintiff’s expert witness statements. Mr Roberts of counsel, who appeared with Ms Neskovcin of counsel on behalf of the first defendant, and Mr Delany SC, who appeared with Mr Andrew of counsel on behalf of the second defendant, both submitted that there were certain “threshold” points which could, and should, be dealt with at this stage. They submitted that it was not necessary to delay the consideration of their arguments until the trial. On that basis, I decided that I had to allow the defendants to proceed with their applications. However, as will be seen, I have concluded that virtually none of the objections, including the so-called “threshold” points, can be finally decided at this stage.
I turn then to deal with the submissions made in respect of each expert witness statement.
Stephen Lechner
Mr Lechner’s expert witness statement attached a report by him dated 27 October 2003. In that report Mr Lechner set out his qualifications and experience. He said that held a bachelors degree in civil engineering and a masters degree in business administration from the University of Illinois in the United States of America. Mr Lechner said that he had been analysing cost, performance and programming aspects of construction projects for over 20 years. He was currently a Principal in the Dispute Analysis and Investigations Group of PricewaterhouseCoopers LLP in San Francisco, where he led the Asia-Pacific Construction Advisory Services practice. He had worked for PricewaterhouseCoopers in Melbourne between January 2000 and September 2002. His curriculum vitae listed a number of projects in Victoria and the Asia-Pacific region on which he had worked.
Mr Lechner commenced his report by stating that he had performed the following tasks:
a.Analysed the number, nature and timing of changes that occurred on the Glengollan Project during the course of construction and provided observations regarding the effect of such changes on contractor and subcontractor performance;
b.Provided observations and conclusions as to whether the Project as originally tendered has materially changed from what ordinarily could have been expected by a builder given the information provided by the Architect at the time of the execution of the contract; and
c.Performed an independent assessment of costs incurred by Mackie in relation to the Glengollan Project and loss and damage amounts that may be claimed under a quantum meruit theory.
Mr Delany submitted that the whole of Mr Lechner’s “so called” expert witness statement should be removed from the file or not allowed into evidence. Mr Delany, supported by Mr Roberts, advanced numerous grounds of inadmissibility, which I have gathered into six separate categories.
First, Mr Delany submitted that in performing the second task, and to a lesser extent the first task, set out above, Mr Lechner had acted “as the Court itself”. Mr Delany referred to the conclusions in Mr Lechner’s report that:
(a)“the magnitude, pervasiveness and manner in which the modifications to the original Project documents were made could not have been reasonably anticipated by a contractor as at the time of providing a fixed lump sum tender quotation”;
(b)“Mackie was faced with a materially different construction process on the Project than it could have reasonably anticipated at the time of tender …”; and
(c)“through his actions and inactions, the Architect generally abdicated his responsibility to resolve numerous documentation conflicts, errors and/or omissions and shifted that responsibility to Mackie”;
in support of the submission that Mr Lechner had improperly usurped the role of the Court in deciding whether or not the unusual claim about a fundamental change in the nature and extent of the works under the contract had been made out. This was said to be “the fundamental complaint” about Mr Lechner’s report advanced on behalf of the second defendant.
Mr Delany submitted that it was not the function or role of the expert to supplant the function of the Court as decision maker. He referred to the decision in Arnotts Limited v Trade Practices Commission[1] where the Full Court of the Federal Court of Australia quoted with approval from Sir Richard Eggleston’s “illuminating” work, Evidence, Proof and Probability, including the following passage:
It is often said that an expert cannot give an opinion as to the ultimate fact that the court has to decide. This is inaccurate, as experts, especially valuers, often give evidence as to the ultimate fact, and in many cases the question whether that fact exists can be answered only by experts. ... What the rule really means is that an expert must not express an opinion if to do so would involve unstated assumptions as to either disputed facts or propositions of law.
[1](1990) 24 FCR 313 at 350 per Lockhart, Wilcox and Gummow JJ.
In RW Miller & Co Pty Ltd v Krupp (Australia) Pty Ltd[2], Giles J referred to the law’s attempt to set out rules confirming the giving of opinion evidence:
One such rule has been expressed in the terms that the expert may not give an opinion upon an ultimate fact in issue. It is almost impossible for a rule in those terms to be applied, there are many cases in which an expert has given such an opinion … A lesser restriction has been recognised, that the expert may not give an opinion on an ultimate issue where that involves the application of a legal standard – for example, that the defendant was negligent, that a risk was reasonably foreseeable, that a testator possessed testamentary capacity, that a representation was likely to deceive or that a publication was obscene.
[2](1991) 34 NSWLR 129 at 130.
Secondly, Mr Delany submitted that Mr Lechner had failed to identify and differentiate between those facts which he had assumed or accepted as correct and those facts which he had “observed” for himself to be true. Thus, it was said that Mr Lechner had not met the requirements of admissibility set out by Heydon JA in Makita (Australia) Pty Ltd v Sprowles:[3]
In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of "specialised knowledge"; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be "wholly or substantially based on the witness's expert knowledge"; so far as the opinion is based on facts "observed" by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on "assumed" or "accepted" facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of "specialised knowledge" in which the witness is expert by reason of "training, study or experience", and on which the opinion is "wholly or substantially based", applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v The Queen[4] on "a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise".
[3](2001) 52 NSWLR 705 at [85].
[4](1999) 197 CLR 414 at [41].
Thirdly, Mr Delany submitted that in developing his “factual framework” Mr Lechner had resolved for himself conflicts within the documents on which he had said he had relied, which comprised virtually the whole of the discovered material. Mr Delany argued that in his report Mr Lechner had neither identified points of conflict in the documents (although they were replete with conflicting assertions) nor specified which views he had favoured where the documents conflicted. It was further submitted by Mr Delany that Mr Lechner had developed his “factual framework” by reference to interviews with persons, a number of whom were unidentified, and to instructions and accounts of events not identified in or appended to his report. Mr Delany argued that Mr Lechner’s report was littered with references to instructions by Mackie, or Mackie’s accountants, and interviews with Mackie’s staff. Thus, Mr Delany submitted, it was plain that the role adopted by the witness was that of “litigation support” and the “preparation and analysis of claims”, which were skills claimed by him in his curriculum vitae. Moreover, it was acknowledged that the task for which PricewaterhouseCoopers and Mr Lechner had originally been engaged was that of providing “expert advice to the plaintiff in preparing its case”.[5]
[5]See paragraph 2 of the affidavit of Mark Lincoln sworn 28 February 2003 filed in this proceeding.
Fourthly, Mr Delany submitted that a further fundamental problem with the form of the report was that Mr Lechner referred to analysis by him without giving details of what was involved in such analysis. Without that, it was submitted that the defendants were unable to determine how, if at all, the “specialised knowledge” claimed by the witness by reason of his “training, study or experience” had been applied to the facts assumed or observed so as to produce the opinions propounded. Examples of the unexplained analysis by Mr Lechner were of the “the Miller statement”, “the RFIs, AIs and other documentation referenced as correcting and/or amending the drawings as described in the Miller statement and the plaintiff’s Room Reports”, “Project documents and information obtained through interviews with Mackie staff” and “Project documents as contained in Appendix A, the various reports and affidavits referenced previously and information obtained through interviews with Mackie staff.”
A fifth criticism was that in performing the third task set out above Mr Lechner had been asked to “explain and substantiate” the costs associated with Schedules 5, 7A and 9 to the statement of claim, which was simply asking him to attempt to prove this part of the plaintiff’s case. As was apparent from the report, this had involved Mr Lechner in interviewing Mackie staff, including its accountant. Mr Delany submitted that Mr Lechner had, however, also been involved in a meeting with various Mackie employees where discrepancies between timesheets and diaries were dismissed and that as a result of this “workshop process”, according to Mr Lechner, “the database associated with Mackie labour was adjusted to reflect the results of this meeting”. Mr Delany submitted that whilst such work might be appropriate or desirable for a litigation consultation it should not be performed by an expert witness.
Finally, Mr Delany submitted that Mr Lechner had adopted the role of an advocate in that his report consisted of argument rather than opinion. Counsel referred to a number of statements by Mr Lechner which were phrased in a tone critical of the Architect, such as:
The Architect generally abdicated his responsibility. …
The Architect’s approach to resolving documentation issues regularly frustrated the process.
On behalf of the plaintiff, Mr Digby submitted that, all but one of the above points, should be rejected and that Mr Lechner’s expert witness statement should be allowed to stand. The one concession made by Mr Digby was in respect of paragraph 134 of Mr Lechner’s report which referred to adjustments to the database to reflect the results of a meeting between Mr Lechner and employees of Mackie concerning discrepancies between timesheets and diaries. Mr Digby accepted that this issue needed to be addressed further by evidence specifically identifying what changes were made to the database. I agree and I consider that the appropriate order is that paragraph 134 of Mr Lechner’s report be struck out, but with leave to the plaintiff to file further evidence dealing with the topic as discussed above.
Mr Digby submitted that a reasonable reading of Mr Lechner’s report showed that none of the other criticisms made by the defendants were justified. He pointed out that in numerous paragraphs Mr Lechner had stated what his instructions were[6] and therefore that he had identified his factual assumptions. Whether those factual assumptions were ever established would depend upon the lay witnesses. Mr Digby argued that it was not correct to say that Mr Lechner had resolved for himself conflicts within documents, rather he had proceeded on the basis that his instructions were correct. Further, Mr Lecher said in paragraph 7 of his report that he had accepted and assumed that “the representations of Messrs Pinkerton, Miller and Degenhardt in their respective affidavits and reports” were “a reasonable and accurate reflection of the true facts and circumstances on the Project and/or a reasonable representation of actual circumstances based on their respective area of expertise”. Thus, Mr Digby submitted, Mr Lechner had assumed, for example, that there were 1,377 drawing errors and 1,643 drawing omissions in expressing his opinion. Again, it was a matter for the trial whether this number of drawing errors and omissions could be established.
[6]See paragraphs 14, 15, 19, 24(r), 24(x), 35, 46, 48, 67, 86(a), 86(c)-(f), 92, 101, 109, 116, 133, 141 and 147.
Mr Digby further submitted that Mr Lechner was not deciding the ultimate issue before the Court when he stated that, in his opinion, the number of errors and omissions in the drawings in a project of this magnitude was beyond the norm. He argued that this was not a matter that was self-evident and therefore it was of assistance to the Court. This evidence, Mr Digby submitted, was not involving Mr Lechner in acting “as the Court itself”. His opinion went to only one of many issues which the Court had to consider.
With respect to the complaint that Mr Lechner had not explained what he had done when he “analysed” something, Mr Digby submitted that a fair reading of those passages showed that really all Mr Lechner meant was that he had looked at or read the documents in question.
It was also submitted that, in “explaining and substantiating” various aspects of Mackie’s case, Mr Lechner was not departing from his role of an expert. Further, Mr Digby submitted that it was premature to conclude that an expert was an advocate for a particular party. That could only be established after cross-examination, when conclusions could properly be drawn about the impartiality and independence of the witness.
In ruling on these objections to the whole or part of the statement of Mr Lechner, and those of the other witnesses, it seems to me to be undesirable to say much more than what my conclusion is, particularly when I am not upholding the objections at this stage. It would be invidious for me to express views about the witnesses’ statements before they have given evidence. Thus, I confine myself to the question of admissibility at this stage.
I am not persuaded that I should, at this stage, rule that the whole of Mr Lechner’s statement is inadmissible. In particular, I am not persuaded that Mr Lechner is acting “as the Court itself” in his report. As far as the other criticisms are concerned, it seems to me that, subject to the matters mentioned below, final determination of these points must await the trial itself and the cross-examination of Mr Lechner.
Apart from the need to replace paragraph 134 of Mr Lechner’s report referred to above, I also consider that paragraphs 19, 42 and 84 need to be amplified. Each of these paragraphs refers to “information obtained” from “interviews” with Mackie staff without identifying what that information was. In my opinion, this deficiency should be rectified, failing which the relevant paragraphs may be struck out. Those paragraphs are to be contrasted with paragraphs 92 and 109 where following a reference to “interviews” with Mackie staff, Mr Lechner went on to state what his instructions were on that particular matter.
Bryan Miller
Mr Miller’s report was dated 27 October 2003. In it he stated that he had been a practising architect since 1967. Not surprisingly Mr Miller’s report dealt with the adequacy of the drawings prepared by the second defendant.
Mr Roberts, supported by Mr Delany, made numerous criticisms of Mr Miller’s report, parts of which, he submitted, were inadmissible. First, Mr Roberts submitted that Mr Miller improperly referred in his report to the Room Reports. Mr Roberts asserted that the Room Reports were simply further and better particulars of this part of the plaintiff’s claim, a pleading, and for Mr Miller to say that he had read them and agreed with them took the matter nowhere. Mr Miller, it was argued, did not have personal knowledge of the preparation of the Room Reports and he could not give evidence as to the truth or accuracy of their contents unless he had verified them. Saying that he had read them and believed them to be reasonable was not admissible evidence by an expert.
A related submission by Mr Roberts was that in his report Mr Miller inappropriately referred to the views of other witnesses and said that he agreed with them, instead of providing his own independent views. Examples of this were the references by Mr Miller to the affidavit of Mr Pinkerton and to the report prepared by Mr Degenhardt. Such evidence did not reveal any process which enabled the conclusions to be tested or that he was qualified to comment.
Mr Roberts referred to the following statement of Anderson J in Pownall v Conlan Management Pty Ltd:[7]
Mr Adam gave oral testimony and attempts were made to lead from him evidence that would show that he had personally verified the data relied on for his estimates or had direct knowledge of the matters relied on. In my opinion, his evidence did not go that far. If anything it underlined the fact that he truly had relied on a range of material reported to him or provided by others. No doubt he treated the data he was given with appropriate circumspection and accorded to it more or less reliability according to his own views about the quality of it and of its provenance and no doubt in doing so, he called upon his own personal experience. Whilst in one sense this constitutes bringing his own judgment to bear on the task of valuation, I do not think it overcomes the fundamental difficulty. Expert opinion is to be judged like any other evidence. It must be comprehensible and reach conclusions that are rationally based. The process of inference that leads to the conclusions must be stated or revealed in a way that enables the conclusions to be tested and a judgment made about the reliability of them. This requirement is not satisfied by evidence from an expert which says, in effect:
I have examined the costs and estimates made by others and on the strength of my own expertise and experience in the field I believe them to be reasonable.
Such a forensic device overlooks the most important rule that it is for the court to judge the reliability of evidence given in support of the case. If an opinion relies on facts that must be proved or assumptions that must be verified, it is to the court that they must be proved and verified, not to the expert witness.
[7](1995) 12 WAR 370 at 390.
The next criticism made by Mr Roberts was that Mr Miller ventured into topics outside his area of expertise. Mr Roberts submitted that Mr Miller had not disclosed that he had the necessary expertise to be able to comment on programming matters or criticise reports prepared by programming experts. Further, Mr Roberts submitted that in the area of programming the opinions expressed by Mr Miller were speculative in nature.
Fourthly, Mr Roberts submitted that Mr Miller had wrongly strayed into the realm of legal opinion by giving his views about the proper interpretation and construction of the contract in question. Such matters were outside the area of his expertise and were matters for determination by the Court. Examples were given of where it was said that Mr Miller had purported to give legal opinions.
A related submission by Mr Roberts was that Mr Miller on occasions purported to express an opinion on matters which were ultimately issues for determination by the Court.
Next, Mr Roberts submitted that at times in his report Mr Miller descended into a commentary on the evidence based on speculation and inference rather than expressing an opinion based on assumed facts. Mr Roberts argued that Mr Miller even purported to speculate as to why Mr Allen had done or not done certain things.
The seventh criticism by Mr Roberts was that parts of the report were irrelevant.
Finally, Mr Roberts submitted that Mr Miller’s reference to research conducted by the CSIRO was hearsay. I will dispose of this issue straight away because I see no reason why an expert cannot refer to research conducted by others.
In response, Mr Digby submitted that, in dealing with the Room Reports in his report, Mr Miller had stated that he had done more than simply look at them and say that he agreed with them. For example, he said that he had “examined” certain documents (paragraph 76), “compared the allegations made about each room to what has been shown on the drawings …” (paragraph 77), “listed a number of examples of the lack of information” (paragraph 77), “described” why the missing drawings were necessary for the builder (paragraph 79), “checked” certain examples (paragraph 87), and “extracted” examples from the Room Reports as typical examples with which he agreed (paragraphs 136 and 138). Mr Digby also referred to Appendix Three to Mr Miller’s report where he analysed a number of the drawings prepared by the Architect.
Mr Digby submitted that all of this showed that Mr Miller had carefully verified the Room Reports in order to be sure that he could use them. Building by one expert on the work of another expert was, Mr Digby submitted, commonplace. Furthermore, Mr Digby submitted that the error identified in Pownall was not present in this case, because Mr Miller had not simply read the Room Reports and believed them to be reasonable. Rather, he had stated that he had examined the same material as the author of the Room Reports and come to the same conclusions.
In response to the criticism that Mr Miller moved outside his area of expertise, Mr Digby submitted that it was inherently part of an architect’s qualification and experience that he or she had expertise in programming and time extension. They were part of the contract administration phase of an architect’s work. Mr Digby further submitted that Mr Miller was entitled to give his views about what the contract entailed and how it worked.
Mr Digby dealt with the remaining criticisms by submitting that these issues could be explored in cross-examination and that they were simply a matter of weight rather than inadmissibility.
It is to be noted that many of Mr Roberts’ criticisms could hardly be described as “threshold” points. The submission of irrelevance is perhaps the best example of that. It cannot be determined at this stage of this proceeding. Insofar as there were legitimate “threshold” criticisms made of Mr Miller’s report, I am not persuaded that any parts of it should be struck out at this stage. Thus, I am not satisfied, at this stage, that Mr Miller cannot refer to the Room Reports given how he said he had analysed them. Nor am I satisfied that Mr Miller has purported to decide any ultimate questions. Whether or not Mr Miller has expressed opinions on topics outside his area of expertise is, I consider, a matter that must await cross-examination. Further, many of the remaining criticisms are the kind of points that could be made in final submissions.
William Degenhardt
Mr Degenhardt’s report is dated October 2003. In the report he set out the qualifications and experience which enabled him to claim expertise in the area of construction and programming matters. As with the previous report, the attack on Mr Degenhardt’s report was made by Mr Roberts, supported by Mr Delany.
Mr Roberts’ primary contention about Mr Degenhardt’s report was that part of it, section 7 on the topic of “Delays to Non-Critical Works”, should be struck out because from its own words it was clear that it was not relevant to any claim pleaded by the plaintiff. Mr Roberts pointed out that Mr Degenhardt said that in section 7 he had assessed the extension of time claims “that did not impact on the critical path activities, but caused disruption to the works”. Later he said that they did not “impact on the completion of the project”. Mr Roberts urged that this section of the report be struck out now as this would save a lot of lay evidence being led about these non-critical delays.
Mr Digby submitted that section 7 of Mr Degenhardt’s report was relevant in two ways. First, he referred to the allegation by Glengollan in its counterclaim that Mackie breached the contract in failing to proceed regularly and diligently with the works and by not achieving the date for completion or completion within a reasonable time. These allegations were denied by Mackie in the reply and defence to counterclaim. Mr Digby argued that this evidence from an expert about delays to the performance of completion of the works was relevant to Mackie’s defence of Glengollan’s counterclaim.
Secondly, Mr Digby referred to what he called the positive case which was that Glengollan had breached the contract by causing Mackie to suffer numerous delays, even if they were delays which were not relevant to an extension of time. Mr Digby conceded, however, that the pleading of the claim was deficient in that no financial compensation was sought for these breaches. Nevertheless, he submitted that section 7 of Mr Degenhardt’s report was relevant to this part of Mackie’s claim.
I have concluded that Mackie has an arguable case that section 7 of Mr Degenhardt’s report is relevant, at least to its defence of Glengollan’s counterclaim, and that it therefore would not be appropriate to strike out that part of his report. In one sense, this is a matter of regret because the contrary conclusion would have saved, I was told, a considerable amount of evidence. But although this case is crying out for some sensible limitation of the issues, this is not a relevant consideration when considering the issue of the admissibility of this part of Mr Degenhardt’s report.
Mr Roberts’ next submission was that, like Mr Miller, Mr Degenhardt inappropriately referred to the Room Reports in section 8 of his report. He again relied on Pownall. I consider that this is a matter which will have to be explored in cross-examination before it can be ruled upon.
Finally, Mr Roberts submitted that in section 6.4(b)(iii) of his report (which should have been section 6.4(b)(v)), Mr Degenhardt quite inappropriately was telling the Court how to construe the contract. As I pointed out in argument, it seems to me that this was a legitimate attempt by the witness to explain how he interpreted the contract and what he understood the relevant extensions of time clauses to mean. If it was subsequently held that his construction was wrong then his evidence may well be worthless, but at least he had explained his approach.
I am, therefore, not persuaded that, at this stage, there is any basis for striking out a part of Mr Degenhardt’s report.
John Pinkerton
Mr Pinkerton’s witness statement incorporated an affidavit which he had sworn in the proceeding on 28 February 2003. He stated that he had been a registered architect in Victoria and a member of the Royal Australian Institute of Architects since 1987. He had commenced working in an architect’s office in 1970 as a draftsperson. His experience included extensive work in analysing the adequacy of construction documentation and drawings and the administration of building contracts utilising construction documentation and drawings. Between August 2000 and September 2003 Mr Pinkerton worked for the architectural firm, MSM Associates, which was a related company of Mackie.
Mr Pinkerton said that in December 2001 he was asked by Mr Ralph Mackie, a director of the plaintiff, to assist it in its review of all of the contractual documents associated with the Glengollan project. He subsequently spent approximately nine months of full time work preparing the plaintiff’s further and better particulars in a form which became known as the Room Reports.
In paragraph 17 of his witness statement Mr Pinkerton stated that his view of the adequacy of the drawings provided to the plaintiff was contained in the Room Reports. In paragraph 18 he gave his analysis of the adequacy of the documents provided to the plaintiff at the time of signing the contract on 4 October 1999.
The defendants submitted that the whole of Mr Pinkerton’s witness statement, including his affidavit, was inadmissible and should be removed. One of the limbs of the defendants’ arguments, which was referred to in both sets of written submissions, namely that Mr Pinkerton could not give expert evidence in that, because he had been employed by an entity associated with the plaintiff, he was not independent of the plaintiff, was effectively abandoned by them at the hearing in the light of the authorities referred to in the plaintiff’s written submission.[8] I consider that this was the correct position to adopt. Mr Pinkerton’s witness statement was not inadmissible simply because he had been employed by MSM Associates, although its weight may be another matter entirely.
[8]See, for example, Fagenblat v Feingold Partners Pty Ltd [2001] VSC 454.
Mr Delany then submitted that Mr Pinkerton’s witness statement was not admissible, first of all because he could not give any factual evidence, as he had no direct involvement and was only involved indirectly from December 2001. Mr Delany referred to the lengthy witness statement of one of the plaintiff’s project managers, Giuseppe Paino, as now arguably providing the factual basis for the further and better particulars or the Room Reports. Secondly, he submitted that the evidence which Mr Pinkerton purported to give was not the evidence of someone engaged as an expert but of someone who had assisted in the preparation of a claim, no doubt putting forward the view which best served the interests of his claimant employer.
Mr Delany submitted that what the plaintiff was seeking to achieve by relying on Mr Pinkerton’s witness statement was to put into evidence “the commentary” contained in the amended version of the Room Reports. This document was forwarded by the plaintiff’s then solicitor to the second defendant’s solicitors by a letter dated 17 April 2003. It was said to be “an edited and condensed version of the Room Reports”, from which all repetitious sections had been deleted. It was also stated in the letter that a “Commentary” had been added, which had been “provided by way of explanation to assist in the defendants’ understanding of the Amended Room Reports”.
Thus, Mr Delany submitted, it was clear from the plaintiff’s solicitor’s own description that the commentary was not in the form of expert opinion evidence. It was simply a further development of the articulation of the plaintiff’s claim. It was then submitted that, because the instructions upon which the Room Reports were prepared, including any assumptions about the resolution of conflicts in the documents and correspondence, were not to be found in either the commentary to the amended Room Reports or Mr Pinkerton’s witness statement, neither of those documents could be regarded as the evidence of an expert witness in admissible form.
Mr Digby submitted that there was no reason at this stage, to conclude that all of the work contained in the amended Room Reports was anything other than that of an expert architect identifying the discrepancies or errors which he had found in his examination of the documents. He submitted that there was no warrant to conclude that what Mr Pinkerton did was always to resolve any issue in favour of Mackie.
It was then submitted that Mr Pinkerton had set out in a very detailed way exactly why he had reached the conclusions that he had. He identified a particular drawing, referred to the relevant facts and stated his conclusion in a way that allowed the defendants to understand how he had gone about his task. As Mr Digby pointed out, Mr Pinkerton had said in his witness statement that where he had spoken to employees or former employees of the plaintiff to clarify any issue and had relied on what was said to him, he had referred to those events in the Room Reports.
Once again, I am not persuaded that any parts of the witness statement of Mr Pinkerton should be ruled inadmissible, at this stage. His approach to his task and his views on the various issues can be tested in cross-examination.
Steven Dickson
Mr Dickson is a quantity surveyor. He has been employed by the firm of Rider Hunt since September 2000. In his witness statement he referred to two tasks he had performed in 2001 and 2002. The first was to assist with the preparation of a progress payment claim. As part of that task Mr Dickson prepared a Valuation of Work in Progress as at March 2001. The second task was to prepare an Estimate of Probable Cost for Glengollan Link Project. It was completed in February 2002. Mr Dickson stated in his witness statement that subsequently the plaintiff contacted Rider Hunt pointing out what Mackie considered were errors in the calculation. Mr Dickson said that he reviewed these matters and issued a revised or adjusted estimate. He stated that he believed the new figure “to be fair and reasonable”.
The first submission by Mr Roberts, supported by Mr Delany, was that the evidence of Mr Dickson was not relevant. Mr Digby explained how he submitted it was relevant. Without in any way judging the merits of that argument, I agree with Mr Digby’s primary submission that, given his explanation, the relevance of Mr Dickson’s evidence cannot be decided at this preliminary stage.
Mr Roberts’ next submission was that when Mr Dickson prepared his two documents he was not acting as an expert but as a claims consultant for Mackie. That is, he submitted, Mr Dickson was acting in a partisan way. As further evidence of this, Mr Roberts referred to the changes made by Mr Dickson, at the behest of Mackie.
Mr Digby submitted that the correction of factually wrong assumptions could only “improve” the resultant opinion. It did not indicate any lack of independence of the expert. Any suggestion that the expert had acted in a partisan way rather than reaching his own genuinely held view could be tested in cross-examination.
As with the other statements, I am not persuaded that, at this stage, there is any reason to exclude all or any part of Mr Dickson’s witness statement.
John Coghlan
Mr Coghlan is a very experienced building consultant. In his witness statement he referred to a “preliminary” report by him dated 19 April 2002 in which he had commented on the numerous matters and allegations set out in the Architect’s notice of intention to determine dated 3 July 2001. A reading of the report makes it clear that its purpose was for Mr Coghlan, having inspected the site, to advise Mackie whether in his opinion the matters and allegations were a sufficient basis for Glengollan to determine the contract. Not surprisingly, the preliminary report was full of unexplained conclusions and “legal” opinions
After very little argument, Mr Digby conceded, properly in my opinion, that in its current form Mr Coghlan’s witness statement could not be supported. He therefore withdrew the statement, indicating that the plaintiff would later seek leave to put in a fresh statement.
Orders
Once the parties have had an opportunity to consider these reasons, I will hear submissions as to what orders I should make in respect of the defendants’ applications.
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