Supreme Court New South Wales Medium Neutral Citation: Welsh v Carnival PLC trading as Carnival Australia (No 5) [2016] NSWSC 1341 Hearing dates: 15 September 2016 Date of orders: 15 September 2016 Decision date: 15 September 2016 Jurisdiction: Common Law Before: Bellew J Decision: See [15] Catchwords: EVIDENCE – Expert opinion – Lay opinion – Whether admissible Legislation Cited: Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Australian Securities and Investments Commission v Vines [2003] NSWSC 1237 ICM Investments Pty Ltd v San Miguel Corporation & anor [Ruling No. 1] [2013] VSC 463 Makita (Aust) Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 R v Leung [1999] 47 NSWLR 405 Category: Procedural and other rulings Parties: Graham Welsh - Plaintiff Carnival PLC trading as Carnival Australia - Defendant Representation: Counsel: Mr R Royle & Ms F Graham - Plaintiff Mr M McCulloch SC & Ms T Berberian - Defendant Solicitors: Slater and Gordon Lawyers - Plaintiff HWL Ebsworth - Defendant File Number(s): 2012/198495 Publication restriction: Nil Judgment – EX TEMPORE (revised) 1. The plaintiff seeks to rely on evidentiary statements of Paul McMahon, one of which is dated 23 August 2016. I have dealt with a number of objections to Mr McMahon's statement, but there has been some lengthy argument this morning regarding a substantive objection taken to paragraphs 16, 17 and 18. 2. Under the heading, "The Thornhill Park Project", those paragraphs are as follows: "[16] The Thornhill Park Project is a speculative enterprise as is common with these projects. As Graham has had to obtain funding for the purchase of the land and its development, he will be the last person to receive any benefit from it. There have been numerous delays in the project which have had a substantial effect on its profitability. The longer the project takes to complete, the less profit that is able. Consequently, the amount of any profit is speculative. [17] Various risk factors in the development includes [sic] any further delays in its progress. The market value of the plots, so that if the economy drops, it will have substantial impact on profits. Other material risks are the fact that other developers are commencing in the same land development corridor which will increase the supply and consequently reduce the demand. [18] It is my opinion that the projected lifespan of this development is about 5‑6 years, which is 4‑5 years from now. It is difficult to estimate the extent of any return that Graham will receive from this investment" 1. Those paragraphs have been objected to in their entirety by senior counsel for the defendant. Although a number of arguments were articulated in the course of submissions, the essential basis of senior counsel's objection is that the three paragraphs in question essentially amount to expert evidence in circumstances where firstly, there is no reference to the expert code of conduct, secondly there is no evidence which establishes Mr McMahon's relevant expertise, thirdly there is no recitation of any substratum of facts upon which the opinions which are expressed have been based, and fourthly there is no exposition of any reasoning process: see generally Makita (Aust) Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705. 2. Counsel for the plaintiff confirmed that the contents of para. 18 were sought to be led as evidence of an expert opinion. However, he pressed for the admission of paras 16 and 17 on the basis that properly construed, they were evidence of a lay opinion under s. 78 of the Evidence Act 1995 (NSW) ("the Act"). It should be noted that in advancing submissions in relation to the admissibility of paragraphs 16 and 17, counsel for the plaintiff referred, on occasions, to the fact that Mr McMahon was "qualified" to express the opinions contained in those paragraphs. The use of the word "qualified" might, on one view, indicate that the true nature of those paragraphs is an expert opinion. 3. Counsel for the plaintiff also drew attention to the fact that the three paragraphs in question had been repeated verbatim in an expert accounting report which was to be relied upon by the defendant. He submitted that in those circumstances, if the evidence in paragraphs 16, 17 and 18 were excluded, then that would necessarily have the effect of excluding the entirety of the defendant's expert report. 4. Counsel for the plaintiff also made reference to provisions of the Civil Procedure Act 2005 (NSW) ("the CPA") and the Uniform Civil Procedure Rules 2005 (NSW) ("the Rules"). He drew attention, in particular, to the dictates of justice which are contained within the CPA and which are directed to the just, quick and cheap resolution of litigation. 5. In considering these competing submissions it is firstly appropriate to make some observations concerning the reliance by counsel for the plaintiff on the CPA and the Rules. Whilst the CPA incorporates the dictates of justice to which I have referred, the pursuit of those dictates cannot be at the expense of allowing the admission of evidence which is otherwise not admissible. Nothing in the CPA, and nothing in the Rules, allows the admission of evidence which is not admissible. The question of admissibility is to be dealt with having regard to relevant provisions of the Act. 6. Secondly, and whilst this may be an issue to which I will have to return, it is difficult to see why the entirety of the defendant's expert report would be excluded in the event that the three passages of Mr McMahon's statement to which objection has been taken were not admitted into evidence. However, that is only a preliminary view. 7. I turn then to consider the admissibility of three paragraphs in question. In doing so, the first observation which might be made is that the paragraphs are contained under the heading "The Thornhill Park Project". Indeed, they are the only three paragraphs which appear under that heading. In those circumstances, it may be somewhat artificial to separate them in a way which suggests that one paragraph is admissible as expert opinion, and the other two paragraphs are admissible as evidence of lay opinion. 8. In my view, paragraph 18 is not admissible as an expert opinion, that being the basis on which its tender was pressed. Exactly what training, study and experience Mr McMahon has to enable him to express the opinions contained in that paragraph is not set out adequately, or at all, so as to provide a proper basis for the opinion which he seeks to express. Similarly, the factual bases on which he seeks to express such opinion are not set out. The statement is entirely bereft of the exposition of any reasoning process at all. 9. Paragraphs 16 and 17 are in a different category, in the sense that they are pressed as evidence of a lay, as opposed to an expert, opinion. In my view, there is a degree of incongruity in suggesting that paragraph 18 is an expert opinion but that paragraphs 16 and 17 are lay opinions. The three paragraphs speak about the same subject matter, and go generally to the same issue. 10. Moreover, the matters which are canvassed in paragraphs 16 and 17 are, by their very nature, at odds with the proposition that they are an expression of lay opinion. They deal variously with matters of finance, valuation, profit, risk factors, supply and demand. The very nature of such subject matter runs contrary to the conclusion that what is expressed in those paragraphs amounts to a lay opinion. 11. It is also relevant to note that s. 78 of the Act (which deals with evidence of lay opinion) has a relatively narrow operation. Its engagement assumes that a matter or event which is perceived by a witness is the primary evidence, such that the opinion is admissible as being incidental to an understanding of that primary evidence: R v Leung [1999] 47 NSWLR 405: Australian Securities and Investments Commission v Vines [2003] NSWSC 1237. It is also relevant to note that having regard to s. 78(a) of the Act, it must be possible to deduce from the opinion, in the context in which it is expressed, that it is about a matter or event, and that it is based upon what the person saw, heard or otherwise perceived about that matter or event: ICM Investments Pty Ltd v San Miguel Corporation & anor [Ruling No. 1] [2013] VSC 463 at [57]. 12. In the present circumstances, there is no identification of any matter or event which Mr McMahon saw, heard or otherwise perceived which forms the basis of the opinion contained in paragraphs 16 and 17. That, in my view, simply highlights the fact that properly categorised, those paragraphs (like para 18) purport to express an expert opinion. To the extent that they do so, they suffer from same shortcomings. 13. Accordingly for those reasons, paragraphs 16, 17 and 18 of Mr McMahon's statement of 23 August 2016 will not be admitted. ********** 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: 28 September 2016