Supreme Court New South Wales Medium Neutral Citation: Wang v Kaymet Corporation Pty Ltd [2015] NSWSC 1058 Hearing dates: 24 July 2015 Decision date: 24 July 2015 Jurisdiction: Equity Division - Technology and Construction List Before: Stevenson J Decision: Tender of expert report rejected Catchwords: EVIDENCE – admissibility – expert opinion – whether opinion shown to be based on expert's specialised knowledge – whether expert's process of reasoning revealed – whether mere ipse dixit – whether report unfairly prejudicial to the plaintiffs Legislation Cited: Civil Liabilities Act 2002 (NSW) Evidence Act 1995 (NSW) Category: Procedural and other rulings Parties: Qi Wang (First Plaintiff) Jue Li (Second Plaintiff) Xiaoyan Xi (Third Plaintiff) Bin Wang (Fourth Plaintiff) Xiaozheng Lao (Fifth Plaintiff) Siping Xia (Sixth Plaintiff) Meng Shi (Seventh Plaintiff) Yijie Wang (Eighth Plaintiff) Yu Di Xi (Ninth Plaintiff) Qian Li Yan (Tenth Plaintiff) Kai Jie Gu (Eleventh Plaintiff) Li Ye (Twelfth Plaintiff) Jia Jia Ye (Thirteenth Plaintiff) Yanchong Wei (Fourteenth Plaintiff) Zhen Jiang Li (Fifteenth Plaintiff) Lisa Chan (Sixteenth Plaintiff) Peter Ray (Seventeenth Plaintiff) Hai Xu (Eighteenth Plaintiff) Chao Lu Ye (Nineteenth Plaintiff) Na Lu (Twentieth Plaintiff) Liang Qiao (Twenty-first Plaintiff) Jiannan Zhang (Twenty-second Plaintiff) Jie Ma (Twenty-third Plaintiff) Qian Lan (Twenty-fourth Plaintiff) Ling Xu (Twenty-fifth Plaintiff) Ahmed Nizamuddin (Twenty-sixth Plaintiff) Alexander Lissaman (Twenty-seventh Plaintiff) Yingqi Wang (Twenty-eighth Plaintiff) Liu Qing Xu (Twenty-ninth Plaintiff) Junfeng Wang (Thirtieth Plaintiff) Wen Shi (Thirty-first Plaintiff) Shaocong Zhou (Thirty-second Plaintiff) Yibing Zhou (Thirty-third Plaintiff) Boying Gu (Thirty-fourth Plaintiff) Yonglan Shen (Thirty-fifth Plaintiff) Lili Gu (Thirty-sixth Plaintiff) Weidong Li (Thirty-seventh Plaintiff) Wei Huang (Thirty-eighth Plaintiff) Can Zhao (Thirty-ninth Plaintiff) Helen Hoi Peng Fong (Fortieth Plaintiff) Huey Ling Liew (Forty-first Plaintiff) Jian Zhong Wu (Forty-second Plaintiff) Tianjiao Liu (Forty-third Plaintiff) Kaymet Corporation Pty Ltd (First Defendant) Toufic Bachara Kayrouz (Second Defendant) Lichah Kayrouz (Third Defendant) William Joseph Metlej (Fourth Defendant) Representation: Counsel: A J McInerney SC with S Jacobs (Plaintiffs) F C Corsaro SC with P J Bambagiotti and M Auld (Defendants) Solicitors: Carneys Lawyers (Plaintiffs) Alphonse & Associates (Defendants) File Number(s): SC 2013/196153 Ex TEMPORE Judgment (REVISED) 1. The hearing of these proceedings commenced on 20 July 2015. This is the fifth day of the hearing. 2. The proceedings concern the development of two towers of apartments at Wolli Creek, adjacent to the East Hills railway line. 3. By contracts entered into with the defendants between November 2009 and April 2010, the plaintiffs agreed to purchase "off the plan" 43 of the 94 residential apartments proposed to be built in the development. 4. Each contract contained a promise by the defendants to use their "reasonable endeavours", in effect, to complete the project within 30 months of contract, and provided that either party could rescind the contract if completion did not take place within that time. 5. The project was not completed by the relevant date. The defendants have purported to rescind the contracts. The plaintiffs dispute that the defendants were entitled to rescind. 6. The property market has risen. It is common ground that the now complete apartments are worth very much more than the contract prices. In those circumstances, the plaintiffs seek specific performance of the contracts. 7. The ultimate matter for determination in these proceedings is whether the defendants used reasonable endeavours to finish the project by the critical date. 8. The defendants seek to tender a report of Mr Michael Wynn-Jones. 9. Mr Wynn-Jones is a practising building surveyor and certifying authority. He is a Conjoint Professor at the School of Architecture and Built Environment at the University of Newcastle and a Fellow of the Australian Institute of Building Surveyors and of the Australian Institute of Building. 10. In his report, Mr Wynn-Jones states that his instructions were: "…to review the actual time required to obtain an operative Development Consent ('the Consent') and the construction certificates for the development, and to provide my opinion on whether some of the actual time was unforeseeable time." [Emphasis in original] 1. Mr Wynn-Jones adopts defined meanings for "foreseeable time" and thus for "unforeseeable time". 2. Mr Wynn-Jones states that, for the purpose of his report, "foreseeable time" is the "estimated time allowed to complete an event or stage" of the development. He continues that "a reasonable developer would estimate the time allowed for the various stages and events therein to be completed". I infer from that statement that Mr Wynn-Jones envisages that the estimate of time to which he refers is that which would be made by a "reasonable developer". 3. "Unforeseeable time" is, unsurprisingly, defined as time which is not "foreseeable". 4. One difficulty I see with Mr Wynn-Jones's report is that there is no exposition by him of the basis upon which the hypothetical reasonable developer would make the estimate to which Mr Wynn-Jones refers. 5. Mr Wynn-Jones goes on to purport to identify a "reasonable certifying authority" and a "reasonable consent authority" by reference to s 5O(1) of the Civil Liability Act 2002 (NSW). 6. Thus, Mr Wynn-Jones states: "It is my opinion that a reasonable certifying authority would act in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice." 1. Mr Wynn-Jones's overall conclusions as to "unforeseeable time" are as follows: "With respect to the actual time of 707 days to receive RailCorp concurrence sufficient for the Consent to be operative it is my opinion that it would be reasonable to calculate that the actual time comprises a foreseeable time of say 100 days and an unforeseeable time of say 607 days. With respect to the actual time of 438 days to issue [Construction Certificate 5] it is my opinion that it would be reasonable to calculate that the actual time comprises a foreseeable time of say 120 days and an unforeseeable time of say 318 days. With respect to the actual time of 521 days to issue [Construction Certificate 6] it is my opinion that it would be reasonable to calculate that the actual time comprises a foreseeable time of say 140 days and an unforeseeable time of say 381 days." 1. Mr Wynn-Jones also concluded: "It is my opinion that the [defendants'] endeavours in completing the development and obtaining the final occupation certificate were reasonable given the challenges and the unforeseeable time the [defendants] confronted…". 1. Mr Wynn-Jones had no involvement in the construction of this project and has not inspected any part of the building. 2. His report does not set out any assumptions he has made other than to refer globally to the various documents set out at appendix C. 3. Mr Wynn-Jones's report concludes that there has been "unforeseeable time" in relation to four matters. The first is "RailCorp's requirements". The second is "work on or over a public road". The third is "landscape plan and statement". The fourth is "construction certificates for upper levels". 4. The extent to which Mr Wynn-Jones has exposed his process of reasoning may be demonstrated by his treatment of "RailCorp's requirements". 5. Mr Wynn-Jones has calculated that, as a matter of fact, it took 707 days for RailCorp to consent to the relevant development. 6. Mr Wynn-Jones opines that of those 707 days, only 100 days were "foreseeable". 7. As I read Mr Wynn-Jones's report, his reasoning commences with consideration of a letter that RailCorp sent to Rockdale City Council on 24 April 2008. 8. Mr Wynn-Jones sets out the following extracts from that letter: "'This assessment has identified that the Geotechnical Report, prepared in 2004, does not relate to the proposed development. That is, the Report assumes excavation being in the order of 1 m whereas as [sic] the cross-sectional drawings indicate excavation of 3.3 m deep. In addition, it appears from the Geotechnical Report that very loose sand shall be encountered at the basement level. As the water table is encountered at shallow depth, lowering of ground water for the construction of the basement may cause subsidence of the adjacent railway embankment and structures. The Geotechnical Report did not make any settlement predictions of railway infrastructure due to lowering of ground water'." 1. And: "'RailCorp therefore advises that the 21 day statutory 'clock' for the issuing of RailCorp's concurrence has now been stopped until the new Geotechnical Report has been submitted. Should RailCorp not be presented with a new Geotechnical Report within 1 month of this letter, RailCorp may chose [sic] to withhold its concurrence for the development proposal'." 1. Having recited those extracts, Mr Wynn-Jones states: "At face value the '21 day statutory clock information' indicates that RailCorp concurrence could reasonably be expected in about 21 days after an application is lodged where sufficient information were submitted for consideration." 1. Mr Wynn-Jones does not state what "statutory clock" is being referred to (other than, inferentially, being that which RailCorp referred to in its letter). He simply asserts that RailCorp could "reasonably be expected" to indicate its concurrence within 21 days after an application was lodged with "sufficient information". He does not explain by what measure that reasonable expectation would arise. 2. Mr Wynn-Jones then states: "Based on the '21 day statutory clock information' it would be reasonable for the applicant to calculate the 'foreseeable time' to receive RailCorp concurrence sufficient for the Consent to be operative as say 100 days, being say 40 days to obtain concurrence, and say 60 days for contingencies. Based on this foreseeable time the likely unforeseeable time to obtain RailCorp concurrence sufficient for the Consent to become operative would likely be 617 [sic: 607] days, being 707 days (actual time as referred to in 7.2.1(j)) minus a foreseeable time of 100 days (40 days + 60 days)." 1. I am unable to see, from Mr Wynn-Jones's report, by which process of reasoning he comes to the conclusion he sets forth in that paragraph. 2. It seems to me to be mere ipse dixit. 3. I invited Mr Corsaro of senior counsel, who appears with Mr Bambagiotti and Mr Auld for the defendants, to direct me to any passages later in Mr Wynn-Jones's analysis of the RailCorp situation which might explain how it was that Mr Wynn-Jones settled on 100 days as being foreseeable. He was not able to do so. 4. Following that passage in Mr Wynn-Jones's report is an analysis of documents passing to and from RailCorp. 5. I do not see, within that analysis, any conclusion reached by Mr Wynn-Jones as to when "sufficient information" was provided to RailCorp. 6. Mr Wynn-Jones's final conclusion is as follows: "It is my opinion that some of the following time was an unforeseeable time, being some of the time associated with: (a) Amending engineering plans on nine occasions to address RailCorp's requirements (b) Liaising with RailCorp and Council to satisfy the RailCorp Deed (c) Complying with the RailCorp Deed (d) Constructing the [Cutter Soil Mix] shoring required by RailCorp, including the construction technique, a wall collapsing, and the tanking (waterproofing) of the slab on ground in the basement (e) Preparing and obtaining separate construction certificates, being [Construction Certificates 1, 2 and 3] (f) Constructing the cut off walls in stages (g) Onsite conditions, including a shallow water table, and issues associated with stable foundation material being in excess of 28 m below ground in some cases, including the sourcing of a suitable drilling rig. With respect to the actual time of 707 days to receive RailCorp concurrence sufficient for the Consent to be operative it is my opinion that it would be reasonable to calculate the 'foreseeable time' as say 100 days (being say 40 days to obtain concurrence, and say 60 days for contingencies) and the unforeseeable time as say 607 days." 1. I am not able to see by what process of reasoning Mr Wynn-Jones concluded that "say" 100 days was "foreseeable time" and that the balance of 607 days was not. 2. Mr Wynn-Jones's analysis of the other three areas to which I have referred is similar. 3. In relation to "work on or over a public road", Mr Wynn-Jones analyses a number of conditions evidently imposed on the development by Rockdale City Council, sets out extracts from some document, and then simply concludes: "With respect to the actual time of 91 days for [the relevant certifier] to address conditions 76 and 186 sufficient to issue [Construction Certificate 5] (being from his appointment on 29 April 2011 to issuance on 29 July 2011) it is my opinion that it would be reasonable to calculate the 'foreseeable time' as say 40 days (being say 25 days for issuance, and say 15 days for contingencies) and the unforeseeable time as say 51 days (being 91 days actual time minus 40 days foreseeable time)." 1. Again, I see no indication at all of the process of reasoning that Mr Wynn-Jones adopted. 2. The situation is even worse in relation to Mr Wynn-Jones's treatment of the "landscape plan and statement". 3. Mr Wynn-Jones sets out briefly some aspects of that matter and then simply says that his opinion concerning work on or over a public road "applies". 4. Mr Wynn-Jones adopts a similar process in relation to the remaining subject matter; "construction certificates for upper levels". 5. Whilst Mr Wynn-Jones doubtless has specialised knowledge in his area of expertise, his report does not reveal how the conclusions to which he has come are based on that knowledge. 6. He seeks to apply his defined terms of "reasonableness" and "foreseeability" to reach untestable conclusions. 7. I see no exposition of the chain of reasoning that has led him to those conclusions. 8. In my opinion, the report is unfairly prejudicial to the plaintiffs. In that regard, I accept the submission made by Mr McInerney of senior counsel, who appears with Mr Jacobs for the plaintiffs, that if the defendants: "…say that something took them by surprise that could be forensically tested in the usual way including cross examination. It is unconventional and with respect, unfairly prejudicial for the Plaintiffs to have to meet through Mr Wynn-Jones, a case that certain matters were not 'foreseen' by [the defendants]." 1. In any event, Mr Wynn-Jones's conclusions are, to a large extent, directed to the ultimate question of whether the defendants used reasonable endeavors to finish the project by the critical date, particularly his overall conclusion which I have set out at [18] above. 2. The fact that Mr Wynn-Jones expresses opinions directed to the ultimate question in the proceedings is not necessarily a reason to reject the report (see s 80 of the Evidence Act 1995 (NSW)). However, in this case, I do not see how I will be assisted by Mr Wynn-Jones's untestable conclusions as to the very question I have to decide. 3. It may be that some of the matters contended for by Mr Wynn-Jones could form the basis of a submission by counsel. But I do not accept that they can be advanced as expert opinion. 4. I reject the tender of Mr Wynn-Jones's report. ********** Amendments 03 August 2015 - Amended to Civil 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. Decision last updated: 03 August 2015