McMurray v AIG Insurance Australia Ltd [No 4]
[2020] WASC 210
•11 JUNE 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: MCMURRAY -v- AIG INSURANCE AUSTRALIA LTD [No 4] [2020] WASC 210
CORAM: SMITH J
HEARD: 3 JUNE 2020
DELIVERED : 3 JUNE 2020
PUBLISHED : 11 JUNE 2020
FILE NO/S: CIV 2962 of 2016
BETWEEN: FREDERICK WILLIAM MCMURRAY
JENNIFER GRACE MCMURRAY
Plaintiffs
AND
AIG INSURANCE AUSTRALIA LTD
First Defendant
RUSSELL BRESLAND
BRESLAND CONSULTANTS PTY LTD
Second Defendants
MOSMAN BAY CONSTRUCTION PTY LTD
First Third Party
HANS BO KRISTIAN HOLGERSSON trading as HOLGERSSONS COMPLETE HOME SERVICE
First Fourth Party
Catchwords:
Practice and procedure - Application for leave to adduce expert evidence - Case principles considered - Proximity to trial - Nature and importance of the proposed evidence considered - Inadequate explanation for the delay
Evidence - Circumstantial - Causation of a fire - Competing hypotheses
Evidence - Admission of expert evidence - Basal facts
Legislation:
Nil
Result:
Application dismissed
Representation:
Counsel:
| Plaintiffs | : | Mr G R Hancy |
| First Defendant | : | Mr M T McCulloch SC & Mr C P K Russell |
| Second Defendants | : | Mr G J Pynt |
| First Third Party | : | No appearance |
| First Fourth Party | : | Mr M Zilko SC & Mr B A Winburn-Clarke |
Solicitors:
| Plaintiffs | : | Solomon Brothers |
| First Defendant | : | Wotton + Kearney Lawyers (Perth) |
| Second Defendants | : | Sparke Helmore Lawyers |
| First Third Party | : | No appearance |
| First Fourth Party | : | SRB Legal |
Case(s) referred to in decision(s):
Anderson v Ausgrid [2015] NSWSC 1308
AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [2009] WASC 301
Automasters Australia Pty Ltd v Bruness Pty Ltd [2004] WASCA 229
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588
Hamersley Iron Pty Ltd v James [2015] WASC 10
Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705
McKay v Commissioner of Main Roads [No 6] [2010] WASC 274
Pollock v Wellington (1996) 15 WAR 1
R v Exall (1866) 4 F & F 922, 926; 76 ER 850
Rhoden v Wingate [2002] NSWCA 165
Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262
Taub v The Queen [2017] NSWCCA 198; (2017) 95 NSWLR 388
SMITH J:
First defendant's application for leave to adduce expert evidence
The first defendant, AIG Australia Insurance Limited (AIG), by chamber summons filed on 25 March 2020, applies for leave to file and serve the expert report of a forensic chemist, Mr Alexander Visotin, dated 6 March 2020, and rely upon the report at the trial of the matter.
After hearing counsel for the parties on 3 June 2020, I made an order dismissing AIG's application. These are my reasons for refusing leave.
Factual background to the claim by the plaintiffs against the first defendant
The first third party, Mosman Bay Construction Pty Ltd, was engaged by the McMurrays to undertake renovations to a house the McMurrays had purchased in Mosman Park. The renovations commenced in May 2015 and were almost complete by 15 January 2016. During this period of time the house was unoccupied.
The plaintiffs, Mr and Mrs McMurray's case against AIG is that by a contract of insurance, made in or about September 2015, AIG agreed that in the event of physical loss or damage to the house that occurred by accident, during the period 30 September 2015 to 30 September 2016, it would make payments to the McMurrays including the amount required to restore or repair, replace or build, a structure with materials and workmanship of like kind and quality as the house, including fees from architects, surveyors and consulting engineers; up to the sum insured of $4,725,000, and reasonable costs necessary to demolish damaged buildings and remove the debris.[1]
[1] Plaintiffs' statement of claim against first defendant, filed 25 November 2016 [3].
During the night of 16 January 2016, a fire occurred which resulted in the whole of the house, including areas of the house under renovation, being extensively damaged which resulted in the house becoming uninhabitable.
Part of AIG's defence is that the fire was caused by self‑ignition of rags infused with a product known as Loba HS 2K Impact Oil Colour (Loba Oil) that were placed in a bin in the front dining room of the house by painters, after using the rags to wipe excess Loba Oil from timber panelling and doors in the house.[2]
[2] First defendant's further amended defence, filed 5 June 2019 [7] ‑ [8].
Background to the application for leave to adduce expert evidence
Orders were made by Chaney J on 24 August 2017 granting leave for all parties to adduce expert evidence at the trial. By order 24 of the Order made on 24 August 2017, AIG (and the other defendants) were required to provide the plaintiffs and the third parties with a copy of the report, or the substance of, any evidence of any expert witness whose evidence it intended to adduce. The time for compliance with order 24 was extended by Chaney J on 8 November 2017, to 18 December 2017.
AIG's application for leave to adduce expert evidence was made over two years out of time and five days prior to, the trial of the action which was listed for 15 days commencing on 30 March 2020. Because of COVID‑19 restrictions, the trial was vacated on 26 March 2020, and on 22 April 2020 orders were made programming this application for hearing on 3 June 2020. On 22 April 2020, provisional dates for relisting the trial for 15 days were set aside in August and early September 2020.
Very shortly after the fire at the house occurred, the third defendant, Tokio Marine & Nichido Fire Insurance Co Ltd (Tokio) engaged a fire investigator, Mr Jim Manser to produce a report. On 28 May 2016, Mr Manser produced a report[3] which was subsequently provided to AIG at least by sometime in 2017, which contained results of laboratory testing conducted by Mr Visotin of samples collected by Mr Manser of Loba Oil, Loba hardener, timber adhesive, part of timber flooring used in the house and floorboards, new floorboards (control), burnt cloth and cleaning oil. Mr Visotin tested each sample and produced separate analysis certificates for each sample and produced two reports, a sample analysis supplementary report dated 4 March 2016 which related to some of the samples and a sample analysis second supplementary report dated 11 April 2016, which related to the remainder of the samples. The 2016 reports explained the results of the information contained in each of the certificates.
[3] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO ‑ 1, report Mr Manser, pages 8 ‑ 43.
In his report dated 28 May 2016, Mr Manser concluded that there were two hypothesis of the cause of the fire and these were:[4]
8.5… The first hypothesis is that the fire is the result of cloth rags, previously used by the painters to wipe up oil with a high propensity to cause self-heating, set fire to the bin of rubbish that was in the doorway between the hallway and the western side room on the ground floor of the house.
8.6.The second hypothesis is that the fire was the result of a deliberate act by a person or persons unknown setting fire to combustible materials in the area of fire origin. A tool that could be used to manipulate the gate and door locks to the house was found outside the only door that could be manipulated by that tool.
[4] Affidavit of Trent Andrew McCartney O'Neill sworn 25 March 2020, annexure TAMO - 1, report Mr Manser, page 29.
AIG and the McMurrays each engaged their own fire investigators. The McMurrays engaged Mr Mark Pollard and AIG engaged Mr Maurice Tong. Mr Manser, Mr Pollard and Mr Tong all shared information and conducted some of their investigations jointly. Mr Manser provided to Mr Pollard and Mr Tong copies of the certificates and sample analysis reports prepared by Mr Visotin in early 2016.
Other than to provide reports of Mr Tong in compliance with the orders made by Chaney J, AIG did not seek to obtain any further expert evidence until at least 9 December 2019 when one of AIG's lawyers, Mr Trent Andrew McCartney O'Neill, tried to contact Mr Visotin.
In an affidavit sworn on 25 March 2020, Mr O'Neill deposes that:[5]
(a)on 6 December 2019, he sent an email to Mr Visotin seeking to discuss the scope of his laboratory reports in preparation for the trial of the matter; and
(b)on 9 December 2019, he spoke to Mr Greg Kelly, the chief executive officer of GKA Investigation Group (Mr Visotin's employer) and informed him that GKA and Mr Visotin had been engaged by Tokio and their solicitors in relation to the matter, and due to confidentiality reasons he was not prepared to allow AIG solicitors to speak to Mr Visotin without the consent of Tokio; and in response he (Mr O'Neill) said to Mr Kelly words to the effect that given Tokio were a defendant in the proceedings, AIG solicitors would refrain from approaching Mr Visotin directly in relation to the matter.
[5] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020 [11] ‑ [12].
On 22 January 2020, orders were made by consent between the plaintiffs and Tokio, dismissing the plaintiff's claim as against Tokio. On the following day, AIG filed a subpoena to be served on Mr Visotin to give oral evidence. On 31 January 2020, the subpoena to give oral evidence was served on Mr Visotin.[6]
[6] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020 [15].
On 18 February 2020, orders were made by consent between AIG and Tokio discontinuing AIG's claim as against Tokio and as a result Tokio was released from the proceedings.
On 24 February 2020, Mr O'Neill spoke to Mr Visotin on behalf of AIG and informed him that AIG intended to instruct him to provide a report to expand on matters already covered in the laboratory reports.[7]
[7] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020 [17].
On 9 March 2020, Mr Visotin provided a report to AIG solicitors titled, 'Sample Analysis Expert Opinion Report' dated 6 March 2020. On the same day, AIG solicitors served the report on the parties to the proceedings.[8]
Tests of Loba Oil infused rags conducted by Tokio's investigator, Mr Manser and AIG's investigator, Mr Tong
[8] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020 [19] ‑ [20].
Part of the investigations by Mr Manser and Mr Tong were to test the capacity of Loba Oil infused rags to self-heat and to ignite.
On 15 March 2016, at the Department of Fire and Emergency Services hot fire training ground in Forrestfield, Mr Manser and Mr Tong conducted tests to identify if the Loba Oil infused rags mixed with Loba hardener was susceptible to self-heating.[9] The tests commenced at 8.56 am and concluded at 5.25 pm and involved placing materials into three 60 litre plastic bins. At the base of each bin 1.7 kg of sawdust was placed and 1.9 kg of small wood blocks in each bin on top of the sawdust. The bins were labelled 1, 2 and 3. Three bundles of cotton rags weighing approximately 300 g were impregnated with Loba Oil and Loba Hardener. In bin 1 and bin 2, rags were added on top of the wooden blocks and additional oil soaked rags were added to bin 2. Oil soaked rags were not placed in bin 3 but were draped around the lip of the bin.
[9] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure report Mr Tong, pages 76 ‑ 77.
The internal temperatures of the bin were tested during the day. At 5.00 pm, bin 3 remained at ambient temperature of 31.6℃. At 5.15 pm, bin 1 rose to a maximum of 56.2℃, and at 5.25 pm, bin 2 attained a maximum temperature of 133℃. By that time the testing facility was being closed so the experiments ceased but the bins were left in place. On the following day, Mr Manser and Mr Tong returned to the facility. At 11.00 am Mr Manser emptied the bins. None of the contents of the bins exhibited any evidence of discolouration or charring that was indicative of the internal temperatures having approached thermal runaway (ignition).[10]
[10] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO - 2, report Mr Tong page 77.
A second experiment was conducted at a Department of Fire and Emergency Services facility over a 24-hour period by Mr Manser on 19 and 20 July 2016.[11] In the second experiment, Mr Manser placed into four separate 60 litre plastic bins on 1.7 kg of sawdust spread evenly over the bottom to which was added cotton painters rags soaked in 500 ml of Loba Oil with hardener.[12] One of the bins (bin 1) was wrapped with a single electric blanket connected to a 240 v power supply, and the electric blanket was left on during the experiment on the highest setting. Another bin, (bin 2) was wrapped in a 4 cm thick layer of wool insulation held in place with tape.[13] The rags in bin 1 were folded into pads whereas the rags in bin 2 were scrunched up. The rags in bin 3 contained another type of oil as a control and bin 4 only contained Loba Oil soaked rags without any insulation or external heating.[14] The result of the experiment was that the highest maximum temperature reached was in bin 2 (178℃ at 10.30 pm) which was insulated with a layer of wool and contained loosely arranged rags soaked in Loba Oil. At the conclusion of the experiment none of the material in the bins showed signs of ignition.[15]
[11] Report of Jim Manser, dated 8 December 2016.
[12] Report of Jim Manser, dated 8 December 2016, page 5.
[13] Report of Jim Manser, dated 8 December 2016, page 5.
[14] Report of Jim Manser, dated 8 December 2016, page 6.
[15] Report of Jim Manser, dated 8 December 2016, page 7.
A summary of the content of Mr Visotin's March 2020 report
Mr Visotin's March 2020 report does not address the tests conducted by Mr Manser and Mr Tong. Mr Visotin's March 2020 report instead provides answers to a number of questions put to him in a letter of instructions from AIG's lawyers by letter dated 24 February 2020. Importantly, most of the questions require Mr Visotin to assume particular facts. The letter of instructions dated 24 February 2020 stated:[16]
[16] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO - 6, pages 100 ‑ 101.
2.assume that:
2.1the Loba HS 2K Impact oil (that is the sample you have tested and noted as WS4) was mixed with the Loba hardener (that is the sample you have tested and noted as WS3) and then painted on to wood panelling with a brush;
2.2the person applying the Loba oil mixture (described in 2.1 above) (Loba Mixture) then wiped the wood panelling with cloth rags to wipe up excess or drips of the Loba Mixture and to ensure an even coating of the Loba Mixture;
2.3the cloth rags were approximately 60-90cm by 30cm but were also sometimes cut smaller;
2.4the cloth rags were disposed of inside a 60-litre bin (see photograph of bin at [Tab 3]) which also contained off-cuts of wood, a broken drill bit, saw dust and unknown general site rubbish. The bin was inside the Property during the evening of 15 January 2016 and early morning of 16 January 2016;
2.5the maximum temperature during the day the fire started, 16 January 2016, was 35.8 degrees Celsius and the temperature in the lead up to the start of the fire was as follows:
(a)midnight 00:00 ‑ 25.5℃;
(b)00:10 ‑ 25.3°C;
(c)00:20 ‑ 25.2℃;
(d)00:30 ‑ 25.2°C;
(e)00:40 ‑ 24.6°C;
(f)00:50 ‑ 24.0°C;
(g)01:00 ‑ 24.0°C;
(h)01:10 ‑ 23.9°C;
(i)01:20 ‑ 23.8°C;
(j)01:30 ‑ 22.7°C;
2.6the fire started at approximately 1:20am on 16 January 2016;
3.prepare a report responding to the below questions. Please ensure that you set out your assumptions and identify the evidence which supports your determinations/responses to the questions:
3.1please set out the contents of the Loba HS 2K Impact oil as set out on the label of the product and to what extent have you been able to verify those from your testing (please describe techniques used in testing);
3.2please explain what you mean by the expression you have used in your report dated 4 March 2016 as 'self‑heating';
3.3please explain which of the contents of the Loba HS 2K Impact oil have a propensity for self-heating and how 'self-heating' occurs;
3.4how does the addition of the Loba hardener to Loba HS 2K Impact oil affect the Loba HS 2K Impact oil? What affect, if any, does this have on the propensity for the Loba HS 2K Impact oil to self-heat;
3.5assuming that the ingredients of the Loba HS 2K Impact oil and the Loba hardener are the same, to what extent would a different batch being used affect the propensity for self-heating;
3.6in what circumstances can the Loba Mixture ignite;
3.7in the circumstances described in paragraphs 2.1 to 2.4 above, could the cloths that contained the Loba Mixture self-heat and the ignite;
3.8how would the condition of the cloths affect your answer to 3.7 above, for example:
(a)cloths scrunched up versus being laid flat in the bin;
(b)cloths on top of the contents of the bin versus being toward the bottom;
3.9as to the samples WS1 and WS2 referred to in your report dated 4 March 2016, please explain how the fact that these cloths were in the fire might affect the vegetable oil residue remaining in them after the fire;
3.10by way of clarification, is the 'neat oil sample' you refer to in para 2.3 of your report dated 4 March 2016 exhibit WS4?
AIG claim that the questions asked of Mr Visotin are simply questions which clarify his 2016 reports and the information contained in the certificates. However, as counsel for the second defendants, Russell Bresland and Bresland Consultants Pty Ltd (Bresland parties), point out:
(a)only questions 3.1 to 3.5 and 3.10 relate to self-heating and can properly be described as questions which go to clarify matters in Mr Visotin's 2016 reports and the certificates; and
(b)questions 3.6, 3.7 and 3.8 raise a new line of enquiry about the circumstances by which a mixture of Loba Oil or rags soaked with Loba Oil might self-ignite, which are new issues not previously addressed by Mr Visotin.
The McMurrays and the other parties opposing AIG's application also contend that the questions put to Mr Visotin about self-ignition are not questions which have been dealt with by Mr Manser or Mr Tong in their reports.
In answer to question 3.4, that is, how does the addition of the Loba hardener to the Loba Oil affect the Loba Oil, and what effect, if any, does this have on the propensity for the Loba Oil to self-heat, Mr Visotin's answer is to the effect that the effect of the hardener on Loba Oil is to assist the process of drying oils, but he could not comment on the latter part of the question without performing a test to establish this.
In answer to question 3.6, Mr Visotin stated in his 2020 report that there are five main conditions that must be met in order for any self‑heating material to ignite and these are the presence of oxygen, sufficiently high ambient temperature, insulation of the material to prevent heat dissipation, a large enough material surface area for the reaction to take place and a sufficient quantity of material to sustain a reaction.[17] Mr Visotin then goes on to state:[18]
Providing all of the above conditions have been met, thermal runaway may occur. Thermal runaway is a condition whereby heat is generated by a material faster than it is dissipated, resulting in a net rise in the material's temperature (National Fire Protection Association, 2017). Eventually, if the autoignition temperature of the self-heating material (or the substrate) is met, ignition will occur.
[17] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO ‑ 7 (2020 report of Mr Visotin) pages 112 ‑ 113.
[18] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO ‑ 7 (2020 report of Mr Visotin) page 113.
In answer to question 3.7, Mr Visotin assumed the facts listed in 2.1 to 2.4 of the letter of instructions, together with the temperatures referred to in 2.5 of the letter of instructions, and formed the opinion, among other opinions, that:[19]
(a)the temperatures listed in 2.5 would have been sufficient for self-heating and ignition to occur;
(b)the state of the Loba mixture described in 2.2 and the size of the rags described in 2.3 would have been conducive to self-heating and ignition;
(c)the location of the Loba mixture‑soaked rags as described in 2.4 (amongst debris in a 60 l bin) would have resulted in the rags being insulated by the debris in the bin, and the Loba mixture soaked in the rags would have been sufficiently insulated for self-heating and ignition to occur; and
(d)a cloth fully soaked in Loba mixture would contain a sufficient quantity to self‑heat to the point of ignition, whereas a cloth with only a minor amount of staining may not self-heat to the point of ignition. Therefore, the actions described in 2.2 may have gathered enough of the Loba mixture on the cloth for self‑heating and ignition to occur.
[19] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO - 7 (2020 report of Mr Visotin) pages 113 ‑ 114.
In answer to question 3.8, Mr Visotin stated:[20]
11.1Scrunching up of the cloths would provide additional insulation to the Loba Mixture soaked into them. Increased insulation allows more heat to be retained, which accelerates the oxidation reaction and increases the probability of thermal runaway occurring (DeHaan, 1996). Laying the cloths flat would have the opposite effect, resulting in loss of heat from the reaction environment. Moreover, self-heating is assisted by the presence of a substrate which forms a rigid char when burned (DeHaan, 1996). This rigidity would maintain the high surface area of the Loba Mixture, which is conducive to oxidation, compared to a substrate which melts and decreases in surface area when heated. Therefore, I form the opinion that, if the cloths were scrunched up versus being laid flat in the bin, they would be more likely to selfheat to the point of ignition. If they were laid flat versus being scrunched up, they would be less likely to self‑heat to the point of ignition.
11.2The position of the cloths within the bin would also affect how well they were insulated. Items towards the bottom of the bin would be more insulated by the items on top of them, whereas items on top would be more exposed to the environment and therefore less insulated. As discussed above, better insulation increases the probability of thermal runaway occurring. Therefore, I form the opinion that, if the cloths were on top of the contents of the bin, they would be less likely to self-heat to the point of ignition. If they were toward the bottom of the bin, they would be more likely to self-heat to the point of ignition.
Principles that apply to the exercise of discretion to grant leave to permit a party to adduce expert evidence
[20] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO - 7 (2020 report of Mr Visotin) page 114.
The principles to be applied are not in dispute and were summarised in the plaintiff's written submissions. These principles are as follows.
In exercising the discretion as to whether to grant leave to permit a party to adduce expert evidence, and in determining where the interests of justice lie, the considerations explained in AON Risk Services Australia Ltd v Australian National University are to be taken into account.[21]
[21] AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [89] - [103] and [111] - [112]; McKay v Commissioner of Main Roads [No 6] [2010] WASC 274 [18]; Hamersley Iron Pty Ltd v James [2015] WASC 10 [150]; Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [2009] WASC 301 [80].
In Hamersley Iron Pty Ltd v James, Beech J explained that when considering whether to grant leave to permit a party to adduce expert evidence, the relevant considerations referred to in AON Risk Services Australia Ltd v Australian National University could be summarised as follows:[22]
[22] Hamersley Iron Pty Ltd v James [2015] WASC 10 [150].
(a)the effect of an application to adduce further evidence on the court and on other litigants is relevant;
(b)there is no right to adduce all arguably relevant evidence, no matter the stage at which the application is made and no matter the effect upon the course of the litigation;
(c)justice requires that parties have a fair opportunity to adduce evidence in support of their case, but limits may be placed on late applications to adduce further evidence;
(d)the nature and importance of the proposed new evidence to the party seeking to lead it must be taken into account;
(e)attention must be given to the extent of the delay, and the costs associated with it, the prejudice which might reasonably be assumed to follow from that delay, and any prejudice that is shown;
(f)the point in the litigation relative to the trial may be an important consideration;
(g)where a discretion is sought to be exercised in favour of a party, an explanation will be called for; and
(h)the point can be reached where a party has had sufficient opportunity to adduce evidence in support of its case.
Further, the AON Risk Services Australia Ltd v Australian National University principles require that in cases where an indulgence is sought, particularly in or close to the trial where there is an obvious potential for serious disruption to the litigation, there should be a proper explanation for the application, showing that it is brought in good faith and bringing to the court's attention, in a candid way, the circumstances giving rise to the application.[23]
[23] Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [2009] WASC 301 [70].
Reasons for refusing to grant leave
AIG points out that it is a scientific fact that Loba Oil can self-heat and this fact is referred to in each of the expert reports of Mr Pollard dated 3 September 2016, Mr Manser dated 28 May 2016, and Mr Tong's report dated 1 February 2018. Further, that at no stage in the proceedings have any of the parties pleaded or asserted to the contrary. To the contrary, the McMurrays' expert (Mr Pollard) has in his report embraced the fact that Loba Oil can self-heat. AIG also points out that on the back of the tin of Loba Oil there is a warning that states:[24]
Store soaked cloth, pads and other tools in closed containers. Sanding dust, cloths, etc contaminated with oil/wax must be wettened with water, stored in a lockable container or disposed fire‑proofely in another way. Otherwise danger of self-ignition.
[24]Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO ‑ 7 (March 2020 report of Mr Visotin) page 131.
AIG contend that there is a real question as to whether the fact that Loba Oil can self-heat and spontaneously ignite, and is a fact that is genuinely in dispute between the parties. The McMurrays say that AIG's pleaded case is not about self-heating, but self-ignition. I do not find it necessary to resolve this point. This point can be left to trial if it is found on the evidence or on AIG's pleaded case to be material. Consequently, for the purposes of this application I accepted AIG's submission on this point.
It is not conceded by AIG that Mr Visotin's March 2020 report contains new matters that are not addressed in his certificates and reports provided in 2016.
AIG claim that if Tokio had continued as a party in the proceedings, they would have called Mr Visotin as their witness and AIG would have been able to cross‑examine Mr Visotin and put to him the questions set out in AIG lawyer's letter of instructions dated 24 February 2020. I do not agree. Firstly, in the absence of being able to speak to Mr Visotin prior to him giving evidence because of a claim of an apparent confidential relationship, it would be unusual for counsel to put the questions in 3.4, 3.7 and 3.8 without some confidence as to what the answers to those questions would be. Secondly, it is clear that questions 3.4, 3.7 and 3.8 raise new issues which had not been addressed by Mr Manser, Mr Pollard or Mr Tong in their reports, which issues would necessarily require AIG to first give notice to the other parties prior to cross‑examination on these issues.
One of the relevant considerations referred to by Beech J in Hamersley Iron Pty Ltd v James, is the nature and importance of the proposed new evidence to the party seeking to lead it. AIG made a submission that it is not of the view that it requires Mr Visotin's 2020 report to prove its case that the painters rags infused with Loba Oil left in the bin at the front of the house was the cause of the fire.
As to the nature of the proposed new evidence of Mr Visotin, the assumed facts upon which he has given an opinion appear to rely substantially on the assumption in 2.4 in the letter of instructions that the cloth rags containing Loba Oil and Loba hardener were disposed of inside a 60 litre bin which also contained offcuts of wood, a broken drill bit, sawdust and unknown general site rubbish. However, as the McMurrays point out in their written submissions AIG has been unable to point to any evidence that has been filed in the proceedings which show that rags infused with Loba Oil were left in a rubbish bin or that infused rags were left in a manner that predisposed them to spontaneous combustion. In particular:
(1)As Mr Mark Blundell points out, on behalf of the McMurrays, in his affidavit sworn 29 April 2020, AIG has not identified any witness evidence of any witness who will say that they saw painters rags in the bin inside the front of the house on the night in question. The only 'evidence' that AIG points to is evidence of matters recorded in the report of Mr Manser that are said to have been stated to a 'Factual Investigator' in records of interview.[25] In a summary prepared by Mr Manser of the interviews, Mr Manser stated that:[26]
[25] The admissibility of this evidence is a matter for trial.
[26] Affidavit of Trent Andrew McCartney O'Neill, sworn 25 March 2020, annexure TAMO ‑ 1 (report of Mr Manser) pages 16 - 17.
(a)Mr Ralph Thomas, the building supervisor employed by Mosman Bay Constructions Pty Ltd, said that on the day prior to the fire he was the last to leave and left the building closed and locked and he recalls a plastic bin in the front hallway or front western side ground floor room that contained rags, pieces of cut-off timber, a broken drill bit and sawdust;
(b)Mr Mark Simpson, a painter and decorator, recalled that on the day prior to the fire, he and several of his employees were using Loba Oil to finish oak timber wall panels in the ground floor front rooms whereby the stain was painted on, scraped off, and then the timber surface was polished using clean white cotton rags. He recalls rags that had oil on them being placed in the bin in the hallway, but the rags were arranged around the rim of the bin in order that they could dry; and
(c)Mr Radford Milton, an employee of Mr Simpson, said that the rags they were using to wipe the excess oil off were left on the edge of the bin so they could air out.[27]
[27] Mr Milton has refused to provide a witness statement to Holgersson and has evaded service of a subpoena to give oral evidence; t/s 421.
(2)In a witness statement dated 30 July 2019 and filed on 31 July 2019, Mr Thomas said the bin was used to dispose of rubbish generated by tradespeople working at the House. The rubbish included:[28]
[28] Witness statement of Ralph Edgar Thomas, dated 30 July 2019 [15] ‑ [20].
(a)the tradespeople's own personal rubbish such as cardboard takeaway coffee cups, plastic water bottles and plastic and cardboard takeaway food containers, and rubbish generated by the work carried out at the site;
(b)the cabinetmaker would typically put sawdust and sandpaper in the bin; and
(c)he and his labourer used cleaning cloths and rags to clean the house and these would generally be put in the bin.
(3)Mr Thomas also said in his witness statement dated 30 July 2019 that it was his job to empty the bin or to have a labourer empty the bin into a skip bin that was on the driveway outside the house when it was looking at all full, by which he meant over half full and that on 15 January 2016 he was last to leave the house and before he left:[29]
[29] Witness statement of Ralph Edgar Thomas, dated 30 July 2019 [32].
32.1I was especially careful to leave the House very clean and tidy because I knew that the owners were likely to come to the House over the weekend to inspect the work, and I wanted the House to be left in a clean and tidy state for them;
32.2.I vacuumed the floors in the dining, entry and lounge areas so that the finished timber floors were clean;
32.3.I left the vacuum cleaner in the place marked on the plans which is exhibit 'RET2';
32.4.I threw some plastic water bottles and a broken drill bit in the Bin;
32.5.I did not see any painters' rags on the floor in the dining room, the loungeroom or the entry hall. I did not see any rags at all, clean or dirty, in those areas;
32.6.I saw that the Bin was not so full that I needed to empty it - I estimate that it was a quarter to a third full;
32.7.I did not look into the Bin to see its contents;
32.8.I was satisfied that the Bin was not in a state that would be unsightly to the owners; and
32.9.I did not see any rags hung around the rim of the Bin.
(4)In a witness statement of Mr Simpson, dated 27 August 2019 filed 10 September 2019, Mr Simpson stated that on the afternoon of 15 January 2016 he left the property about 2.30 pm and before he left the site he spoke to the subcontractors painters he was working with, Mr Milton and Mr Roach and requested that they both make sure before they left the site that they either put the rags in the skip bin outside, or lay them out flat near the store area (this was across planks and ladders to dry out in the kitchen at the rear of the property) and not to put those in the inside bins found on each level. Mr Simpson also stated in his witness statement that he spoke to both Mr Roach and Mr Milton in the days after the fire and asked whether they had laid out the rags as instructed, and they both said they had done so and that these had been laid out on a plank near the store area in the kitchen.
AIG makes a submission that there is authority that its inability to show precisely how the fire started is not fatal to the proof of its case. In considering the issue of causation, it is necessary to look at the competing hypotheses.[30] Whilst it is clear that it is necessary to look at competing hypotheses, in the passage of Bradshaw v McEwans Pty Ltd referred to by senior counsel for AIG, the plurality remarked:[31]
Of course as far as logical consistency goes many hypotheses may be put to which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities.
[30] Anderson v Ausgrid [2015] NSWSC 1308 [82].
[31] Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 (Dixon, Williams, Webb, Fullagar & Kitto JJ).
In a case that is established by a process of inference from circumstantial evidence, as Spigelman CJ remarked in Seltsam Pty Ltd v McGuiness (in a case involving proof of negligence):[32]
[32] Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 [80], [85] ‑ [88] and [98].
The common law test of balance of probabilities is not satisfied by evidence which fails to do more than establish a possibility. See especially the unanimous joint judgment of the High Court in St George Club Ltd v Hines (1961) 35 ALJR 106 at 107 … where the court referred to Bonnington Castings Ltd v Wardlaw [1956] AC 613 as authority for the following proposition :
'In an action at law a plaintiff does not prove his case merely be showing that it was possible that his injury was caused by the defendant's default.'
…
It is often difficult to distinguish between permissible inference and conjecture. Characterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists.
Lord Macmillan in Jones v Great Western Railway Co (1930) 47 LT 194 in the context of stating that a possibility that a negligent act caused injury was not enough, said (at 202):
'The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible but is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have validity of legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference.'
After referring to this passage, Sir Frederick Jordan in Carr v Baker (1936) 36 SR (NSW) 301 at 306 said:
'The existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the quite possible.'
As Lord Wright put it in a frequently cited passage in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169-170:
'Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some case the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.'
The test is whether, on the basis of the primary facts, it is reasonable to draw the inference: see, eg, Luxton (1952) 85 CLR 352 at 358.
…
The courts must determine the existence of a causal relationship on the balance of probabilities. However, as is the case with all circumstantial evidence, an inference as to the probabilities may be drawn from a number of pieces of particular evidence, each piece of which does not itself rise above the level of possibility. Epidemiological studies and expert opinions based on such studies are able to form 'strands in a cable' of a circumstantial case.
Consequently, whilst each strand in a cable itself may only be established as a possibility, when all of the relevant evidence is added and considered together, to establish causation, the totality of that evidence must rise above a mere possibility. Thus, where each piece of evidence is able to add to another piece of evidence to add to the strength of evidence it is able to form, 'strands in a rope, not links in a chain' (which may break).[33]
[33] R v Exall (1866) 4 F & F 922, 926; 76 ER 850, 853 (Chief Baron Pollock).
Importantly, the admission of expert evidence is conditional upon proof of the assumed basal facts.[34] In Automasters Australia Pty Ltd v Bruness Pty Ltd, Steytler J said:[35]
Where an expert relies upon the existence of some fact in support of an opinion, that fact must be proved by admissible evidence: R v Abadom [1983] 1 WLR 126 at 131; Pownall, at 375 ‑ 376 and 389 ‑ 390; English Exporters (London) Ltd v Eldonwall Ltd [1973] Ch 415 at 422 ‑ 423; Makita at 731 ‑ 732, 737 ‑ 738 and 743 ‑ 744; and McNeil v Commissioner of Taxation (2003) 202 ALR 35 at 52. Where an expert opinion is based entirely on inadmissible evidence, the opinion will itself be inadmissible: Pownall at 378. Similarly, where the inadmissible evidence is so intertwined with the admissible evidence that they cannot be separated, the whole body of evidence will be rejected: Pownall at 376 ‑ 377; Steffen v Ruban [1966] 2 NSWR 622. However, where the inadmissible evidence can readily be ascertained and discarded, leaving admissible evidence in support of the opinion, the opinion should be admitted, subject to weight: Pownall at 378.
[34] Rhoden v Wingate [2002] NSWCA 165 [60].
[35] Automasters Australia Pty Ltd v Bruness Pty Ltd [2004] WASCA 229 [29] (Murray &Wheeler JJ agreeing); see also Pollock v Wellington (1996) 15 WAR 1, 3; Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 [85] (Heydon JA); Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 [32], [37], [66], [100]; see the discussion of Dasreef in Taub v The Queen [2017] NSWCCA 198; (2017) 95 NSWLR 388 [22] ‑ [33].
Thus, it is strongly contestable as Holgersson contends in his written submissions that Mr Visotin's March 2020 expert report has no basis in fact (as it is based upon mere possibilities), and if that is found to be the case then the evidence in answer to questions 3.7 and 3.8 would be irrelevant. This circumstance is a point that weighs against leave being granted.
However, this is not the only point that weighs against the discretion to grant leave to AIG to adduce Mr Visotin's March 2020 expert report at the trial.
AIG also claims in their written submission that there is no prejudice to the other parties if their application was granted. I do not agree.
Firstly, the provision of the report is too close to trial (which at the time of hearing the application it was anticipated that it would be listed in August 2020, and at the conclusion of the hearing of the application, the trial was by order relisted for hearing for 20 days from 10 August 2020 until 4 September 2020).
Secondly, it addresses a new topic, namely, the scientific basis for the propensity of Loba Oil for self-ignition by an assessment of assumed facts, which if allowed does not allow sufficient time for the McMurrays, the Bresland parties and Holgersson to be in a position to put on any expert evidence in response to the report and give the experts time to confer about any differences they might have, particularly their opinion about the matters that go to Mr Visotin's opinion that rely upon the facts to be assumed in the letter of instructions.
Although a submission was made that none of the other parties have taken any steps to engage another expert to provide contradictory opinion, and that this should be regarded as a factor that militates in favour of making an order in favour of AIG, during the course of the hearing on 3 June 2020, counsel for the Bresland parties informed the court that they had taken steps to identify an expert and have had some discussions with that expert but had not got to the point of asking for any report.
In circumstances where Mr Visotin's opinion relies upon assumed facts in respect of which there is some doubt as to whether those facts can be established, the other parties should be entitled to at least await the outcome of AIG's application before seeking to obtain their own experts. In any event, even if the other parties were to obtain their own expert chemist reports, the cost of such efforts may be wasted if Mr Visotin's 2020 expert report is either ruled inadmissible or given no or little weight on the grounds of relevance, if in the event that the assumed facts upon which Mr Visotin has given his opinion are not established by the evidence of the lay witnesses.
Further, I am not satisfied that AIG has given an adequate explanation for its delay in obtaining an expert report from a chemist on the process of thermal runaway and propensity of Loba Oil when mixed with Loba hardener to self-heat and ignite and the conditions in which that is likely to occur. There is nothing before the court which would suggest that Mr Visotin is the only chemist who can express a view on the samples analysed by him. It is clear from the affidavit of Mr O'Neill, sworn on 25 March 2020, that no steps were taken to engage another expert after the orders granting leave to adduce expert evidence were made in 2017. Put more simply, the application for leave is in all the circumstances too late.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
NM
Research Orderly to the Honourable Justice Smith11 JUNE 2020
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