ASIC v Rich [2005] NSWSC 149

Reported Decision : 53 ACSR 110 (2005) 23 ACLC 430

New South Wales Supreme Court

CITATION : ASIC v Rich [2005] NSWSC 149

HEARING DATE(S) : Various dates between 6 September 2004 and 7 December 2004, then written submissions, and oral submissions on 4 and 7 February 2005

JUDGMENT DATE : 7 March 2005

JURISDICTION : Equity

JUDGMENT OF : Austin J

DECISION : Report inadmissible as a whole; in the alternative, to be excluded as a whole on discretionary grounds

CATCHWORDS : EVIDENCE - expert opinion evidence - forensic accountant's report on financial position and board reporting in complex corporate group - whether report, as a whole, admissible under s 79 as opinion evidence wholly or substantially based on specialised knowledge - whether report should be excluded on discretionary grounds under s 135 - applicability of Makita principles to an accountant's report - whether expert's prior relationship with litigant, involving access to additional information and formation of opinions for another purpose, rendered expert's evidence tendered by that litigant inadmissible under s 79 or open to exclusion under s 135 - whether lack of independence rendered expert opinion evidence inadmissible or open to exclusion

Australian Securities and Investments Commission Act 1989 (Cth), ss 19, 68 Corporations Act 2001 (Cth), ss 180, 206C, 206E, 1317H LEGISLATION CITED : Evidence Act 1995 (NSW), ss 55, 56, 60, 76, 79, 135, 137 Supreme Court Rules, Pt 36 r 13C and Sch K

Adler v Australian Securities and Investments Commission (2003) 46 ACSR 504 Aktieselskabet de Danske Sukkerfabrikker v Bajamar Compania Naviera SA ("The Torenia") [1983] 2 Lloyd's LR 210 Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (No 5) (1996) 64 FCR 73 Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 ASIC v Rich [2005] NSWSC 62 ASIC v Vines (2003) 48 ACSR 291 BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 679 Cadwallader v Bajco Pty Ltd (2001) 189 ALR 370 Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 Carter v Boehm, 1 Smith LC, 7th ed, 1876, p 577 Clark v Ryan (1960) 103 CLR 486 Clough v Tameside Health Authority [1998] 2 All ER 971 Collins Thomson Pty Ltd (in liq) v Clayton [2002] NSWSC 366 Collins Thomson Pty Ltd v Clayton [2002] NSWSC 366 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 Dallas v P & M Denton Building and Constructions Pty Ltd [2003] NSWSC 883 Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh, 1953 SC 34 Dean-Willcocks v Commonwealth Bank of Australia (2003) 45 ACSR 564 Elliott v Ivey [1998] NSWSC 116 Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 Fagenblat v Feingold Partners Pty Ltd [2001] VSC 454 Fagenblat v FGT Custodians Pty Ltd [2004] VSC 196 Fail v Hutton [2004] QCA 61 FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 Fidgeon v Westpac Banking Corporation [2002] VSC 85 Filipowski v Island Maritime Ltd [2002] NSWLEC 177 Grollo v Macaulay (1993) 45 FCR 336 Guide Dog Owners' & Friends' Association Inc v Guide Dog Association of New South Wales (1998) 154 ALR 527 Hancock Prospecting Pty Ltd v Porteous (unreported, Supreme Court of Western Australia, Anderson J, 15 February 1999) Harrington-Smith v State of Western Australia (No 7) (2003) 130 FCR 424 Hartglen Pty Ltd v Geoff Mitchell & Associates Pty Ltd [2004] QSC 67 HG v The Queen (1999) 197 CLR 414 Idea Technology Services Pty Ltd v Nguyen [2002] QSC 432 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 123 Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870 Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 Jarrama Pty Ltd v Caltex Australia Petroleum Ltd [2004] FCA 144 Johnson v Johnson (2000) 201 CLR 488 Kirch Communications Pty Ltd v Gene Engineering Pty Ltd [2002] NSWSC 485 Lakeman v Finlay (1959) 59 SR (NSW) 5 Li v R (2003) 139 A Crim R 281 Liverpool Roman Catholic Archdiocesan Trustees Inc v Goldberg (No 3) [2001] 1 WLR 2337 CASES CITED : Magill v National Australia Bank Ltd [2001] NSWCA 221 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 McMartin v Newcastle Wallsend Coal Company Pty Ltd [2003] NSWIRComm 292 Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 Murray v Macquarie Bank Ltd (1991) 33 FCR 46 National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The 'Ikarian Reefer') [1993] 2 Lloyd's Rep 68 Neowarra v Western Australia (2003) 205 ALR 145 Paric v John Holland Constructions Pty Ltd (1985) 59 ALJR 844 Potts v Miller (1940) 64 CLR 282 Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370; 16 ACSR 227 Pradhan v Eastside Day Surgery Pty Ltd [1999] SASC 256 Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 Quick v Stoland Pty Ltd (1998) 87 FCR 371 R (Factortame Ltd) v Secretary of State for Transport (No 8) [2002] 3 WLR 1104 R v Donovan Kimball Christie [2003] QCA 413 R v Glennon (1992) 173 CLR 592 R v Hally [1962] Qd R 214 R v Kovats (Provincial Court of British Columbia, Judge D Pothecary, unreported, 10 November 2000) R v Perry (No 4) (1981) 28 SASR 119 R v Sing (2002) 54 NSWLR 31 R v Turner [1975] QB 834 R W Miller & Co Pty Ltd v Krupp (Australia) Pty Ltd (1991) 34 NSWLR 129 Ramsay v Watson (1961) 108 CLR 642 Re Montecatini's Patent (1973) 47 ALJR 161 Rhoden v Wingate [2002] NSWCA 165 Rich v ASIC (2004) 50 ACSR 242 Rigney v Browne [2004] QSC 265 Roach v Page (No 11) [2003] NSWSC 907 Rozmus v Illawarra Area Health Service (unreported, Supreme Court of New South Wales, Hidden J, 23 December 1996) Sebastian v Neufeld (1995) BCJ 1684 SmithKline Beecham (Australia) Pty Ltd v Chipman [2003] FCA 796 South Australian River Fishery Association v South Australia (2003) 84 SASR 507 Spassked Pty Ltd v Commissioner of Taxation (No 4) [2002] FCA 491 Spassked Pty Ltd v Federal Commissioner of Taxation (No 2) (2002) 49 ATR 642 Steffen v Ruban [1966] 2 NSWR 622 Stoland Pty Ltd v Thurn (1997) 29 ACSR 280 Switz Pty Ltd v Glowbind Pty Ltd [1999] NSWSC 1296 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 948 Trade Practices Commission v Arnotts Ltd (No 5) (1990) 21 FCR 324 Whitehouse v Jordan [1981] 1 WLR 246