Chaina v Presbyterian Church (NSW) Property Trust (No. 24) [2013] NSWSC 1677

Supreme Court New South Wales

Medium Neutral Citation: Chaina v Presbyterian Church (NSW) Property Trust (No. 24) [2013] NSWSC 1677 Hearing dates: 13 November 2013 Decision date: 13 November 2013 Jurisdiction: Common Law Before: Davies J Decision: The report of Rick Millar dated 27 July 2012 is rejected. Catchwords: EVIDENCE - expert evidence - opinion based upon assumptions and documents - documents not in evidence - assumptions not otherwise proved - report rejected Legislation Cited: Evidence Act 1995 Cases Cited: Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 Category: Interlocutory applications Parties: Mathew Chaina (First Plaintiff) and ors Presbyterian Church (NSW) Property Trust (First Defendant) and ors Representation: Counsel: In person (Plaintiffs) R Stitt QC, G L Turner & H Stitt (Defendants) Solicitors: In person (Plaintiffs) Curwoods Lawyers (Defendants) File Number(s): 2002/69354

Judgment 1Objection is taken to the report of Rick Millar of 27 July 2012. Associated with that objection is an application by the Defendant to have exhibits YY1 and YY2 limited under section 136 of the Evidence Act 1995 in the same way that exhibits WW and XX have been limited. 2Exhibit YY1 was tab 105 in the statement of Mr Chaina of 8 February 2010. Exhibit YY2 is another form of that statement which has been colour coded by the Defendants to highlight machinery not shown in depreciation schedules attached to the tax returns of the Plaintiffs. The Defendant submitted that, if tab 105 had been put into evidence before the cross-examination of Mr and Mrs Chaina concluded, questions would have been directed to those discrepancies. 3Mr Millar's instructions are set out in section 2 of his report. His opinion was sought on the following issues: (a) The equipment and machinery already in place for manufacturing the new products which were the products in both the domestic and industrial launches that were proposed; (b) The equipment and machinery proposed to be used by the Plaintiffs in manufacturing the new products. (c) The likelihood that the Plaintiffs would have been able to successfully implement the manufacturing processes outlined in the material provided to Mr Millar. (d) The ability of the Plaintiffs to successfully manufacture the new products in line with the volume and quality required for the domestic launch and the industrial relaunch. 4Mr Millar set out in section 4 of his report the materials that he was provided with. Some of those materials include reports in respect of the domestic launch which have been rejected. I do not consider that the rejection of those materials affects, from an admissibility point of view, Mr Millar's report. 5More significantly, Mr Millar lists in section 4.2 the following two items: (o) One (1) folder titled "Documents relating to the Plaintiffs' Plant, Machinery and Equipment", and (p) Proton Technology - Project for Domestic Market - Donald Street Tower & Plant & Machinery List. 6The Defendant sought information from the Plaintiffs' then solicitors, Berrigan Doube, about what constituted item (o). They received a letter and attachments which has become exhibit 217. The attachments are a list of the items referred to in 4.2(o). That list is to be contrasted with what is contained in exhibit YY1 which Mr Chaina said in his Statement (exhibit C1) was the equipment that the Plaintiffs had at the relevant time. Tab 105 to that Statement (containing that list), along with the other tabs annexed to that Statement, was not tendered when the Statement was tendered. 7Item 4.2(p) referred to in Mr Millar's report is Exhibit WW. 8Exhibits WW and XX were recently tendered by the Plaintiffs as being relevant to the issue of what machinery and equipment was available to them. Because they were tendered at a late stage where cross-examination of the Plaintiffs had long concluded, I limited those exhibits under s 136 as being documents that were put into evidence, not as to the truth of the matters contained in them, but to show what was provided to Mr Millar for him to prepare his report. 9I consider that exhibit YY1 should be similarly limited because that was not in evidence at the time Mr Chaina was cross-examined. It is a document that was said by Mr Chaina to constitute the plant and equipment which the Plaintiffs had at the time, but that has not been able to be tested. It follows that exhibit YY2, which is another form of that document, should also be limited. 10Mr Millar set out a number of assumptions in his report including those in paragraph 5.3 which said this: In 1999 there was nothing commercially which would have prevented Proton from finalising and purchasing premises and equipment at Donald Street Lithgow. The equipment listed in documents referred to above in 4.2 o & p, items 21.1 to 21.30A including 21.29 Plant and Machinery Not used - Ingleburn listed plant and equipment, was owned by Proton and available for installation at Lithgow. 11The document referred to in that assumption as 21.29 Plant and Machinery Not used - Ingleburn is Exhibit XX. 12By reason of the way those lists (Exhibits WW, XX and YY1) have come into evidence and the s 136 limitation that has been imposed upon them that assumption has not been proved. 13Assumption 5.5 was that Proton Technology would obtain sufficient venture capital and other funding in time to establish requisite plant and equipment facilities. Evidence concerning the Plaintiffs' ability to raise venture capital was contained in Professor Trende's report but that report is not in evidence by reason of the rejection of the claim for the Domestic launch. The Plaintiffs asserted that venture capital was only to be raised for the Domestic launch. The assumption is not proved. 14Assumption 5.6 was that Proton would have recruited and trained sufficient production staff, developed facilities and sourced supplies of raw materials to produce the products described in 2001 and production of sufficient volumes of those products to meet anticipated sales. There is no evidence showing what would be sufficient production staff nor how and when they would have been recruited and trained or that the facilities would have been so developed. This assumption is not proved. 15What Mr Millar opines, based on the assumptions he has made and the documents he has seen, is that the facilities at Lithgow would have been capable of producing the number of volumes that he has calculated in his report. It is not clear how that conclusion has been used by Ms Cartwright or any other expert on the Plaintiffs' side to prove the sales volumes and the sales that would have been obtainable in relation to the launches. In that way the evidence in this report does not lead anywhere. 16The lack of evidence proving the assumptions that Mr Millar has made seem to me to be fatal to the admissibility of the report: Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588. Accordingly the report of Mr Millar's is rejected.