New South Wales Supreme Court CITATION : Stockland (Constructors) Pty Limited & Anor v Darryl I Coombs & Ors [2004] NSWSC 323 revised - 30/04/2004 HEARING DATE(S) : 19/04/04, 20/04/04 JUDGMENT DATE : 20 April 2004 JURISDICTION: Equity Division Technology & Construction List JUDGMENT OF : Einstein J DECISION : Reasons for rejecting sections of the proposed evidence sought to be tendered from Mr WF Farrant as a Section 79 Evidence Act expert. CATCHWORDS : Evidence - Practice and procedure - Expert evidence - Procedure of scheduling objections - Section 79 Evidence Act (1995) - Principles LEGISLATION CITED : Evidence Act 1995 Clark v Ryan (1960) 103 CLR 486 HG v R [1999] HCA 2 Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 123 CASES CITED : Makita (Australia) Pty Limited v Sproules [2001] NSWCA 305 Murphy v R (1989) 167 CLR 94 Quick v Stoland Pty Limited (1998) 87 FCR 371 R V G (1997) 42 NSWLR 451 Trust Company of Australia Ltd v Perpetual Trustees WA Ltd [unreported, Supreme Court of New South Wales,18 September 1996, McClellan CJ in Eq] Stockland (Constructors) Pty Limited (First Plaintiff) Stockland (Properties) Pty Limited (Second Plaintiff) PARTIES : 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 Mr DE Grieve QC, Mr P Dodson (Plaintiffs) COUNSEL : Mr IG Roberts (First and Second Defendant) Ms E Ollson SC (Third Defendant) Cohen & Krass (Plaintiffs) SOLICITORS : 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 Tuesday 20 April 2004 ex tempore Revised 23 April 2004 55046/99 Stockland (Constructors) Pty limited & Anor v Darryl I Coombs Pty Limited & Ors JUDGMENT Objections to the admissibility of particular statements of opinion sought to be read from statements made by Mr W F Farrant 1 Objections have been taken to the admissibility of certain statements of opinion made by Mr William Noel Farrant in statements which the plaintiffs seek to read. Oral and written submissions have been received on the issue. Schedule template 2 The course of the written scheduling which has come forward is, it seems to me, particularly efficient, this having comprised the defendants setting out in three columns: · the paragraphs of the relevant statements which are objected to; · in relation to each of those paragraphs or portions of paragraphs, the nature of the opinion which the defendants submit the witness seeks to give [in terms of a characterisation of the opinion] and, · the required training and expertise which the defendants submit would be necessary [and in relation to which the defendants submit that Mr Farrant's expertise has shortcomings which are said to remove his opinions from the legitimate ambit of the section 79 elements]. 3 The plaintiffs in response have added a further column setting out their submission as to the area of specialised knowledge which it is submitted has been shown and acting as a contradictor for relevant purposes. 4 This mode of the Court dealing with section 79 objections by schedule is an efficient, it seems to me, manner of treating with what can otherwise become a very difficult exercise for the Court. It enables the Court, quite often without having to spend very much time at all in concentrating on the precise paragraphs the subject of objection, to determine: · what are the areas of the witness's training, study and experience; · what is the specialised knowledge shown to have been demonstrated by that training, study and experience; and · what are the areas, if any, in relation to which the witness is shown to be in a position to express section 79 opinions wholly or partly based upon that specialised knowledge. 5 It is unnecessary to repeat the record. It is sufficient to note that the central claim pleaded in the summons is generally described in the plaintiffs overview submissions 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: (a) The architectural drawings in the package did not adequately depict the structural steel components required to be fabricated and erected, that is there were omissions and inaccuracies – which were not immediately evident. (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. (d) The architects failed to warn the plaintiffs about these deficiencies and errors in the tender package at any material time. The principles – S.79 specialised knowledge 6 It is convenient to commence by an examination of the relevant principles. These were recently enunciated by Justice Heydon in the Court of Appeal in Makita (Australia) Pty Limited v Sproules [2001] NSWCA 305. They were earlier identified in Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 123 where the following propositions were accepted: · The current rules for the admissibility of expert evidence at least include: (1) the evidence must be relevant (s 55) and have sufficient probative value (s135, and in criminal proceedings s137); (2) the witness must have specialised knowledge based on training, study or experience (s 79); (3) the opinion expressed by the witness must be based wholly or substantially on that knowledge (s 79). · At the most basic level section 79 points up that there is a critical nexus between: (a) the requirement that the specialised knowledge be shown to be based on the training, study or experience of the witness; and (b) the requirement that the opinion expressed by the witness be based wholly or substantially on the specialised knowledge. · If either nexus be broken, section 79 is not satisfied. · These requirements bear close examination. That examination is considerably assisted by an extra curial commentary by Heydon JA of the New South Wales Court of Appeal in a paper delivered at a seminar dealing with aspects of the Act held by the Judicial Commission of New South Wales on 14 November 2000 [the Commentary and the paper in respect of which the Commentary was delivered are now published on Lawlink NSW [www.findlaw.nsw.gov.au]]. · The Paper which was addressed by the Commentary included the following: 'It is important to note that an expert witness should not be allowed to stray outside the witness' area of expertise. It is for this reason that the opinion expressed by the witness must be based wholly or substantially on the witness' specialised knowledge, which is in turn specialised knowledge based on training, study or experience. At common law, the field of expertise prerequisite required a court in determining the admissibility of expert evidence, to assess the reliability of the knowledge and experience on which the opinion was based. An immediate question arose as to whether a similar exercise was required under the Act. The question appears to have been answered by Gaudron J in terms of the expression 'specialised knowledge' in a recent decision to which I shall refer. I note that the Australian Law Reform Commission did not enter the difficult field of determining what were the criteria which were required to be shown before the field of expertise would be treated as a recognised or accepted field of expertise. The Commission recommended that there be no field of expertise test. The Commission's position was that:' "There will be available the general discretion to exclude evidence when it might be more prejudicial than probative, or tend to mislead or confuse the tribunal of fact. This could be used to exclude evidence that has not sufficiently emerged from the experimental to the demonstrable." Australian Law Reform Commission, Evidence, ALRC 26 (Interim) Vol.1 (AGPS, Canberra, 1985) at para 743. 'This position one might have thought, is reflected in s 79 of the Act, which requires only that the expert have "specialised knowledge", with the exclusionary rules regarding irrelevant, prejudicial or misleading evidence presumably operating to exclude the opinions of specialists in unreliable and unacceptable fields of expertise.' [See generally Peter Berman "Fundamentals of Expert Experience: part 2" (1996) 3 Criminal Law News 55-56.] 'It is appropriate then that a trial judge examine evidentiary reliability under s 79, s 56 and/or s 135, and when doing so, exercise the court's appropriate discretion to ensure that the manner in which evidence is adduced by an expert does not have the quite often unforeseen consequence, which by dint of s 60 and/or s 77 of the Act would otherwise result, namely that evidence which neither party intended to be evidence of the fact, becomes evidence of the fact. That situation can very easily arise if the court is not astute to limit the precise purpose for which assumptions relied upon by experts in their reports or matters stated in those reports as facts, are admitted into evidence.' In HG v R [1999] HCA 2, Gleeson CJ adverted to the significance of the need for an expert whose opinion is sought to be tendered, to differentiate between the assumed facts upon which the opinion is based and the opinion in question. In the view of the Chief Justice, the provisions of section 79 of the Act will often have the practical effect of emphasising the need for attention to requirements of form . His Honour said: 'By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question .' [at para 39] [cf approach taken in Trust Company of Australia Ltd v Perpetual Trustees WA Ltd Supreme Court of NSW, unreported, 18 September 1996 per McLelland CJ in Eq] Gleeson CJ pointed out that in trials before judges alone, as well as in trials by jury, it is important that the opinions of expert witnesses be confined, in accordance with section 79, to opinions which are wholly or substantially based on their specialised knowledge. As his Honour said at paragraph 44: 'Experts who venture "opinions", (sometimes merely their own inference of fact), 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.' · Heydon JA in the above Commentary conveniently identifies and elucidates the relevant requirements under the following 7 headings: 1. There must be a field of specialised knowledge and the witness must identify it. 2. The witness must have expertise in an aspect of that field, and must identify it. 3. The opinion proffered must be substantially based on the expertise of the witness and the witness must identify it. 4. Any factual assumptions underlying the witness's opinion must be clearly identified and articulated. 5. Any factual observations made by the witness which underly the witness' opinion must be clearly identified and articulated, and the observations must have been sufficiently detailed to form a satisfactory basis for the opinion. 6. If the witness relies on a combination of factual assumptions and factual observations, they must be identified. 7. The 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. · The first three heads identified by Heydon JA reflect the requirements of section 79 of the Act and encapsulate the first three steps identified in the above described summary of the approach to be taken as set out in the Admissibility Directions. Section 79 of the Act is not concerned with the factual basis of an expert opinion, but rather with the view, estimation or judgment inherent in the inference drawn by the expert from that factual basis: Quick v Stoland Pty Limited (1998) 87 FCR 371 at 375. · It is unnecessary for present purposes to set out the section of the Commentary dealing with the first head as this in substance repeats passages from the judgments of Gleeson CJ and Gaudron J in HG v R already referred to above. [The Commentary draws extensively from comments made by Gleeson CJ in HG v R] The proposition is that there must be a field of specialised knowledge which would involve matters about which ordinary persons are unable to form a sound judgment without the assistance of those possessing special knowledge or experience which is sufficiently organised or recognised to be accepted as a reliable body of knowledge or experience. This was the common law test and the test under section 79 is not narrower nor more restrictive. · Most of the balance of the Commentary dealing with the second to seventh heads expresses in detail a number of points of principle including: 2. Expertise of Witness in Field of "Specialised Knowledge " There must be an aspect of that field in which the witness is expert, by reason of training, study or experience, and which the witness identifies: see s 79 and Murphy v R (1989) 167 CLR 94 at 111. What must be evidenced is the training, the study or the experience, and how it has made the witness an expert in some aspect of the field of "specialised knowledge". The reasons for judgment of Mason P [ R V G (1997) 42 NSWLR 451 at 459] said that witnesses must identify their expertise " with precision ". 3. Opinion "Wholly or Substantially Based" on Expert Knowledge The opinion proffered must be "wholly or substantially based on that knowledge": s 79. Gleeson CJ said of the witness in question "as Clark v Ryan (1960) 103 CLR 486 illustrates, his opinion had to be related to his expertise". It would seem incumbent on the witness also to identify how the opinion proffered relates to the field of specialised knowledge in which he is an expert. In HG v R in the Court of Criminal Appeal, Mason P doubted that the witness's general expertise and experience established that his opinion was based on "specialised knowledge" ( R v G (1997) 42 NSWLR 451 at 459). That is, the opinion "lacked the requisite scientific rigour ". The training study and experience of Mr Farrant 7 Mr Farrant has given the following evidence: 1. I am a construction manager employed by the plaintiff ("Constructors"). 2. I obtained my Higher School Certificate in 1969. I commenced a quantity surveying course in 1970 at the New South Wales Institute of Technology. The course was a 5 year part-time course. I completed the course in 1974 and received a Diploma in Technology (Quantity Surveying). I became an associate of the Australian Institute of Quantity Surveyors in about 1975. 3. During my studies I worked as a student quantity surveyor for Thompson & Wark, quantity surveyors until mid 1974. I was then employed by Ian Turner & Partners, builders, as a student quantity surveyor. I worked in that capacity for several months until a date shortly before I finished my Diploma course. I then worked for McCredie, Richmond and Johns, quantity surveyors, first as a student and then as a quantity surveyor, for about six months. My duties included the preparation of bills of quantities under the supervision of a partner or supervisor. 4. I left McCredie, Richmond and Johns in about early 1975. I was then employed by Ken Green & Associates Pty Limited, quantity surveyors. I worked as a quantity surveyor carrying out all of the normal duties and functions of a quantity surveyor. I remained in that employment for 12 years. In about 1980 I became a director of Ken Green & Associates Pty Limited. The quantity surveying work which I carried out in that employment included work in relation to schools, hospitals, large houses, multi-storey residential blocks, offices and special purpose buildings. 5. I ceased working for Ken Green & Associates in late 1986 and was employed by Pipe Couplings Australasia Pty Limited. My duties varied but included work as a chartered quantity surveyor for the company. I spent about 70% of my time working for that company as a chartered quantity surveyor. 6. In August 1987 I left my employment with Pipe Couplings Australasia Pty Limited and was employed by the plaintiff. I was engaged as a construction manager. At first I reported to a superior, Mr George Coleman who was a licenced builder. Mr Coleman was the head of the commercial construction division. By 1991 Mr Coleman had retired and I was appointed as Construction Manager of the plaintiff. Although I have used my knowledge and experience as a quantity surveyor in the course of my current employment, I am not engaged as a quantity surveyor. From the outset my duties have included supervision and management of the company's construction projects. I do not work on sites supervising the carrying out of building work. I arrange for consultant specialists to prepare documents, I arrange for the calling and letting of tenders, I oversee the construction process on projects, I am involved in the programming of projects, budgeting, site inspections, contract administration and related activities. I say that I have gained expertise in reading architectural and building design drawings and that I am able to identify deficiencies in such drawings. 7. Building projects on which I have worked in my current employment include: (a) Extensions to Wetherill Park shopping centre; (b) Extensions to Jesmond shopping centre; (c) Alterations and additions to Baulkham Hills shopping centre; (d) Alterations and additions to Merrylands shopping centre; (e) Alterations and additions to Maroubra shopping centre; (f) Major expansion and alterations to the Townsville shopping centre; (g) Major expansion and alterations to the Earlville Shopping centre in Cairns; (h) Construction of a hotel in Darwin, Northern Territory; (i) Work in conjunction with other developers and builders on hotel projects owned or operated by the plaintiff in Canberra, Perth, Sydney and Melbourne. 8. Of these projects, the Cairns shopping centre project was the largest project which I have undertaken. That project, which was carried out from 1992 to 1996, is the subject of the present dispute. The next largest shopping centre project was the Townsville project, which was as complex as the Cairns project. The Townsville project was carried out immediately before the Cairns project. [Statement of WN Farrant of 30 August 2000] 8 Although there are a number of opinions sought to be given by Mr Farrant the nature of these opinions has been conveniently captured and relevantly characterised in the schedules of section 79 objections prepared on behalf of the first and second defendants and with additional characterisation and detail in the schedule prepared on behalf of the third defendant. The convenient course is to append that schedule, that is the first and second defendants' schedule, to this judgment [as Appendix "A"]. 9 There is no doubt that Mr Farrant is, by his training, study and experience, shown to have acquired specialised knowledge in certain areas permitting him to express opinions wholly or substantially based upon that knowledge. In this regard he has acquired specialised knowledge in the following areas: · quantity surveying expertise; · the ability to read and understand architectural and building design drawings; · construction and project management of construction projects including the overseeship of the construction process · the making of arrangements for consultant specialists to prepare documents; · the making of arrangements for the calling and letting of tenders. 10 He has also had an extensive involvement in the programming of construction projects, the budgeting of those projects, site inspections of such projects, contract administration and related activities. This is however essentially the role of an overseer. Not a Programming Expert 11 Mr Farrant is not, however, a programmer with programming expertise in terms of the ability to assess the timing, the logic and methodology of the design and construction processes to be in a position to assess and determine with precision how the various disciplines and the works may be managed to create the ultimate 'as built' construction, but his construction and project management experience has permitted him to gain some general knowledge of some of these processes. Not an Architect 12 Clearly he is not an architect and his training, study and experience does not extend to being in a position to express an opinion as to the standards required of an architect in terms of the discharge of its professional duties. Not an Engineer/No Structural Steel Detailing Expertise 13 Clearly he is not an engineer and does not have structural steel detailing expertise. He has not been shown, by his training, study or experience, to have acquired specialised knowledge on the basis of which to be in a position to express opinions on the ability of a structural steel detailer or fabricator to understand the design. Matters on which opinions are sought to be expressed 14 Particular matters upon which Mr Farrant is put forward as having the requisite specialised knowledge and in respect of which he seeks to express opinions include: 1 (a) what are the standard industry practices as to processes to be followed by an architect to coordinate the design (b) the adequacy of architectural documentation in terms of the documentation meeting or failing to meet a relevant standard 2 (a) whether particular documents, including engineering drawings, produced by the architects were deficient as being either insufficiently clear or being incomplete; (b) whether particular documents produced by the architect were deficient for not being properly coordinated; (c) the assessment of the level of coordination required between consultants and/or the need to refer to other consultants; (d) the assessment of the effect of design changes [that is to say in terms of the programming of works]; (e) the assessment of the effect of design changes [that is to say the flow-on effect in terms of additional work required]; (f) the adequacy of detail for tenderers [other specialist contractors]. 3 Whether particular deficiencies in architectural documents led to particular problems in relation to the preparation of structural steel documentation or may do. 4 What was the ability of a structural steel detailer or fabricator to understand particular designs. 5 What was the level of detail [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 a structural steel detailer or fabricator to be in a position to put forward a commercially competitive tender. 6 What events or matters would affect an architect in the process of preparing architectural documentation. 7 What is: (a) involved in the preparation of architectural documents and, in particular, (b) what requirements are there to have changes made to such documents, and (c) what effect would such changes have upon documentation, not necessarily directly connected to structural steel. 8 Whether particular drawings show a level of particular competence or incompetence and the gradation of competence in this regard. 9 The assessment of the likelihood of consequential loss being suffered by others 15 In my view Mr Farrant has not been shown by his training, study or experience, to have acquired specialised knowledge on the basis wholly or partly of which to be in a position to express opinions on areas enumerated as 1 (a), 1 (b), 2(b), 2 (c), 2 (d), 2 (e), 2 (f), 3,4,5, 6, 7 (a), 7 (b), 7 (c), 8, and 9. 16 There is some difficulty in determining whether or not Mr Farrant has been shown to have, by his training, study or experience, acquired specialised knowledge on the basis of which wholly or partly to be in a position to express opinions on area 2 (a) [whether particular documents including engineering drawings produced by the architect were deficient as being either insufficiently clear or being incomplete]. 17 The difficulty, it seems to me, arises because the issue is one of degree. Since Mr Farrant has acquired specialised knowledge in terms of an ability to read and understand architectural and building design and engineering drawings it would appear that he would have acquired specialised knowledge on the basis wholly or partly of which to be in a position to express opinions as to deficiencies in terms of certain types of lack of clarity in those drawings or in terms of certain types of incompleteness in those drawings. The problem lies in the detail. There may well be minutiae concerning, for example, parameters of structural steel detailing with which Mr Farrant has no familiarity and no specialised knowledge. But there will may well be matters in respect of which at a macro level, he has the specialised knowledge upon which, even if only partially, to be able to base opinions as to lack of clarity or incompleteness. For those reasons it is presently, as a matter of case management, simply not possible or practicable for the Court, in advance and at this stage of the hearing, to hand out rulings rejecting his evidence as not meeting the section 79 criteria. The proper course is to admit evidence given by him on area 2 (a) and to treat with the difficulties of degree as a matter of weight. 18 It is appropriate to further note in this regard that the third defendant has sought to thumbnail sketch areas in respect of which Mr Farrant is said not to have acquired relevant specialised knowledge as including: · the adequacy of design methodology [that is to say whether drawings required further detail before tender or construction]; · the resolution of design issues [that is to say whether there were defects in the drawings]. Whilst these matters are interrelated and perhaps have a degree of overlap, it does seem to me that the fact that Mr Farrant can read and understand architectural and building design and engineering drawings carries with it a finding that whilst he does not have the specialised knowledge on the basis of which to express opinions as to what precisely was the further detail required to be included in the drawings before tender or construction, he does have the specialised knowledge on the basis of which to be in a position substantially to express an opinion as to deficiencies in terms of certain types of lack of clarity in those drawings or in terms of certain types of incompleteness in those drawings. 19 For those reasons the Court has, in terms of principle, endeavoured to draw, to the extent it can be drawn, a line as between (1) many of the areas in respect of which as it seems to me, Mr Farrant simply is not shown to have acquired the specialised knowledge on the basis of which whether wholly or partly to express the opinions he seeks to express; and (2) the area where specialised knowledge has been proven, namely whether particular documents including engineering drawings produced by the architects were deficient as being either insufficiently clear or being incomplete. Section 135 discretion to exclude evidence 20 If I be wrong in the findings that Mr Farrant has not been shown to have acquired the requisite specialised knowledge on the basis of which to express opinions on areas 1(a), 1(b), 2(b), 2(c), 2(d), 2(e), 2(f), 3, 4, 5, 6, 7(a), 7(b), 7(c), 8 and/or 9, I would still not admit that evidence. This is for the reason that the probative value of the evidence is substantially outweighed by the danger that the evidence would be unfairly prejudicial to the defendants and/or would amount to a waste of time and/or would be misleading and deceptive. [cf Section 135 Evidence Act 1995] This must follow by reason of the fact that if Mr Farrant has acquired any specialised knowledge on the basis of which, whether wholly or substantially, he would be in a position to express the opinions put forward in those areas, the specialised knowledge so acquired is by reason of his narrow or limited training, study or experience, so far from the mainstream specialised knowledge of a micro nature which would be needed, as to warrant rejection of the evidence on each of the grounds set out in section 135(a), (b) and (c) of the Act. I certify that paragraphs 1 - 20 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 20 April 2004 ex tempore and revised 23 April 2004 ___________________ Susan Piggott Associate 23 April 2004 Last Modified: 04/30/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.