Southernwood v Brambles Limited (Ruling No 1)

FEDERAL COURT OF AUSTRALIA

Southernwood v Brambles Limited (Ruling No 1) [2022] FCA 1036

File number(s):

VID 972 of 2018

Judgment of:

MURPHY J

Date of judgment:

30 August 2022

Catchwords:

EVIDENCE – admissibility of expert evidence – specialised knowledge of a valuer.

Legislation:

Evidence Act 1995 (Cth) ss 79, 80

Cases cited:

AAPT Ltd v Cable & Wireless Optus Ltd (1999) 32 ACSR 63

Australian CementHoldings Pty Ltd v Adelaide Brighton Ltd & Anor [2001] NSWSC 645

HG v The Queen (1999) 197 CLR 414

Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705

Stuart v Rabobank Australia Ltd [2021] FCA 1388

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Number of paragraphs:

26

Date of hearing:

30 August 2022

Counsel for the Applicants:

Mr B Quinn QC, Mr W A D Edwards, Mr T Chalke and T Rawlinson

Solicitor for the Applicants:

Maurice Blackburn Lawyers and Slater & Gordon Lawyers

Counsel for the Respondent:

Mr M Borsky QC, Mr K Loxley and Ms S C B Brenker

Solicitor for the Respondent:

Allens

REASONS FOR JUDGMENT

VID 972 of 2018

BETWEEN:

HOLLY SOUTHERNWOOD

First Applicant

WILLIAM VINCENT KIDD AND MARY AGNES AS TRUSTEES FOR THE MAGNESS-BENNETT SUPERANNUATION FUND

Second Applicant

AND:

BRAMBLES LIMITED

Respondent

MURPHY J:

1. This securities class action is in the fourth week of a five week trial. The applicants seek to rely upon the report of Tony Samuel, a forensic accountant and valuer, dated 2 March 2022.  In the report Mr Samuel provides his opinion on the following questions:

   (a)Did the information available to Brambles Limited (Brambles) at the time it prepared its budget for the financial year ended 30 June (FY) FY2017 (FY2017 Budget) provide a reasonable basis for its projected increase in:

   (i)        revenue;

   (ii)       underlying profit (ULP); and/or

   (iii)      return on capital invested (ROCI);

   in FY2017 compared with FY2016 for:

   (A)      the North American Pooled Pallets Business;

   (B)      the North American Whitewood Pallets Business; and

   (C)      the North American Operations? 

   (Question 1); and

   (b)Did the information available to Brambles provide a reasonable basis to support the:

   (i)        August Sales Revenue Forecast;

   (ii)       August ULP Forecast;

   (iii)      August  ROCI Forecast; and

   (iv)      Medium-Term Targets,

   at each of the following dates;

   (A)      18 August 2016 (Question 2);

   (B)      20 October 2016 (Question 3); and

   (C)      16 November 2016 (Question 4)? 

2. Brambles submits that Mr Samuel’s opinions, as to whether the information available to Brambles provided a reasonable basis for its FY17 budget and forecasts are not wholly or substantially based on his specialised knowledge as a valuer, fall outside the exception in s 79 of the Evidence Act 1995 (Cth) (the Act), and the report is therefore inadmissible.  Brambles also contends that, notwithstanding professing to give his opinion as a valuer, Mr Samuel’s methodology did not in fact apply his specialised knowledge, and thus the report…