Idoport Pty Ltd & Anor v National Australia Bank Ltd & 8 ors; Idoport Pty Ltd & Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Ltd "JMG" v National Australia Bank Ltd [17] [2001] NSWSC 123

New South Wales Supreme Court

CITATION : Idoport Pty Ltd & Anor v National Australia Bank Ltd & 8 ors; Idoport Pty Ltd & Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Ltd "JMG" v National Australia Bank Ltd [17] [2001] NSWSC 123 FILE NUMBER(S) : SC 50113/98; 50026/00; 3991/00 HEARING DATE(S) : 29/01/01, 30/01/01, 31/01/01, 1/02/01, 5/02/01, 6/02/01, 8/02/01, 12/02/01, 13/02/01, 15/02/01 JUDGMENT DATE : 21 March 2001

Idoport Pty Ltd (Plaintiff) PARTIES : Market Holdings Pty Ltd (Plaintiff) National Australia Bank Ltd (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J

COUNSEL : JJ Garnsey QC, RC Titterton (Plaintiffs) JR Sackar QC, JA Halley (Defendants) Withnell Hetherington (Plaintiffs) Freehills (Defendants)

SOLICITORS :

CATCHWORDS : Evidence Act (1995) - Evidence-Admissibility - Opinion evidence - Expert opinion - Principles applicable at common law and by Evidence Act - Specialised knowledge - By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience section 79 requires that the opinion is presented in a form which makes it possible to answer that question - Experts who venture "opinions" outside their field of specialised knowledge may invest those opinions with a spurious appearance of authority and legitimate processes of fact finding may be subverted - There must be a field of specialised knowledge and witness must identify it - Witness must have expertise in an aspect of that field, and must identify it - Opinion proffered must be substantially based on expertise of witness and witness must identify it. - Any factual assumptions underlying witness' opinion must be clearly identified and articulated - Any factual observations made by witness which underlie witness' opinion must be clearly identified and articulated and the observations must have been sufficiently detailed to form satisfactory basis for the opinion - If witness relies on combination of factual assumptions and factual observations, they must be identified Witness must explain how the knowledge on which the witness is an expert applies to the facts assumed or observations made so as to produce the opinion propounded - Opinions reliant on books, research and other data - Experiential capacity - A person put forward as an expert must by his or her study training or experience be shown to have become sufficiently acquainted with different views in field of suggested expertise as to permit he or she to be shown to be in a position to appreciate the arguments and studies relating to particular issues in the field in order to then be in a position to express expert opinions taking into account in an informed way, literature which he or she has read - Appropriate and inappropriate use of secondary sources within opinion - Opinion on matters dealt with by other expert witnesses - Admissibility of opinions of other expert witnesses on the question of the section 79 expertise of a particular witness - Opinions grounded upon unique experience on novel matters - Court may not intrude into interior scope of the subject matter which the expert professes - Plaintiffs loss of opportunity cases - Examination of entitlement to express opinions given in relation to (i) the "functionality" of particular e-commerce financial services - (ii) the financial services markets in Australia, New Zealand, United Kingdom, Europe, the United States, Japan, Hong Kong and Taiwan - (iii) the valuation of performance bonus rights under the Consulting Agreement and the valuation of the Ausmaq Service and businesses such as the Ausmaq Service. LEGISLATION CITED : Evidence Act 1995 Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 Bonython v R (1984) 38 SASR 45 Bugg v Day (1949) 79 CLR 442 Clark v Ryan (1960) 103 CLR 486 Davie v Edinburgh Magistrates 1953 SC 34 HG v R [1999] HCA 2 Hughes Aircraft Systems International v Airservices Australia (No. 3) (1997) 80 FCR 276 Jacara Pty Ltd v Autobake Pty Ltd [1999] FCA 417 Jeffrey v The Queen [1991] Tas.R. 336 Lipovac v Hamilton Holdings Pty Ltd (1997) 136 FLR 400 Milirrpum v Nabalco Pty Ltd (1971) FLR 141 Murphy v R (1989) 167 CLR 94 National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The 'Ikarian Reefer') [1993] 2 LloydsRep 68 NMFM Property Pty Ltd v Citibank Ltd (1999) 161 ALR 576 NRMA v Morgan unreported, Supreme Court of New South Wales, 1 September 1998 CASES CITED : Ocean Marine Mutual Insurance Association (Europe) OV v Jetopay Pty Ltd [2000] FCA 1463 Osland v The Queen (1998) 159 ALR 170 Palmer v R (1998) 193 CLR 1 Papakosmas v R [1999] HCA 37 Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 Quick v Stoland (1998) 87 FCR 371 Ramsay v Watson (1961) 108 CLR 642 R v Anderson (2000) 111 ACrimR 19 R v Fowler (1985) 39 SASR 440 R V G (1997) 42 NSWLR 451 R v Jenkins; ex parte Morrison [1949] VLR 277 R v Welsh (1996) 90 ACrimR 364 Shane Russell Sopher 74 ACrimR 21 Trade Practices Commission v Arnotts Ltd (No.5) (1990) 21 FCR 324 Trust Company of Australia Ltd v Perpetual Trustees WA Ltd Supreme Court of NSW, unreported, 18 September 1996 Wentworth v Wentworth (unreported Supreme Court of NSW, 17 April 1997) DECISION : Mr Maconochie held to have demonstrated by his training, study or experience that he has acquired specialised knowledge on which to base, whether wholly or substantially, his opinions:; - as to the functionality of Ausmaq; - as to the functionality of the Bank Services in question; - as to the relevant comparison between the functionality of the Ausmaq Service and of the relevant Bank Services; - as to the Australian financial services markets generally and particularly in relation to Australian mutual funds industry; - by way of an assessment of the detailed prospects for success of the introduction of the Ausmaq Service into the United States markets [findings to extend to cover expressions of opinion as to the ascertainment of United States addressable markets and their extent, likely market penetration and prediction of market success]; - from a conceptual perspective, to the effect that Ausmaq Service had an actual or potential functionality such that with such enhancements, additions or modifications as might be necessary in any given circumstance, the Service could be successfully introduced into target financial markets around the world ; Mr Maconochie held not to have demonstrated by his training, study or experience that he has acquired specialised knowledge on which to base, whether wholly or substantially, his opinions:; - as to the ultimate question of valuation [he is however capable of expressing expert opinions in relation to matters such as anticipated cash flows and costs projections and market penetration and the viability of the Ausmaq System within particular markets in respect of which he has been shown to be in a position to express expert opinions as to viability]; - as to the anticipated revenue generated by financial transactions for products worldwide (i.e. outside of Australia and the United States - position as to New Zealand reserved) ; - as to anticipated revenue to be generated by the commercialisation of Ausmaq qua mutual funds in the Japanese/Taiwanese/Hong Kong Financial Services markets; - as to anticipated revenue to be generated by the commercialisation of Ausmaq qua mutual funds and life and pension products in the United Kingdom and European financial services markets.; Leave reserved to the parties in relation to a number of matters for further consideration following the handing down of these reasons