Coyne v Calabro [2009] NSWSC 1023

New South Wales Supreme Court

CITATION : Coyne v Calabro [2009] NSWSC 1023

HEARING DATE(S) : 15/09/09

JUDGMENT DATE : 18 September 2009

JURISDICTION : Equity

JUDGMENT OF : White J

DECISION : Refer to paras 23 and 24 of judgment.

CATCHWORDS : EVIDENCE – expert evidence – single expert appointed – communication took place between appointed expert and party which should not have occurred – significant differences in opinion between appointed expert and expert separately engaged by the defendants - leave to adduce further expert evidence

LEGISLATION CITED : Uniform Civil Procedure Rules 2005 (NSW)

CATEGORY : Procedural and other rulings

Tomko v Tomko [2007] NSWSC 1486 CASES CITED : Wu v Statewide Developments Pty Ltd [2009] NSWSC 587 Daniels v Walker [2000] 1 WLR 1382 Cosgrove v Pattison [2000] All ER (D) 2007

Terence Michael Coyne & 1 Or PARTIES : v Grazia Rita Calabro & 1 Or

FILE NUMBER(S) : SC 2817/08

Plaintiffs: P Barham COUNSEL : Defendants: J Ireland QC with J S Cooke Cross-Defendant: A P LoSurdo

Plaintiffs: Comino Prassas SOLICITORS : Defendants: Pikes Lawyers Cross-Defendant: Lander & Rogers Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WHITE J

Friday, 18 September 2009

2817/08 Terence Michael Coyne & 1 Or v Grazia Rita Calabro & 1 Or JUDGMENT 1 HIS HONOUR: One of the significant issues in these proceedings is the value of the subject property as at 6 May 2008. Some parties contend that the value of the property at other dates is also relevant to questions of damages. 2 The defendants filed an affidavit of Mr Jason Field, a practising valuer, sworn 10 December 2008. He exhibited to his affidavit a valuation report he prepared on 14 November 2008. He valued the subject property as at 6 May 2008 at $5 million. No application was made under r 31.19 of the Uniform Civil Procedure Rules 2005 (NSW) for directions in relation to the adducing of expert evidence at the trial. 3 On 20 April 2009 for reasons which I then gave I acceded to an application by the plaintiffs pursuant to r 31.37 for an order that a single expert be engaged by the parties jointly to value the property as at each of the dates any of the parties contended to be relevant. I stood the proceedings down to a convenient time for the parties to consult further on the identity of the person to be appointed as the single expert and to consult upon the terms of his or her instructions. The plaintiffs' solicitors submitted to the other parties the names of three valuation firms as potential appointees as a single expert. On 30 April 2009 I made orders appointing Mr Danny Sukkar of LandMark White to be engaged jointly by the parties as the parties' single expert in the proceedings. I directed that the instructions to the valuer include a direction that any communication seeking further instructions or clarification should be done in writing with a copy to each party's solicitor. That statement was duly included in the instructions to Mr Sukkar. The letter of instructions also advised him that: " All parties [scil. parties' solicitors] have been directed by the Court to inform their clients in writing of their obligations not to communicate with you either directly or indirectly. Also any parties' solicitors who wish to communicate with you have been directed by the Court to do so only in writing after first providing a copy to the solicitors for the other parties and obtaining consent to any such communication. " 4 Mr Sukkar's valuation report assessed the market value of the subject property as at 6 May 2008 to be $6.25 million. He also provided valuations as at three other dates which one or other of the parties contends to be relevant. 5 Malouf Real Estate Pty Ltd is a cross-defendant. It acted as one of the selling agents for the plaintiffs on the sale of the property to the first defendant. Its director, Mr William Malouf, acted in the matter. 6 In giving his opinion of the subject property's market value as at 6 May 2008 Mr Sukkar said that "the most appropriate method of valuing a residential property is via the direct comparison method whereby sales of similar properties are directly compared to the subject in determining a current market value." He said that he had particular regard to four sales between May 2007 and June 2008 which he described. He then said: " In light of these details and with regard to the aforementioned sales evidence I have assessed the market value as at 6 May 2008 to be $6,250,000 (free of GST). Furthermore, to clarify the events leading to the May 2008 sale I have met with the selling agent, Mr Bill Malouf of LJ Hooker Double Bay. Following my enquiries regarding offers for the subject property, it was ascertained that an initial offer of $6.25 million was submitted by L & D Mulham in April 2008, and that a second offer of $6.15 million was made by Mrs Calabro. Mr Malouf informed Mrs Calabro that her offer was lower than a current offer of $6.25 million and invited both parties to submit written offers the following day. Mulham maintained his offer of $6.25 million, whereas Calabro increased her offer to $6.455 million, hence the sale was agreed at the higher price on 6 May 2008. The adopted value of $6,250,000 is supported by the abovementioned offers at the time of sale. " 7 I was told that Mr Malouf had been advised by his solicitor of the court's direction not to communicate with the valuer, but I understand he responded to Mr Sukkar's approach. 8 I do not understand there to be a dispute as to the matters which Mr Sukkar says he ascertained from Mr Malouf, in the sense that I do not understand there to be a dispute that offers in the amounts stated were submitted by the parties stated at or about the times stated. However, there is an issue as to the true value of the offer of $6.25 million submitted by L & D Mulham. The defendants say that the true value of the offer was affected by its having been made on the basis of an extended settlement period. 9 The plaintiffs and the cross-defendant say that that fact, and the facts described by Mr Sukkar in the paragraph quoted above, appear in the pleadings and the affidavits with which Mr Sukkar was provided. They also submit that Mr Sukkar only used the evidence of the offers as confirmation of the value he had independently assessed. 10 The defendants submit that the communications between Mr Malouf and Mr Sukkar have undermined Mr Sukkar's position as a single expert and that his views cannot be considered to be independent or impartial. They submit that his role as a single expert has become untenable. They say they are not in a position to know exactly what was communicated between Mr Malouf and Mr Sukkar. 11 I do not understand the defendants to submit that Mr Sukkar's report should not be received. For the reasons which follow, I would not in any event be prepared at this juncture to exclude his report on the basis of the communication between him and Mr Malouf. The defendants submit that they should now be given leave to rely upon the valuation of Mr Field which was exhibited to his affidavit of 10 December 2008. They do not seek any wider leave. 12 Where a single expert is appointed pursuant to r 31.37, the parties may not adduce evidence of any other expert on any issue arising in the proceedings if the parties' single expert has been engaged in relation to that issue unless the court gives leave (r 31.44). In Tomko v Tomko [2007] NSWSC 1486, Brereton J said (at [9]) that where some arguable basis is shown for challenging the report of the single expert, the court should be disposed to grant leave lest trial by judge be supplanted by trial by single expert. In Wu v Statewide Developments Pty Ltd [2009] NSWSC 587, his Honour identified three guidelines relating to the exercise of the discretion whether to grant leave under r 31.44. After referring to Daniels v Walker [2000] 1 WLR 1382 at 1387; Cosgrove v Pattison [2000] All ER (D) 2007; and Tomko v Tomko, his Honour said (at [17]): " These cases establish, at least as guidelines, the following: