FEDERAL COURT OF AUSTRALIA
Parkin v Boral Limited (Materiality Evidence Ruling) [2025] FCA 70
File numbers: NSD 602 of 2020
NSD 935 of 2020Judgment of: LEE J Date of judgment: 5 February 2025 Catchwords: EVIDENCE – where an objection was made to expert evidence – where the issue of “materiality” considered – where the utility of expert evidence considered – where the ultimate issue was one of weight – where prejudice identified could be ameliorated by appropriate rulings and the adoption of pragmatic measures – where factors under s 192 of the Evidence Act 1995 (Cth) considered more generally – where the relevant evidence determined sufficiently relevant to be placed before the court
REPRESENTATIVE PROCEEDINGS – general problem of spiralling costs of expert evidence in class actions
Legislation: Corporations Act 2001 (Cth) ss 674(2)(c)(ii), 677
Evidence Act 1995 (Cth) ss 135, 136, 190(1)(c), 192
Cases cited: Australia and New Zealand Banking Group Ltd v Australian Securities and Investments Commission [2024] FCAFC 128; (2024) 305 FCR 383
McNickle v Huntsman Chemical Company Australia Pty Ltd (Initial Trial) [2024] FCA 807
Parkin v Boral Limited (Loss of Privilege Issue) [2024] FCA 1039
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 22 Date of hearing: 5 February 2025 Counsel for the applicants in NSD 602 of 2020 and NSD 935 of 2020: Mr W A D Edwards KC with Mr J A Brezniak Solicitor for the applicants in NSD 602 of 2020 and NSD 935 of 2020: Maurice Blackburn Counsel for the respondent in NSD 602 of 2020 and NSD 935 of 2020: Mr T Kane with Ms M Caristo Solicitor for the respondent in NSD 602 of 2020 and NSD 935 of 2020: Herbert Smith Freehills ORDERS
NSD 602 of 2020 BETWEEN: ANDREW PARKIN
Applicant
AND: BORAL LIMITED (ACN 008 421 762)
Respondent
NSD 935 of 2020 BETWEEN: MARTINI FAMILY INVESTMENTS PTY LTD ACN 606 000 944 ATF MARTINI FAMILY INVESTMENTS SUPER FUND
Applicant
AND: BORAL LIMITED (ACN 008 421 762)
Respondent
ORDER MADE BY:
LEE J
DATE OF ORDER:
5 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The matter be stood over to 10:15am on 3 September 2025.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Delivered ex tempore, revised from the transcript)LEE J:
A INTRODUCTION
Boral objects to the expert report of Associate Professor Jackson (Jackson Report) and to his evidence as contained in the joint materiality report (Joint Report). The foundation of this objection is that it is asserted Professor Jackson does not apply specialised knowledge to the matters contained in the Jackson Report, and that admitting his evidence would also result in an undue waste of time.
During his cogent submissions, Mr Kane made four principal points.
First, that it was not in dispute that Associate Professor Jackson has accounting expertise, but that such expertise…
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- Case
- [2025] FCA 70
- Decision Date
CaseChat Overview and Summary
In its reasoning, the court found that while materiality was an important issue in the case, the expert evidence in question was of limited utility. The court observed that materiality is generally an evaluative assessment informed by commercial common sense, rather than a matter that requires extensive expert analysis. The court noted that expert evidence on materiality often over-intellectualises a concept that is supposed to be understood by all. Despite this, the applicants had retained experts to buttress their case, leading to a reactive stance by the respondents. The court acknowledged that the bulk of the prejudice identified could be mitigated by appropriate rulings and that the issue ultimately came down to the weight to be afforded to the evidence. The court concluded that the evidence was sufficiently relevant to be placed before the court but that its weight would be addressed in final submissions. The court rejected the notion of excluding the evidence under s 135 of the Evidence Act, as the savings associated with exclusion were not sufficiently worthwhile. The court also rejected discretionary exclusion under s 192 of the Evidence Act, noting that the evidence had limited probative value and that there was unlikely to be any undue waste of time or oppression given the already voluminous material in the case. The court emphasised the recurring problem of escalating costs of expert evidence in class actions, where parties often retain experts to buttress cases that should be understood by all.
The court's final order was to stand the matter over to 10:15 am on 3 September 2025. The court stressed that it would keep an open mind and hear the materiality evidence and submissions as to its weight in the case, without rejecting or excluding the evidence. The decision highlights the court's approach to the admissibility and utility of expert evidence in cases involving materiality and the broader issue of controlling costs in class actions.
Orders
Orders of the court
1. The matter be stood over to 10:15am on 3 September 2025.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Fourthly, even if the material is admissible, it ought to be excluded under s 135 of the Evidence Act 1995 (Cth) (EA) because of the likely wastage of time that will result from its admission into evidence. B CONSIDERATION It is worth commencing by having regard to the issue in this case to which this proposed evidence is said to have relevance. I will not rehearse the background to the case or the facts in issue, which I have previously done in an earlier interlocutory judgment: Parkin v Boral Limited (Loss of Privilege Issue) [2024] FCA 1039 (at [9]–[17]). Broadly, the evidence goes to the issue of “materiality”, which is the fourth requirement provided for in s 674(2)(c)(ii) of the Corporations Act 2001 (Cth). As I explained at some length in Australia and New Zealand Banking Group Ltd v Australian Securities and Investments Commission [2024] FCAFC 128; (2024) 305 FCR 383 (at 392–394 [41]–[53]), for the purposes of s 674, s 677 relevantly provides that a reasonable person will be taken to expect information to have a “material effect” on the price or value of securities if that information “would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of” the securities. As I then went on to say (at 394 [52]), in assessing materiality, expert evidence will not always be useful. At least in my experience of dealing with materiality questions in cases of this sort, I have found expert evidence on materiality as being of very limited significance. It often amounts to voluminous and expensive material which over-intellectualises something which is supposed to be a matter of judgment assessed by reference to the realities of the business world and on an ex ante basis. Put another way, it is an evaluative assessment informed by commercial common sense. Despite this, applicants and litigation funders, for reasons not always readily apparent to me, think it is a good idea to spend vast amounts of money on experts to put such materials before the court and, perhaps understandably, in those circumstances, respondents feel they have no choice but to reply. All points made by Mr Kane have some underlying merit, but, at the end of the day, the bulk of the prejudice identified can be ameliorated by appropriate rulings and, in the end, the issue is one of weight. The first and third points can be taken together. Associate Professor Jackson’s opinions are replete with references to the representations made by others in articles and assertions as to his opinion that such representations are cogent. This is, obviously, evidence of limited utility. The authors of the literature relied upon are not witnesses and, subject to a request being made to call the maker of the representation pursuant to s 167 of the EA, those persons are not being called to give evidence. I recently dealt with the admissibility of scientific articles and studies placed before a court in McNickle v Huntsman Chemical Company Australia Pty Ltd (Initial Trial) [2024] FCA 807. Relevantly, I said the following (at [58]–[62]): [58] There is one qualification to what I have said about admissibility. I referred earlier to the scientific articles and studies placed before the Court. There is a lot of law about how a court is to deal with representations of opinion made in such material. As Heydon J explained in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 (at 615 [69], 631–632 [110]), there has long existed a qualification to the proof of assumption rule (under a common law exception to the hearsay rule), that experts may give evidence of hearsay matters which go to demonstrate their expertise — what is said in the writings of others in the relevant area of expertise they have read as a basis for their opinion, or what has been said to them in discussions they have had with colleagues and taken into account.[59] In short, experts are generally entitled to rely upon publications and material produced by others in the area in which they have expertise as a basis for their opinions and may give evidence of fact which is based on them. As is explained in Wigmore on Evidence (Little, Brown and Company, 3rd ed) Vol 2 (at 784–785):The data of every science are enormous in scope and variety. No one professional man can know from personal observation more than a minute fraction of the data which he must every day treat as working truths. Hence a reliance on the reported data of fellow-scientists, learned by perusing their reports in books and journals. The law must and does accept this kind of knowledge from scientific men. On the one hand, a mere layman, who comes to court and alleges a fact which he has learned only by reading a medical or a mathematical book, cannot be heard. But, on the other hand, to reject a professional physician or mathematician because the fact or some facts to which he testifies are known to him only upon the authority of others would be to ignore the accepted methods of professional work and to insist on finical and impossible standards. Yet it is not easy to express in usable form that element of professional competency which distinguishes the latter case from the former. In general, the considerations which define the latter are (a) a professional experience, giving the witness a knowledge of the trustworthy authorities and the proper source of information, (b) an extent of personal observation on the general subject, enabling him to estimate the general plausibility, or probability of soundness, of the views expressed, and (c) the impossibility of obtaining information on the particular technical detail except through reported data in part or entirely.[60] In Karpik v Carnival plc (The Ruby Princess) (Evidential Ruling) [2022] FCA 1318 , Stewart J addressed this topic and, after referring to the above extract, noted (at [5]) that “[i]t can thus be seen that expert reliance on such learned publications is not excluded by the rule against hearsay (s 59) or the opinion rule (s 76)”. His Honour was dealing with a case, like here, where the expert reports were replete with references to scientific articles. Having noted the need for caution in making an order under s 136 EA limiting the use of such materials, such a limitation order was not made generally but was made in relation to an article which was: (1) not referred to in any of the expert reports; (2) only referred to in cross-examination; and (3) “deal[t] with an area of expertise not possessed by any of the many expert witnesses in the case” and therefore “there is no other evidence against which to compare, or weigh, the opinions and conclusions expressed in the article”, leaving the Court “in an invidious position with regard to trying to assess the weight to give to those opinions and conclusions” (at [24]).[61] His Honour explained that “[f]or that reason, taken together with the absence of any opportunity for the respondents the test or challenge those opinions and conclusions, I am satisfied that to not limit the use to which the article can be put under s 136 would be unfairly prejudicial to the respondents” (at [24]).[62] To their great credit, the parties to this case (well advised by experienced solicitors and junior counsel), took a sensible and constructive approach to all issues as to admissibility. One aspect of their agreement related to the reception and use of the scientific articles. Taking a slightly different approach to Ruby Princess, I had proposed to the parties a limitation that would restrict reception of material to those articles and studies in the experts’ relevant area of expertise that were read and were said to form a basis for otherwise admissible opinion evidence or were used in cross-examination, accompanied by a general limitation under s 136 EA that the evidence was to be used for the purposes of providing a basis for, or understanding, the expert opinions adduced by the witnesses called.