New South Wales Supreme Court CITATION : Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2008] NSWSC 1201 HEARING DATE(S) : 10 & 11 November 2008 JUDGMENT DATE : 11 November 2008 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Valuation report rejected. CATCHWORDS : EVIDENCE [56] - Admissibility and relevancy - Opinion evidence - Expert opinion – Report to contain facts and assumptions of fact on which opinion based - Qualifications of witness - Compliance with expert witness code of conduct - Dispensation with compliance. LEGISLATION CITED : Uniform Civil Procedure Rules 2005 Part 31 rr 31.23, 31.27 CATEGORY : Procedural and other rulings 5533/06 Lym International Pty Limited (P1) Limin Yang (P2) Yang Liu (P3) PARTIES : Yu Po Chen (D1) Westpac Banking Corporation (D2) 5049/07 Leonilda Marcolongo (P) Lym International Pty Limited (D1) Yu Po Chen (D2) FILE NUMBER(S) : SC 5533/06; 5049/07 T S Hale SC & S A Wells (Lym International, Yang & Liu) COUNSEL : D R Pritchard SC & J S Emmett (Chen) T A Alexis SC & D H Mitchell (Marcolongo) Submitting appearance (WBC) TressCox Lawyers (Lym International, Yang & Liu) SOLICITORS : Middletons (Chen) Dunstan Legal (Marcolongo) Henry Davis York (WBC) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J TUESDAY, 11 NOVEMBER 2008 5533/06 LYM INTERNATIONAL PTY LIMITED & ORS v YU PO CHEN & ANOR 5049/07 LEONILDA MARCOLONGO v LYM INTERNATIONAL PTY LIMITED & ANOR JUDGMENT re Admissibility of Affidavit of Mr Martin of 1 October 2008 and his August 2006 Valuation 1 HIS HONOUR: There has been a comedy of errors relating to the bringing forward of expert evidence as to valuation in this case. The first defendant in 5533/06 now seeks to tender a valuation of Anthony Edward Martin made in August 2006 ("the August 2006 valuation") for Westpac as lender to prove the value of the property ("the property") the subject of this case. 2 Directions were sought under Part 31 of the Uniform Civil Procedure Rules 2005 ("the "UCPR") as to the giving of valuation evidence in these proceedings. Each side commissioned one valuer, the first defendant, Mr Martin, and the plaintiffs in 5533/06, Mr Phippen. Those valuers were ordered to confer and they did so on 14 and 25 August 2008. They brought forward an agreement which has been tendered as Exhibit 9 in the trial. 3 However, the basis on which the valuers agreed was erroneous in two regards. They did not deal with the value of the property in its "as was" state at the time of the transaction in August 2006 and, in dealing with the value of the units as completed, they agreed the values as at 1 August 2007, which is not a date relevant to these proceedings. 4 The situation is that is for some time neither side perceived the fault in the valuers' agreement and both approached the trial with the intention of tendering it. Ultimately, despite its faults, I did admit it into evidence because, although it was not at the appropriate date, I took the view that it had some tendency to show the value of the completed units at relevant times. 5 The first defendant did perceive the problem and attempted to remedy the situation by serving an affidavit of Mr Martin of 1 October 2008 that attached the August 2006 valuation. This valuation is on as "as was" basis as at August 2006. The affidavit also attached a second valuation by Mr Martin, the tender of which is not now pressed. 6 The trial commenced on 13 October 2008. The step that I initially took was on 16 October 2008 to direct that the valuers confer further and seek to agree on the valuation as at August 2006 of the property "as was" in globo and of the projected value on completion of the units. The plaintiffs now say that they do not propose, because of cost, to obtain further valuation evidence, although it is possible that they could do so in the reasonably near future. 7 It is in this context that the first defendant now seeks to read Mr Martin's affidavit of 1 October 2008 and tender the August 2006 valuation. 8 The plaintiffs initially objected to the tender on the basis that they had had no opportunity to answer it. However, time has moved on. It is now 11 November 2008. What has occurred between then and now is that, initially, the plaintiffs had difficulty in contacting Mr Phippen, then, after they contacted him, they dispensed with his services, apparently through loss of confidence in him. They subsequently contacted a second valuer who could provide a report and presumably confer with Mr Martin in a comparatively short period of time. They do not now press inability to answer Mr Martin's further evidence as a ground for its rejection. 9 As I have said, the first defendant, in face of the plaintiffs not proffering a valuer to confer with Mr Martin, presses the tender of the August 2006 valuation attached to his affidavit of 1 October 2008 and indicate that he could be proffered for cross examination in the near future if necessary. 10 However, Mr Wells, of counsel for the plaintiffs, now continues to object to the tender of the August 2006 valuation on two bases. The first is that no directions have been given for its use under Part 31. The second is that it does not comply with r 31.27 of the UCPR. In particular, it does not comply with r 31.27(1)(b), in that there are not set out the facts and assumptions of fact on which the opinions in the report are based. 11 The instructions on which Mr Martin acted in preparing the August 2006 valuation are not set out by incorporation into the August 2006 valuation or by a letter of instructions being annexed to the valuation or otherwise propounded. There is some doubt as to whether the August 2006 valuation is an expert report for the purposes of Part 31, in that Mr Martin was not engaged or appointed for the purpose of providing the August 2006 valuation for use as evidence in the proceedings. However, he did provide a subsequent report for the purposes of the proceedings and he did as an expert in the proceedings confer with Mr Phippen, leading to the production of Exhibit 9. 12 Furthermore, the August 2006 valuation is now put forward as an expert report to be used in the proceedings. The use to which it is to be put in the proceedings, as stated by Mr Pritchard, of Senior Counsel for the first defendant, is to prove the value of the property "as was" at the time of the August 2006 transaction. In these circumstances, whatever the naissance of the August 2006 valuation, it is now proposed to be used as an expert's report in the proceedings and, to be admissible, it should comply with r 31.27. Since it does not comply with r 31.27, in my view it must be rejected. 13 Mr Pritchard has offered to approach Westpac, for which the report was prepared, in the hope that the Bank will produce its letter of instructions to be used. However, this matter has dragged on and on throughout the trial and the first defendant has had since 1 October to present the report and surrounding material in a fashion that brings it within the Rules. I have put the matter off and off as the trial has gone on, to enable the parties to bring forward further valuation evidence if they desired, but we are now close to the end of final addresses and I am not now inclined to allow more time for the matter to be put in order. In the circumstances I refuse to allow the reading of Mr Martin's affidavit of 1 October 2008 and I reject the tender of the August 2006 valuation annexed to it. 14 I should add, there was another ground of objection taken to which I have not yet adverted. That was that at the time of the August 2006 valuation Mr Martin had not been furnished with the Expert Witness Code of Conduct embodied in the Rules. That is hardly surprising, bearing in mind that it was prepared for a bank as a mortgagee valuation. 15 There are imprecise statements in Mr Martin's proffered affidavit of 1 October 2008 to the effect that he subsequently received the Expert Witness Code of Conduct and "I regard myself as bound by the Expert Witness Code of Conduct in relation to my August valuation report." What this means in the context of a report prepared before that time is quite unclear. I should also be inclined to reject the report on the ground of non compliance with r 31.23 and to refuse leave to order that it may be admitted despite that non compliance. 16 The result is, as I have said, that Mr Martin's affidavit of 1 October 2008 may not be read and the August 2006 valuation is rejected. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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