Optus v Leighton - [2002] NSWSC 325

No judgment structure available for this case.

CITATION: Optus v Leighton & Ors [2002] NSWSC 325

CURRENT JURISDICTION: Equity Division
Construction List

FILE NUMBER(S): SC 55059/97

HEARING DATE(S):

JUDGMENT DATE: 24 April 2002

PARTIES :

First Plaintiff: Optus Networks Pty Limited
Second Plaintiff: Optus Systems Pty Limited
Fourth Plaintiff: Optus Vision Pty Limited
Fifth Plaintiff: Optus Communications Pty Limited
First Defendant: Leighton Contractors Pty Limited
Second Defendant: Norman Disney & Young & Partners Pty Limited
Third Defendant: Tyco Australia Pty Limited
Sixth Cross-claimant: EMAE Pty Limited
Fifth Cross-claimant: The WorkCover Authority of New South Wales

JUDGMENT OF: Hunter J

COUNSEL : Plaintiffs: P Greenwood SC; P Durack; S Climpson
First Defendant: P Garling SC; R Pepper
Second Defendant: S Robb QC; G Ellis
Third Defendant: N Hutley SC; J Lockhart
Sixth Cross-claimant: G Downes QC; N Kidd
Fifth Cross-claimant: S Donaldson SC

SOLICITORS: Plaintiffs: Minter Ellison Lawyers
First Defendant: Moray & Agnew
Second Defendant: Colin Biggers & Paisley
Third Defendant: Blake Dawson Waldron
Sixth Cross-claimant: Allen Allen &Hemsley
Fifth Cross-claimant: Phillips Fox

CATCHWORDS: Practice and Procedure - leave to amend - "unavailability" of witness during giving of evidence - discretion as to incomplete evidence - ss 135, 136 Evidence Act 1995.

LEGISLATION CITED: Evidence Act 1995 (NSW)

CASES CITED: Ordukaya v Hicks [2000] NSWCA 180

DECISION: Leave to amend granted conditionally - Evidence admitted in accordance with reasons for judgment. Costs of application and of adjornment be costs in the proceedings.

- 3 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CONSTRUCTION LIST

HUNTER J

24 April 2002

55059/97 OPTUS NETWORKS PTY LIMITED & ORS -v- LEIGHTON CONTRACTORS PTY LIMITED & ORS

JUDGMENT

1 HUNTER J: During the course of the proceedings, in respect of certain procedural matters, I gave indicative rulings and deferred the giving of reasons with the intention of providing formal rulings with reasons when publishing the principal reasons for judgment.

2 I have adopted in these reasons the same terminology used in the principal reasons.

3 One of the matters was the subject of a notice of motion of Optus of 27 July 2001 which sought the following orders, namely, that:

“1. the evidence of Allan Gilfillan McLachlan, namely:

a) his first statement dated 29 November 1999 (Ex10.044); and

b) his second statement dated 17 March 2001 (Ex 10.045); and

c) his examination in chief and cross-examination on 20 June 2001 (transcript pages 3602 – 3603)

remain on the record in its entirety.”

Evidence Act 1995

4 A second matter concerned applications by Optus to further amend the summons in terms of the further amended summons, being Schedule 1 to these reasons (the amendment). Those applications were partly disposed of in accordance with reasons for judgment of 12 June and 18 June 2001, save in two respects.

5 In relation to the amendment which had the effect of discontinuing the proceedings brought by Mobile, in my reasons for judgment of 18 June 2001 I indicated that leave to discontinue would be granted conditionally upon Mobile giving an appropriate undertaking to the Court of the nature referred to in those reasons.

6 The question whether par 178 of the amendment should be allowed was also deferred. For ease of reference that paragraph was in the following terms:

178. Further and in the alternative to the whole of the above pleadings, if it be contended by any of the defendants and found (contrary to the denials of the plaintiffs) that:

(a) the loss and damages suffered by the plaintiffs as pleaded above (or any part of such loss or damage) would have been incurred, in any event,, due to gypsum dust contamination; and

(b) the gypsum dust contamination resulted from gypsum dust

(i) dislodged from ceiling tiles within the CDC ; and/or

(ii) located within areas of the CDC and disturbed ;

by the discharge of the Inergen System on 3 January 1997,

Then the plaintiffs say that their loss and damage was caused by;

(a) breach of contract and/or negligence by the first defendant;

(b) the negligence of the third defendant; and/or

(c) the negligence of the second defendant.

Particulars of breach of contract by first defendant

In breach of its contract with the first plaintiff resulting from the issue of the purchase order referred to in paragraph 4 ;

(i) the System as supplied was not fit for its intended purpose because there was a material risk that on any discharge of the System it would cause gypsum dust contamination of the computers in the CDC;

(ii) the first defendant failed or omitted to construct and install the System thoroughly, skilfully and diligently in that it failed to ensure that upon installation there was no available source of gypsum dust contamination that could be dislodged or disturbed by a discharge of the System.

Particulars of negligence of first defendant

In breach of its duty of care owed to the plaintiffs in and about the installation of the System, the first defendant ;

(a) failed to advice or warn the plaintiffs that there was a material risk that a discharge of the System would cause gypsum dust contamination of the computers in the CDC;

(b) failed to advise or warn the plaintiffs that in installing the System it was necessary to ensure that there were no sources of particulate contamination that could be dislodged or disturbed by a discharge of the System, including, but not limited to ensuring that there were no unprotected edges to ceiling tiles in the CDC;

(c) by its certificate of 21 August 1995 represented that the System supplied was fit for purpose without the first defendant :

(i) ensuring that there was no available source of gypsum dust contamination that could be dislodged or disturbed by a discharge of the System :

(ii) advising or warning the plaintiffs of the matters referred to in (a) and (b).

(d) failed to advise or warn the plaintiffs that the precaution of installing tile clips on the ceiling tiles in the CDC may not be sufficient to prevent gypsum dust contamination of the computers in the CDC.

Particulars of negligence of the third defendant

In breach of its duty of care owed to the plaintiffs in and about the installation of the System the third defendant :

(a) failed to advise or warn the plaintiffs that there was a material risk that a discharge of the System would cause gypsum dust contamination of the computers in the CDC;

(b) failed to advise or warn the plaintiffs that in installing the System it was necessary to ensure that there were no sources of particulate contamination that could be dislodged or disturbed by a discharge of the System, including, but not limited to ensuring that there were no unprotected edges to ceiling tiles in the CDC;

(c) by its certification dated 4 August 1995 represented that the System supplied was fit for purpose without the third defendant :

(i) ensuring that there was no available source of gypsum dust contamination that could be dislodged or disturbed by a discharge of the System :

(ii) advising or warning the plaintiffs of the matters referred to in (a) and (b).

(d) failed to advise or warn the plaintiffs that the precaution of installing tile clips on the ceiling tiles in the CDC may not be sufficient to prevent gypsum dust contamination of the computers in the CDC.

7 Although not apparent on the face of the applications, their subject matter was related and, in respect of which, an amendment of Tyco’s defence had some bearing. I directed that an amended defence be filed in accordance with my reasons for judgment of 27 June 2001. Those reasons for judgment were given in disposing of an application by Optus, namely, that:

“The defendants should not be entitled to advance a positive case that there was gypsum dust contamination on the plaintiffs’ equipment which would have caused cleaning of the plaintiffs’ equipment independently of any contamination by the solution of iron oxide: that if the defendants plead such a positive case by leave, as a condition of leave the plaintiffs be given leave to reply to such a pleading [and] that the plaintiffs be entitled to advance alternative cases against the defendants arising out of that aspect of the defendant’s case…..”

8 The amendment which Tyco was directed to make was that effected by Tyco in paragraphs 12, 23 and 30 of its further amended defence which were in similar terms. Par 12 was as follows:

and further denies that any act or neglect of Tyco caused any loss to the plaintiffs and says that as at and from 4 January 1997 the computers in the Computer Data Centre at Rosebery were so contaminated by gypsum dust as to have necessitated the cleaning of those computers, as in fact it occurred, regardless of the presence of iron oxides or any contaminants associated with the discharge of water through the Inergen system.

(The gypsum dust case)

9 The gist of the issue raised by the gypsum dust case, was an issue of causation only, Tyco expressly disavowing any reliance on contributory negligence or failure to mitigate in respect of that defence.

10 Mr McLachlan’s evidence, was given by him on 20 June 2001. It is not a coincidence that these issues came to a head in June 2001. Although Tyco took on the responsibility of arguing an entitlement to raise the gypsum dust case, it was supported by both Leighton and NDY.

11 In the case of NDY, counsel readily conceded that NDY had not proposed to run a positive gypsum dust case prior to Mr McLachlan’s cross examination and that the raising of a positive gypsum dust case should have been pleaded and particularised. Counsel for Leighton conceded, not so readily, that Leighton had not proposed to run a positive gypsum dust case prior to Mr McLachlan’s evidence, but did not concede that it was required to be particularised. I remain indebted to counsel for NDY for his frankness in conceding what in my view was clearly the practice of matters conducted in the Commercial List.

12 It was my firm view at the time that it was indefensible to run the gypsum case without alerting Optus to that, either by pleading it specifically (not simply relying on a general denial of causation), or by supporting such a contention with the filing of statements of expert evidence.

13 Paradoxically, it cannot be asserted fairly that Optus was taken completely by surprise in relation to this issue in June 2001. It was clear in Tyco’s running of the case from early in the proceedings that a causation issue was being explored by Tyco in cross-examination of some of Optus’ expert witnesses. I think it was equally clear that in the course of that cross-examination, Tyco’s positive gypsum dust case was not put squarely to any witness called in Optus’ case.

14 Tyco denied that it had any obligation to put Optus on notice of the gypsum dust case by its pleading, or by the filing of statements of expert evidence prior to hearing. On its behalf it was asserted that it was entitled to raise such a case through cross-examination and to rely on its general denial of causation in its defence.

15 In support of those submissions, a detailed outline of Tyco’s conduct of this issue of causation was provided to the Court which particularised cross-examination on behalf of Tyco of expert witnesses called in Optus’ case. I have examined the numerous passages relied upon in those written submissions and nowhere in the course of that cross-examination was it put to a witness that the contamination of the computer equipment by calcium sulphate alone (the gypsum dust case) would have required Optus to clean the equipment.

16 In the extensive references provided by counsel of his conduct of the case on behalf of Tyco, the closest the cross-examination reached to putting the gypsum dust case squarely to the witness was at transcript 480 and 823 where it was put to Mr Hubble that “Had there been no rust water in the heat exchanger and had the Inergen system discharged, it could well be the case that these computers would have required cleaning because of the contamination they were subjected to by reason of that discharge” [at 480:48] and the suggestion that “isn’t it likely that you would have held the view, setting aside the iron and zinc contamination, that this board ought to be cleaned in any event because of those levels of ionic contamination” [at 823:46] as put to Professor Hibbert. The substance of the cross-examination of Professor Hibbert, Mr Hubble and Mr Flynn was directed to sources of contamination, the nature of discharge of Inergen gas, the possible association of calcium sulphate with ceiling tiles and, in relation to contamination other than from the iron oxide, questions were put as to the possibilities that flowed from that contamination.

17 Counsel for Tyco directed my attention to an exchange which took place with me on 27 February 2001 as follows:

18 Counsel relied upon that, with some justification, as evidencing a recognition of the causation issue as being pursued by Tyco. However, it should be noted that, at that point, I had assumed that the matter had been adequately particularised and been the subject of expert evidence served upon Optus. No objection had been taken to that line of cross-examination. Further, the nature of the defence was such that my comments were not completely devoid of scepticism at that point of the hearing. The matter was referred to in my reasons for judgment of 27 June 2001 which was expressed as follows:

“(b) my remarks in relation to this issue when first raised should not be read too literally. They were borne partly out of an appreciation of the unusualness of the defence of parties if found guilty of ruining the plaintiffs’ equipment, that substantially the same damage would have resulted from other contamination for which those parties were not responsible. That is not a defence that has frequently found favour in this Court. That is not to say that this is not a case that may prove to be the exception.”

19 I would add that those remarks were also fortified by the fact that the cross-examination had not put squarely to a witness the positive assertion that cleaning of the equipment would have been required, regardless of the incident, as against mere possibilities being explored in cross-examination. However, as appears from my reasons for judgment of 27 June 2001, the causation issue in relation to contamination by calcium sulphate had been explored to such an extent, without objection prior to 21 June 2001, that it was an issue that the Court was required to adjudicate upon, as far as it was consistent with the efficient conduct of the hearing to do so.

20 There is no doubt that the catalyst for the issue surfacing as one that had not been pleaded or particularised, nor made the subject of statements of evidence by Tyco, was the evidence given by Mr McLachlan. The matter arose on 21 June 2001, the day after Mr McLachlan commenced his evidence: the Court being informed that Mr McLachlan was unable to continue due to ill health.

21 Optus raised the matter in the context of my exploration of the course of future cross-examination of Mr McLachlan as follows:

Allied to that there will be significant cross-examinations about the various reports about calcium, and we will have to go through the comparison.

Now, it is not pleaded, and there is no evidence from any witness on the part of Tyco that has been provided to date to suggest that Optus would have cleaned or it would have been necessary for Optus to.

If there would have been a discharge, there would have been an event which Mr Hubbell – and I am going back a long way, I haven't been given notice of this so-called pleading point before --

22 In fact, the supplementary statement of Dr Lunsmann of 6 June 2001 raising a positive gypsum dust case had been served on Optus in the week preceding this exchange: a matter which appeared to have escaped both counsel for Optus and for Tyco and was unknown to the Court.

23 I think the written submissions of counsel for Optus in opposing reliance by Tyco on the gypsum dust case, conceded that the evidence given by Mr McLachlan in cross-examination on 20 June 2001 had been the catalyst for the raising of the pleading and evidentiary point by counsel for Optus on 21 June 2001. The submission in reply was as follows:

24 By the time of those submissions of 26 June 2001, the statement of Dr Lunsmann had come to counsel’s attention.

25 It is appropriate then to examine the evidence of Mr McLachlan and the circumstances in which he was called as a witness as the context in which the par 178 amendment should be considered.

26 As a preliminary observation, with the benefit of hindsight, there is no doubt that Mr McLachlan should not have been submitted to rigorous cross-examination and the only question of substance is whether the whole or any part, of his evidence should be remain as evidence in the proceedings, having regard to the condition he was in at the time of giving evidence, the devastating effect of being subjected to cross-examination and the incompleteness of his evidence.

27 I think there is some utility in looking at the circumstances surrounding the calling of Mr McLachlan as a witness. Aspects of Mr McLachlan’s involvement in the emergency work undertaken immediately following the incident and Relectronic’s participation in the recovery program are outlined in the principal reasons for judgement. He was the managing director of Relectronic which he described as “an international disaster recovery company, specialising in the recovery and restoration of equipment……. subjected to catastrophic events [and which specialised] in the restoration of a wide variety of ‘high-tech’ equipment”. In his statement of evidence in chief he said that early in the week following the incident he had the following conversation with Mr Cearns:

“PC: “Is all this equipment contaminated?”

AM: “Yes”.

PC: “Does this equipment need to be decontaminated?”.

AM: “Yes, absolutely, as well as the environment”.

PC: “Is there any other option?”

AM: “Commercially, no.”

28 He expressed the opinion that contamination of the kind relating to the incident “invariably [reduced] the long, medium and short term reliability of electronic assemblies.” His statement detailed the work undertaken by Relectronic which took the form, mainly, of identifying the reports which were in the tender bundle.

29 His company was also engaged in the ongoing sampling and testing of equipment on a “random sampling basis” carried out under internationally recognised sampling procedures. He identified how the samples were sent to Mr Flynn at Unisearch for analysis and the receipt of reports back from Mr Flynn. His explanation for this exercise of testing was “to establish an objective and accurate record of contaminants found on equipment….. to verify that the equipment was contaminated”. His statement of evidence identified each of the reports so received from Mr Flynn. He described how, under instructions from Optus’ solicitors, he carried out tests on other facilities of Optus than that situated at Rosebery. He also was instrumental in the carrying out of environmental monitoring at Rosebery during the latter part of 1997 and 1998. His statement outlined his personal involvement which included the following:

“33. I reviewed the workshop files on equipment from the Computer Data Centre at the STC cleaned by Relectronic. I also reviewed the reports on swab testing and wash sampling provided by Unisearch and the other reports from Unisearch. I also visually examined a large proportion of the computer equipment and components decontaminated by Relectronic. Every item of computer equipment that I inspected was contaminated with iron oxides to some degree, prior to decontamination.”

30 He expressed the general view of the state of the equipment as experienced by him as follows:

“40. As appears from the reports that were issued shortly after the incident, I believed at the time that the contamination presented a very real threat to Optus’ equipment. Having examined the equipment, the micrographs and the test results over many months, I strongly maintain that view.”

31 Finally, Mr McLachlan evidenced the cost of the cleaning program undertaken by Relectronic on the instructions of Optus. Mr McLachlan had an extensive experience in electrical and mechanical engineering over 30 years.

32 In a supplementary statement of evidence of 17 March 2000, Mr McLachlan responded to the contents of a statement of evidence of Dr Lunsmann of 22 July 1999, which had been served on Optus by Tyco. In particular, he challenged Dr Lunsmann’s figures on “allowable residual contamination levels” as relating to flux residues and not ionic residues which he said should be expressed in units of weight per area and not in dimensional units, as apparently, Dr Lunsmann adopted in his statement.

33 He also took issue with the view that solder alloy was inert, voicing his experience of corrosion in the presence of “water and electrical energy, or ionic contamination”. It was also his opinion that computer cabinets are not “usually fitted with fine air filters” as apparently asserted by Dr Lunsmann. He also offered corroborative evidence of opinions expressed by Professor Hibbert and Mr Flynn regarding the capacity of conductive material to track across electronic connections.

34 He also challenged the view, apparently expressed by Dr Lunsmann, of the limited life of commercial computer equipment, stating that it was his experience that equipment of the kind in use by Optus would “almost invariably be utilised for periods well in excess of three years. Ten years’ service life, as a minimum, would realistically reflect that ‘real world’ situation”. He described Relectronic’s use of aqueous-based decontamination chemicals and not “chlorinated solvents or other hydrocarbon-based chemical formulations” which apparently Dr Lunsmann had referred to in his statement.

35 Mr McLachlan was due to give evidence on 2 April 2001. It was the twenty-fifth day of the hearing. Up to that point Dr Doig, Mr Thompson, Dr Basden, Mr Bayley, Mr Hubbell, Mr Flynn, Mr Berents, Professor Hibbert, Ms Gunasekera, Mr Harrison, Mr Kennewell and Mr Cearns had given evidence. On 2 April the proceedings were adjourned in the following circumstances:

36 On 3 April 2001 Senior counsel for Optus informed the Court that Mr McLachlan was unable to attend and the case proceeded with the evidence of Mr Wyles. On 4 April at the conclusion of hearing, the Court was informed that counsel for Optus had “some optimism about Mr McLachlan next week”. In endeavouring to keep the case moving I enquired as follows:

37 At the conclusion of evidence on 5 April, the position relating to Mr McLachlan was treated in the following way:

38 The reference to the undesirability of calling Mr McLachlan as there expressed by me was out of concern for the witness and also the unfairness to cross-examining counsel, in this case Mr Hutley S.C., in being faced with cross-examination of a person who had suffered some form of mental breakdown.

39 During the course of considering the future conduct of the case on 30 April 2001, counsel for Optus informed the court that Mr McLachlan had been “spoken to” and that the prospect had been raised with him of giving evidence “in a couple of weeks” and when it was said he expressed the view “he thought he would be able to do that”. That did not eventuate and it was not until 19 June 2001, well into the case of the first and second defendants that the Court was informed as follows:

40 Mr McLachlan was not called until late in the afternoon of 20 June 2001. There were no objections to the statements of evidence of Mr McLachlan which became exhibits 10.044 and 10.045. He was examined very briefly in chief and that examination concluded in the following way:

41 My purpose in taking that course may be obvious. While having significant concern for Mr McLachlan’s well-being, he appeared very subdued and with a heightened complexion, it was not apparent to me that the health of Mr McLachlan was strictly relevant and, as earlier noted in these reasons, I regarded it as potentially very unfair to a cross-examiner to present a witness with a stated vulnerability due to ill-health.

42 Senior counsel for Tyco had led the defence throughout the proceedings. His cross-examination, which is recorded in some twenty-seven pages of transcript, covered the nature of Relectronic’s business and its profitability. It will be remembered that on one occasion the Court had been informed that part of Mr McLachlan’s mental health problems was related to the collapse of his business. Part of the cross-examination included the following:

43 That was the business that presumably had gone into liquidation. The relevance of that evidence presumably lay in the implication that Mr McLachlan’s advice and opinion that the contamination of the equipment was so bad as to require cleaning was tainted by self interest.

44 As appears in the principal reasons for judgment, Tyco has submitted that the Relectronic costs were not reasonable, although it has called no evidence from an expert in the field as to the suggested reasonableness of the costs of cleaning. Tyco has relied on onus of proof considerations and a calculation by Mr Lonergan of an alternative cost of cleaning based upon a document included in Optus’ discovery. It is not evidence of the reasonable cost of cleaning as distinct from a calculation based on the documents disclosed by Optus.

45 Towards the latter part of Mr McLachlan’s short cross-examination, the questions turned to the presence of gypsum dust on the contaminated equipment. As appears from the following:

46 There was further cross-examination concerning contamination levels, during which I think it became increasingly obvious that it was extremely difficult to gauge whether Mr McLachlan was conscious of the answers he was giving. He was clearly very submissive and subdued. There then followed a series of concessions which I noted at the time as being of very doubtful reliability. The following evidence fell into that category:

47 That evidence concluded Mr McLachlan’s cross examination on that day and I was left with very serious reservations concerning the reliability of Mr McLachlan’s answers, given his appearance in the witness box and the nature of the cross-examination. I was satisfied that Mr McLachlan had no real capacity to resist pressure in the witness box. He showed signs of resisting and then would appear to give in mentally.

48 I was not at all surprised by the following information conveyed to the Court on 21 June 2001 and which is repeated for ease of reference:

Allied to that there will be significant cross-examinations about the various reports about calcium, and we will have to go through the comparison.

49 It was at that point that counsel for Optus raised the failure of Tyco to present a positive gypsum dust case, either in the form of a pleading, or by serving a statement of expert evidence.

50 Earlier in these reasons I have set out the exchange that took place on 21 June in which counsel for Tyco informed the Court that it was not Tyco’s intention to call any witness to support the positive gypsum dust case. Later in that day counsel for Tyco had the following further to say:

It may have something to do with the fact that the first witness who was actually there on the spot finally gave evidence on the 51st day and disclosed to your Honour what his perception was. That may cause a situation where my client has been prejudiced because of a failure of any person to raise this point with us until this day.

51 Unbeknown to counsel at that time, the supplementary statement of Dr Lunsmann had been served on Optus supporting a positive gypsum dust case. At the conclusion of the evidence on 21 June 2001 I again addressed the matter that, in the event that Tyco relied on a positive gypsum dust case, then that required attention to the pleading and the possibility of the need for the filing and serving of further statements of expert evidence. [T3671:31 – 3676:51]

52 Following that, counsel for Optus raised the matter of further amendment as appears from the following:

I should have raised this before Mr Hutley left.

53 Following the resumption of the hearing that day, that matter was further discussed between the Bench and counsel. It was during the course of further discussion of the related issues of amendment of Tyco’s defence and of Optus’ causes of action that concessions were made on behalf of Leighton and NDY that it had not been intended to run a positive gypsum dust case prior to the evidence of Mr McLachlan [T3690:51 – 3691:33: 3692:34 – 58]. Later that afternoon counsel for Tyco corrected the statements earlier made that Tyco had not served an expert report in support of the positive gypsum dust case.

54 On the resumption of hearing on Monday 25 June I raised the question of the availability of Mr McLachlan to resume giving evidence. Up to that point counsel for NDY had described the concessions made by Mr McLachlan in cross-examination as a “moment of truth”. Having regard to my observations of Mr McLachlan in the witness box and the manner in which he was cross-examined I regarded that description as singularly unfortunate and the medical evidence that was later adduced gave me no reason to change that view. It was not a submission that was repeated by counsel once the seriousness of Mr McLachlan’s ill-health was established.

55 Because of the way in which counsel for Optus and for Tyco and NDY were taking up positions in the proceedings based upon the evidence of Mr McLachlan I took the step of informing counsel of the notes I had made in relation to Mr McLachlan and his evidence, as appears from the following:

I think it is important to know whether his recent hospitalisation is a consequence of his experience in the witness box, which one rather suspects it was. That will give rise, I think, to the desirability of him being recalled for further cross-examination, particularly since it has been indicated by Mr Hutley that there is extensive further cross-examination to be addressed to him.

56 The medical evidence that was adduced in support of the application concerning the admissibility of Mr McLachlan’s evidence only reinforced my impressions as conveyed to counsel. Senior counsel for Tyco has been critical of my exposing of those notes at that stage. However, it seemed to me that he failed to recognise the importance to both the defendants and Optus that the evidence of Mr McLachlan be placed into a realistic context and not necessarily, as constituting a ‘moment of truth’. If I entertained very serious doubts about the reliability of Mr McLachlan’s concessions it was clearly in the interest of the defendants that that be known.

57 Similarly, Optus’ reaction to Mr McLachlan’s evidence should, in my view, have regard to those observations of Mr McLachlan in the witness box. Optus at that point was pressing for an amendment which was the predecessor of the par 178 amendment as a condition to Tyco being permitted to run a positive gypsum dust case. That condition was dropped by Optus on 26 June 2001 [T3791:36].

58 I think there is some utility in expressing some views about the potential problems confronting the future conduct of the case as at 27 June 2001. It was and remains my view that the defendants had not put Optus on notice by pleading or by serving a statement of expert evidence prior to the hearing that it relied upon a positive gypsum dust case.

59 The cross-examination of expert witnesses up to the point of calling Mr McLachlan, as earlier stated, did not advance to the point of putting such a case squarely to them. It was not until 13 June that such a statement of expert evidence was served upon Optus by Tyco. By requiring Tyco to plead a positive gypsum dust case, if that was to be advanced by it, the consequences of other parties, particularly Optus, responding with further statements of expert evidence and recalling expert witnesses was an unknown and, potentially, very serious problem.

60 Moreover, it was apparent that Tyco related the presence of calcium sulphate to the use of gyprock tiling in the Rosebery centre. That gave rise to the possible liability of Leighton in the installation of the tiles in the first place, and of Tyco and Leighton as to the appropriateness of the Inergen system in such an environment.

61 It was difficult to see how Optus could be excluded, fairly, from litigating such issues if a positive gypsum dust case was to be raised by Tyco.

62 As was submitted by counsel for Leighton, the implications of the raising of such further causes of action were such that they could not be accommodated within these proceedings without a complete dislocation of the hearing.

63 Consequently, it was essential, in my view, that the parties took whatever steps were perceived to be in the interest of their respective clients’ with knowledge of my observations of the reliability of Mr McLachlan’s evidence, so far as that evidence had been taken and at a time when there were strong indications that Mr McLachlan would not be returning to the witness box, although that matter had not been resolved.

64 One course which seemed to me to be open to Optus was to issue fresh proceedings in relation to those proposed fresh causes of action, subject to questions of limitation and Anshun estoppel. I suggested as much during the course of discussion on 27 June 2001 [eg T3922.33 – .48].

65 The par 178 amendment was submitted by Optus during the course of proceedings on 28 June 2001 [T3975:37* note transcript error]. As it happened, the course of taking fresh proceedings had been implemented by Optus’ solicitors a week previously. It was my view that in these circumstances, there remained only the question of Optus being protected against any Anshun estoppel in relation to those fresh proceedings, if Optus was not permitted to litigate the par 178 amendment in these proceedings.

66 It is common ground amongst the parties that such a fresh cause of action against the defendants could not be accommodated realistically, in these proceedings. The dilemma that posed was bound up with the fact that, in my view, Optus could not be criticised for failing to raise the par 178 amendment until a positive gypsum dust case was advanced by the defendants. As conceded by, at least, Leighton and NDY, it had not been their intention to advance such a case prior to Mr McLachlan’s evidence. In the case of Tyco, having regard to the belated serving of Dr Lunsmann’s supplementary report on 13 June and the nature of the cross-examination of Optus’ experts to that point, I think it is fair to say that Tyco had not signalled such a positive case prior to mid-June 2001.

67 In those circumstances, any decision taken by the Court, in my view, should be one that did not preclude Optus from pursuing causes of action in the form of the par 178 amendment. If such causes of action could not be pursued in fresh proceedings without being confronted with an Anshun estoppel, the Court would be left with little alternative than to grant the amendment with the inevitable consequence that the proceedings would be derailed.

68 It was for that reason that I raised with counsel for the defendants whether they contended that such causes of action would be Anshun estopped in fresh proceedings.

69 On 9 July 2001, the position of Mr McLachlan was still outstanding and the matter was raised in the following circumstances:

70 On 16 July 2001, at the commencement of hearing, a medical report relating to Mr McLachlan was furnished to the Court, although, at that point, no formal application had been made by any party concerning Mr McLachlan’s recall to the witness box. Later that day counsel for Optus stated from the bar table that Mr McLachlan was not going to be available for the remainder of the proceedings [T4813:31 – 50]. As a result of what passed between the Bench and counsel that day and on 17 July 2001 [T4826:1] I gave the following directions:

His evidence was not completed, in that he was in the course of cross-examination when the court adjourned on 20 June and did not thereafter appear. It has been stated from the Bar table that the witness was hospitalised shortly after his departure from the court and I have been furnished with a specialist's report which I'll mark for identification 101.

In those circumstances, I think it is necessary to address the status of the evidence that has been given by Mr McLachlan and, in this respect, I direct that the plaintiff file and serve a notice of motion seeking what appropriate orders it contends should be made in relation to that evidence, supported by any affidavit evidence, by --

71 That resulted in Optus’ application that Mr McLachlan’s evidence be admitted, notwithstanding his unavailability. It was common ground that the mental condition of Mr McLachlan was such that he was unfit to be recalled to the witness box [T4826:1 – 4833:5]. On 20 July 2001, pursuant to directions given on 17 July, Optus filed in Court the notice of motion in relation to the admissibility of Mr McLachlan’s evidence.

72 On 27 July 2001 the application was heard. The principal evidence in support of the application was that of Dr Prem Naidoo together with his reports and clinical notes. Dr Naidoo is a medical practitioner who specialised as a consultant psychiatrist. He is a member of the Royal College of Psychiatrists London.

73 The evidence disclosed that Mr McLachlan had been referred to him for specialist psychiatric treatment by Dr Alan Carless on 11 April 2001. Mr McLachlan’s condition at that time was described as follows:

“He has been very distressed by the collapse of his business. He has been taking Prozac, Serepax and Temazepam to try and cope. So far he has been unable to give expert evidence in a long-standing court matter and on present indications I do not think he will be able to face cross-examination for three months without risking further deterioration of his health.

He is extremely anxious today and cannot even sit comfortably in my surgery.”

74 Mr McLachlan was seen by Dr Naidoo on 12 April 2001 and his history, condition, treatment and prognosis was contained in a report to Dr Carless of 19 April 2001 which was in the following terms:

“Thank you for referring this man who has been having great difficulties coping with the collapse of his business over the last two months. He has been extremely nauseous and has been feeling that life is not worth living. His sleep varies greatly and his appetite is decreased. He has lost about six kilograms. He has no energy and is worst in the morning.

There is no past medical or surgical history of significance.

Three years ago the patient was in the Wesley Mission in Auburn for two weeks. He was treated for depression with Prozac and he has been on Prozac for the three years since. He saw a psychiatrist for a while after his hospital admission and has then been seeing his GP.

He currently is on Prozac 2mg mane, Serepax 1 tablet and temazapam 1 – 2 nocte. He is not allergic to anything that he knows of.

The patient’s parents died in their eighties. He has six brothers and a sister is the oldest in the family. There is no family history of psychiatric illness or alcohol or drug problems.

The patient was born in Glasgow and his family was very poor. He enjoyed his childhood though and was close to his parents. He attended school between the ages of 5 and 15. He then went into the railways as a cadet for three years and in the army for three years. He moved to New Zealand and has been involved in electrical engineering. He came to Australia in 1988 and since 1991 has been involved in a loss recovery business. Things started going downhill about three years ago and has terminated in the collapse of the business in the last few months.

The patient married for the first time at the age of 23. This marriage lasted 27 years and the couple have three children who are currently aged 31, 35 and 38. He married for a second time in 1995, having been together with his current wife since 1989. His wife is 53 and has four children from her first marriage. Their relationship is said to be “fantastic”.

The patient does not smoke cigarettes. He drinks a couple of glasses of wine per night. He does not abuse illegal drugs.

At interview the patient was clearly anxious and depressed. He had been feeling that life was not worth living but was not actively suicidal when seen. There was no evidence of psychosis or gross cognitive problems.

My impression was that he was suffering with a relapse of his depression, secondary to his business collapse. I suggested that we review his haematological status. I have advised him to reduce his coffee intake and alcohol intake. In order to deal with the acuteness of his anxiety I have prescribed Olanzapine 5 mg nocte to him and will review his situation shortly.

I certainly do not believe that the patient is in a fit state to give evidence on any court matter at present and would be in agreement with your feelings about this being best avoided for the next twelve weeks or so.

I will let you know how things progress.”

75 The history of being nauseous, as there referred to, was described in cross-examination by Dr Naidoo as “a symptom of anxiety [which was] often present in severe depression”.

76 Dr Naidoo’s clinical notes recorded that Mr McLachlan experienced dry wretching in the morning which Dr Naidoo identified as a common symptom of anxiety. The clinical notes also recorded that Mr McLachlan was required as an expert witness and that he couldn’t cope with that at the time of the examination.

77 I think the evidence of Dr Naidoo in cross-examination is a little confused, in relation to these clinical notes. As I read them, Mr McLachlan was on medication for some three years after his admission to Wesley Mission consisting of Prozac, Serepax three times daily, and Temazapam. At the time of the examination, he was on medication of that kind, but, it seems, in different quantities.

78 In Dr Naidoo’s report to Minter Ellison of 12 July 2001 he covered the examination of 12 April 2001 in more detail and it was expressed in the following way:

“The patient presented with depression which had worsened considerably in the two-month period prior to seeing me. The depression was secondary to the collapse of his business. His business had been deteriorating in the two to three year period or so prior to seeing me. The patient had put an immense amount of time and all his capital into the business in order to rejuvenate it to no avail. In the end he lost all his money (several million dollars). He was absolutely a broken man, with feelings of extreme guilt in relation to his family. He felt an absolute and total failure and he felt that there was no way that he had any hope for the future at his age. He felt that life was not worth living.

The patient was sleeping only a few hours and on some nights was not sleeping at all. His appetite was diminishing and he had lost 6 kg in weight. He had no energy and he had diurnal variation of mood, i.e. he was worse in the mornings (which is a clinical indicator of biological depression).

…….

At interview the patient was socially appropriate and cooperative. He was very downcast and expressionless. He appeared very depressed and had been having passive suicidal ideation. The patient had been clearly very anxious and agitated. There was no evidence of psychotic symptomatology and there was no evidence of organic difficulties.

My impression was that this man was suffering with a Major Depressive Disorder and in view of the acuteness of his illness I wrote to Dr Carless stating my opinion that he was not in a fit state to give evidence in Court for at least twelve weeks.”

79 As further noted in Dr Naidoo’s report of 12 July 2001, he continued to see Mr McLachlan weekly for the months following his first examination and thereafter two weekly until 23 May 2001. In cross examination of Dr Naidoo on the clinical notes of 19 April, he gave the following evidence:

80 The clinical notes of 19 April 2001 recorded that Mr McLachlan’s concentration levels were low and, when seen on 23 April, the history given included a description by Mr McLachlan that:

“Brain goes back over the events of last week’s woolly headed difficult to remember things.”

81 When seen on 9 May 2001 his concentration was said to have improved. On 23 May 2001 Dr Naidoo referred Mr McLachlan to the Northside Clinic for a program established for “Anxiety, General Day & Mood Disorders”. When seen on 23 May 2001 it was noted that there was “no great change” and his medication was changed.

82 From this point Mr McLachlan was seen by Dr Naidoo weekly. The change in medication was described by Dr Naidoo as a “major tranquilliser [and that an increased dosage of] Prozac” “made no difference to [Mr McLachlan’s] mood state”. That resulted in additional medication being prescribed in the form of “Lithium Carbonate”. Dr Naidoo recorded that “these manoeuvres failed to improve the patient’s mood and he was still very depressed when seen on the 14th June 2001”.

83 At that time Dr Naidoo discussed with Mr McLachlan treatment in the form of electro-convulsive therapy which would have required hospitalisation. Mr McLachlan was reluctant to undertake that treatment. The history given by Mr McLachlan, when later seen by Dr Naidoo, included the facts that Mr McLachlan’s home was put to auction on 16 June as a result of his financial difficulties: that he received far less in the sale than expected which only made his condition worse, resulting in a “minor overdose”.

84 That was the Saturday prior to Mr McLachlan being called to give evidence. It may also be noted that that was in the period during which Dr Naidoo was of the opinion that Mr McLachlan was not fit to submit himself to cross-examination.

85 Dr Naidoo saw Mr McLachlan the day after Mr McLachlan gave evidence and his report of that examination was as follows:

“I next saw the patient on the 21st June following his Court appearance on the 20th June 2001. He was in a state of extreme agitation following the cross-examination. He felt that he had become completely confused and unable to think clearly during the cross-examination. He felt that he’d been saying inappropriate things. He was mortified and terrified. I had no hesitation in immediately arranging his admission to The Northside Clinic where he was admitted directly into the intensive care unit. The patient is in fact still in the intensive care unit at the Clinic. My assessment of him on the 21st June was that he was acutely suicidal and at extreme risk to himself.”

86 Interposing there: it is not being wise after the event to say that I was significantly concerned about Mr McLachlan during the course of his cross-examination on 20 June and while I declined to intervene for the reasons stated earlier, I think not to have done so was unfortunate. Although cross-examining counsel was not to know the depth of Mr McLachlan’s vulnerability, I did think a much more restrained and sensitive approach to cross-examination would have been fairer and possible without sacrificing the interest of Tyco.

87 The treatment given to Mr McLachlan following his admission to the Northside Clinic included electro-convulsive therapy. Initially he received six treatments of unilateral therapy, but in the absence of “significant improvement [it was necessary] to use bilateral ECT (which is used in the most severe intractable depressive states)”. As well as that shock treatment, Mr McLachlan had been put onto different anti-depressant medication which, at the time of Dr Naidoo’s report of 12 July, he was still undergoing. As at that date, the shock treatment was ongoing with “a suggestion of some improvement in [Mr McLachlan’s] condition”. His admission as an in-patient to the clinic was continuing.

88 The opinion evidence of Dr Naidoo as set out in his report was as follows:

“Opinion

In my opinion there is no doubt whatever that Mr McLachlan suffers from a Major Depressive Disorder of extreme severity to the point that he was at major risk of suicide at the time that he was admitted to The Northside Clinic on the 21st June 2001. The patient has been suffering with this disorder for several months with a steady worsening in his condition.

The cause of his condition is the collapse of his business. The problems with his business have been escalating over the last two or three years. Initially three years ago, the patient became depressed and suicidal following the stresses of the business problems that he was facing at that time. However, he was treated in hospital and recovered and has been on antidepressant therapy, namely Prozac 60 mg mane, from that time on. However, he has become depressed again on this occasion because of the collapse of his business in spite of being on the antidepressant medication. A number of other medications added to his treatment in the last few months by myself have not alleviated his depressive condition.

“The following matters referred to by Dr Fuchs in his 12 November 1997 report are bona fide in issue:

(a) On p. 517 of Ex. 4.012 Dr Fuchs provides observations upon various photographs contained in various Relectronic reports. Dr Fuchs refers to flux residues which relate to the solder flux from the manufacturing process of the PCBs. There is an issue as to these residues and whether the incident would have any effect on them. It was proposed to take Mr McLachlan through these Relectronic reports and photographs in some detail, with a view to challenging statements in the reports and the photograph sections, as to the precise nature of what was observed, the sampling methodology, the source of particular contaminants and other matters (see the fourth page under the section entitled “Section B – Reports” in the document entitled “Third Defendant’s Areas of Challenge to Mr McLachlan’s Statements and Relectronic Reports, handed to the Court on 30 July 2001”);

4. On page 516 of the 12 November report Dr Fuchs comments about the effect of zinc on corrosion. The relevant of zinc (as opposed to iron) to corrosion has never played a significant role in the Plaintiff’s case.

5. In relation to Dr Fuchs’ facsimile dated 5 February 1997 (part of Exhibit 4.005) it is in dispute that the contaminants would have caused long term corrosion (first paragraph of facsimile).

101 In relation to those submissions I am satisfied that the reports should be admitted into evidence. The only question is the basis upon which the material is to be admitted.

102 As to the submission that there was no evidence of Dr Fuchs’ qualifications: that is a submission which, in my view, does no credit to the approach adopted by Tyco. Dr Fuchs is identified as the responsible project engineer for Relectronic in Munich. I would have little difficulty in inferring from the content of the material that the Doctorate of Dr Fuchs has a relevant relationship to his expertise to express the views in the report which are of a highly technical, informative nature, reflecting a high degree of expertise.

103 The reports were relied upon by Mr Berents as evidenced in his statements of evidence in chief, to which no objection was taken. If Mr McLachlan was to be cross-examined upon the contents of those reports, it is difficult to reconcile that with the absence of cross-examination of Professor Hibbert, Mr Hubbell, Mr Flynn and Dr Basden on the reports.

104 So far as cleaning methodology was the subject of Dr Fuchs’ report, while Mr McLachlan may have been cross-examined on that subject matter, I note Mr Flynn was cross-examined on related matter. Moreover, none of the statements of evidence adduced on behalf of Tyco commented upon the reports of Dr Fuchs, presumably by reason of the fact they were not asked to.

105 While Mr McLachlan may have been cross-examined on some aspects of those reports, those aspects, I think apart from the cleaning technology, adopted by Mr McLachlan, were equally capable of being put to other witnesses. I think the submission that Dr Fuchs’ opinion to the effect that “iron/zinc particles can agglomerate to cause tracking,” was disputed and that the subject matter of tracking and conductivity was to be the subject of cross examination of Mr McLachlan is not a particularly attractive submission. Tracking and conductivity of magnetic iron oxides I would have thought was a matter of common ground, as distinct from the capacity of such particulate matter to behave in that way in the concentrations found on the circuit boards of Optus’ equipment.

106 I think there is little substance in the submission that Mr McLachlan would have been subjected to cross-examination on that matter, given the extent to which the issue has been laboriously explored over hundreds of pages in these proceedings with experts of very high qualifications. It is very difficult to refrain from expressing criticism of the approach adopted by Tyco.

107 The objection that Dr Fuchs’ opinion in the first report “that the contaminants would have caused long term corrosion” was a matter in dispute mis-states that content of the report referred to.

108 I have particular difficulty in accepting the submissions advanced on behalf of Tyco in relation to this matter. There had been no indication that Dr Fuchs’ qualifications were in dispute, nor that he would be required to attend to be cross-examined upon his reports which, as earlier stated, had gone into evidence through, at least, the evidence of Mr Berents whose evidence in chief was as follows:

“146. Relectronic produced numerous reports relating to the contaminated equipment at Rosebery. I read most of the reports as they were received by Optus. In about November 1997 I recall reading a report from Dr Fuchs EX.4.012 P 0510 I had previously read a shorter report from him in about February 1997 EX.2.041 P 0168.

147. Nothing in the reports led me to believe that the decision to decontaminate the equipment should be amended. Indeed, the reports confirmed in my mind that the decision to clean the equipment was entirely correct.

109 However, I do not propose to admit the material in Dr Fuchs’ reports as evidencing the truth of their contents. They are to be admitted as expert opinions obtained by Optus through Relectronic, the contents of which were material to the reasonableness of Optus’ undertaking of a cleaning of the contaminated equipment.

110 As to the evidence of Dr Naidoo, the view I have taken is that it is relevant to the issue of Mr McLachlan’s availability, to the nature of that unavailability and, more particularly, relevant to the state of mind of Mr McLachlan at the time that he gave evidence: matters which I think are important in determining the way in which the evidence of Mr McLachlan should be treated.

111 The reports of Relectronic are admissible and should not be struck out as Tyco contended. The reports went into evidence long before the calling of Mr McLachlan and a series of expert witnesses were cross-examined upon them. That alone would have been sufficient for the reports to go into evidence, save possibly for the reports of Dr Fuchs, which, although forming part of the Relectronic reports, were not the subject of specific cross-examination.

112 However, the cross-examination on behalf of Tyco was wide ranging, detailed and such that, in my view, would have made the reports admissible, regardless of Optus’ dependence upon them in the course of carrying out the rectification program. In written submissions on behalf of Tyco one ground for the rejection of the reports, other than the Unisearch reports, was expressed as follows:

“A number of witnesses including Mr Hubbell and Prof. Hibbert relied upon the Relectronic reports to form their own opinions, particularly the photographs as representing a fair sample of the nature and spread of contamination. It was proposed to take Mr McLachlan through the reports and photographs in the considerable detail with a view to challenging statements in the reports and the photograph sections as to the precise identity of particles observed, the sampling methodology, the source of particular contaminants and other matters.”

113 It is difficult to assess the substance of that submission, since neither Mr Hubbell nor Professor Hibbert were cross-examined on a basis that revealed the extent of the challenge to the Relectronic reports which counsel contended was to be mounted in cross-examination of Mr McLachlan. The extent of Mr Flynn’s cross-examination on sampling techniques renders little substance, in my view, to the submission that Mr McLachlan was to be taken through the reports and photographs “as to the precise identity of particles observed, the sampling methodology, the source of particular contaminants and other matters”, whatever they may be.

114 Moreover, it is difficult to see how Tyco can maintain an objection to the Relectronic reports whilst accepting the admissibility of the Unisearch reports based upon the samples provided by Relectronic and, implicitly, the sampling techniques adopted. The fact that Mr McLachlan may have been cross-examined on sampling methods in my view is no persuasive basis for rejecting the reports or any part of them.

115 In addition to those contentions Tyco identified the following “Additional areas of contention ….. in respect of some of the various reports”

116 As to Exs 4.001 and 4.002: the conclusion that all equipment required decontamination as set out in the reports was “challenged on the various bases advanced in the reports filed by (Tyco), particularly those of Dr Lunsmann” This was to be the subject of cross-examination. The further opinion that the hygroscopic nature of the contaminant was potentially damaging was also to be challenged. Those are not particularly persuasive grounds of objection, given the extensive cross-examination of other expert witnesses called in Optus’ case on that subject matter.

As to Ex 4.003: it was contended that the statement in the report at page six that “prior contaminants” were of “lesser importance” was contentious. Again, matters of that kind were the subject of extensive cross-examination of other expert witnesses.

117 As to Ex 4.012: it was the second report of Dr Fuchs which I have already considered.

118 As to Ex 4.014: it contained an appendix A, being Relectronic photographs of various deposits. It was submitted that the “precise nature of the deposits shown and possible sources was to be the subject of cross-examination”. Presumably, the same cross-examination could have been addressed to the relevantly qualified experts called in Optus’ case.

119 As to Exs 4.016, 4.017, 4.018 and 4.019: these exhibits fell into the category of those which add “nothing to the Unisearch report”.

120 As to Ex 4.020: it was contended that Tyco proposed to cross-examine Mr McLachlan on the application of standard MSI-JSTD-001. Presumably, the application of such a standard could have been put to other expert witnesses. It is not a persuasive basis for rejecting the report.

121 As to Exs 4.021 and 4.022: these do not appear to be in issue, as adding nothing to the Unisearch report.

122 As to Ex 4.023: it contained photographs of various deposits which were objected to on the same basis as Ex 4.014 and nothing further need be said about that.

123 As to Ex 4.025: it was noted that an area of contention was the source of contaminations recorded in this report as being found in the under floor area of the Rosebery centre. That was subject matter that could have been addressed to a number of witnesses, lay and expert, other than Mr McLachlan. It is not a sufficient basis for rejecting this report.

124 As to Ex 4.026 and 4.027: it is in the same category as the objection to Ex 4.020.

125 As to Ex 4.028: it does not appear to be in contention.

126 As to Ex 4.029: it is a Relectronic report on an “accelerated life testing” undertaken by Relectronic and which the objection noted “was dealt with by Dr Blanchard in his reports”. That report was adduced in evidence through Dr Blanchard on 27 June 2001, without any reservation by Tyco as to the admissibility of the Relectronic report. The evidence of Dr Blanchard, if nothing else, in my view, rendered the reports admissible. In any event, the objection does not justify rejection of the report.

127 Any prejudice to the defendants arising out of the inability of Tyco to further cross-examine Mr McLachlan, in my view, is miniscule, if one is to gauge the substance of such a complaint against the subject matter of statements of expert evidence adduced in the defendants’ cases.

128 Mr Berents in his evidence in chief testified to his reliance upon the Relectronic reports. However, apart from some cross-examination on those reports by counsel for NDY, the matter was not addressed further in cross-examination.

129 Mr Hubbell, whose evidence was in many respects based upon the Relectronic reports, was subjected to extensive cross-examination.

130 Dr Lunsmann, for the purpose of becoming qualified to give evidence in the proceedings, was provided with the Relectronic reports. He had regard to them in giving his statements of evidence in chief.

131 Dr Blanchard was in a similar category in his commenting upon the Relectronic accelerated life test report.

132 Mr Bayley was also cross-examined upon the contents of the Relectronic reports.

133 Subject to the rulings I have given in relation to Dr Fuchs' reports, the Relectronic reports shall remain in evidence both as material upon which Optus acted in the conduct of the rectification program and as evidence of the truth of their contents.

134 As to the evidence of Mr McLachlan, the basic position adopted on behalf of Tyco, was that the evidence disclosed that Mr McLachlan was not fit to give evidence on 20 June 2001 and his evidence, accordingly, should be treated as unreliable and struck out: further, that there were strategic areas in issue in the proceedings upon which it was proposed to cross-examine Mr McLachlan.

135 It is accepted that the admissibility of, or the weight to be given to, that evidence is now a question of discretion and that the nature of that discretion is to be found in the terms of ss 135 and 136 of the Evidence Act 1995 which are in the following terms:

136 Of those provisions the only relevant provision that has been argued is the ‘unfairly prejudicial’ ground. It is common ground that this is not a case of incompetency within the meaning of s 13 of the Act. While that was so, I note that s 13 (6) contemplates an analogous situation to this case, in so far as it provides for the admissibility of evidence of a witness who ceases to be competent to give evidence prior to the conclusion of giving evidence by that person.

137 Tyco contended that the way in which the discretion should be approached was as follows:

“5. The only fair outcome is to reject all of Mr McLachlan’s evidence as set out above. Other than short examination in chief, Mr McLachlan’s evidence in chief was by statement, not affidavit, in accordance with Construction List practice. The circumstances are that Mr McLachlan’s evidence should be treated as if had [sic] never sworn to the truth of his statements when he entered the witness box on 20 June 2001. The matter should not be treated as a case in which the witness’ examination in chief was led, and then it was only prior to the completion of the cross-examination that the witness’ illness prevented the completion of the cross examination. The circumstances (which are now known following Dr Naidoo’s report) are that Mr McLachlan should not have entered the witness box at all.”

138 On that basis it was contended that the evidence “should be excluded under s135 of the Evidence Act, or pursuant to the Court’s general discretion.” I have not regarded this issue as involving any general discretion of the Court.

139 In Ordukaya v Hicks [2000] NSWCA 180, Mason P observed in relation to ss 135 and 136 that they were sections which conferred a very wide discretion and that having regard “to the likely common law position and the broad language of those sections, the notion that evidence might “be unfairly prejudicial to a party” should not be confined beyond that which emerges on a fair reading of the sections in context”. The proposition that the whole of Mr McLachlan’s evidence should be excluded on the basis that he ”should not have entered the witness box at all” does not involve a logical exercise of discretion. The events have shown that he most certainly should not have been subjected to strenuous cross-examination. In the light of Dr Naidoo’s evidence, if Mr McLachlan had been taken quietly, things may have ended up quite differently.

140 I have no hesitation in concluding that the evidence in chief of Mr McLachlan should be admitted. The only challenge to his credibility that has been advanced on behalf of Tyco was to the effect that, because of a conflict of interest arising out his fading business prospects, Mr McLachlan recommended full scale cleaning of Optus’ equipment, when he didn’t hold the view that such cleaning was necessary, or had no sufficient basis for expressing it to Optus.

141 There was also the related question as to the reasonableness of Relectronic’s cleaning charges. That latter aspect is addressed in my principal reasons for judgment. However, as firmly as one may express it, that challenge would not cause me to reject any of Mr McLachlan’s evidence. I think it is testing the patience of the Court to suggest that such an issue should have any measurable influence in the exercise of the discretion required in respect of Mr McLachlan’s evidence.

142 In most areas of Mr McLachlan’s evidence, there is the evidence of other witnesses, both lay and expert, against which the reliability of Mr McLachlan’s evidence in chief may be gauged, remaining conscious of the fact that it has not been the subject of full cross-examination.

143 In my view, there is no unfair prejudice to the defendants in admitting Mr McLachlan’s evidence in chief.

144 The real difficulty that Mr McLachlan’s evidence has presented to me arises out of my observations of him during his cross-examination, as earlier noted. I was very concerned about the reliability of Mr McLachlan’s answers in cross-examination in which he became very submissive, to the point where I doubted if he knew what he was agreeing to.

145 That impression was confirmed by the detailed history given to Dr Naidoo by Mr McLachlan and the opinion evidence of Dr Naidoo based on that history. At times I considered Mr McLachlan’s responses in cross-examination as bizarre. One cannot point to a dividing line beyond which one can say the evidence is completely unreliable. I think it would be unfair to the defendants to treat the whole of the cross-examination as unreliable.

146 The approach I have adopted is to decline to exclude the whole, or any part of the cross-examination. In taking that approach I accept that there is an element of unfairness to the defendants, in that, whatever use they wish to make of Mr McLachlan’s evidence in cross-examination, it will be done in the knowledge that the reliability of that evidence must be viewed in the context of the evidence adduced through Dr Naidoo, including the history given to him by Mr McLachlan.

147 In my view, that approach does not involve any unfairness to Optus. To the extent that the evidence given by Mr McLachlan in cross-examination related to communications made by him to Optus following the incident, Optus had the opportunity of responding to that in evidence in reply.

148 Having isolated what I think are the potentials for unfairness to one party or another, the firm conclusion I have reached is that it is not unfairly prejudicial to the parties to admit the whole of Mr McLachlan’s evidence. However, in weighing the reliability of that evidence, I think, in fairness to the defendants, caution should be exercised in areas where there is no contemporaneous record, or where no other witness testified, or was capable of testifying, to the same or similar subject matter.

149 As to credibility, that will be addressed in the principal reasons to the extent that his credibility is brought into issue.

150 During the course of submissions, Tyco presented a written outline “indicating in a general way those parts of Mr McLachlan’s statements…… which are contentious and which were proposed to be the subject of cross-examination”. They included the following:

a) Initial contact and advice: it was submitted that Tyco proposed to challenge the correctness of Mr McLachlan’s advice that a decontamination of all the equipment was required based upon the “cursory nature of his observations……. and an attack upon his impartiality”; given Relectronic’s financial position in 1997. I have addressed those matters in the course of these reasons. That aspect of his evidence may be viewed in the context of the fact that he was not cross-examined upon it and of the evidence of other witnesses upon the same, or similar subject matter.

b) Services agreement: this is the agreement under which the cleaning of the equipment was performed by Relectronic. It was submitted that the reasonableness of these charges was to be the subject of cross-examination. That is a matter I have dealt with in these reasons.

c) Further testing and reports: it was submitted that the “randomness” of the sampling was to be tested under cross-examination, together with the extent of Mr McLachlan’s own knowledge. Very little turns, in my view, upon the identity of the person who conducted the sampling. Otherwise, the records identified where samples were obtained and the specific nature of the samples. If they were not representative that would be a matter of record and open to the defendants to challenge by expert evidence.

d) The on-going environmental monitoring at Rosebery: in relation to this subject matter it was submitted that Tyco “proposed to directly test” in cross-examination Mr McLachlan’s actual involvement in the reports referred to in this section. Dr Basden was involved in the environmental testing and it is difficult to see how the inability to cross-examine Mr McLachlan on these matters would be of particular moment.

e) Comparative testing: it was submitted that the appropriateness of this comparison was to be challenged. Similarly, this is a matter of record and amenable to challenge by expert evidence called in Tyco’s case.

151 Other items have been identified as areas for cross-examination which have either been covered earlier in these reasons, or are not of particular moment.

152 In relation to the Relectronic reports, the submission of Tyco was that those documents should be admitted only as evidence of communications made to Optus. For the reasons given, I think that submission is not sustainable.

153 It was put on behalf of Tyco that the defendants have been deprived of the opportunity of testing the “accuracy” of the reports. What flows from the inability to test the accuracy of the reports is by no means clear. It was not articulated beyond matters I have covered in these reasons. One would have thought that, if there was a substantial issue concerning their accuracy, that would be the subject of statements of expert evidence in the respective cases of the defendants.

154 The statements of evidence and the evidence adduced on the application have been given exhibit numbers in the exhibit list as presented by the parties. Those have been retained.

155 The issues concerning the par 178 amendment, in substance resolved themselves during the course of the proceedings. As stated in these reasons, I am of the firm view that Optus should not be criticised for failing to raise the par 178 amendment earlier in, or prior to the proceedings, in the face of the failure of the defendants to plead a positive gypsum dust case and their failure to serve a statement of evidence upon Optus, prior to 13 June 2001 in support of such a case.

156 It was obvious in cross-examination that Tyco was ‘feeling the way’ and that it was not until Dr Lunsmann’s report of 6 June 2001 and the cross-examination of Mr McLachlan that a positive gypsum dust case was advanced.

157 Incorporating the par 178 amendment in these proceedings is really out of the question without further derailing these proceedings. An alternative approach was advanced on behalf of Optus that the amendment should be granted and that determination of the issues raised by those fresh causes of action should be deferred until after the determination of the issues raised in these proceedings prior to the amendment: the rationale being that the nature of the findings in these proceedings could well avoid the necessity ever to explore the fresh causes of action.

158 In the face of my unavailability to determine those fresh causes of action, in the event that it became necessary to do so, no advantage lay in bringing those issues into these proceedings.

159 In my view, the application should be rejected. In reaching that conclusion I have been influenced by the opinion that fresh proceedings in relation to those fresh causes of action would not be met, successfully, with an Anshun estoppel, given the circumstances in which Optus sought to raise the issues in these proceedings.

160 I think that view was shared by counsel for the defendants. That position was clearly stated by counsel on behalf of NDY: I think it was also Leighton’s position: although counsel for Leighton reserved its position so far as a conventional issue estoppel could arise out of the determination of these proceedings. In the case of Tyco, senior counsel accepted that position, though careful to make it clear to the Court that he had no instructions to make concessions of that kind.

161 However, in those circumstances, the application for leave to amend to plead the par 178 amendment should be refused and I so order.

162 Similarly, the application for leave to discontinue on behalf of Mobile, resolved itself, substantially, in the course of proceedings with the general concurrence of the parties that discontinuance upon suitable undertakings as to future proceedings would afford sufficient protection to the defendants.

163 The intention to remove Mobile from the proceedings had been foreshadowed as early as 21 November 2000. That is not in issue. It was accepted that a copy of proposed amendments which removed Mobile from the proceedings was received by Tyco’s solicitors on 16 January 2001. On 17 February 2001, Optus filed in court a form of further amended summons which included the excision of Mobile from the proceedings.

164 However, prior to the application for leave to amend being formally addressed in June 2001, there had been an interruption to the proceedings as a result of a failure in Optus’ equipment in zone 1. That event caused Optus to foreshadow the possibility of an amendment of its claim to include a major claim by Mobile as a consequence of contamination of the equipment in the switch and transmission room.

165 The possibility of a major amendment in relation to the equipment in that area was allayed by the following statement in the facsimile of Minter Ellison to Blake Dawson Waldron of 15 May 2001:

“We confirm that the position with regard to the recent failures of two printed circuit boards on 11 and 15 April 2001 in the Switch & Transmission Room of the Optus Sydney Technical Centre, Rosebery is that the plaintiffs do not propose to amend their summons in connection with those failures nor do they intend to bring a fresh claim in relation to those failures.

not

166 Those matters were addressed in my reasons for judgment of 18 June 2001. As appears from those reasons, the only question that remained outstanding was the giving of a suitable undertaking by Mobile as a condition of being granted leave to discontinue. Essentially, the undertaking sought was one that it would not bring further proceedings against any of the parties to these proceedings for damage arising out of the incident and of which it had been given notice by the incidents of 11 and 15 April 2001. The precise form of the undertaking I left to the parties to settle upon. That has not been possible.

167 However, it has come down to a matter of counter proposals. That set out on behalf of Optus in Minter Ellison’s facsimile to Blake Dawson Waldron of 13 August 2001 was as follows:

“By its Counsel, Optus Mobile Pty Limited undertakes to the Court that it abandons all claims, including potential claims, for loss or damage arising out of the incident on 3 January 1997 in respect of any equipment in the Switch and Transmission Room at Rosebery which the incidents of 11 and 15 April 2001 (concerning printed circuit boards) or any other incidents of which it is aware could have reasonably led it to discover”

168 The proposal of Blake Dawson Waldron for Tyco of 15 August 2001 was in the following terms:

“ By their counsel each of Optus Networks Pty Limited, Optus Systems Pty Limited, Optus Mobile Pty Limited, Optus Vision Pty Limited and Optus Communications Pty Limited undertakes to the Court that it abandons all claims including potential claims for loss or damage arising out of the incident on 3 January 1997 in respect of any equipment in the Switch and Transmission Room at Rosebery which the incidents of 11 and 15 April 2001 concerning printed circuit boards or any other incidents of which they are aware could have reasonably led them to discover (including claims arising from any necessity to clean any other of the equipment in the Switch and Transmission Room).”

169 The course I propose to follow is to adopt the form of undertaking proposed on behalf of Tyco, however, limiting that undertaking to Mobile. Upon that form of undertaking being given to the Court and conditionally upon it being given, I grant leave to Mobile to discontinue these proceedings and grant leave to Optus to amend its further amended summons in terms of schedule 1 to these reasons, save for the paragraph 178 amendment.

170 The costs of these applications will be costs in the proceedings as will be the costs occasioned by the April/May adjournment.

Last Modified: 05/01/2002

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Citations

Optus v Leighton [2002] NSWSC 325

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Luc Daigle v SCT Operations Pty Limited [2022] NSWDC 364

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Luc Daigle v SCT Operations Pty Limited [2022] NSWDC 364

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Ordukaya v Hicks [2000] NSWCA 180

CITATION:	Optus v Leighton & Ors [2002] NSWSC 325
CURRENT JURISDICTION:	Equity Division Construction List
FILE NUMBER(S):	SC 55059/97
HEARING DATE(S):
JUDGMENT DATE:	24 April 2002
PARTIES :	First Plaintiff: Optus Networks Pty Limited Second Plaintiff: Optus Systems Pty Limited Fourth Plaintiff: Optus Vision Pty Limited Fifth Plaintiff: Optus Communications Pty Limited First Defendant: Leighton Contractors Pty Limited Second Defendant: Norman Disney & Young & Partners Pty Limited Third Defendant: Tyco Australia Pty Limited Sixth Cross-claimant: EMAE Pty Limited Fifth Cross-claimant: The WorkCover Authority of New South Wales
JUDGMENT OF:	Hunter J

COUNSEL :	Plaintiffs: P Greenwood SC; P Durack; S Climpson First Defendant: P Garling SC; R Pepper Second Defendant: S Robb QC; G Ellis Third Defendant: N Hutley SC; J Lockhart Sixth Cross-claimant: G Downes QC; N Kidd Fifth Cross-claimant: S Donaldson SC
SOLICITORS:	Plaintiffs: Minter Ellison Lawyers First Defendant: Moray & Agnew Second Defendant: Colin Biggers & Paisley Third Defendant: Blake Dawson Waldron Sixth Cross-claimant: Allen Allen &Hemsley Fifth Cross-claimant: Phillips Fox
CATCHWORDS:	Practice and Procedure - leave to amend - "unavailability" of witness during giving of evidence - discretion as to incomplete evidence - ss 135, 136 Evidence Act 1995.
LEGISLATION CITED:	Evidence Act 1995 (NSW)
CASES CITED:	Ordukaya v Hicks [2000] NSWCA 180
DECISION:	Leave to amend granted conditionally - Evidence admitted in accordance with reasons for judgment. Costs of application and of adjornment be costs in the proceedings.