Willoughby City Council v Transport Infrastructure Development Corporation (No 2)

[2008] NSWLEC 238

Land and Environment Court

of New South Wales

CITATION:	Willoughby City Council v Transport Infrastructure Development Corporation (No. 2) [2008] NSWLEC 238
PARTIES:	APPLICANT: Willoughby City Council RESPONDENT: Transport Infrastructure Development Corporation
FILE NUMBER(S):	30213 of 2005; 30841 of 2006
CORAM:	Lloyd J
KEY ISSUES:	Evidence - Practice and Procedure :- expert evidence - admissibility - overriding duty to assist the court - report prepared by an employee of a party - witness is not independent from the party and from the matter in dispute - tender is rejected
LEGISLATION CITED:	Corporations Act 2001 (Cth) Ch 6 s 648A, Ch 6A s 667B Corporation Regulations 2001 (Cth) reg 5.1.01, schs 8303, 8306 Uniform Civil Procedure Rules 2005 r 31.23, sch 7.
CASES CITED:	Fagenblat v Feingold Partners Pty Ltd [2001] VSC 454 Kirch Communications Pty Ltd v Gene Engineering Ltd [2002] NSWSC 485 Pilmer v Duke Group Limited (2001) 207 CLR 165 Phosphate Co-Operative v Shears (No. 3) (1988) 14 ACLR 323 (Pivot)
TEXTS CITED:	Australia Securities and Investment Commission Regulatory Guide 112
DATES OF HEARING:	14 August 2008
EX TEMPORE JUDGMENT DATE:	14 August 2008
LEGAL REPRESENTATIVES:	APPLICANT: P C Tomasetti SC and N M Eastman (barrister) SOLICITORS: Pike Pike & Fenwick RESPONDENT: A E Galasso SC and C D Norton (barrister) SOLICITORS: Clayton Utz

JUDGMENT:

- 1 -

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Lloyd J

Thursday, 14 August 2008

LEC Nos. 30213 of 2005 & 30841 of 2006

WILLOUGHBY CITY COUNCIL v TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION (No. 2) [2008] NSWLEC 238

EX TEMPORE JUDGMENT

On objection to admissibility of expert report of Mrs L de Carvalho

1 HIS HONOUR: Objection is taken to the tender of a report prepared for the council by Mrs Leonie de Carvalho, who is employed by the council as a senior development planner.

2 A cursory look at the report shows that it contains both historical facts mixed with opinion and, it must be said, in some cases it is partisan opinion.

3 Rule 31.23 of the Uniform Civil Procedure Rules 2005 (NSW) states that an expert witness must comply with the code of conduct set out in Sch 7. Schedule 7 is headed “Expert Witness Code of Conduct” and it applies to any expert witness engaged or appointed to provide an expert’s report for use as evidence in proceedings or proposed proceedings or to give evidence in proceedings or proposed proceedings: cl 1. The Expert Witness Code of Conduct states that an expert witness has an overriding duty to assist the court impartially on matters relevant to the expert witness’s area of expertise: cl 2(1). An expert witness’s paramount duty is to the court and not to any party to the proceedings, including the person retaining the expert witness: cl 2(2). Moreover, an expert witness is not an advocate for a party: cl 2(3).

4 The court rules, the Expert Witness Code of Conduct, the practice notes and the nature of an expert’s role, require that an expert be independent from the parties and from the matter in dispute.

5 The High Court decision in Pilmer v Duke Group Limited (2001) 207 CLR 165 at [82]-[83] supports the proposition that the existence of an ongoing or existing relationship between an expert witness and a party results in a breach of the necessary independence. That case involved an application of the stock exchange rules to the relationship between an auditor and an auditee. In my opinion, those rules and corporations law can have a general utility in deciding what is an independent report.

6 Thus, the Corporations Act 2001 (Cth) indicates the need for an expert to be independent: an expert must not be associated with certain interested parties, particularly when preparing reports required by the Act for a takeover bid under Ch 6, s 648A, or for a scheme or arrangement under the Corporation Regulations 2001 (Cth), reg 5.1.01 and sch 8303 and 8306, or for a compulsory acquisition or buy-out under Ch 6A, s 667B.

7 Similarly, the Australia Securities and Investments Commission Regulatory Guide 112, issued October 2007 (ASIC RG 112) governs the independence of experts. The guide states in section B: “An expert should be and should appear to be, independent”. The guide states at RG 112.21:

Previous and existing relationships may threaten, or appear to threaten, the independence of an expert. The objectivity of an expert may also be compromised...

8 The ASIC Regulatory Guide 112 refers to a judgment of Brooking J in Phosphate Co-Operative v Shears (No. 3) (1988) 14 ACLR 323 (Pivot), in which his Honour said at 339: “The expert’s integrity and freedom from baneful influences are essential”.

9 The guide notes at RG 112.17 that in that case Brooking J ‘found that a commissioning party’s active role in shaping an expert report meant that the expert report was not the product of “an exercise of judgment” by the expert “uninfluenced by pressure brought to bear by or on behalf of [the commissioning party]” and was not “a genuine expression of opinion... but was the result of an exercise carried out for the purpose of arriving at a desired result”’ (at 340 and 342).

10 Mr P C Tomasetti SC, appearing with Mr N M Eastman for the council, relies upon the judgment of Campbell J in Kirch Communications Pty Ltd v Gene Engineering Ltd [2002] NSWSC 485, in which his Honour adopted what was said by Pagone J in Fagenblat v Feingold Partners Pty Ltd [2001] VSC 454. In that case a less strict approach was applied to the admission of expert evidence produced by the brother in law of one of the parties. That, however, was a decision made in 2001, before the present approach to the evidence of expert witnesses was fully developed.

11 In my opinion, the report of Mrs de Carvalho should be rejected. She is not independent from a party but, on the contrary, is an employee of a party. Moreover, she appears to have been heavily involved in proposal for the development of the land in question and so is not independent from the matter in dispute. Finally, as I have already noted, the report itself contains not only facts but also partisan opinions, which demonstrate that she has clearly adopted the role of an advocate for a party.

12 I reject the tender of the report.

I hereby certify that the preceding 12 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

Associate

Dated: 20 August 2008
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