Redman v Verticon Group Limited

[2009] NSWDC 37

CITATION:	Redman v Verticon Group Limited [2009] NSWDC 37
HEARING DATE(S):	9 - 13 February 2009
EX TEMPORE JUDGMENT DATE:	12 February 2009
JURISDICTION:	Civil
JUDGMENT OF:	Goldring DCJ
DECISION:	1. Application to qualify witness as an expert refused. 2. Application to exclude evidence refused.
CATCHWORDS:	EVIDENCE - Expert evidence - qualification of expert - need for statement of qualification - need for independence of expert - apprehended bias of expert
LEGISLATION CITED:	Uniform Civil Procedure Rules 2005
CASES CITED:	United Rural Enterprises Pty Ltd v Lopmand Pty Ltd and Ors [2003] NSWSC 870 (19 September 2003)
PARTIES:	Jason Redman (Plaintiff) Verticon Group Limited (Defendant)
FILE NUMBER(S):	5716 of 2007
COUNSEL:	J Berwick (Plaintiff) T Saunders (Defendant)
SOLICITORS:	Craddock Murray Neumann (Plaintiff) Deacons (Defendant)

JUDGMENT

1 HIS HONOUR: I have before me two matters. One is an application by Mr Saunders for the defendant to qualify the witness Mr Chris Hipwell as an expert. The second matter is an application by the plaintiff to exclude all of Mr Hipwell’s affidavit evidence, and I am not sure whether this is conditional on my granting the previous application or whether it is an application which stands on its own. I suspect the latter.

2 To take the second point first, yesterday I considered a number of detailed objections which Mr Berwick, for the plaintiff, raised about parts of Mr Hipwell’s affidavits. Some of those parts were clearly opinion and they were, in my view generally, opinion which would not have been admissible even if Mr Hipwell had been qualified as an expert, because they represent conclusions of law and other such matters.

3 Most of Mr Hipwell's affidavits relate to matters of fact. He states in his affidavit that he is the chief financial officer and company secretary of the defendant. He has been in this position since May 2007. I have evidence that before that he was involved in the financial operations of the Verticon Group in other capacities.

4 He has been the officer of the company who, to all intents and purposes, represents the defendant company in these proceedings and he has been instructing the solicitor and counsel for the defendant throughout these proceedings. He has been in court on that basis.

5 In my view he is entitled to give evidence about matters of fact, and that comprises the bulk of his affidavits, to which some objections have been taken. If there are matters which relate to matters of expertise and financial operations of the company, then it may be that those are objectionable if they are opinion evidence; however, if they are matters relating to the practice of the defendant, or matters of fact, then I think Mr Hipwell is in as good a position as anyone to give evidence of those practices. I am not inclined to allow the plaintiff’s application to reject the whole of the affidavits.

6 However, I am also not disposed to give the defendants leave to qualify Mr Hipwell as an expert, for a number of reasons. I take the point that the plaintiff’s witness, Mr Sokialis, was allowed to be qualified as an expert. There was very little in his affidavits which amounted to expert evidence, but there were some opinions on matters of accounting, particularly the characterisation of capital and revenue items, but very little else. No objection was taken to that.

7 The Rules of the Court make certain provision for the qualification of experts. One is Part 31 rule 31.24, which requires an expert to be familiar with, and acknowledge, the Code of Conduct. Rules 31.27 and 31.28 deal with the contents of experts’ reports. Rule 31.27(1) says:

An expert’s report must (in the body of the report or in an annexure to it) include the following:

(a) the expert’s qualifications as an expert on the issue subject of the report,

I will not read the rest of that section, but it does set out a number of things that must appear in the report. Rule 31.28 requires the service of reports in advance. Subrule (1) says:

Each party must serve experts’ reports and hospital reports on each other active party

(a) in accordance with any order of the court or

(b) if no such order is in force, in accordance with any relevant practice note, or

(c) if no such order or practice note is in force, not later than 28 days before the date of the hearing at which the report is to be used.

Subrule (3)(c) of that rule says:

Except by leave of the court, or by consent of the parties:

(c) the oral expert evidence in chief of any expert is not admissible unless an expert’s report or hospital report served in accordance with this rule contains the substance of the matters sought to be adduced in evidence.

(4). Leave is not to be given as referred to in subrule (3) unless the court is satisfied

(a) that there are exceptional circumstances that warrant the granting of leave, or

(b) that the report concerned merely updates an earlier version of a report that has been served in accordance with subrule (1).

8 The affidavits of Mr Hipwell, or two of the three anyway, have been sworn or affirmed and served well in advance of these proceedings. The last one has not, but that does not matter. However, nowhere in the reports is there any statement of Mr Hipwell's qualifications, on which it is sought to qualify him as an expert.

9 Even if that were done, I think there is another and stronger reason why leave should not be granted to qualify him as an expert, and that is that the nature of his expertise, reflective in evidence to be given in this case, was not made known to the plaintiff within the period of twenty-eight days.

10 That rule, 31.28, is a rule which I tend to apply with uniform severity because it is, in my view, a rule which is necessary for fairness to the parties. If evidence is relied on as expert evidence, the other party must have an opportunity to answer it. In this case, it was not until yesterday that the defendant gave notice that it intended to rely on Mr Hipwell as an expert witness. The plaintiff has thus had no opportunity to answer expert evidence that Mr Hipwell might be asked to give, even if that were permitted under the Rules, which in my view it is not.

11 There is a further reason why I am disinclined to allow Mr Hipwell to give expert evidence, and that is the fact that he is, and has been for some time, an employee of the defendant. I accept that he has made affidavits and he has recently read and acknowledged that he understands the Code of Conduct. I have been referred to a case of United Rural Enterprises Pty Ltd v Lopmand Pty Ltd [2003] NSW SC 870, a decision of Palmer J. His Honour was referring to an earlier rule, which corresponds to the rules that I have referred to, and he says this:

“The policy which underlies the existence of Part 36 rule 13C is one which I should take into account in deciding whether the affidavit should be rejected under section 135. That policy recognises that an expert witness can form a view in circumstances where he or she does not realise that his role is one of the kind set out in the Code, and once that view has been formed will find it difficult to retreat from it. This can happen as a matter of ordinary human psychology, without any dishonesty on the part of the expert concerned. Therefore, one needs to be very much on guard as to whether there is any real possibility that this sort of process of opinion formation may have influenced the ultimate report which is presented to the Court, with the result that the Court cannot safely act on it.”

I omit the remainder of that paragraph, because I think that is all that I need to refer to.

12 In this case, Mr Hipwell is intimately connected with the affairs of the defendant and has virtually represented it. He was performing that role when he made the affidavits and before he read the Code of Conduct for experts. I am not certain that any expert evidence, that he gave in those circumstances, could be safely relied upon.

13 There is one further point that I would like to make, and it arose in a case before me a couple of weeks ago. In that case, a medical negligence case, the defendant, who was a medical practitioner, tendered a report, which I rejected, on other grounds, from another medical practitioner, who was a member of the same department in the hospital where he practised. I have no doubt that the expert was honest, and he acknowledged that he had read the Code of Conduct, but, it seemed to me unfortunate, and at least raised an apprehension of bias or partiality, which is unwise when such an expert’s report is tendered. Experts are independent, and must be seen to be independent, and although I am sure Mr Hipwell is doing his best, I cannot see that, in the circumstances of this case, his independence is such that I could safely act on his expert’s report.

14 However the rest of his affidavits, it seems to me, are admissible and should be admitted.

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