Stockland (Constructors) Pty Limited v Darryl I Coombs - [2004] NSWSC 333

No judgment structure available for this case.

CITATION: Stockland (Constructors) Pty Limited & Anor v Darryl I Coombs & Ors [2004] NSWSC 333

HEARING DATE(S): 19/04/04, 20/04/04, 21/04/04

JUDGMENT DATE:
21 April 2004

JURISDICTION:
Equity Division
Technology & Construction List

JUDGMENT OF: Einstein J

DECISION: Final hearing vacated. Proceedings referred pursuant to Part 72 Supreme Court Rules.

CATCHWORDS: Practice and Procedure - Part 72 References - Principles - Final hearing date vacated where seamless transition to appropriately qualified expert practicable - Nature of technical issues identified - Just, quick and cheap determination of proceedings - Evidence Act 1995 - Section 78 - Admissibility of lay opinion evidence - Principles

LEGISLATION CITED: Evidence Act 1995

CASES CITED: Allstate Life Insurance Co v Australian & New Zealand Banking Group Limited (No 32) (1996) 64 FCR 73
Beveridge v Dontan Pty Ltd (1991) 23 NSWLR 13
Hughes Aircraft Systems International v Airservices Australia (No 3) (1998) ATPR 41-612 (Federal Court, Finn J)
Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 529
R v Harvey [NSWCCA, unreported, 11 December 1996, BC9605997]
R v Leung and Anor (1999) 47 NSWLR 405
R v Panetta [NSWCCA, unreported, 2 October 1997, BC9704859]
Unity Insurance Brokers Pty Limited v Rocco Pezzano Pty Limited (1998) 72 ALJR 937

PARTIES :
Stockland (Constructors) Pty Limited (First Plaintiff)
Stockland (Properties) Pty Limited (Second Plaintiff)
Darryl I Coombs Pty Limited (First Defendant)
Philip J Flook Pty Limited (Second Defendant)
Retail Design Group (International) Pty Limited (Third Defendant)

FILE NUMBER(S): SC 55046/99

COUNSEL: Mr DE Grieve QC, Mr P Dodson (Plaintiffs)
Mr IG Roberts (First and Second Defendant)
Ms E Ollson SC (Third Defendant)

SOLICITORS: Cohen & Krass (Plaintiffs)
Minter Ellison (First and Second Defendants)
James Legal Pty Limited (Third Defendant)

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

Einstein J

Wednesday 21 April 2004 ex tempore
Revised 27 April 2004

55046/99 STOCKLAND DEVELOPMENT PTY LIMITED & ANOR v DARRYL I COOMBS PTY LIMITED & ORS

JUDGMENT – On Part 72 reference

The proceedings

1 These proceedings concern the rights and liabilities of the respective parties in relation to an extensive redevelopment of the shopping centre at Cairns in Queensland known as the Earlville Shopping Centre ["the centre"].

2 The following short summary is taken from the plaintiffs' overview submissions and in part from the pleadings and does not constitute any form of findings in the proceedings. There has been no cross-examination of any witness up to this point in time. The limited basis upon which evidence has been tendered subject to objection does not make it practicable or possible for the Court to give any form of findings in relation to any issue in the proceedings.

3 What follows is intended as no more than an overview, albeit incomplete, of how the case has been opened in order to then deal with the proper approach to the further case management and hearing of the litigation.

The parties

The plaintiffs

4 The first plaintiff, Stockland Developments Pty Limited [formerly known as Stockland (Constructors) Pty Limited] ["Stockland Constructors" or "Constructors"] and the second plaintiff, Stockland Properties Pty Limited ["Stockland Properties" or "Properties"] are said to be members of a group of related companies apparently to be referred to in the evidence as the Stockland Trust Group. It is said that the group has for many years carried out large development and construction projects and has, amongst other assets, interests in large shopping centres in New South Wales and Queensland. Its property development activities are said to further the objectives of a publicly listed commercial unit trust, the Stockland Unit Trust. Assets in the form of real property of which the trustee from time to time is the registered proprietor (and of which the unit holders from time to time are said to be the beneficial owners) are apparently developed by the construction of new buildings or by the development or refurbishment of existing buildings.

5 Stockland Constructors' function is said to have, at all material times, acted as a builder within the group.

6 There is an issue as to whether Stockland Properties was ever a developer. The plaintiffs apparently deny this claiming that it only ever carried on maintenance work on established trust properties and was not in any way involved in the subject project.

7 At all material times the first and second defendants [Darryl I Coombs Pty Limited and Philip J Flook Pty Limited] were companies trading jointly as “Hoffer Reid and Coombs” ["HRC"]. They are said to have been experienced in major construction projects and to have had a long association with the Stockland Trust Group.

8 The third defendant [Retail Design Group (International) Pty Ltd] [“RDG”], was a company providing retail design services. Mr Riley was apparently the principal of RDG.

9 All three defendant companies had apparently previously provided professional services to Stockland Constructors.

10 In about June 1992 the defendants are said to have constituted themselves as joint venturers for the purpose of offering architectural and design services for the Earlville project.

The trustee

11 National Australia Trustees Limited ["NAT"], an independent specialist trustee company, was apparently the trustee of the unit trust in the 1990s. It is said not to have been related to the members of the group. In 1992, apparently on the advice of the trust manager, it acquired legal title to the subject property on which there was a shopping centre. The property was held apparently on the terms of the trust.

Mid 1992 - Contract for the Supply of Architectural Services

12 The defendants arguably in anticipation of the November 1993 agreement said to have been entered into between NAT and Constructors referred to below are said to have entered into a contract to supply architectural services for the Earlville project in 1992. The contract is alleged to have been constituted by letters, the primary document said to be an offer from the architects of 10 June 1992 and a letter of acceptance dated 31 August 1992.

November 1993 - NAT Contract with Constructors

13 It is asserted that in November 1993 by a written contract, as I understand it, NAT engaged Constructors to refurbish and extend the shopping centre ["the Earlville project"].

14 The consideration for acting as developer and builder is said to have been, at least in the first instance, some $75 million. The proposed extensions to the existing shopping centre would apparently have the effect of increasing its size considerably by in the order of 50 percent.

15 It is alleged that by this contract Constructors undertook to engage architects, engineers, contractors, subcontractors and suppliers and to pay them for goods supplied and services rendered.

The Issues

16 It is not intended by this statement to exhaustively summarise the pleadings but merely to identify what I understand to be the structural issues or some of them thrown up by those pleadings.

17 The proceedings concern a number of issues as to the terms of the subject contract. There is also a significant issue as to which of the plaintiffs was a party to the relevant contract. The plaintiffs' primary contention is that Constructors retained the defendants through its agent Properties to provide these services. Their alternative contention is that if Properties was the true contracting party, then it was subject - by operation of law and the equitable doctrine of contribution between co-venturers - to a liability to reimburse Constructors the settlement sum.

18 The defendants contend that they were retained by Properties as principal. The plaintiffs' overview submissions have thumbnail sketched the central claim pleaded in the summons in the following terms:

On about 1 December 1994 Constructors issued an invitation for tenders for the steel fabrication sub-contract. The invitation was based upon a “trade package” comprising architectural and engineering drawings depicting the structural steel, a bill of quantities and sub-contract documents containing proposed terms. This “trade package” was made available to potential tenderers. The [defendants] were responsible, under their retainer, for ensuring that the totality of drawings in this package sufficiently depicted the work to be carried out by a tenderer. Constructors alleges that when it issued the steel fabrication trade package, it relied upon the defendants having properly carried out their contractual obligations. Constructors collated the trade package but did not at any time excuse the [defendants] from their obligation to ensure the sufficiency/suitability of the drawings in the trade package. Constructors contends in this action that the defendants failed to carry out those obligations. It claims:

(b) Because the defendants failed to co-ordinate the architectural drawings with the structural engineering drawings, the totality of drawings in the tender package, when read together did not satisfactorily depict the works to be carried out by the prospective subcontractor; that is, there were conflicts between the architectural and engineering documents – which were not immediately evident.

(c) Because the architects failed to liaise with the structural engineer and the quantity surveyor there were inconsistencies between the bill of quantities and the drawings forming part of the structural steel sub-contract which made the bill of quantities an unreliable basis for tender.

19 It will be necessary to return to examine the technical issues in more detail below.

D A Story Pty Limited

20 In January 1995 a trade package (being an invitation to subcontractors to tender accompanied by architectural and engineering drawings and related documents) is said to have been issued to D A Story Pty Limited.

18 January 1995 - Subcontract between Constructors and Story

21 Story is then said to have submitted a tender which was apparently accepted by Constructors. The case is that by an agreement ["the Story subcontract"] made in or about 18 January 1995 between Constructors and Story, Story agreed to fabricate, supply and erect certain of the structural steel required for the project for in the order of $1,658,203. This figure is said to have been above the tender price for which Constructors had budgeted but lower than previous tenders.

January 1995 to Early 1996 - Works carried out by Story

22 Story is said to have carried out most of the subcontract works between January 1995 and early 1996 but it apparently claimed during and after this work that because of deficiencies and errors in documents in the trade package it had to carry out substantially more work than it had contracted for. It claimed that the structural steelwork, which it ultimately fabricated and erected, was substantially different from that which was depicted by the defendants in the architectural drawings. As a result, its own subcontract draftsman, Mr Davies, trading as Downs Building Consultants and Drafting Service ["Downs"] is said to have issued a very large number of documents known as RFIs (requests for information) in order to clarify uncertainties and ambiguities in the tender drawings in order that "shop drawings" (which precisely depicted steel elements prior to fabrication) could be prepared for Story.

23 In the case of structural steel fabrication very precise measurements and tolerances are apparently required. These RFIs are said to have taken time to resolve. In this way errors and omissions in the documents in the trade package are said to have given rise to delays, wasted work and additional work which are said to have caused Story to suffer loss and damage.

24 In May 1996, near the end of the Earlville project, RDG apparently requested that it be paid an amount for work it claimed was outside or additional to the contract. This is said to have been rejected by Constructors on the ground that RDG's claim was for work substantially within the scope of the contract. Constructors is said to have offered RDG a particular ex gratia payment, but RDG is said apparently not to have responded to that offer. Its alleged claim for extra contract work apparently was not thereafter pursued until 2002 when a particular cross-claim was propounded.

25 At the conclusion of the steel subcontract Story sued Constructors and the trustee in the Supreme Court of Queensland claiming payment of extras, variations and damages including loss of profits. Story is said to have claimed in effect that the work necessary to carry out the subcontract was substantially greater than the work depicted in the tender package and that as a consequence it had incurred expense and suffered damages including lost profits and lost profit opportunities.

26 Constructors defended the claim and engaged MacDonnells, a firm of Brisbane solicitors, and an experienced barrister, Mr Amarena, to act for it. Story's claim was apparently investigated and analysed. It was apparently compromised by Constructors and the trustee on about 24 December 1997 on legal advice and on the basis of a detailed investigation and analysis of the claim which is said to have been carried out. Constructors, as I understand it, contends in the present claim that on an objective consideration of the facts it entered into a reasonable settlement of that action.

27 Constructors contends in the summons that it suffered loss and damage as a result of defending and settling the Supreme Court proceeding with Story on a reasonable basis, that the defendants' breaches of duty were the cause of that action by Story and that the defendant are therefore liable for that loss and damage. It relies upon Unity Insurance Brokers Pty Limited v Rocco Pezzano Pty Limited (1998) 72 ALJR 937 contending that the High Court relevantly held that where a settlement of litigation is shown to be reasonable the settling party is entitled to recover the settlement sum and costs of settlement from the person who brought about the liability on which the litigation was based.

28 As I understand it, Constructors now claims:

· $566,650 as the part of the settlement sum representing compensation for additional work carried out by Story and for its other losses;

· $253,475 for investigating, defending and properly settling the action; and.

· interests and costs in this action.

Present Position in Relation to the Final Hearing

29 The final hearing was fixed to commence on 19 April 2004. The proceedings which commenced in 1999 had had a relatively regrettable degree of progress, as the sundry associates' notes in the court file makes plain.

30 Early during the commencement of the final hearing I inquired of the parties as to whether or not, and if so when, consideration had been given by the parties or during the case management of the proceedings, to the question of the whole or part of the proceedings being the subject of a Part 72 reference to an appropriately qualified person with a background, presumably, in either architecture or engineering or both. As I have been given to understand the position by the parties, they did give consideration to this matter but were unable to agree upon a referee. As Mr Grieve QC, leading counsel for the plaintiffs, has indicated, there is a note on the further amended cross-claim suggesting the appropriateness of at least certain questions for referral. Apparently the attention of the list judge was not specifically directed to the particular utility of a Part 72 reference. However, during opening addresses and during the course of the Court taking objections to the first witness statement put forward by the plaintiffs, it has become more and more clear to me that there are indeed very special reasons why the final hearing should be vacated and a Part 72 reference should, even at this stage, be ordered. Ultimately, as will appear from what follows, as I understand it, all counsel have agreed with this proposition, albeit at various levels and in relation to various approaches to which matters would be appropriate for reference, even at this late stage, to a referee.

The Technical Issues

31 A particular new development involves a joint report by the experts, Professor Rice and Mr Poiner following a conclave held on 19 April 2004. The discussion of issues in the proceedings which follows should be read as subject to such issues as may have fallen away entirely or been substantially reduced as a matter of significance by reason of that report. A very significant factual issue in the proceedings [subject as I say to aspects by which issues may have been reduced by that joint report] would involve an examination of architectural and engineering drawings in a context in which the issue would be as to whether drawings produced by the architects were deficient as being either insufficiently clear or being incomplete or deficient or not being properly co-ordinated. The issue is perhaps, at least in part, now collapsed by the measure of agreement by these experts. The extent to which that may be the case is apparently not the subject of clear agreement at the Bar table.

32 Associated issues will concern the assessment of the effective design changes in terms of the programming of work; the assessment of the level of co-ordination required between consultants and/or the need to refer to other consultants; the assessment [in terms of the flow-on effect in terms of additional work required] where design changes were concerned. Other issues will concern the adequacy of detail for tenderers [that is to say for other specialist contractors]. Other issues will concern whether particular deficiencies in architectural documents led to particular problems in relation to the preparation of structural steel documentation. Further issues will concern what was the ability of a structural steel detailer or fabricator to understand particular designs. Another issue will be what was the level [concerning the depiction of the structural steel components required to be fabricated] required to be included in architectural drawings, to permit the structural steel detailer or fabricator to understand the design and on the basis of which to permit such structural steel detailer or fabricator to be able to put forward a commercially competitive tender. Other issues will concern what events or matters will affect an architect in the process of preparing architectural documentation. Another issue concerns what is involved in the preparation of architectural documents, and in particular, what requirements are there to have changes made to such documents and what effect would such changes have upon documentation not necessarily directly connected to structural steel. Another issue will concern whether particular drawings show a level of particular competence or incompetence and the gradation of competence in this regard. As I have said more than once, some of these issues may be now minimised or clarified by the measure of agreement which the experts have apparently been able to agree upon.

33 The judgment delivered yesterday on the admissibility of evidence sought to be put forward by the plaintiffs' first witness, Mr Farrant, gives further detail of these issues and how they arise. It is unnecessary, for obvious reasons, to repeat what appears in that judgment which in its revised form should be available shortly.

34 The occasion of the taking of objections to the statements by Mr Farrant has served, as it happens, as the vehicle for pointing out the degree of detail to which the parties intend to descend in litigating the above-described issues. There is no doubt at all but that the more appropriate mode for the litigation of the above-described technical issues would be for an appropriately qualified expert to be appointed as a Part 72 referee. Whilst such a referee would of course determine the precise procedures to be determined during the reference, such a person, being obviously versed in the subject disciplines, would not require anything remotely like the detail which a trial judge would require in terms of description of particular aspects of the numerous plans which will fall for examination in the above described context. Such a referee could be expected to "speak the same language" as the witnesses who are to give evidence on these technical issues and to be in a position to extremely quickly follow and get to the bottom of the technical matters which will require to be understood in order to follow the respective cases. Additionally, the Court has been informed that there are many minutes of construction meetings, programming schedules and the like which will be the subject of detailed cross-examination, with which issues also such a referee could be expected to be very familiar.

35 Another of the complex set of technical issues concerns the defendants' case that as a matter of fact the project was "fast tracked", which I understand to be a reference to the notion that design and construction occurs at the same time. The matter apparently arises:

· in terms of the defendants' case that at a particular meeting they informed the plaintiff [s] that the subject drawings would not be co-ordinated and were in turn advised that this was not seen as a difficulty;

· in terms of the actual position on the ground.

36 This again appears to me to be a set of technical issues which par excellence is tailor-made for determination pursuant to a Part 72 reference to an appropriately qualified referee.

37 Following the discussion between the Court and the Bar table of yesterday, when the matter was resumed before the Court this morning Mr Grieve QC addressed detail on a number of matters. The first concerned the signed record of conference to which I have referred. A copy of that document will be appended to this judgment. The submission which followed from the plaintiffs' side of the Bar table was that the measure of agreement shown by this record of conference has self-evidently put a number of issues to rest.

38 Whilst I do not intend, for obvious reasons, to comment on whether this summary of the document is accurate and if so in what precise respects, it does seem to me clear that there will at least remain as a live issue to be litigated in the proceedings, the question of whether or not, and if so as a matter of fact, the evidence discloses the employment of what amounted, in colloquial terms, to a "fast track" approach to documentation and construction. Hence, it seems to me clear that a deal of the evidence is certainly likely to concern the requirement for a determination on that issue.

39 I make plain that Mr Grieve QC for the plaintiffs has emphasised during address that the plaintiffs' central case is that the contractual obligation of the defendants was to produce properly completed, detailed and properly co-ordinated drawings at an early point of time. The plaintiffs' case, as I understand it, is that all that the defendants are about in this litigation is [in an attempt to exonerate what is put as their clear contractual and common law liability] to put forward the proposition that events following the initial production of these drawings by the architects, [by way of occasions when it was necessary to have variations for various reasons] provide a legitimate basis by which the defendants are able to explain their subsequent conduct.

40 At the end of the day, from submissions from both sides of the Bar table, it has become apparent that a likely central issue in the whole of the proceedings will concern questions of degree, that is to say it will be necessary for a referee to examine in each instance whether, and if so to what extent, changes to instructions to the architects could be regarded as minor or major.

41 The next matter which was the subject of address by Mr Grieve concerned the attempt to formulate, albeit in overview fashion, a particular issue which both counsel for the plaintiffs have apparently distilled as clearly suitable for a Part 72 reference even at this late stage. This issue was expressed, albeit in broad terms which may require further examination by the parties and the Court, as follows:

· the first formulation was:

“The issue which the document produced by the experts and signed by them exposes as appropriate for determination by a referee is the extent to which the incompleteness, inaccuracy and/or lack of co-ordination of the drawings identified in paragraph 5 bore adversely upon the steel contractor's capacity to manufacture and install the steel components in accordance with his subcontract so as to give rise to legitimate or reasonable claims on the part of that subcontractor against the head contractor.”

· the second formulation in closely similar wording was:

“To what extent did the incompleteness, inaccuracy or lack of co-ordination of the drawings identified in paragraph 5 give rise to difficulties on the part of the steel subcontractor in the manufacture, supply and installation of the steel works required under the subcontract in accordance with the terms of the subcontract, so as to entitle the subcontractor to make reasonable or legitimate claims for additional payments against the head contractor.”

42 The transcript is self-explanatory in relation to other matters which were then put to the Court by Mr Grieve, particularly in terms of how the plaintiffs may seek to further progress such a reference out.

43 Counsel for the first and second defendants then indicated to the Court that overnight inquiries had been made and that an eminently suitable and experienced referee, namely Mr Lumsdaine, is available virtually immediately, to sit upon a reference, should the Court be disposed to so direct. As I understand the position, all parties have accepted his nomination and background, training, study and experience as eminently suitable for the purpose of dealing with the issues for reference.

44 The fact that Mr Lumsdaine is almost immediately available is of very great significance where the Court, during the commencement early stages of the final hearing and before a word of oral evidence is taken, takes the very unusual step of referring the matter out. For obvious reasons there are very large savings to the parties if the proceedings, albeit commenced as a final hearing, can now in close to seamless fashion be further progressed through a reference.

Part 72

45 The Law Book Company's expert evidence service, Freckleton and Selby (eds), makes the point at paragraph 18A.10 that where there is a complicated technical issue to be decided, a superior court may refer an issue to an independent expert known as a referee, who then makes inquiries, evaluates competing information, makes findings of fact and reports the analysis and findings to the court. The further point which is made is that such a reference with its resulting report to the trial judge can be most helpful to a quick and more final and less costly resolution of a dispute. The learned authors continue:

46 Under Part 72 the Court has a general discretion to appoint referees and to refer to them either the whole of the proceedings or any questions to which the proceedings give rise. The discretion is exercisable whenever the interests of justice make it appropriate. In making orders under the rule the Court will have regard to the nature of the matters proposed for reference out and to the desirability of just, quick and cheap determination of the proceedings under Part 26 rule 1.

47 It is important to recognise that where the referee is a technical expert, it is inappropriate to require that the rules of evidence be applied. The obligation to adhere to the rules of natural justice does not mean that the technical expert appointed as a referee should observe formal judicial procedures: Beveridge v Dontan Pty Limited (1991) 23 NSWLR 13. In the result the conduct of a reference provides a wide scope for procedural flexibility.

48 These matters have been emphasised in particular by Ms Olsson, counsel for the third defendant, and by Mr Roberts, counsel for the first two defendants, where they have submitted that hearing time would be saved. As put by counsel for the third defendant:

Matters of detail

49 The following matters of detail require to be further addressed. The first concerns what are the issues which should be referred out to the referee. In that regard, both yesterday and today the Court has taken fairly detailed submissions from the parties. I am prepared to accept [because all counsel appear, as I have understood their submissions, to generally accept] that the gravamen of the particular issue which in broad terms was outlined by Mr Grieve QC, is likely to be the matter of crucial, central or substantial significance in a reference. It seems that resolution of that matter will likely answer a number of the questions which are to be found as pleaded issues in the proceedings.

50 As I earlier indicated, one of the issues in the proceedings concerns the identification of the plaintiff which in fact entered into the relevant contract with the architects. Whilst I recognise that that issue may be an issue with which a Part 72 referee without legal training may have some difficulty, it does seem to me that in the circumstances there is no reason why that issue should not be remitted to a referee. The particular reason which speaks in favour of that issue also being before a referee concerns the fact that, as the Court has been informed by all counsel, it is likely that some evidence relating to that issue will be adduced from witnesses who will otherwise in any event be giving evidence before the referee. Hence, if the referee is obliged to determine the credit of evidence given by such a witness, there would be an obvious difficulty if the party issue were quarantined to be determined only after the Part 72 reference. The Court would, quite arguably, have difficulty in dealing with the credit of a witness whose credit had already been dealt with by the referee, so that there is a common sense logic to that issue being referred out to the referee.

51 Further, the whole of the issue concerning the causation question and the issue which I have described as the reasonableness of the Queensland settlement, while certainly involving questions of close legal analysis would be appropriately also referred to the referee.

52 The experience of the Court is that unless the Court is absolutely confident that the separate distillation of a very disparate, discrete question for reference will not lead to difficulty in the further progression of the hearing through the court level [on adoption and rejection and the like], the Court should be extremely wary about identifying particular issues for determination by a referee.

53 That is not to say that such issues may not be distilled and they often are. To my mind, having the familiarity which I have with the pleadings and some of the issues in the present proceedings, this case is par excellence one in which the Court should strain not to distil out any particular issues and to have all the issues which are pleaded determined by the referee and then adjudicated upon in the usual way on an adoption/rejection hearing. To my mind to do anything otherwise would be an incorrect exercise of the Court's discretion, not only generally, but most particularly in these proceedings where the longevity of the proceedings does really dictate that for once and for all the proceedings should be determined and the parties should be in a position to reach what is colloquially referred to as "closure" one way or another, either through adoption or rejection of the report by the Court and then the following of appellate procedures should they be mobilised.

54 The next matter which requires to be attended to is the approach which is proper to be taken in relation to the evidence which may be said to be presently before the Court. This is not a particularly difficult matter for the reason that all that has happened up to this point in time is that, as occurs certainly in the cases which I generally hear, particular documents are tendered at the commencement of the case by the various parties usually in an agreed bundle of documents. As here that occurred and the order was that the relevant exhibits be admitted into evidence subject to objection. The whole gamut of possible objections by any party to those materials is then left for examination when objection arises and it is simply an efficient procedure to commence with.

55 To my mind, in the sense that those particular documents have been tendered subject to objection, as the Court is to appoint Mr Lumsdaine as a referee under Part 72, the proper order is to vacate the orders admitting into evidence documents such as PX, DXX and the like. That would mean that the referee is not constrained in any fashion when the reference commences before him in terms of what it is that he sees fit, on the procedures which he adopts, to admit or reject documents and for particular reasons.

56 The only other matter which has been dealt with up to this point in time concerns the judgment which was given in relation to the evidence of Mr Farrant. In that regard the judgment which was delivered is self-explanatory and it dealt with Mr Farrant being put forward by the plaintiffs under section 79 of the Evidence Act as a person equipped with the specialised knowledge on the basis wholly or partly of which to express the opinions which he had sought to express.

57 As the transcript of this morning will make plain, to my mind that judgment must stand. However, that judgment did not in any way, shape or form speak to the possibility that Mr Farrant may have been able to be put forward as a witness qualified to express opinions under section 78 of the Evidence Act. Such opinions are subject to a regime which is different to that which applies insofar as section 79 is concerned.

58 This issue was examined in Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 529:

Evidence

“739. Exception-Lay Opinion Evidence.

At present lay opinion evidence is conventionally said to be inadmissible unless it fits within an apparently anomalous miscellany of "exceptions". The main factors that these share are that they can be said to be short hand expressions of fact based on the witness perceptions and that it has been seen by the courts as convenient to allow the expression of opinion in their case rather than to insist upon a lengthy, and possibly not particularly helpful, recitation of facts. The ultimate criterion for admission of opinion evidence should be whether it will assist the trier of fact in understanding the testimony, or determining a fact in the issue . To be of the requisite assistance, the lay opinion evidence must be based on the witness' personal perception of a matter or event. Against the admission of such evidence must be balanced time and cost factors, the danger of the evidence misleading or confusing the tribunal of fact and the possibility of being more prejudicial than probative . Thus, it is proposed to admit lay opinion testimony where it is based upon the personal perception of the witness and it is necessary to obtain an adequate account of his perceptions .

740.

[footnotes omitted] [emphasis added]

Guide Dog Owners

"The following propositions appear to have been adopted in relation to section 78:

(1) Section 78 is concerned only with the non-application of the opinion rule. If evidence cannot be characterised as opinion evidence, neither section 76 nor section 78 of the Act applies: Allstate Life Insurance Co v Australian & New Zealand Banking Group Limited (No 32) (1996) 64 FCR 73 at 75; Hughes Aircraft Systems International v Airservices Australia (No 3) (1998) ATPR 41-612 (Federal Court, Finn J) at 40, 712-40, 713 (a case in which the exclusionary power in section 135 of the Act was exercised)

(2) Section 78 substantially alters the common law, by permitting lay opinion to be given by a person whose opinion is based on what the person saw, heard or otherwise perceived about a matter or event. While lay opinion evidence was admissible in certain classes of cases under the common law (see Cross on Evidence (5th Australian edition, 1996) para 29090), section 78 expands the scope for such evidence: R v Panetta (CCA (NSW), 2 October 1997, unreported), at 4, per Hunt CJ at CL

(3) As foreshadowed by the Law Reform Commission, section 78 should be construed as requiring a rational basis for the opinion before it becomes admissible : R v Panetta , at 5. Such a requirement is imposed through sections 55 and 56 of the Evidence Act.

R v Harvey

R v Leung and Wong

“27 "The opinion rule" referred to in the opening words of the section is contained in s 76 , by which, subject to exceptions provided in the ensuing sections, opinion evidence is generally declared inadmissible.

(i) evidence of that person's opinion is necessary to obtain an adequate account or understanding of his or her perception of that matter or event; and

(ii) the opinion is based on what he or she saw, heard or otherwise perceived about the matter or event;

(i) there is a "matter or event" relevant to the proceeding;

(ii) the matter or event is perceived by the witness;

(iii) the witness has formed an opinion based on what he or she saw, heard or otherwise perceived about the matter or event; and

if a witness's "perception of a matter or event" is relevant, evidence of that perception is admissible; and if evidence of that person's opinion is necessary to obtain an adequate account or understanding of his or her perception, then an opinion based on what that person saw, heard or otherwise perceived about the matter or event is admissible as exception to the opinion rule

31 Necessarily implicit in the section is the requirement that evidence of the witness's "perception of a matter or event" be admissible; to be admissible it must, inter alia, be relevant (s56); if, in order to obtain an adequate account or understanding of the witness's perception of the matter or event, evidence of the witness's opinion is necessary; and if that opinion is based on the witness's visual, aural or other perception: then the opinion rule does not operate to exclude evidence of the opinion. The starting point is identification of the "matter or event" which must be relevant to the proceeding. The questions are:-

(i) what is the "matter or event" relevant to the proceeding?

(ii) has the witness seen, heard or otherwise perceived something about the "matter or event"?

(iii) has the witness formed an opinion based on what he/she saw, heard or otherwise perceived about the matter or event?

32 Only if questions (ii), (iii) and (iv) are all answered affirmatively does the opinion rule not operate to exclude the evidence of opinion.

[emphasis added]

59 In those circumstances, if the events which follow before the referee involve the plaintiffs being granted leave to seek to transform opinions which were put forward from Mr Farrant as section 79 opinions into contemporaneous statements of opinion of the same witness sought to be put forward as section 78, nothing which I have had to say should constrain the referee in any respect. My judgment, as I say, dealt solely with section 79.

60 The other matter with which the Court has commenced to deal, is the more particular objections to the statements by Mr Farrant. It may be said that the application of the section 79 judgment has not been entirely dealt with because there were a number of schedules which remain to be treated with. In that regard, as I have understood all counsel at the bar table, there is no particular reason why the Court should, now that a Part 72 reference is to be ordered, continue to laboriously go through all of the items and all of the schedules which would be required to be travelled through in that exercise. As I understood Mr Grieve QC, [although this may change depending upon the informed assessment of the situation], it may well be that the plaintiffs elect not any longer to press these matters on section 79 bases but to transform their approach to the admissibility into a section 78 gateway.

61 In any event, the court is always available and if, as necessary, it becomes necessary for the Court to deal with any of these matters then the parties have obviously, as usual, leave to restore the matter and the Court will deal with the matters to facilitate the Part 72 reference as expeditiously as practicable.

62 Finally, the question of costs is raised. Unless the parties wish to address me otherwise, to my clear observation the proper approach and way forward is for costs of and occasioned by so much of the final hearing as has been commenced, and costs which may be wasted by reason of the fact that a Part 72 reference was not the initial approach to the litigation, to simply be reserved. That preserves for all parties the opportunity to address submissions on that issue.

I certify that paragraphs 1 - 62
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 21 April 2004 ex tempore
and revised 27 April 2004

Susan Piggott

Associate

Last Modified: 04/30/2004

Citations

Stockland (Constructors) Pty Limited v Darryl I Coombs [2004] NSWSC 333

Most Recent Citation

Cases Citing This Decision

4

Stockland (Constructors) Pty Limited v Darryl I Coombs Pty Limited [2005] NSWSC 252

Stockland (Constructors) Pty Limited v Darryl I Coombs Pty Limited [2004] NSWSC 894

McDougall bnf Williams v Gomm [2020] NSWDC 428

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6

Statutory Material Cited

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Seven Sydney Pty Ltd v Fuji Xerox Australia Pty Ltd [2004] NSWSC 902

Idoport Pty Limited v National Australia Bank Limited and 8 Ors; Idoport Pty Ltd and Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [28] [2001] NSWSC 529

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CITATION:	Stockland (Constructors) Pty Limited & Anor v Darryl I Coombs & Ors [2004] NSWSC 333
HEARING DATE(S):	19/04/04, 20/04/04, 21/04/04
JUDGMENT DATE:	21 April 2004
JURISDICTION:	Equity Division Technology & Construction List
JUDGMENT OF:	Einstein J
DECISION:	Final hearing vacated. Proceedings referred pursuant to Part 72 Supreme Court Rules.
CATCHWORDS:	Practice and Procedure - Part 72 References - Principles - Final hearing date vacated where seamless transition to appropriately qualified expert practicable - Nature of technical issues identified - Just, quick and cheap determination of proceedings - Evidence Act 1995 - Section 78 - Admissibility of lay opinion evidence - Principles
LEGISLATION CITED:	Evidence Act 1995
CASES CITED:	Allstate Life Insurance Co v Australian & New Zealand Banking Group Limited (No 32) (1996) 64 FCR 73 Beveridge v Dontan Pty Ltd (1991) 23 NSWLR 13 Hughes Aircraft Systems International v Airservices Australia (No 3) (1998) ATPR 41-612 (Federal Court, Finn J) Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 529 R v Harvey [NSWCCA, unreported, 11 December 1996, BC9605997] R v Leung and Anor (1999) 47 NSWLR 405 R v Panetta [NSWCCA, unreported, 2 October 1997, BC9704859] Unity Insurance Brokers Pty Limited v Rocco Pezzano Pty Limited (1998) 72 ALJR 937
PARTIES :	Stockland (Constructors) Pty Limited (First Plaintiff) Stockland (Properties) Pty Limited (Second Plaintiff) Darryl I Coombs Pty Limited (First Defendant) Philip J Flook Pty Limited (Second Defendant) Retail Design Group (International) Pty Limited (Third Defendant)
FILE NUMBER(S):	SC 55046/99
COUNSEL:	Mr DE Grieve QC, Mr P Dodson (Plaintiffs) Mr IG Roberts (First and Second Defendant) Ms E Ollson SC (Third Defendant)
SOLICITORS:	Cohen & Krass (Plaintiffs) Minter Ellison (First and Second Defendants) James Legal Pty Limited (Third Defendant)