Ross v Luscombe and Crowder No. DCCIV-02-912

TRACEY-LEE ROSS by her next friend KENNETH GRANT
v DAN LUSCOMBE and PHILLIP JAMES CROWDER
[2003] SADC 167
Chief Judge Worthington
Civil

This is an appeal from a decision of a Master. For present purposes it is enough to give a brief outline of the action.
The plaintiff sold a property at Echunga to the second defendant in 1999 for $240,000. It is alleged by the plaintiff that the second defendant acted unconscionably in purchasing the property because at the time of the contract, said to be in June 1999, the plaintiff was subject to a protection order under the Aged and Infirm Persons Property Act, and by taking advantage of his position as a land agent he was able to purchase the property at less than its true market value. The second defendant denies any impropriety and says that the contract was not entered until August 1999 by which time the protection order was no longer in place. The plaintiff claims that the first defendant, a valuer, was retained by the second defendant to value the property on behalf of both the plaintiff and the second defendant, but that his written valuation was misleading or deceptive in stating the market value at $254,000 instead of $312,000. The plaintiff seeks damages and other compensation.
In the course of preparing for trial, the first defendant came upon a valuation report on the property dated 19 August 1999 on the letterhead of Herron Todd White, Property Valuation and Advisory Service (“the HTW report”). The copy shown to the court is not signed but it purports to have been prepared by John Curley, “a Director” of HTW Valuers (SA) Pty Ltd, and Mark Sanders, “Certified Practicing Valuer”. The part played by Mr Curley has not been disclosed, but for present purposes Mr Sanders can be regarded as the author. The report states that it was prepared for Bernie Lewis Finance, 147 Flinders Street, Adelaide, in connection with an application by the second defendant for finance. It says that the property has a market value of $240,000.
On 12 February 2003 the solicitors for the first defendant sent a copy of the HTW report to the plaintiff’s solicitors who replied by letter noting that the report was unsigned and that it did not comply with the requirements of R38.01A of the District Court Rules. In the course of further correspondence the plaintiff’s solicitors made it clear that if the first defendant tried to tender the HTW report at trial as an expert valuer’s report, objection would be taken to its admissibility on the ground that it did not comply with the requirements of that Rule.
By an application dated 23 May 2003 the solicitors for the first defendant asked the Master for directions about the operation of R38.01A in relation to the HTW report. It was supported by an affidavit from Grant Mitchell, the principal solicitor for the first defendant. Neither the correspondence nor Mr Mitchell’s affidavit discloses why the first defendant would seek to introduce the HTW report into evidence. However during the hearing before me this was clarified to some extent, viz: there is only a possibility that the report may be tendered, but purposes for the possible tender include that it be received as expert evidence of valuation. There are other reasons why the first defendant may seek to introduce the report into evidence but they are not relevant here.
The nature of the orders sought from the Master is not completely clear, but the draft Minutes of Order prepared by the first defendant’s solicitors for that hearing indicate that the Master was being asked to make an order dispensing with the need for the HTW report to comply with R38.01A except to the extent that Mr Sanders would provide some limited information. In refusing the application the Master gave short reasons. He found that, as conceded by the first defendant’s solicitors, the HTW report did not comply with the requirements of R38 but said that it was not clear why they had not asked the author to comply with the court’s requirements, commenting that the draft Minutes of Order did not provide him with any purpose to make orders which “appear to sit in a vacuum”. The application was dismissed with costs against the first defendant. As the matter had already been set down for trial on 15 March 2004, the Master extended time to allow both defendants to serve experts’ reports within four weeks. The first defendant appeals against the dismissal of the application and the order for costs.
As the pleadings in this action closed after 3 June 2000 it is necessary to consider Rules 38.01, 38.01A and 38.02, and Practice Direction 46A. The HTW report describes the land and improvements, and after listing some other sales in that general locality, expresses the opinion that the land with improvements has a market value of $240,000. On the face of it, therefore, it comes within the description of an expert report in R38.01(6). Once it came into the possession of the first defendant he was required by R38.01(1) to deliver a copy to all other parties, and that was done. Failure to comply with R38.01 may mean that a party cannot adduce evidence from that expert - R38.01(7) and R38.02(1) - but the court can at any time dispense with compliance with R38.01 either in whole or in part - R38.02(3). Since the argument here turns mainly on R38.01A, sub-rules (1), (2), (3) and (5) I set them out:
38.01A
(1)     Rule 38.01A applies only to actions in which the pleadings have closed on or after 3 June 2000 and to such other actions as the Court directs.
(2)     Any report of an expert obtained by a party and which is to be delivered under Rule 38.01 is to:
(a)     set out with reasonable particularity all of the qualifications of the expert which are relied upon to qualify him or her to give the report;
(b)     set out separately each of the factual findings or assumptions upon which the opinions are based;
(c)     set out separately from the factual findings or assumptions each of the opinions which the expert expresses; and
(d)     comply with any Practice Direction published about the contents and form of reports from experts.
(3)     ..............................................
(4)     ..............................................
(5)     Unless the trial Judge otherwise allows expert evidence-in-chief at the trial is to be given only by tendering reports from the expert which comply with the Rules and the expert swearing that the reports are correct.
Practice Direction 46A applies by virtue of R38.01A(2)(d). It gives detailed instructions about what is required of an expert, both as to that person’s function and the content of a report. It is common ground that the HTW report does not comply with R38.01A(2) or PD46A.
The first defendant’s argument on appeal is wider than it was before the Master. It is two-fold: that the HTW report does not need to comply with R38.01A to be admissible; alternatively, that if R38.01A does apply, the court should dispense with the need for compliance. An additional argument that the report does not attract the operation of R38 at all was abandoned during the hearing.
I deal first with the submission that I should declare that R38.01A does not apply. It is submitted that, because the HTW report was prepared in 1999 without litigation in contemplation and without the involvement of lawyers, R38.01A does not apply to it. In particular, it is put that this is not a “report of an expert obtained by a party” within the meaning of R38.01A.
In my opinion, the occasion for making a ruling on that submission has not arisen. There is a limited discretion given to the trial judge in R38.01A(5) about the way in which expert evidence-in-chief is to be adduced and that could involve consideration of R38.01A(2). There is also a general provision in R38.01(7) that unless there has been compliance with that sub-rule (and it appears that there has not) a party cannot adduce expert evidence other than with leave of the court. Once again, that would be a matter for the trial judge to consider in light of all the circumstances put forward at the time the party seeks to lead the evidence. Until the first defendant tenders the HTW report admissibility is not an issue. At present there is no vehicle for a submission that it does not need to comply with one or more parts of R38 or PD46A. A declaration now about whether the HTW report needs to comply with R38.01A could be no more than an advisory opinion and that is impermissible. It is for the first defendant to assess the strength of his argument and, if he so elects, rely on it at the appropriate time.
The alternative submission is that the court should exempt the report from the need to comply with R38.01A. While R38.02(3) permits the court to dispense with compliance with R38.01, it does not mention R38.01A. However, R3.04 gives a general power to dispense with compliance. It is submitted that it would be unfair to Mr Sanders to require him now to comply with R38.01A some years after he prepared the report.
The starting point is that these requirements are designed to ensure that those giving evidence as experts are aware of their duty to the court and the obligation to be non-partisan, as well as to enable the parties and the court to understand the basis of the opinion. Without being exhaustive, this includes the facts relied on and the assumptions made: TPC v Arnotts Limited (1990) 92 ALR527. They also emphasize the need for parties to be on notice about such matters in advance of the trial. If the court is asked to exercise its discretion to dispense with compliance, it must balance these considerations against matters such as the inconvenience, difficulty or expense that a party or an expert may incur in complying with the Rule.
The first defendant has not produced evidence that would enable the court to undertake that exercise, and such as there is does not support the application for exemption. In a letter to the plaintiff’s solicitors of 20 March 2003, Mr Mitchell states that he does not intend to ask Mr Sanders to redraft his report to comply with R38.01A. That is in the context of informing them that although he might be called to authenticate the report, it would not be as an expert. This attitude is confirmed in Mr Mitchell’s affidavit but it indicates that Mr Sanders is available, at least to be called to authenticate his report. There is no later evidence about whether Mr Sanders could revisit his report now that there is the possibility that the report may be tendered as expert evidence. Although not in evidence, it can be inferred from the draft Minutes of Order presented to the Master that Mr Sanders can provide some information that would result in partial compliance with R38.01A and PD46A. Nothing has been said about why compliance would be limited in that way or why now, an appeal, complete dispensation is sought. It is obvious that compliance would require some effort but there is no evidence of what obstacles, if any, would be faced by Mr Sanders or the first defendant in doing so.
Further, the court could not infer from the HTW report that when it was prepared, Mr Sanders was aware either of the need for independence or that it may be used one day for a purpose other than to support a loan from Bernie Lewis Finance (or an associated organization) to the second defendant with a mortgage over the property. Indeed the report contains the following disclaimer:
“This valuation is for the use only of the party to whom it is addressed and for no other purpose. No responsibility is accepted to any third party who may use or rely on the whole or any part of the content of this valuation.
This valuation report does not purport to be a site or structural survey of the land or improvements thereon, nor was any such survey undertaken.”
In my opinion the Master was right in holding that the first defendant had not made out grounds upon which the court should dispense with compliance, and there has been nothing put to me that would lead to a different conclusion.
For these reasons the appeal is dismissed. I will hear the parties on costs and any consequential orders.

[2003] SADC 167

26 November 2003