Cargill Australia Ltd v Viterra Malt Pty Ltd

For the plaintiff and the 1st and 2nd third parties

1 The key parties in the proceeding have filed opposing expert reports related to the topic of certain practices ("the Industry Practices") which the defendants ("the Viterra Parties") have alleged are engaged in by a significant number of participants in the commercial malting industry.[1] Each of these parties has raised global and specific objections to the opposing expert report.

2 For the reasons given below, some of the specific objections to the reports filed by the parties are upheld, but the global objections to the respective reports are rejected.

3 This proceeding was brought by the plaintiff, Cargill Australia Ltd ("Cargill Australia"), against the Viterra Parties following its acquisition of a malting company, Joe White Maltings Pty Ltd ("Joe White").[2] The Viterra Parties consist of the 3 companies who were the vendors, being Viterra Malt Pty Ltd ("Viterra Malt"), Viterra Operations Ltd and Viterra Ltd, together with the ultimate holding company of the group, Glencore International AG.

4 Broadly speaking, Cargill Australia alleges that, prior to the acquisition, the Viterra Parties failed to disclose certain unlawful practices engaged in by Joe White, to the knowledge of the Viterra Parties ("the Viterra Practices"). It is alleged in the fourth further amended statement of claim dated 24 September 2018 ("the Statement of Claim"), that the Viterra Practices were engaged in routinely, in that Joe White, without informing customers:

(1) Supplied malt to customers that did not comply with contractual requirements and specifications.[3]

(2) Supplied certificates of analysis to customers that misstated the results of analytical testing on the malt supplied, so that the certificates reported that the malt complied with contractual requirements and specifications when it did not.[4]

5 It is further alleged that the Viterra Practices were recorded and endorsed by certain written policies ("the Viterra Policies"). Cargill Australia claims that, had it known of the Viterra Practices or the Viterra Policies, it would not have executed the acquisition agreement on 4 August 2013 ("the Acquisition Agreement") or completed the purchase of Joe White on 31 October 2013 ("the Acquisition").[5]

6 The issue of the Industry Practices being engaged in generally by participants in the malting industry has been raised by the parties, including Cargill Australia, the first third party ("Cargill, Inc") and Joe White (collectively, "the Cargill Parties") and the Viterra Parties, throughout this proceeding.[6] The Viterra Parties allege that practices similar to the Viterra Practices were known to occur in the malting industry and were considered standard industry practice. In particular, they contend that, in the time leading up to the Acquisition Agreement, other malting companies used gibberellic acid during the malting process regardless of any customer prohibition, and altered testing results on certificates of analysis provided to customers without disclosing this to the customer.

7 The Cargill Parties accepted that Cargill Australia understood in 2013 that some people in the industry cheated their customers at times by not complying with contractual specifications and inaccurately reporting test results. However, they argue that nothing Cargill Australia knew or suspected about industry participants could have caused it to conclude that Joe White was cheating its customers in the manner they allege it was.

8 The Viterra Parties filed an expert report of Bruce French ("French") dated 30 March 2018, which was subsequently amended on 8 November 2018 ("the French Report"). The Cargill Parties filed their final objections to the French Report on 14 November 2018,[7] and the Viterra Parties filed their responses on 19 November 2018. After the hearing of the objections to the French Report on 19 November 2018, the Viterra Parties filed a supplementary expert report of French dated 21 November 2018 ("the Supplementary French Report"). The Cargill Parties filed objections to the Supplementary French Report on 3 December 2018 and the Viterra Parties filed responses to those objections on 13 December 2018.[8]

9 The Cargill Parties filed an expert report of Joseph Hertrich ("Hertrich") dated 17 April 2018 ("the Hertrich Report"). The Viterra Parties filed objections to the Hertrich Report, which were dated 27 April 2018, on 15 November 2018.[9] The Cargill Parties filed their responses on 19 November 2018. The Cargill Parties have also filed a supplementary expert report of Hertrich dated 16 November 2018.[10]

10 The objections filed consist of global objections to the admissibility of the expert report filed by the opposing parties and, in the alternative, specific objections to various sections of those reports.

11 Prior to the hearing of the objections on 19 November 2018, the Cargill Parties informed the court that if the global objection to the French Report were to be upheld, and French was not called to give evidence by the Viterra Parties, then they would not call Hertrich to give evidence.

12 The threshold requirement for evidence to be admissible is relevance to the issues in dispute.[11] In this respect, s 55(1) of the Evidence Act 2008 (Vic) provides:

The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.

C.2 The opinion rule and expert opinion evidence

13 Section 76 of the Evidence Act sets out the rule known as the opinion rule:

Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.

(Emphasis added.)

14 This provision assumes that evidence of an opinion is tendered to prove the existence of a fact. The party tendering opinion evidence pursuant to an exception to the opinion rule is required to identify the fact in issue that it asserts the expert opinion proves or assists in proving. [12]

15 There are several exceptions to the opinion rule. Relevantly, s 79(1) of the Evidence Act provides:

If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.

(Emphasis added.)

16 Accordingly, to fall within this exception, the relevant expert opinion must conform to 2 distinct requirements.[13] First, the witness must have specialised knowledge based on training, study or experience. Secondly, the relevant opinion must be wholly or substantially based on that knowledge. Any expert opinion that does not meet these requirements is not admissible.[14] These preconditions to admissibility are required to be established, as a matter of fact,[15] by the party seeking to tender the evidence.[16] The question of admissibility is to be determined primarily by reference to the text of the Evidence Act rather than "particular statements in decided cases divorced from the context in which those statements were made".[17]

17 It is opinion evidence with which s 79 is concerned. Opinion evidence has been described as "evidence of a conclusion, usually judgmental or debatable, reasoned from facts".[18] Although the distinction may not always be readily apparent,[19] in determining admissibility it is important to distinguish between opinion evidence and factual evidence of an expert. In some instances, an expert witness may be able to give factual evidence relevant to a case, including factual evidence known to the expert by reason of her or his expertise.[20] This evidence may include a generalisation of objective facts within the expert's experience and outside ordinary lay experience.[21] Section 79 is not concerned with the admissibility of evidence that is properly characterised as expert factual evidence.

18 The phrase "specialised knowledge" is not defined in the Evidence Act. The word "knowledge" connotes more than subjective belief or unsupported speculation.[22] Knowledge, in this context, is an "acquaintance with facts, truths, or principles, as from study or investigation".[23] The knowledge held by the witness must also be specialised in the sense that it is not generally held by members of the community.[24] Specialised knowledge is not limited to scientific or technical knowledge, but must amount to more than ordinary or common knowledge.[25] The term "specialised knowledge" is not intended to be restrictive.[26] Its scope is informed by the available fields of training, study or experience.[27] The exclusionary rules[28] may operate to exclude opinions based on "unreliable and unacceptable" fields of expertise.[29]

19 The acquisition of specialised knowledge by way of experience does not require completion of a course of training or study resulting in a formal qualification.[30] Relevant experience may be gained simply by "doing a job", if that job is sufficiently specialised.[31]

20 The opinion of witnesses possessing specialised knowledge may, generally speaking, be admissible where the subject matter of the inquiry is such that inexperienced persons are unlikely to form a correct judgment upon it without assistance.[32]

21 The field in which the witness is an expert must correspond with the field the subject of the expert opinion.[33] Opinions expressed on matters in respect of which the witness has no relevant specialised knowledge will not fall within the exception, because such opinions are not wholly or substantially based on specialised knowledge.

22 The expert must explain how the field of specialised knowledge in which she or he has become an expert, and on which her or his opinion is wholly or substantially based, "applies to the facts assumed or observed so as to produce the opinion propounded".[34] This requirement has been described as a "statement of reasoning"[35] and serves to ensure that the connection between the opinion and the witness's specialised knowledge is sufficiently identified.[36] The expert must explain their reasoning by stating any facts, assumed or otherwise, so that the court may plainly identify and state the reasons for accepting or rejecting the opinion.[37] That said, in many cases this requirement may be met "very quickly and easily" once the expert witness's qualifications and experience have been described and the subject matter about which the opinion is proffered has been properly identified.[38]

23 Section 59 of the Evidence Act sets out the rule known as the hearsay rule:

(1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.

(2) Such a fact is in this Part referred to as an asserted fact.

(3) For the purposes of determining under subsection (1) whether it can reasonably be supposed that the person intended to assert a particular fact by the representation, the court may have regard to the circumstances in which the representation was made.

24 There are several exceptions to the hearsay rule. Relevantly, s 60 of the Evidence Act provides:

(1) The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of an asserted fact.

(2) This section applies whether or not the person who made the representation had personal knowledge of the asserted fact (within the meaning of section 62(2))[39] ...

25 Evidence of an expert, that comes within s 79 of the Evidence Act to prove the basis of the expert's opinion, does not attract the hearsay rule as it is "relevant for a purpose other than proof of an asserted fact" within the meaning of s 60(1).[40]

26 Except where the court otherwise orders or directs, facts that are admissible by virtue of s 60 may be used as evidence of their truth, unless those facts are identified by the expert witness as facts assumed for the purpose of providing her or his opinion.[41]

27 The court has a general discretion with respect to the admissibility or use of evidence. Section 135 of the Evidence Act relevantly states:

The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might -

(a) be unfairly prejudicial to a party; or

(b) be misleading or confusing; or

(c) cause or result in undue waste of time ...

28 Section 136 of the Evidence Act states:

The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might -

(a) be unfairly prejudicial to a party; or

(b) be misleading or confusing.

29 Both ss 135 and 136 may be called in aid, in the appropriate case, to restrict the effect of s 60(1) if the previous representation in question would otherwise be admissible.[42] Where the previous representation consists of hearsay, the evidence is admissible and may be accorded such weight as is appropriate in the circumstances of the case, or may be excluded or limited under s 135 or s 136 respectively.[43]

30 Broadly speaking, the Cargill Parties objected to the entirety of the French Report on 2 separate bases. First, they contended that the subject matter of the French Report was unclear and not relevant to the issues in this proceeding. Secondly, they submitted that French does not possess specialised knowledge relevant to the subject matter of his opinion.

31 As to the first of these contentions, the Cargill Parties submitted that French purported to give evidence concerning industry practice, but it was not clear as to precisely what industry was the subject of the French Report. French used various terms, including "the industry", "the malting industry", "the malting and brewing industry" and "the export malting industry", none of which was defined. French also referred to participants in the industry in various ways. The Cargill Parties submitted this unsatisfactory position was exacerbated by the fact that the issue of industry practice was not raised on the pleadings or in the list of issues.[44] In particular, they pointed to the fact that the issue of industry practice was absent from the amended defence dated 20 August 2018.

32 In oral argument on 19 November 2018, the absence of a properly pleaded issue was accepted by the Viterra Parties. Senior counsel for the Viterra Parties sought leave to file and serve a further amended defence to raise these issues.[45] Leave was ultimately granted,[46] and a further amended defence was filed on 13 December 2018 ("the Amended Defence").[47] The scope of the commercial malting industry was identified in the Amended Defence, where the following definition is now pleaded:

[C]ommercial malthouses throughout the world who were in the business of supplying malt to customers ... not including internal malt production facilities/units within brewing businesses.

(Emphasis added.)

33 In their reply to the Amended Defence filed on 19 December 2018, the Cargill Parties do not take issue with this definition of the commercial malting industry. Rather, they deny that there were any industry practices "equivalent or substantially similar" to the Viterra Practices.[48]

34 After the Amended Defence was filed, the Cargill Parties informed the court that they did not press the global objection "in so far as it goes to the relevance of the French Report".[49]

35 However, the Amended Defence did not clarify the various uses of the terms "the industry" and "participant(s)" in the French Report. This was raised by the court with the parties (in the form of a schedule) and the matter was relisted for further hearing. On 1 February 2019, the Viterra Parties informed the court that French would give evidence in chief to clarify the use in the French Report of variations of the terms "the industry" and "participant(s)" in accordance with a supplemented schedule provided to the court.[50] The Cargill Parties did not seek to be heard in opposition to this course if the French Report was otherwise ruled to be admissible.

36 The second aspect of the global objection based on a lack of specialised knowledge on the part of French remains in issue.

37 The Cargill Parties submitted that the opinion expressed by French "is an opinion about how maltsters behave and what they understand". In particular, the Cargill Parties contended that French purported to express opinions in respect of:

(1) Practices adopted in the malting industry before August 2013.[51]

(2) The knowledge of participants in the malting industry of those practices.

(3) What "Cargill" should have known from information disclosed during due diligence for the sale of Joe White.

(4) The appropriateness of steps taken by "Cargill" in conducting the Joe White business following the Acquisition.[52]

38 The Cargill Parties argued that French lacks specialised knowledge in respect of these matters. Further, the Cargill Parties argued that French failed to provide the basis of his reasoning in arriving at the opinions contained in the French Report. In particular, it was stated that there was no apparent connection between the specialised knowledge said to be possessed by French and the opinions espoused. Consistent with this argument, the Cargill Parties contended that French does not have specialised knowledge in relation to the malting industry as a whole, despite addressing his opinion to the "malting industry and industry practice in globo". Furthermore, the Cargill Parties submitted that the absence of defined terms for "the industry" and "participant(s)" made the task of determining whether French was qualified to express an opinion in respect of the malting industry, or the notion of industry practice, unduly difficult.

39 The Cargill Parties argued that the fact that French had previously worked in the malting industry did not qualify him to speak about how it behaves. In particular, they submitted that it could not be assumed that all participants in the malting industry behaved in the same way or adopted substantially the same approach as the limited number of companies at which French had been employed. Further, it was argued that the French Report offers no proof in the form of surveys, studies or other data about the behaviour or practices of industry participants.

40 Finally, the Cargill Parties argued that the opinions expressed by French were addressed to issues of fact in this proceeding, including the state of mind of Cargill Australia and Cargill, Inc, and what steps they should have taken after the Acquisition, which were questions of fact and not properly matters for opinion based on specialised knowledge.

41 In response to the Cargill Parties' global objections, on the question of specialised knowledge the Viterra Parties submitted that French had acquired relevant knowledge from several decades of experience working for commercial malthouses and providing consulting services to participants in the malting industry since 2013.[53] Further, the Viterra Parties submitted that the nature of the opinions expressed in the French Report are such that they could only be provided on the basis of specialised knowledge. In this respect, they argued that many of the opinions expressed could only be the product of direct observation of practices, procedures and methodologies.

42 For completeness, the Viterra Parties contended they would suffer prejudice if the Cargill Parties were permitted to press their global objection and the French Report was ultimately ruled inadmissible.[54] It was argued that, had those objections been raised earlier, the Viterra Parties could have sought to adduce other evidence relating to the subject matter of the French Report, either by way of lay evidence during the trial, by amending or supplementing the French Report, or by retaining an alternative expert. In the event that the French Report was ruled inadmissible, the Viterra Parties indicated they would seek an adjournment of the trial.

43 The Cargill Parties argued that the late provision of the global objection could not put the Viterra Parties at risk of suffering any relevant prejudice. They pointed to the specific objections served on the Viterra Parties on 27 April 2018 which related to the "vast majority" of the French Report. The Cargill Parties contended that there would be "virtually nothing left to tender" if the objections as originally served were upheld, and yet no prejudice had been previously identified by the Viterra Parties.

44 The question for determination is whether French possesses specialised knowledge, arising from his experience within the malting industry, upon which to base the opinions expressed in the French Report. The field of expertise in respect of which French professes to express his opinions is, broadly speaking, the conduct, practices and understandings of participants generally in the commercial malting industry in respect of meeting and reporting upon customer specifications.

45 According to the French Report, French has 38 years' experience in the malting industry after training as a malt master in Canada. He has a Bachelor of Science in Agriculture from the University of Guelph in Ontario, Canada, and a certificate in management from the Canadian Institute of Management in Calgary, Alberta. During his career, he has worked at 3 locations in Canada as a "process manager (maltster)", followed by 18 years in either a technical or operational role at 3 separate malt companies in the Graincorp Malt group in his home country of Canada and elsewhere.[55] His responsibilities have included oversight of malt production and shipment quality, and technical support for customers in the brewing industry. While working in Germany, French provided technical and sales support to several large breweries who were also customers of Joe White. French has been a selfemployed consultant in the malting industry since 2013. French is a member of a number of expert industry committees in Canada and the United States of America.

46 Broadly, with respect to characteristics of, or practices pertaining to, the worldwide industry of malt production, French has the relevant experience of working in technical and operational roles at several different malting companies in a number of countries over almost 4 decades to qualify him to express expert opinions on that industry. The evidence already before the court has demonstrated that the malting industry is a global industry.

47 In short, generally speaking, French possesses relevant specialised knowledge in respect of the malting industry within the meaning of s 79(1) of the Evidence Act.[56] That said, this global ruling as to admissibility does not apply to opinions expressed about Cargill, Inc's or Cargill Australia's knowledge. Those objections will be addressed below in dealing with the relevant specific objections.[57]

48 Given that, in substance, the global objections have not been upheld, the issue of prejudice to the Viterra Parties from the late provision of the global objections does not arise. However, it should be observed that the late notice of the global objections by the Cargill Parties was unsatisfactory and that, up until very shortly before the hearing on 19 November 2018, on the evidence before the court the Viterra Parties were justified in assuming that no such global objections would be taken.

49 By way of further general observation, French expresses many of his opinions as being "based on my experience in the malting industry". In respect of the objections based on the failure to express a path of reasoning, the Viterra Parties submitted that many of the "opinions" expressed in the French Report were the product of "discrete observable phenomena" rather than being the result of analysis, calculation or inference. As already noted,[58] an industry expert may be qualified to state, as a matter of fact, that a particular practice, or particular routine conduct, is engaged in in the industry of which she or he is an expert.[59] Moreover, to the extent any evidence on this topic is properly characterised as including opinion evidence, it is unnecessary for French to set out matters beyond evidence establishing he has the relevant specialised knowledge as the basis of expressing that opinion about industry practice or conduct.[60]

D.3 Specific objections to the French Report, responses and rulings

50 The Cargill Parties have made 34 specific objections in respect of the French Report. Of these objections, 4 have been conceded or partially conceded by the Viterra Parties.[61] The remaining specific objections are:

(1) Objection to the second sentence of paragraph 10 on the ground that no basis for the opinion is identified. Paragraph 10 relevantly reads:

[B]ased on my experience in the malting industry the industry recognises that the contribution to brewery performance of a particular barley variety in a malt shipment is of less importance than the malt analytical analysis.

The Viterra Parties argued that this opinion is identified as being based on what French has directly experienced and observed while working in the malting industry.

This objection is rejected. This paragraph contains direct observations based on the professional experience and understanding gained by French as a result of his employment history.

(2) Objection to the final sentence of paragraph 14(b) on the basis that it constitutes speculation, as opposed to an opinion based on specialised knowledge. Paragraph 13 states that it was not industry practice to use non-malting varieties such as Hindmarsh barley, subject to certain exceptions. Paragraph 14(b) then states:

I have not viewed all of the [Joe White] customer specifications during the relevant period, but it is possible that there are malt sales contracts in place at [Joe White] that would allow a small inclusion of nonmalting approved malting varieties ...

The Viterra Parties argued that French provides this opinion, on the types of contractual terms sometimes agreed between malthouses and brewers, based on his professional experience.

This objection is upheld. The opinion is not a general observation as to contractual terms commonly agreed between maltsters and brewers. Rather, this sentence constitutes a specific hypothesis concerning Joe White's customer contracts and is entirely speculative.

(3) Objection to paragraph 16 on the basis that it constitutes speculation as opposed to an opinion based on specialised knowledge.[62] The second sentence of this paragraph was conceded by the Viterra Parties. The remainder of paragraph 16 reads:

It is noted that in the [Joe White] barley purchasing contracts 2012/13 ... there are two contracts for 9,000 [metric tonnes] and 1,500 [metric tonnes] of Hindmarsh and two contracts for 13,000 and 4,500 [metric tonnes] of Malt 1 + [Hindmarsh] ... Barley purchases referenced in the contracts totalled 502,356 [metric tonnes] of barley. The total Hindmarsh contracted for 2012/2013 would represent between 2.0 [percent] to 5.8 [percent] of the total barley purchased. This represents a low percentage of the total purchase, which suggests that it could have been purchased for use and/or blending in a compliant manner.

The Viterra Parties argued that this paragraph does not contain opinion evidence, but rather evidence to which French has had regard when providing his opinions.

This objection is upheld. The proposed evidence consists of comments and inferences able to be drawn readily from particular documents, rather than opinions based on specialised knowledge. In respect of the final sentence from the words "which suggests", that part of the sentence lacks sufficient reasoning for the basis of the opinion expressed to be properly understood and is speculative. Further, the evidence is not supportive of, or materially relevant to, the opinion ultimately expressed,[63] namely that, subject to any agreement to the contrary, the use of Hindmarsh barley would not be consistent with industry practice.

(4) Objection to the first sentence of paragraph 21 on the basis that French does not have specialised knowledge in respect of "the industry worldwide" and that the opinion is not wholly or substantially based on specialised knowledge. The first sentence of paragraph 21 reads:

I was aware [gibberellic acid] is at times used in the industry worldwide on some customer contracts that stipulate that [gibberellic acid] not be used.

The Viterra Parties argued that this sentence does not contain opinion evidence, but rather direct evidence of French based on his professional experience and observations. Further, the Viterra Parties contended that the term "worldwide" should be given its natural meaning.

This objection is rejected. The French Report demonstrates that French possesses specialised knowledge which extends to an awareness of practices within the malting industry generally, including the use of gibberellic acid.

(5) Objection to paragraph 28 on the basis that it constitutes a comment on a factual matter rather than an opinion based wholly or substantially on specialised knowledge. Paragraph 28 reads:

[Joe White] personnel appear to have been well aware of [certain blending factors] and it was addressed in the Malt Blend procedure [at Joe White], which directed Production managers that: "attention should be paid to the impact of individual batch quality and all blend parameters".

The Viterra Parties explained that this paragraph contains the reasoning for some of the opinions expressed in the French Report and was not sought to be tendered as proof of the underlying facts.

Based on this clarification by the Viterra Parties, the objection is rejected but the evidence will be the subject of a ruling under s 136 that it will not be admitted to prove the truth of the asserted fact and its use will be limited accordingly.

(6) Objection to paragraph 29 on the ground that no basis for the opinion is identified. Paragraph 29 reads:

Based on my experience in the malting industry I believe [Joe White] followed practices and used judgment based on factors I would expect an experienced competent person in the industry would follow.

The Viterra Parties argued that this opinion is identified as being based on what French has directly experienced and observed while working in the malting industry.

This objection is rejected. The opinion is based on the professional experience and understanding gained by French as a result of his employment history. Further, this opinion is preceded in the French Report by details of the practices alleged to have been adopted by Joe White and factors considered relevant in the industry generally when developing a malt blend.[64]

(7) Objection to the first sentence of paragraph 30 on the basis that it constitutes a comment on a factual matter rather than an opinion based wholly or substantially on specialised knowledge. The first sentence of paragraph 30 relevantly reads:

Consistent with the above, formal procedures were incorporated into the Malt Blend Parameters Procedures [at Joe White] ... to provide that more senior personnel who were aware of [the factors considered by participants in the commercial malting industry when developing a malt blend within specification] were part of the decision making process.[65]

(Emphasis added.)

The Viterra Parties argued that this paragraph contains the reasoning for some of the opinions expressed in the French Report and was not sought to be tendered as proof of the underlying facts.

This objection is rejected. This sentence contains background information in respect of the procedures reviewed by French for the purpose of expressing his opinions. However, it will be the subject of a limitation ruling under s 136 as set out in subparagraph (5) above, so that it cannot be used as proof of the knowledge of the "more senior personnel" or evidence of what in fact comprised Joe White's "procedures".

(8) Objection to paragraph 31 on the basis that no path of reasoning is demonstrated by which the conclusion expressed follows from observed or assumed facts so as to establish that the opinion is wholly or substantially based on specialised knowledge. Paragraph 31 reads:

Based on my experience in the malting industry ... I am of the opinion that the blending procedures used by [Joe White], including those documented in the Malt Blend Parameters procedure [at Joe White] are similar to practices adopted by most malthouses in the industry prior to August 4, 2013.

(Emphasis added.)

The Viterra Parties argued that this paragraph contains the reasoning for the opinion expressed.

The objection is largely rejected. French is able to say, based on his specialised knowledge, whether the procedures used by Joe White as documented are similar to practices adopted by most participants in the commercial malting industry at the relevant times. However, insofar as the paragraph refers to blending procedures other than those documented, it is entirely unclear as to what it is that the evidence is encompassing. Accordingly, to that extent the evidence is not admissible under s 79 and, even if it were, I would exclude it under s 135. The French Report will need to be amended accordingly to confine this evidence to Joe White's written practices and policies considered by French.

(9) Objection to the first sentence of paragraph 38 on the ground that no basis is stated for the expression of an opinion as to "industry practice" and no path of reasoning is expressed so as to establish that the opinion is wholly or substantially based on specialised knowledge. The first sentence of paragraph 38 reads:

It is also industry practice to adjust results based on the variability of testing and sampling.

The Viterra Parties argued that, to the extent it contains opinion, this sentence is based on French's specialised experience.

This objection is rejected. French has specialised knowledge of practices within the commercial malting industry generally. The evidence given in this sentence purports to be based on that knowledge.

(10) Objection to the remainder of paragraph 38 on the basis that it constitutes a comment on factual matters rather than an opinion based wholly or substantially on specialised knowledge. Paragraph 38 relevantly reads:

[Joe White] staff appear aware of [factors that must be taken into consideration when making adjustments to malt analysis], some of which were partly documented in the Viterra Malt Certificate of Analysis Generation Procedure ... This was explained in detail by [Douglas Stewart][66] in his witness statement ... There were formal procedures which provided that qualified personnel who were aware of all the relevant factors could make appropriate decisions on adjusting certificates of analysis [reference was made to evidence of Stewart and another witness who has given evidence at trial] .... This is also documented in the Viterra Malt Analysis Generation Procedure where it states for [the] International Customers section:

results that appear out of specification on the [certificate of analysis] may be adjusted by the Technical Services Manager (or their nominated proxy). This adjustment must be based on the associated analytical error for that test parameter as defined in the [Malt Analytes Proficiency Testing Scheme] program and may be made up to two Standard Deviations, where required. These changes will be approved by the Technical Services Manager and General Manager Technical when signing off the Certificates of Analysis

and further states in the Domestic Customer[s] section:

These changes will be approved by the Plant Manager when signing off the Certificates of Analysis ...

• The final shipment results must be within two standard deviations of the pre-shipment result, highlighting the importance of accurate pre-shipment data. Pre-shipment data should be based on actual blend data wherever possible.
• Results that still remain out of specification after a maximum two standard deviations adjustment can only be altered further and signed off for progressing of the shipment by the consensus of two or more General Managers, or the shipment may be recalled.

If the investigation indicated the malt did not meet customer requirements and would cause a brewing problem, a decision would be made on recall. This is documented in the Viterra Malt Certificate of Analysis procedure ...

The Viterra Parties argued that the inclusion of these comments was appropriate as they contain the reasoning for some of the opinions expressed by French.

This objection is rejected. This passage contains background information and inferences he has drawn in respect of the procedures reviewed by French for the purpose of expressing his opinions. That said, to the extent French purports to express a view of the awareness of Joe White staff and the proper construction of the procedure referred to, that evidence will be the subject of a ruling under s 136, limiting its use as set out in subparagraph (7) above.

(11) Objection to paragraph 40 on the ground that no basis is stated for the expression of an opinion as to the behaviour of "the malting industry" or "many companies" in the industry in relation to the "adjustment" of analytical results. Further, it was argued that no path of reasoning is expressed so as to establish that the opinion is wholly or substantially based on specialised knowledge. Paragraph 40 reads:

Based on my experience in the malting industry I believe it would be more common to adjust analytical results based on two standard deviations based on the plant laboratory of the company laboratory shipping the malt. In my experience there are occasions when results are adjusted that were outside the two standard deviations after appropriate consideration of the [factors that must be taken into consideration when making adjustments to malt analysis]. Many companies would utilise a similar practice either based on an objective measure or based on experience.

(Emphasis added.)

The Viterra Parties argued that this opinion is identified as being based on what French has directly experienced and observed while working in the malting industry.

This objection is rejected. French has specialised knowledge of practices within the malting industry generally, including the adjustment of the results of laboratory testing of malt. To the extent opinions are expressed in this passage, they are based on that knowledge. Despite the word "many" lacking precision, it is distinguishable from "other",[67] which is completely unclear as to prevalence. Although this lack of precision affects the weight which might be given to the evidence in the last sentence, in my view "many" is sufficiently descriptive of the industry to be admissible.

(12) Objection to the fifth sentence of paragraph 43 on the basis that French is purporting to give evidence about facts that are not identified and cannot be tested. The Cargill Parties also argued that the relevance of the sentence was not apparent. Paragraph 43 refers to a review undertaken by French of data referred to in the witness statement of Liam Ryan.[68] The fifth sentence relevantly reads:

For the purpose of my review I sorted the data for one customer, Sumitomo Asahi, because I am familiar with the customer and am aware of what specifications to which their brewery process is sensitive.

The Viterra Parties argued that French has direct knowledge as to the sensitivities of Asahi's brewery in respect of malt specifications. It was submitted that this sentence provides the basis for French deciding to review Asahi's data, rather than that of another customer.

Further, the Viterra Parties generally disputed the contention that several of the opinions in the French Report could not be tested. The Viterra Parties pointed to the fact that a joint expert report had been prepared by French and Hertrich on 7 June 2018 ("the Joint Report"), and that the experts had been able to explore and test the reasoning behind their respective opinions without any apparent difficulty.

This objection is rejected. Although the manner in which the data was "sorted" is not clear on the face of the French Report and the specifications to which the specific customer is apparently sensitive are not disclosed, the evidence appears to do no more than explain why French chose to focus on a particular set of data in the large spreadsheet he reviewed. Further, this rejection of the objection is in the context where there was no specific objection to the remainder of paragraph 43, which appears to set out the information upon which French has relied.

(13) Objection to paragraphs 44, 45 and 46 on the basis that no path of reasoning is expressed so as to establish that the opinions are wholly or substantially based on specialised knowledge. Further, in respect of paragraph 44, it was argued that French has not demonstrated relevant specialised knowledge in respect of "the reporting methodologies" of "other participants in the malt industry". Furthermore, it was argued that French failed to state the basis for the expression of an opinion as to the practices adopted by such participants or the conclusion that such practices are similar to those adopted by Joe White. Paragraph 44 reads:

Based on my preliminary review, of a part of the data obtained from the [certificate of analysis] spreadsheet and based on my experience in the malting industry, reviewing malt analytical data and shipment malt analytical trend data, I am of the opinion that the reporting methodology used by [Joe White] was similar to the practice of other participants in the malt industry.

(Emphasis added.)

The objection to this paragraph is upheld. The path of reasoning is not disclosed in a number of respects. Precisely what the "preliminary review" entailed is not disclosed. Further, which "part of the data" was considered is unclear. Even if it is assumed those phrases relate to what is contained in paragraph 43 of the French Report (which is far from clear), precisely what malt analytical data and shipment malt analytical trend data was reviewed is not apparent.[69] Finally, the reference to "other participants" is too vague. There is no indication as to whether such participants represent a significant or insignificant sector of the malt industry. Also for these reasons, if the evidence were admissible by reason of the exception in s 79, I would have excluded it under s 135.

(14) In respect of paragraphs 45 and 46 it was further argued by the Cargill Parties that French has not demonstrated relevant specialised knowledge in respect of the practices followed or adopted "by most malthouses". Paragraphs 45 and 46 read:

I am therefore of the opinion that the policies, procedures and practices in place at [Joe White] with respect to Certificate of Analysis generation were similar to practices followed by most malthouses prior to August 4, 2013.[70]

Therefore, based on the information I have reviewed, I am of the opinion that the Viterra Policies and Practices were similar overall to practices adopted by most malthouses prior to August 4, 2013.

(Emphasis added.)

The Viterra Parties argued that the opinions expressed in these paragraphs are identified as being based on what French has directly experienced and observed while working in the malting industry.

The objections to each of these paragraphs are upheld. Although I do not accept the Cargill Parties' submission concerning French's professional experience and understanding, there is no proper statement of reasoning for the opinions expressed. Further, and in any event, both paragraphs are premised on what was stated in paragraph 44.[71] The disallowance of paragraph 44 necessarily has the cascading effect of undermining the admissibility of paragraphs 45 and 46.

(15) Objection to paragraphs 47 to 61 on the basis that the opinions contained in those paragraphs are addressed to the state of knowledge of "participants in the malt industry". It was argued that French has not demonstrated specialised knowledge of the behaviour, practices or knowledge of participants in the malting industry generally. Further, it was submitted the question of what maltsters knew or understood was a factual matter, and not evidence that could be admissible under s 79 as an opinion based on specialised knowledge. Furthermore, it was argued that no path of reasoning is expressed so as to establish that any opinion is wholly or substantially based on specialised knowledge.

The Viterra Parties argued that the opinions expressed in these paragraphs are identified as being based on what French has directly experienced and observed while working in the malting industry.

It is not necessary to set out these paragraphs for the purpose of this general objection. For reasons stated,[72] I reject the submission that French does not have the necessary experience to give evidence about the commercial malting industry. Further, insofar as these paragraphs contain statements as to common practice or knowledge in the industry, I agree with the Cargill Parties' submission that such statements are factual evidence and not opinions that fall for consideration under s 79.[73] Accordingly, this general objection is rejected insofar as it relates to the factual evidence. As to the opinion evidence, this will be dealt with based on the specific objections addressed below.

To the extent these paragraphs are concerned with "Cargill's" position, there is significant overlap between this objection and the further specific objections addressed below.[74] As to French's opinions as to Cargill, Inc's likely awareness of the Industry Practices, the objection is upheld. Such assertions are not opinions based on specialised knowledge, but are bald conclusions about the state of mind of a specific corporation. To be clear, a suitably qualified expert could properly give evidence concerning the nature and extent of an industry practice or industry practices from which the court might draw an inference about the knowledge of a particular participant in the industry. Further, an opinion as to the likelihood of knowledge in the industry generally may be based, wholly or substantially, on the specialised knowledge as to the prevalence of a particular practice or particular practices.[75] However, putting aside cases where an expert is able to give direct evidence of a party having actual knowledge of the practice in question, it is no part of an industry expert's role to make assertions based on general specialised knowledge concerning the likelihood or otherwise of the actual knowledge of a party to the proceeding of the practice or practices in question.[76]

(16) Objection to paragraph 48(a) on the basis that it seeks to prove the facts asserted and thereby contravenes the prohibition on hearsay evidence. It was argued that the exception for evidence that is relevant for a nonhearsay purpose does not apply because the opinion expressed is not wholly or substantially based on specialised knowledge. Paragraph 48 relevantly reads:

Based on my experience in the malting industry, most participants in the industry would likely be aware of [the practice of using nonapproved malting varieties to produce malt]. For example:

(a) Asahi Breweries of Japan in about 2010/2011, initiated the testing of lots of malt shipped to them by their suppliers for varietal purity inclusion rates. They take in malt from a significant number of maltsters around the world from Australia, Europe and Canada. They take in malt from more than one supplier from each region. This allows them to objectively compare suppliers' analysis and malt brewery performance from each supplier from a given geography and investigate differences which might arise after taking into account known differences of malthouse or barley supply within a region. Laura McIntyre's witness statement at [79] references that Asahi analysed and determined that Gairdner [which is a variety of barley] had not been used on the blend ...

The Viterra Parties argued that any hearsay evidence contained in this paragraph was relevant for a non-hearsay purpose, being part of the reasoning upon which French has based his opinions.

The objection is rejected. On the face of his report, French is providing an example based on his direct observations and knowledge. Even if that conclusion is incorrect, the hearsay rule does not operate to exclude the evidence by reason of s 60 and the relevance of a purpose other than the asserted fact. However, the last sentence does not fall into this category, it being a comment on evidence given by a witness at trial. That sentence will be subject to a ruling under s 136 limiting its use so that the comment is not proof of the asserted fact.

(17) Objection to paragraph 48(b) on the same basis as paragraph 48(a). It was further argued that the second sentence constitutes speculation as to the reasons for the actions of a major importer. Paragraph 48(b) reads:

A major importer of a significant quantity of malt into Africa, mostly from the [European Union], for brewing has variety specifications and performs variety analysis based on random analysis of third party samples using [polymerase chain reaction] to determine the varieties on a malt shipment. This was part of their specifications prior to August 4, 2013. I am aware this was put in place due to noncompliance issues with variety integrity.

This objection is rejected for the same reasons as stated with respect to paragraph 48(a).

(18) Objection to paragraph 48(c) on the same basis as paragraph 48(a) and (b). Paragraph 48(c) reads:

IFBM, in Nancy, France had made available a [polymerase chain reaction] testing service to test for varietal integrity. I am aware that other maltsters had discussed the use of this service with them.

This objection is rejected for the same reasons. The use of the word "other" in this passage is not problematic because the point being made is the establishment of the testing service, which, of itself, suggests the issue of varietal integrity was not insignificant.

(19) Objection to paragraphs 49 and 50 on the basis that they express an opinion about the factual matter of what most maltsters knew or understood, which is not a matter for opinion based on specialised knowledge. Further, it was argued French has not demonstrated specialised knowledge in respect of the subject matter. Furthermore, it was argued that no path of reasoning is expressed so as to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Paragraphs 49 and 50 read:

Based on my experience in the malting industry, each of the [examples contained in paragraphs 48(a)-(c)] was likely to have been known to most participants in the export malting industry.

Therefore, I am of the opinion that it is likely most participants in the industry were aware that this practice was engaged in by a number of malthouses.

The Viterra Parties argued that the opinions expressed in these paragraphs did not pertain to the knowledge or understanding of particular maltsters but was concerned with the industry generally. Further, they contended that the opinions expressed in these paragraphs are identified as being based on what French has directly experienced and observed while working in the malting industry.

The authorities demonstrate an expert may give evidence about common industry practices or customs.[77] If, in fact, a practice or custom is engaged in throughout an industry, ordinarily it would follow that it would be likely to be known by industry participants. This is an inference that, again ordinarily, it would be expected would be drawn from evidence concerning the common practice or custom in question. However, in some cases it may be a matter for expert evidence as to whether a particular practice or custom is well known or "notorious" in an industry.[78] In this case, the court is concerned with a practice that is alleged to be, in part, covert. In these circumstances, an industry expert may possess specialised knowledge which enables her or him to give evidence concerning knowledge of a particular industry practice.

Proceeding on this premise, the objection to paragraph 49 is rejected on the basis that French has confined his opinion to the awareness of most participants in the "export malting industry". The objection to paragraph 50 is also rejected. Although the shift from "export malting industry"[79] to "the industry" may, on its face, appear to make the evidence less probative, this is a matter of weight rather than admissibility.

(20) Objection to paragraph 51 on the basis that it expresses an opinion of what most maltsters knew or understood, which is a factual matter and not a matter for opinion based on specialised knowledge. Further, it was argued French has not demonstrated specialised knowledge in respect of the malting industry "on a worldwide basis". Furthermore, it was argued that no path of reasoning is expressed so as to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Additional objections were made to the final sentence of paragraph 51(c) and the second, third and fourth sentences of paragraph 51(d) on the basis that they constitute hearsay and speculation. Paragraph 51 reads:

In my experience ... [gibberellic acid] was used throughout the industry as required, in a non-compliant manner on a worldwide basis prior to [the execution of the Acquisition Agreement]. Further:

(a) Based on my experience in the malting industry I believe it was well known by malting participants in North America prior to [the execution of the Acquisition Agreement] that six row barley was at times difficult to malt without the use of [gibberellic acid]. The use of [gibberellic acid] was also well known among the maltsters on the malt barley quality evaluating (approval) committees; [American Malting Barley Association], Malt quality evaluation committee, and [Prairie Regional Recommending Committee for Grain], Malt and Oat approval committee and the Malt barley evaluation subcommittee. Participants in the industry likely would have known it was used in a non-compliant manner.

(b) Based on my experience in the malting industry it would likely have been known in Europe by most participants in the malting industry that [gibberellic acid] was at times required to produce malt to specification and sometimes this use would be in a manner not compliant with customer contracts.

(c) [Campden BRI], an independent malt testing laboratory in the [United Kingdom] was offering a service to analyse for exogenous applied [gibberellic acid] in malt prior to [the execution of the Acquisition Agreement]. Based on my communications with [Campden BRI] I understood this service was being offered as a result of demand from the industry to test for the use of [gibberellic acid] because its use was common.

(d) A major Japanese brewer who did not allow the use of [gibberellic acid] was conducting random testing for [gibberellic acid] prior to [the execution of the Acquisition Agreement]. This was initiated because the brewer likely suspected of noncompliant [gibberellic acid] usage in the industry. To my knowledge at that time [gibberellic acid] was detected in [a] number of maltster's shipments. This testing was industry knowledge.

(Emphasis added.)

The Viterra Parties repeated their response to the objections to paragraphs 49 and 50 above.

For reasons stated above, the Cargill Parties' submission concerning specialised knowledge is rejected. Accordingly, subject to the specific objections, the evidence will be allowed. Although I accept much of paragraph 51 is not opinion evidence that attracts s 79, such evidence is admissible on the basis that French is an industry expert. To the extent it consists of opinion evidence, the specialised knowledge has been established for those opinions to be given.[80]

As to the specific objections, the final sentence in paragraph 51(c) is hearsay evidence. However, the exception in s 60 for evidence that is relevant for a purpose other than proof of an asserted fact is engaged because this sentence contains an observed fact upon which French has based some of his opinions. The objection as to admissibility is rejected. However, given the conclusory form of the sentence, a ruling under s 136 will be made limiting its use to being the basis of French's understanding rather than the truth of the underlying facts.

As to paragraph 51(d), the second sentence is plainly speculation. The use of the word "likely" in respect to a specific matter demonstrates this. It is disallowed. However, the third and fourth sentences are admissible on the basis that they are put forward as being from French's own knowledge.

(21) Objection to paragraph 52 on the basis that no path of reasoning is shown so as to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Paragraph 52 reads:

Therefore I am of the opinion that the use of [gibberellic acid] similar to the Viterra practice was sufficiently engaged in by some malthouses prior to [the execution of the Acquisition Agreement] such that participants in the industry would likely have been aware of these practices.

The Viterra Parties argued that the opinions expressed in this paragraph are identified as being based on what French has directly experienced and observed while working in the malting industry.

This objection is rejected. French has observed the use or knowledge of the use of gibberellic acid during his career in the malting industry. The opinion expressed is based on the professional experience and understanding gained by French as a result of his employment history. Although the use of "some" is quite vague, the evidence concerning knowledge goes to the awareness of the participants in the industry more generally.

(22) Objection to the first sentence of paragraph 53 on the basis that French has not demonstrated specialised knowledge in relation to the practices of "most malthouses". Further, it was argued that no path of reasoning is demonstrated so as to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Furthermore, it was contended there is no basis stated for the opinion expressed[81] and it therefore cannot be tested. The first sentence of paragraph 53 reads:

Causes of variation in blending, sampling and malt testing would require that most malthouses have practices in place which are similar to the [certificate of analysis] practices prior to [the execution of the Acquisition Agreement].

The Viterra Parties argued that the opinion expressed in this sentence is identified as being based on what French has directly experienced and observed while working in the malting industry.

The objection is rejected. The opinion is based, or at least substantially based, on French's knowledge of the various matters identified with respect to producing and testing malt. Further, preceding sections of French's Report discuss why it is said that such a requirement for the practices referred to would exist.

(23) Objection to the second and third sentences of paragraph 53 on the basis that they contain comments on a factual matter rather than an opinion based on specialised knowledge. Those sentences read:

Additionally, these could not have been isolated practices within the [Joe White] malthouse. Based on my experience in the industry I believe a number of employees at a malthouse must have been aware of these issues and worked together as a team to effectively produce, ship and report malt within customer's specifications and expectations.

The Viterra Parties contended that these sentences contain the reasoning for some of the opinions expressed in the French Report and were not sought to be tendered as proof of the underlying facts.

Based on this position, the evidence will be permitted subject to a ruling under s 136 limiting the use of the evidence to French's understanding of industry practice rather than what occurred specifically at Joe White (noting that, immediately following, French refers to evidence on this issue already before the court from other witnesses).

(24) Objection to paragraph 57 on the basis that the witness has not demonstrated specialised knowledge in relation to "the industry" globally. Further, it was argued that there is no path of reasoning so as to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Furthermore, it was contended there is no basis stated for the opinion expressed[82] and it therefore cannot be tested. Paragraph 57 reads:

In my experience practices similar to [solutions proposed in a Cargill Australia document dated 17 January 2014 to address the gap between capability and customer expectations, including engaging the customer to either go to a theoretical blend, allow a variation of 2 standard deviations of the analytical method on either side of customer specifications or widen their specifications] were utilised within the industry. As an example:

(a) Where analysis was required before lab results would be available in instances such as direct truck deliveries from malthouse to brewery customer approval would be gained to report the theoretical blend followed by laboratory testing on samples representing each blend; and

(b) Some customers were open to discussion about analytical capability and would adjust and/or widen specifications to allow for analytical variability.

The Viterra Parties argued that the opinions expressed in this paragraph are identified as being based on what French has directly experienced and observed while working in the malting industry.

The objection is rejected. French is suitably qualified to state, as a matter of fact, whether what was (according to the particular document) being proposed by Cargill Australia aligned with practices engaged in within the industry.

(25) Objection to paragraph 59 on the basis that the witness has not demonstrated knowledge in relation to "most participants in the industry". Further, it was argued that there was no path of reasoning to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Furthermore, it was contended that no basis is stated for the opinion expressed[83] and it therefore cannot be tested. Paragraph 59 reads:

Based on my experience in the malting industry I believe the practice of most participants in the industry was to adjust [certificate of analysis] results, based on 2 standard deviations or by experience.

The Viterra Parties argued that the opinions expressed in this paragraph are identified as being based on what French has directly experienced and observed while working in the malting industry.

The objection is rejected. French is giving factual evidence based on specialised knowledge derived from his industry experience.

(26) Objection to paragraphs 60 and 61 on the basis that they contain comments on the factual matter of the state of mind of "Cargill" and other industry participants. Further, it was argued that no path of reasoning existed to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Paragraphs 60 and 61 read:

Therefore, in my opinion, Cargill would likely have been aware of industry practices similar to [Joe White] practices with respect to blending and customer reporting prior to the [A]quisition.

I am therefore of the opinion that most participants in the industry would be aware of practices similar to the [certificate of analysis] practices.

The Viterra Parties argued that the opinion expressed in these paragraphs is identified as being based on what French has directly experienced and observed while working in the malting industry.

With respect to paragraph 60, the objection is upheld. The evidence given in paragraph 60 purports to give specific opinion evidence as to the likelihood of the actual knowledge of Cargill, Inc (and probably also Cargill Australia, though this is not clear). Despite s 80(a) of the Evidence Act, it is not the role of an expert to seek to usurp the role of the court with respect to specific factual findings regarding the parties to the proceeding.[84] Further, the French Report provides no statement of reasons as to why Cargill, Inc in particular would have been likely to have the knowledge alleged. On that basis alone it is not admissible. Even if it were admissible, I would exclude the evidence under s 135. French's view about an issue for determination by the court without the benefit of the evidence at trial is of little probative value, and any such value is substantially outweighed by the real potential for an undue waste of time if the evidence were admitted.

In contrast, paragraph 61 is concerned with knowledge in the industry generally. This is factual evidence that French is able to give by reason of his specialised knowledge, and the basis of this evidence is clear from what precedes this paragraph. Accordingly, the objection is rejected.

(27) Objection to paragraphs 62 to 97 on the basis that the evidence is directed to the factual matter of what the Cargill Parties knew or understood as a result of the due diligence process preceding the Acquisition. It was argued that this was not properly a matter for expert opinion and that French has not demonstrated specialised knowledge in respect of the subject matter. It is not necessary to set out all these paragraphs to address this general objection. It is sufficient to set out the 3 opinions in this section of the French Report:[85]

Therefore, I am of the opinion, that there was evidence in the form of industry practices and lack of malt storage segregations of the use of barley in a non-compliant manner. I am also of the opinion that if Cargill had a policy of strict compliance with varietal requirements they should have investigated variety compliance as part of their due diligence process. As a result, they must have known they would be operating the plants significantly different (sic) from the practices employed by [Joe White].

...

Therefore, it is my opinion, that the presence of the [gibberellic acid] application systems and the purchase of [gibberellic acid] were discoverable during the due diligence process. It is also my opinion given that Cargill likely would have known about the non-compliant use of [gibberellic acid] in the industry, and their policy was to be compliant with brewery purchase contracts with respect to [gibberellic acid] use, I would have reasonably expected this would have triggered a review of [gibberellic acid] non-compliant use by [Joe White] to take place during the due diligence process.

...

I am therefore of the opinion, that it would have been apparent in the due diligence process that the [Joe White] plants did not have the required capability to meet the Cargill methods with respect to blending and [certificate of analysis] generation.

The Viterra Parties argued that the question of what was and should have been known to the Cargill Parties was properly a matter for expert opinion. Further, they argued that French has specialised knowledge in respect of what should have been known or investigated by an experienced maltster during due diligence based on his experience as an employee of, and consultant to, several malthouses. However, in oral submissions, the Viterra Parties' senior counsel properly acknowledged there was nothing in the French Report to suggest French had any expert knowledge concerning due diligence.

In circumstances where there is no evidence that French has any expertise with respect to the conduct of due diligence before the acquisition of a malt business, he does not have relevant specialised knowledge on this topic. Accordingly, there is no basis upon which he can properly express an opinion about what ought to have been done in the due diligence before the Acquisition, or what ought to have been apparent from that process. In addition, the observations made above with respect to upholding the objection to paragraph 60 are repeated.[86] Moreover, if I had been of the view that the evidence was admissible, I would have excluded it under s 135 of the Evidence Act. If the evidence were allowed to stand, it would open up for cross-examination all of the issues pertaining to the due diligence process leading up to the Acquisition. This would be likely to cause or result in an undue waste of time.

Despite the general objection has been upheld, upon this ruling being given the Viterra Parties will be invited to consider whether any of the evidence contained in paragraphs 62 to 97 of the French Report is otherwise relied upon for purposes beyond French's opinions concerning due diligence (and is admissible consistent with the various rulings in these reasons).

In case I am incorrect in upholding the general objection to paragraphs 62 to 97, the specific objections will also be considered.

(28) Objection to the first sentence of paragraph 85 on the basis that French has not demonstrated specialised knowledge in relation to the "methods generally accepted by most participants in the industry". Further, it was argued that there was no path of reasoning to establish that the opinions expressed are wholly or substantially based on specialised knowledge. The first sentence of paragraph 85 reads:

Contrary to the Cargill method, in spite of the inherent limitations in the industry standard analytical methods it is generally accepted by most participants in the industry that [certificate of analysis] malt analysis should be based on malt laboratory analysis.

The Viterra Parties argued that the opinion expressed in this sentence is identified as being based on what French has directly experienced and observed while working in the malting industry.

The objection is rejected. French has specialised knowledge with respect to the testing of malt in the industry. That said, the introductory words referring to Cargill's method will be limited in their use, pursuant to s 136, to French's understanding of the method, and will not be proof of the asserted fact.

(29) Objection to paragraph 87 on the basis that French has not demonstrated specialised knowledge on the question of the approaches and requirements of "most participants in the industry".[87] Further, it was argued that no path of reasoning was shown to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Paragraph 87 reads:

[The Cargill standards constitute] a different approach than that adopted by most participants in the industry, who recognise that errors, equipment failures and variation do occur, when blending and loading malt resulting in the theoretical blend not matching the shipment analysis. Most participants in the industry, both maltsters and brewers, therefore require laboratory analysis on each shipment based on actual samples taken at the time of loading.

The Viterra Parties repeated their response to the objection to paragraph 85 above.

The objection is rejected. Again, French is in a position, based on his experience, to state what most participants in the industry do with respect to laboratory analysis. However, the evidence concerning Cargill's standards will be the subject of a like limitation to the limitation set out in the previous subparagraph.

(30) Objection to paragraph 99 on the basis that the witness had not demonstrated specialised knowledge on the question of "the practices" of "other malthouses". Further, it was argued that there was no path of reasoning to establish that the opinions expressed are wholly or substantially based on specialised knowledge. Furthermore, it was contended that no basis for the opinion has been identified. Finally, it was contended that no basis is stated for the opinion expressed[88] and it therefore cannot be tested. Paragraph 99 reads:

Based on my experience in the malting industry, in my opinion, [Joe White] was operated with practices consistent with other malthouses which ensured customers were satisfied with the malt they were receiving.

The Viterra Parties argued that the opinion expressed in this paragraph is identified as being based on what French has directly experienced and observed while working in the malting industry.

The objection is upheld. The opinion is not concerned with industry practice generally, or even most of the participants in the industry, but only refers to "other" malthouses, unidentified in name or approximate number. Further, to the extent French asserts the satisfaction of Joe White customers, this is nothing but a bald assertion without any identified basis.

(31) Objection to paragraphs 100 to 103 on the basis that these paragraphs will fall away if the previous objections to the evidence on "industry practice" are upheld. Paragraphs 100 to 103 read:

In my opinion, as the use of non-compliant malting barley varieties was consistent with industry accepted practice, therefore there were no changes required [to be made by the Cargill Parties following the Acquisition in order to operate the Joe White business in a manner that accorded with general industry practice].

The exception would be the use of Hindmarsh as it was not an approved malting variety, but was classified as a "food grade" barley and was used for malting purposes in China. If it was being used for customers that did not specify "food" grade barley as the only standard for the malting barley, it would not be to industry standard.

In my opinion the use of [gibberellic acid] in a non-compliant manner was consistent with accepted industry practice, therefore no changes were required [to be made by the Cargill Parties following the Acquisition in order to operate the Joe White business in a manner that accorded with general industry practice] to meet industry accepted practice.

In my opinion, [certificate of analysis] practices relative to blending and customer reporting were consistent with accepted industry practice, therefore no changes were required [to be made by the Cargill Parties following the Acquisition in order to operate the Joe White business in a manner that accorded with general industry practice].

As the uncertainty concerning the use of the term "industry" has been resolved,[89] the specific objection to these paragraphs has dissipated. However, consistent with other rulings on this issue, to the extent the passages set out above refer specifically to the Cargill Parties' position and whether changes were required, that evidence is inadmissible under s 79, alternatively excluded under s 135 for reasons stated elsewhere.[90]

(32) Objection to paragraphs 105 to 129 on the basis that the opinion is addressed to the factual matter of what action Cargill ought to have taken post-Acquisition and whether the actions taken were appropriate. It was argued that this was not properly a matter for expert opinion and that French has not demonstrated specialised knowledge in respect of the subject matter. Furthermore, it was argued that no path of reasoning was demonstrated to establish that the opinions expressed are wholly or substantially based on specialised knowledge. It is not necessary to set out the entirety of these paragraphs. Some relevant extracts follow:

If the use of Hindmarsh was not permitted by any existing customers, the following steps should have been taken ...

In my opinion the steps taken by Cargill were not an appropriate means to implement their [certificate of analysis] policies. Implementation on day one of the [A]cquisition would be disruptive to the business and harm relations with existing customers. That would not be the way a prudent industry participant would go about it ...

A study should be conducted to determine if the existing malthouses, have the capability to produce the malt quality to meet the Cargill policies ...

Where cost effective, plant capability should be improved to meet the Cargill policies ...

The Cargill [certificate of analysis] policies should not be implemented at each plant, until each plant capability upgrades are completed ...

In my opinion the steps taken by Cargill were not an appropriate means to implement their varietal policies ...

It is not possible to implement the Cargill varietal policies until additional storage and segregation capacity had been constructed ...

In my opinion the steps taken by Cargill were not an appropriate means to implement their [gibberellic acid] policies ...

The Viterra Parties argued that the question of what steps the Cargill Parties should have taken was properly a matter for expert opinion. Further, they argued that French has specialised knowledge in respect of this matter based on his professional experience .

The objection is upheld. Largely, the evidence is not concerned with industry practices or knowledge, but with the specific circumstances that Cargill faced after the Acquisition. The observations with respect to rejecting paragraph 60 of the French Report are repeated.[91] Further, much of this section of the French Report consists of bald assertions or conclusions, the basis of which is unclear, or substantially unclear. In any event, if I had been of the view that this evidence was otherwise admissible, I would have excluded it under s 135. To allow evidence purporting to deal with the actual circumstances of Cargill Australia after the Acquisition would be to open up for cross-examination a vast range of topics and issues that would be highly likely to result in an undue waste of time, and would also be likely to be unfairly prejudicial given all lay witnesses have already given their evidence.

51 Although not raised by the Cargill Parties, it must be noted that the French Report discloses that the materials provided to French included witness statements that have not been put into evidence at trial. In the circumstances, it is incumbent upon the Viterra Parties to require French to identify what matters, if any, have been relied upon in those witness statements for the purposes of preparing the French Report. The Viterra Parties will be directed to do so promptly, so that any issues arising from this may be addressed before French is called to give evidence.

D.4 Specific objections to the Supplementary French Report, responses and rulings

52 In respect of the Supplementary French Report,[92] the Cargill Parties have made a global objection to the entire report together with 3 specific objections.

53 The global objection is based on lack of relevant specialised knowledge in respect of the malting industry. That objection is rejected on the same basis as the global objection to the French Report.[93]

(1) Objection to the second sentence of paragraph 3 on the ground that no basis for the opinion is identified. Further, the Cargill Parties argued that the relevant purchasing standards were not identified and that French had not demonstrated specialised knowledge in respect of "worldwide" purchasing standards. It is necessary to set out both the first and second sentences of paragraph 3:

In my opinion, based on my experience in the malting industry, some breweries allow for a 5% variety admixture in their malt specifications. This is consistent with the generally accepted worldwide barley purchasing standards of a minimum varietal purity of 95%.

(Emphasis added.)

The Viterra Parties contended that this opinion is based on French's specialised knowledge of the malting industry. Further, they argued that there is no requirement for French to specifically identify all documents constituting purchasing standards in order for his opinion to be admissible. Finally, the Viterra Parties submitted that the purchasing of barley is a necessary aspect of operating a malting business.

The objection is upheld. The applicable "worldwide barley purchasing standards" are wholly unidentified, so that the reader can only speculate as to what the term refers or encapsulates.

(2) Objection to the first sentence of paragraph 5 of the ground that no basis for the opinion is identified. That sentence reads:

Based on my experience in the malting industry, most breweries would have a maximum tolerance of 5% [of] other varieties of malt, to recognise the reality of 95% minimum varietal purity of malting barley utilised in malting as a result of unavoidable admixtures which occurs during the malting barley supply chain.

The Viterra Parties contended that the basis for this sentence is French's specialised knowledge and experience in the malting industry. They argued that, given malthouses supply brewers with malt, French was qualified to give the opinion expressed.

This objection is rejected. The opinion is based on French's professional experience in the malting industry. The reference to admixtures and how they occur has been the subject of evidence at trial.

(3) Objection to paragraph 6 on the ground that no basis for the opinion is identified. That paragraph reads:

In my experience in the malting industry, given the likely unavoidable inclusion of up to 5% admixture, the testing of lots of barley, lots of malt or blends of malt for varietal purity would typically result in the identification of barley varieties other than the variety or varieties expected.

The Viterra Parties contended that the basis for this sentence is French's specialised knowledge and experience in the malting industry.

This objection is rejected. This opinion is based on French's specialised knowledge in respect of malt purity and testing and the means by which "admixtures" may occur is readily understood based on the evidence already before the court.

55 The Viterra Parties object to the entirety of the Hertrich Report on the basis that Hertrich lacks relevant specialised knowledge in respect of the malting industry. The Viterra Parties argued that Hertrich "is an expert in brewing practices" and that such expertise is not relevant to the issues in this proceeding, which pertain to the conduct and practices of the commercial malting industry.

56 The Viterra Parties submitted that the qualifications and experience listed in the Hertrich Report relate solely to working for brewing companies. The only exception was Hertrich's experience working with "vertically integrated brewing company malt plants".

57 Further, the Viterra Parties pointed to statements in the Joint Report to the effect that Hertrich's experience was based on his "background of working with multiple breweries receiving malt".

58 In response, the Cargill Parties argued that Hertrich possessed relevant specialised knowledge. They submitted that Hertrich had been responsible for supervising the malt supply to brewers and had operations responsibility for internal malting operations at 6 different plants within breweries. Further, they submitted that his work included the development of malt-related contract specifications and engagement with malting companies in respect of those specifications. Furthermore, they submitted that Hertrich was suitably qualified as he had been responsible for the operation of internal malt plant laboratories and the generation of certificates of analysis.

59 In addition, the Cargill Parties argued that the commercial malting industry was not limited to independent maltsters operating externally to brewing companies and extended to internal malt units and customers of the malting industry. In particular, the Cargill Parties submitted that the opinions in the French Report were not limited to external maltsters, and that French had encompassed brewing companies within his conception of the commercial malting industry.[94] However, as noted above,[95] this submission has been, at least in part, overtaken by subsequent events.

60 The question for determination is whether Hertrich possesses specialised knowledge, arising from his professional experience, upon which to base the opinions expressed in the Hertrich Report (which is responsive to the French Report).

61 According to the Hertrich Report, Hertrich has experience in relation to "malt and malt evaluation from the customer's perspective based on [his] interaction on behalf of multiple [United States] brewing companies with multiple malting companies, in multiple countries". Hertrich has developed "a wide range of experience on malt plant operation and malt plant management behaviour on issues associated with barley procurement, malt production, and the blending and shipment of finished malt". This experience is based upon his responsibility for and direct involvement with "vertically integrated brewing company malt plants".

62 Hertrich trained and worked in operational positions in breweries for approximately 15 years before being promoted to senior brewing positions and head office functions. He worked for a further 28 years in these roles up until his "retirement" in 2009. His responsibilities included "the technical supervision of the malt supply for 3 different large [United States] brewing companies, all with multiple brewing plants", including working with "every" commercial malting company and plant in the United States and Canada. During this time, while employed by Anheuser-Busch, Inc ("Anheuser-Busch"), Hertrich's supervision extended internationally to malt supply in various locations in Ireland, England, Belgium, Spain, Hungary, Argentina and China. The technical supervision included the following functions:

(1) The development of malt purchasing in contract shipment specifications.

(2) The engagement with malting companies on their ability to meet contractual specifications.

(3) The resolution of issues when specifications were unable to be met, both prior to shipment and after discovery of out-of-specification malt after shipment.

(4) The evaluation and approval of new malt barley varieties.

(5) Annual specification meetings with malting companies concerning the impact of seasonal variations on finished malt shipment specifications.

(6) Regular visits to "every major commercial malt plant in North America" to discuss with senior management and individual malt plant management malt processes and procedures, specifications and compliance.

63 Also while involved in his supervisory role, Hertrich was the nominated representative for his employers with the American Malt and Barley Association, from its foundation in 1982. The membership of this association at the time of the Hertrich Report included the 5 major malting companies in the United States (including Cargill Malt) and the 2 largest brewers in the United States. Hertrich has also been a representative on other industry organisations, the detail of which he set out.

64 Hertrich currently works as an independent consultant in the "brewing and malting industry". He also teaches "Malting and Malt Plant Operations" and "Malt Analyses: Measurements and Functionality" in a brewing and malting science course at the University of Wisconsin. Hertrich has a Bachelor of Science degree in commerce and engineering from Drexel University, Philadelphia. He also has obtained a number of certificates from various institutions upon the completion of brewing technology courses. In addition, Hertrich has given numerous presentations on matters pertaining to malt production, including with respect to certificates of analysis and specifications.

65 It is apparent from the foregoing description of his experience and qualifications that Hertrich has no experience being employed by a maltster which is not also a brewer.[96] In short, he has worked solely for brewing companies who were the customers of malt supplied either in-house or by the commercial malting industry, or both. In that regard, Hertrich has an advanced understanding of the expectations of brewing companies in respect of the malt supplied to them either from arms-length suppliers or "vertically integrated brewing company malt plants". Further, his experience with malt production has always been in a context that did not include working for a maltster that was not associated with a brewer. It follows that Hertrich's background and experience is, at least in some respects, significantly different to that of French.

66 The Viterra Parties emphasised this difference because of the nature of the allegations by the Cargill Parties in respect of the Viterra Practices and the Viterra Policies; namely, that they were not disclosed to customers. This is stated plainly in the Statement of Claim.[97] This is also true of the affirmative defence raised by the Viterra Parties in respect of the Industry Practices. The Amended Defence states that the Industry Practices were "not ordinarily disclosed to customers".[98] The alleged covert nature of the Industry Practices is also reflected in the questions posed to Hertrich by the Cargill Parties. For example, he was asked:

[W]hether, during the period 2010 to 2013 ("the Period"), it was widespread or generally accepted practice in the malting industry for maltsters to ... supply malt to customers that had not been produced from the specific barley varieties requested by the customer, without the customer's knowledge or consent? ...

[W]hether the [practice of using unapproved barley varieties] represented widespread or generally accepted industry practice during the Period, assuming that, if they occurred, they occurred without the knowledge or consent of the customer? ...

[W]ere reputable malting companies using non-approved barley varieties in malt production without informing their customers? ...

[W]hat is your opinion as to whether, during the Period, it was widespread or accepted industry practice to use [gibberellic acid] in the malting process if the use of [gibberellic acid] was not permitted by the customer contract, without the knowledge or permission of the customer? ...

During the Period was it widespread or generally accepted industry practice for maltsters to make such adjustments [to test results] without disclosing the adjustments to customers? ...

(Emphasis added.)

67 On balance, I have formed the view that Hertrich's extensive background and experience in the production and testing of malt, together with his extensive dealings with maltsters and involvement with associations of the malting industry, his experience working for brewers and his qualifications give him specialised knowledge of a kind that enables him to give expert evidence concerning the practices and knowledge of participants in the commercial malting industry. Such specialised knowledge places him in a position to give evidence concerning the industry generally and also regarding malt production, including with respect to malt testing, specifications and the preparation of certificates of analysis. In short, speaking generally and contrary to the Viterra Parties' contention, the nature and level of his experience does not mean that his expert evidence on the malting industry is necessarily inadmissible for the purposes of s 79 of the Evidence Act, but the limitation of his experience may go to the weight of some of the views expressed.[99]

68 That said, much of the evidence contained in the Hertrich Report based on Hertrich's specialised knowledge in respect of the brewing industry and customer expectations in respect of the malt supplied to them, as well as some technical matters, plainly do not suffer from the limitation referred to in the preceding paragraph. In case this matter is to go further, it is appropriate that several sections of the Hertrich Report are differentiated from the ruling on the global objection. At present, the sections to which I consider there ought be no suggestion of any limitation are paragraphs 1 to 8, 13 (except for the first sentence) to 16, 20, 21, 28 to 34, 37, 38, 48, 49 (first 2 sentences), 50, 51 and 54 to 56.

69 Having addressed the global objection, I turn now to consider the specific objections to various parts of the Hertrich Report.

E.3 Specific objections to the Hertrich Report, responses and rulings

70 The Viterra Parties also made 24 specific objections in respect of the Hertrich Report. Prior to the hearing, 3 objections were conceded or partially conceded by the Cargill Parties.[100] The remaining objections are:

(1) Objection to the last sentence of the first paragraph of the summary of opinion on the basis of relevance. Further, it was submitted that Hertrich did not state the basis for this opinion. The relevant sentence reads:

In my opinion, it is not the practice of a reputable malting company to substitute any barley variety in shipments that has not been specified without consultation with the customer.

The Cargill Parties argued that the issues raised in this paragraph are relevant to whether the Viterra Practices corresponded to the Industry Practices.

This objection is rejected. The subject matter of the opinion is relevant, and is in direct response to French's stated position. Further, this section of the Hertrich Report is only the summary of the opinion. I accept the Cargill Parties' submission that the basis of the opinion is contained in the body of the report.

(2) Objection to the last sentence of the second paragraph of the summary of opinion on the basis of relevance. Further, it was submitted that Hertrich did not state the basis for this opinion. Furthermore, it was submitted that the opinion was not based on specialised knowledge. It is necessary to set out the entire paragraph to provide relevant context:

In my opinion, gained through extensive interaction with multiple malting companies over a long period of time, it is NOT widespread or generally accepted practice in the malting industry to use [gibberellic acid] in malting when the brewer supply contract specifically prohibits its use without the customers knowledge or consent. Additionally in my observation, reputable malting companies take this contract requirement very seriously.

The Cargill Parties repeated their response to the objection to the last sentence of the first paragraph of the summary of opinion above.

This objection is rejected for the same reasons as stated above.

(3) Objection to the last sentence of the third paragraph of the summary of opinion on the basis of relevance. The relevant part of the sentence reads:

I ... can state with certainty that during my management of brewery internal malting operations, that malt analysis results were NOT adjusted in any operation for which I was responsible.

The Cargill Parties contended that there was no basis to argue that the commercial malting industry excludes internal malting operations or customers of the malting industry.[101]

Whilst the commercial malting industry has been defined in the Viterra Parties' defence to exclude internal malt production facilities or units within brewing businesses, it does not follow that the activities of such businesses are irrelevant to the issues at hand. Undoubtedly, if the Industry Practices were said to exist in these brewing businesses, the Viterra Parties would seek to rely upon that. The evidence suggests that internal malt production has the same types of issues as stand-alone production when it comes to dealing with the particular characteristics of barley and malt, and the problems associated with producing malt to match desired specifications. Accordingly, although not as directly relevant as evidence of stand-alone malting businesses and somewhat limited in its potential use, evidence of internal malting operations has some significant relevance and is therefore admissible.[102]

(4) Objection to the last 2 sentences of the fourth paragraph of the summary of opinion on the basis of relevance. Those sentences read:

I regularly instruct brewing industry personnel at [Master Brewers Association of the Americas] and Siebel Institute educational course and make technical presentations to industry groups on barley and malt. There is not a single case where I have taught the concept of adjusting laboratory results by standard deviation as a recognised and accepted procedure.

The Cargill Parties argued that the training of brewers and industry groups on barley and malt are relevant parts of the malting industry.

This objection is upheld. The evidence only purports to relate to Hertrich's conduct alone in the teaching of brewery and industry personnel and does not concern the malting industry in general.

(5) Objection to the sixth sentence of paragraph 11 on the basis that it constitutes speculation. Hertrich states that he engaged in specific discussions with malt companies regarding the unavailability of malting barley varieties specified by brewing companies for which he worked. He continues:

The malt company would inform me the variety specification cannot be met well in advance of any potential supply interruption.

The Cargill Parties contended that this sentence contains a statement of what Hertrich was told during interactions with malting companies.

This objection is rejected. This sentence is based on the direct observations and experience of Hertrich and is relevant to some of the opinions expressed in the Hertrich Report.

(6) Objection to the first sentence and part of the last sentence of paragraph 17 on the basis of relevance. Further, it was submitted that the basis for the opinion is not stated. The relevant parts of paragraph 17 read:

In my opinion reputable companies were NOT using non-approved varieties in malt production without informing their customers ... and it has never been the practice of a reputable malting company to [substitute malt made from feed or food barley].

The Cargill Parties contended that the conduct of reputable malting companies is relevant to whether the Viterra Practices were similar to the Industry Practices, in light of what they submitted were admissions during the trial to the effect that aspects of the Viterra Practices were dishonest.

This objection is rejected. Although expressed in terms of an opinion, Hertrich is effectively giving evidence of the conduct of malting companies in the industry. Despite the existence of some limitation of his experience, for reasons discussed,[103] Hertrich has the relevant specialised knowledge to give this evidence. To the extent the evidence consists of opinion evidence, the basis of that evidence is sufficiently explained.[104]

(7) Objection to part of the first sentence and the entire last sentence of paragraph 18 on the basis that they contain impermissible hearsay evidence. Further, it was submitted that the opinion is not based on specialised knowledge. Furthermore, it was argued that the opinion amounts to a conclusion.[105] The relevant parts of paragraph 18 read:

[M]alting companies respect the brewer choices [concerning barley varieties]. Malting companies do not hesitate to tell a brewer customer they do not have a variety and they do not substitute any variety without consultation and the consent of the customer.

The Cargill Parties contended that the opinion was based on specialised knowledge gained by Hertrich as a result of his experience as a customer of malting companies and the management of internal malting operations. Further, the Cargill Parties argued that these sentences are relevant for the non-hearsay purpose of exposing the path of reasoning by which Hertrich reached some of his opinions.

This objection is rejected. The evidence is largely, if not entirely, factual and is based on Hertrich's experience as an expert dealing with malting companies in the industry. If his evidence also incorporates opinion evidence, a basis has been established.[106]

(8) Objection to the third and last sentences of paragraph 22 on the basis that they contain impermissible hearsay evidence. Those sentences read:

I received a uniform response from malting all (sic) companies that I was in contact with: "[gibberellic acid] technology is effective, there are circumstances when we would like to use it, but we cannot and will not use it without the customer's permission". ... [Anheuser-Busch] received the same response, focused on "cannot and will not use it without the customer's permission".

The Cargill Parties argued that these sentences form the basis for some of the opinions expressed in the Hertrich Report and were not sought to be tendered as proof of the underlying facts.

This objection is rejected. This sentence is based on the direct observations and experience of Hertrich and is relevant to some of the opinions expressed in the Hertrich Report. Given the Cargill Parties' stated position, a ruling will be made under s 136 limiting the use to evidence that these responses were given.

(9) Objection to the third sentence of paragraph 23 on the basis that the opinion is not based on specialised knowledge. Further, it was submitted that the basis for the opinion is not stated and that the opinion amounts to speculation. The relevant sentence reads:

It has been my observation, gained through extensive interaction with multiple malting companies over a long period of time, that malting companies consider [gibberellic acid] a "tool in the tool kit" and feel fully enabled to use [gibberellic acid] in any situation when it is not strictly prohibited.

The Cargill Parties referred to the Joint Report and submitted that this opinion is not in dispute.[107] They pointed to the fact that the experts had agreed in the Joint Report that "gibberellic acid is routinely used in malting when approved by [the] customer" and "when the customer supply contract is silent on its use".

This objection is rejected. This sentence is based on the direct observations and experience of Hertrich as a participant in the malting and brewing industry, including those referred to in the preceding paragraph of the Hertrich Report.

(10) Objection to the second and third sentences of paragraph 24 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that the basis for the opinions is not stated. Furthermore, it was submitted that those sentences contain impermissible hearsay. The relevant sentences read:

I have observed through networking with other brewers at industry technical organisations such as the [Master Brewers Association of the Americas] and [American Society of Brewing Chemists], that the principal reason that brewers prohibit the use of [gibberellic acid] is to prevent the use of unsound barley in the production of their malt and to prevent the use of accelerated malting processes in the production of their malt. Experienced brewers with malting experience understand that these practices can lead to a wider range of outcomes from the malting process and more variability in their malt supply.

The Cargill Parties contended that this opinion is based on Hertrich's observations and his interactions with brewers in industry settings. Further, the Cargill Parties argued that these sentences form the basis for some of the opinions expressed in the Hertrich Report and, to the extent these sentences contained hearsay, were not sought to be tendered as proof of the underlying facts.

This objection is rejected. These sentences are based on the direct observations and experience of Hertrich and provide the basis for some of the opinions expressed in the Hertrich Report. However, in light of the Cargill Parties' position, a ruling will be made under s 136 to the effect that the hearsay evidence will not be admitted as to the truth of the asserted facts.

(11) Objection to paragraph 25 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that the basis for the opinions is not stated and that they amount to speculation. The Cargill Parties conceded part of the second sentence. The remainder of paragraph 25 reads:

A malt customer the (sic) prohibits the use of [gibberellic acid] does so from a position of strong belief, and the instruction to the malt company is unambiguous and not open to interpretation. It is my observation and opinion that malt companies ... do not ignore unambiguous language in a specification. I expressed an example of a lack of clarity in paragraph 23, when malt supply contracts are silent on the use of [gibberellic acid], it has been my observation that malting companies consider [gibberellic acid] as a "tool in the tool kit" and feel fully enabled to use [gibberellic acid] in any situation when it is not strictly prohibited.

The Cargill Parties argued that this opinion is based on Hertrich's experience as a malt customer and that he is well placed to give his opinion as to why malt customers prohibit the use of gibberellic acid.

This objection is upheld in respect of the first sentence. Hertrich cannot give evidence, by way of bald assertion, of the state of mind of individual malt customers. Further, Hertrich cannot sensibly purport to account for every instruction given by a malt customer to a maltster. However, the remainder of the paragraph is based on Hertrich's specialised knowledge and is admissible. Naturally, the reference to "unambiguous language in a specification" will not be treated as proof that any particular type of specification is universally unambiguous in its terms.[108]

(12) Objection to the first sentence of paragraph 26 on the basis of relevance. Further, it was submitted that the basis for the opinion is not stated.

It is NOT my experience that it would be expected in the malting industry that a reputable malting company with contracts with the world's leading brewers would be using [gibberellic acid] "as required in a non-compliant manner".

The Cargill Parties contended that the conduct of reputable malting companies is relevant to whether the Viterra Practices were similar to the Industry Practices, in light of "admissions" during the trial to the effect that aspects of the Viterra Practices "were dishonest".

This objection is rejected. The evidence is undeniably relevant given the allegations made in the Viterra Parties' defence that the Industry Practices included practices involving the use of gibberellic acid in breach of customer agreements. Further, the basis of Hertrich's evidence is stated. It is based on his experience, the detail of which is set out elsewhere in the Hertrich Report.

(13) Objection to the second sentence of paragraph 26 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that the basis for the opinion is not stated and that it amounts to speculation. That sentence relevantly states:

As noted in paragraph 25, it is my opinion malting companies take this contract requirement, a requirement in clear and unambiguous language, very seriously.

The Cargill Parties contended that this opinion is based on Hertrich's experience as a malt customer and that he is well placed to give his opinion as to why malt customers prohibit the use of gibberellic acid.

This objection is upheld for the same reasons as stated above for the first sentence of paragraph 25.[109] Further, Hertrich cannot give evidence about unspecified contractual requirements, and then assert such requirements are clear and unambiguous.

(14) Objection to the first 2 sentences of paragraph 27 on the basis that the opinions expressed are not based on specialised knowledge.[110] Further, it was submitted that those sentences contain impermissible hearsay. The first 2 sentences of paragraph 27 read:

I have observed what is widespread or generally accepted practice within reputable companies in the malting industry, again gained through extensive interaction with multiple malting companies over a long period of time, is that when a processing circumstance is encountered that could be remedied with the use of [gibberellic acid], the malt company will inform the customer and seek permission to apply [gibberellic acid] prior to any use. The malt company and the brewer will then engage in a discussion that will reach mutual agreement on next steps.

The Cargill Parties argued that this opinion is based on Hertrich's experience including his interactions with multiple malting companies. Further, the Cargill Parties contended that these sentences come within the exception to the prohibition on hearsay evidence in s 60 for evidence that is relevant for a purpose other than proof of an asserted fact.

The objection is rejected. The evidence is based on the direct observations and experience of Hertrich and also provides the basis for some of the opinions expressed in the Hertrich Report.

(15) Objection to paragraph 33 on the basis that the opinion is not based on specialised knowledge. Further, it was submitted that the basis for the opinion is not stated, and that it amounts to speculation. Paragraph 33 relevantly states:

[M]y observation, gained through extensive interaction with multiple malting companies over a long period of time, that (sic) malt specifications assert some control limits on the malting process. Malt specifications can limit maltster behaviour that the brewer believes is an unacceptable excursion (to that particular brewer) from good malting practice. Examples would be minimum water usage (for washing barley), a no use of additives statement, a specific germination time, a not to exceed maximum germination temperature, or a not to exceed minimum kiln curing temperature. Beyond attempting to limit the range of brewing process outcomes, customer malt specifications are designed to require the maltster to track the malting process, set boundaries for the malting process, and to produce repeatable malt.

The Cargill Parties argued that this opinion is based on Hertrich's experience including his interactions with multiple malting companies, and his specialised knowledge in respect of the purpose for which brewers write malt specifications.

This objection is rejected. This paragraph is based on the direct observations and experience of Hertrich during his career in the malting and brewing industry, including where he was responsible for developing malt specifications. He is well placed to provide his opinion as to the purpose of malt specifications.

(16) Objection to the second and third sentences of paragraph 36 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that those sentences amount to speculation. Those sentences read:

Limitations of testing methodology and (sic) are not a foreign concept to brewers, they understand the limits of sampling and method accuracy at a higher level than maltsters based on the sheer number of complex tests that are run on beer during its brewing, packaging and release for shipment.[111] It is simply not necessary to make [certificate of analysis] adjustments to obscure the actual and true results.

The Cargill Parties contended that this opinion was based on Hertrich's experience in the brewing industry as a customer of malting companies.

This objection is rejected in respect of the second sentence on the basis that Hertrich is expressing his expert opinion from the perspective of a person who has had extensive experience testing malt both with respect to malt production and also for the purposes of a brewer producing beer.

The objection is upheld in respect of the third sentence. Whether Hertrich considers it necessary for malting companies to adjust the results of malt testing is irrelevant to the issues in this proceeding. Further, it is not clear what "necessary" means in this context.

(17) Objection to the first 2 sentences and the final sentence of paragraph 39 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that those sentences amount to speculation. The relevant sentences read:

It is my opinion none of the altered results cases [meaning (1) altering of reported test results so as to record them as being within specification when they were not, without disclosing those alterations to the customer; (2) altering reported results to a value within or close to the margins of the customer's specifications so that the adjusted result would appear legitimate, without disclosing that alteration to the customer; or (3) altering reported results so as to make them appear to be consistent with earlier results reported to the customers, even if they were not consistent, without disclosing that alteration to the customer] were widespread or generally accepted practice. There is not a reason to alter [certificates of analysis] in this manner ... There is no reason to alter results.

The Cargill Parties contended that this opinion does not constitute speculation as its basis is set out in paragraph 40 of the Hertrich Report, which is set out below.

This objection is rejected in respect of the first sentence. The evidence is directly responsive to French's evidence and Hertrich does possess the specialised knowledge in respect of the practices of participants in the commercial malting industry upon which to base this evidence.

In respect of the second sentence, the objection is upheld. Whether or not Hertrich considers that there are reasons, or otherwise, for malting companies to make any adjustments to the results of malt testing is irrelevant to the issues in this proceeding. Similarly, the objection to the last sentence is upheld.

(18) Objection to paragraph 40 on the basis of relevance. Further, it was submitted that the opinions expressed are not based on specialised knowledge. Furthermore, it was contended that the paragraph contains impermissible hearsay and amounts to speculation. It was submitted that the final 3 sentences would fall away if the objection to the first sentence were to be upheld. The Cargill Parties conceded part of the third sentence. The remainder of paragraph 40 reads:

What I did observe as widespread or generally accepted practice within reputable companies in the malting industry, was that when an out of specification condition occurred, the malt company would inform the customer of the condition and seek permission to release the shipment. Over time I engaged in discussion and sought resolution many times with every malting company ... I operated under a very simple guideline that was clearly articulated to the malting companies. They were instructed by me that "you are not to knowingly ship any malt that is out of specification", and they were reminded "you are doing the analysis, so you are the first person to know that it is out of specification".

The Cargill Parties contended that this opinion is relevant to whether the Industry Practices were concealed from customers. Further, the Cargill Parties argued that the opinion is based on Hertrich's experience and direct observations. Finally, the Cargill Parties argued that the evidence in this paragraph constitutes direct evidence of communications between Hertrich and malting companies, and does not constitute hearsay evidence.

This objection is rejected. Hertrich's specialised knowledge qualifies him to speak of widespread or generally accepted practice in the industry as set out in the first sentence. The remainder of the paragraph is based on Hertrich's direct observations. They form part of the basis for his opinions and are admissible.

(19) Objection to the first sentence of paragraph 41 on the basis that this sentence will fall away if the objections to paragraph 40 are upheld. Paragraph 41 reads:

After the description of the out of specification condition, the typical discussion moved to "what is your action plan to prevent recurrence? [I]s it a final blend issue? [I]s it a systemic process control issue?"

The Cargill Parties repeated their response to the objection to paragraph 40 above.

This objection necessarily is rejected given the premise of the objection does not exist. In any event, this sentence is based on Hertrich's direct observations and provides the basis for some of the opinions expressed in the Hertrich Report.

(20) Objection to paragraph 43 on the basis of relevance. That paragraph reads:

Recognising the limitations of my opinion on malt company preparation of [certificate of analysis] reports because I was not "inside" the malting company laboratory when the [certificate of analysis] was generated, I do have extensive experience with the management of brewery owned internal malting operations. I can clearly state that malt analysis results were NOT adjusted in any operations for which I was responsible for (sic) at Anheuser-Busch, Stroh or Pabst.

The Cargill Parties contended that there was no basis to argue that the commercial malting industry excludes internal malting operations or customers of the malting industry.[112]

This objection is rejected for the same reason as the objection to the last sentence of the third paragraph of the summary of opinion,[113] noting that this evidence of Hertrich's direct observations forms part of the basis for the opinions expressed.

(21) Objection to the last sentence of paragraph 46 on the basis that it contains impermissible hearsay. That sentence reads:

The licence brewer told me that they had a long-standing relationship with the malt supplier, the practice [of generating certificates of analysis by a calculation of bins of malt that were blended into the shipment] was acceptable to them, and that ultimately, they were responsible for the malt supply, and I need not be involved as long as the Budweiser beer was acceptable.

The Cargill Parties argued that this sentence contains the reasoning for some of the opinions expressed in the Hertrich Report and was not sought to be tendered as proof of the underlying facts.

This objection is rejected on the basis that this sentence forms part of the basis upon which Hertrich expresses his view. In light of the Cargill Parties' position, a ruling will be made under s 136 limiting the use so that it will not be proof of the asserted fact.

(22) Objection to the first 3 sentences of paragraph 49 on the basis that the opinions expressed are not based on specialised knowledge. Further, it was submitted that those opinions amount to speculation. The relevant sentences of paragraph 49 read:

As noted in paragraph 36,[114] brewers understand standard deviation and laboratory variance to a higher degree than maltsters. They accept that results that are out of specification within 2 standard deviations of the specification limit might actually be in specification. But that knowledge does not justify adjusting results.

The Cargill Parties contended that this opinion is based on Hertrich's specialised knowledge as to what brewers understand and accept. Further, the Cargill Parties argued that the opinion expressed in the second sentence is not in dispute. They pointed to the fact that the experts had agreed in the Joint Report that "the brewing and malting industry accepts that results that are out of specification by two standard deviations of the specification limit might actually be in specification".

The objection to the first sentence is rejected for the same reasons for rejecting the objections to the second sentence of paragraph 36.[115]

As for the second sentence, the objection is rejected. It is difficult to understand why the Viterra Parties have objected to this sentence in circumstances where, as I understand it, the proposition in the sentence is entirely consistent with the case they put. In any event, Hertrich has specialised knowledge enabling him to give such evidence.

This objection is rejected in respect of the third sentence. Unlike earlier opinions on asserted necessity or the absence of any reasons (the scope of which were entirely unclear),[116] this evidence is confined to the knowledge about matters specifically identified and is necessarily confined to those matters. In my view, based on Hertrich's specialised knowledge, the evidence is not speculative but reflects his expert opinion in a manner which is properly disclosed.

(23) Objection to the second and third sentences of paragraph 57 on the basis of relevance. Those sentences read:

I regularly instruct brewing industry personnel at [Master Brewers Association of the Americas] and Siebel Institute educational courses and make technical presentations to industry groups on barley and malt. There is not a single case where I have taught the concept of adjusting laboratory results by standard deviation as a recognised and accepted procedure.

The Cargill Parties contended that these sentences are relevant to whether adjustments on certificates of analysis by reference to standard deviations is known and accepted within the commercial malting industry.

This objection is upheld for the same reason as the objection to the last 2 sentences of the fourth paragraph of the summary of opinion.[117]

71 For these reasons, both French and Hertrich will be permitted to give expert evidence in accordance with their reports, but subject to the specific rulings set out above.

72 Further, the parties will be invited to consider the status of the Joint Report in light of these rulings.

AMENDED FRENCH REPORT - REFERENCES TO THE MALTING INDUSTRY

Participants in the industry, both maltsters and brewers

RELATIONSHIP TO THE "COMMERCIAL MALTING INDUSTRY" (AS DEFINED IN PARAGRAPH 44(a) OF THE DEFENCE)

Referring to his experience in the malting industry with companies owned by Graincorp

Referring to his current role as a consultant in the malting industry

Referring to memberships with expert industry committees including the Prairie Regional Recommending Committee for Grain and the American Malting Barley Association

Broader meaning referring to industry committees generally, but providing specific examples

Referring to Joe White operating similarly to other malting companies operating consistently with industry practices

Referring to the management of limited storage plants consistently with malt industry practice

Referring to the Viterra Practices being known and occurring in the malting industry

Referring to Cargill as an experienced and significant participant in the malting industry

Stating that Cargill would likely have been aware that practices equivalent to the Viterra Practices occurred in the malting industry

Referring to whether Joe White's business accorded with general industry practice

Stating that Cargill's actions at acquisition were not in accordance with general industry practice

Referring to Cargill as an experienced and significant malt industry participant

Referring to recognition within the malt and brewing industry in respect of malt quality

Broader meaning extending to both malting and brewing activities

Referring to his experience in the malting industry

Stating that the industry recognises that the contribution to brewery performance of a barley variety is less important than malt analysis

Referring to the practice within the industry of using malt from an unapproved variety in a blend

Referring to the use of unapproved malting varieties as a practice adopted at times by a number of malthouses in the industry

Referring to the practice within the industry of using nonapproved malting varieties on a malt shipment

Stating that the use of unapproved malting varieties was always done with industry accredited malting varieties

Referring specifically to bodies responsible for accrediting barley varieties for use in malting

Stating that it is not an industry practice to use non-malting varieties such as Hindmarsh

Stating that the use of Hindmarsh would not generally be consistent with industry practice

Citing a statement by Stewart to the effect that the use of gibberellic acid was common in the Australian malting industry

Stating that gibberellic acid was used in the industry worldwide on some customer contracts which stated it was not to be used

Stating that the use of gibberellic acid in circumstances where it was not permitted by a customer is an industry practice

Stating that the use of gibberellic acid in circumstances where it was not permitted by a customer is an industry practice

Setting out factors that are considered "in the industry" when developing a blend

Referring to his experience in the malting industry

Referring to the factors an experienced competent person in the industry would follow in respect of their practices

Referring to his experience in the malting industry

Referring to the practices adopted by most malthouses in the industry

Referring to well accepted knowledge regarding industry standard analytical testing either by European Brewing Convention or American Society of Brewing Chemists within the industry

Referring to well accepted knowledge regarding industry standard analytical testing either by European Brewing Convention or American Society of Brewing Chemists within the industry

Stating that the malt analytes proficiency scheme service which most industry labs participate in publishes industry statistics

Stating that the malt analytes proficiency scheme service which most industry labs participate in publishes industry statistics

Referring to the attitude of the industry to test results within 2 standard deviations

Referring to a lack of understanding of the limitations of the testing methodologies in the industry within both the malting and brewing industry

Referring to a lack of understanding of the limitations of the testing methodologies in the industry within both the malting and brewing industry

Broader meaning extending to both malting and brewing activities

Stating that the adjustment of results is sometimes referred to within the industry as "pencilling"

Stating that it is industry practice to adjust results based on testing and sampling variability

Referring to his experience in the malting industry

Referring to his experience in the malting industry

Stating that the reporting methodology used by Joe White was similar to the practice of other participants in the malt industry

Referring to the practice of unapproved malting varieties occurring in the industry at a number of malthouses

Referring to his experience in the malting industry

Referring to the awareness of most participants in the industry

Referring to his experience in the malting industry

Referring to the knowledge of most participants in the export malting industry

Same, but limited to malthouses involved in exporting malt to other countries

Referring to the awareness of most participants in the industry

Stating that gibberellic acid was used throughout the industry as required in a non-compliant manner on a worldwide basis

Referring to his experience in the malting industry

Stating that it was well known by malting participants in North America prior to 4 August 2013 that six row barley was at times difficult to malt without using gibberellic acid

Referring to the knowledge of participants in the industry

Referring to his experience in the malting industry

Referring to the knowledge in Europe by most participants in the malting industry

Referring to demand from the industry to test for the use of gibberellic acid

Stating that a major Japanese brewer likely suspected noncompliant gibberellic acid usage in the industry

Stating that random testing conducted by a major Japanese brewer was industry knowledge

Referring to the likely awareness of participants in the industry

Referring to the awareness of Cargill of industry practices such as the certificate of analysis practices

Stating that practices similar to those listed in a Cargill document were utilised within the industry

Referring to the practice of most participants in the industry of adjusting certificate of analysis results by 2 standard deviations or by experience

Referring to the awareness of Cargill of industry practices similar to the Viterra Practices

Referring to the awareness of most participants in the industry

Referring to what an experienced industry participant would have asked in respect of information disclosed in due diligence

Referring to what an experienced participant in the industry would looked at and concluded during due diligence

Stating that a Cargill policy would not be typical of industry practice

Stating that Cargill were likely aware of industry practices

Referring to evidence in the form of industry practices

Referring to Cargill as an experienced participant in the malt industry

Referring to the practice of non-compliant use of gibberellic acid at times utilised in the industry

Referring to the non-compliant use of gibberellic acid in the industry

Referring to the inherent limitations in the industry standard analytical methods

Stating that it is generally accepted by most participants in the industry that certificate of analysis malt analysis should be based on malt laboratory analysis

Referring to the approach adopted by most participants in the industry

Participants in the industry, both maltsters and brewers

Stating that most participants in the industry, both maltsters and brewers, require laboratory analysis on each shipment based on actual samples taken upon loading

Referring to the likely knowledge of Cargill that their procedures differed from other participants in the industry

Referring to what is typical in the malting industry in respect of plant storage capacity

Referring to what an industry participant with policies and practices similar to Cargill should have investigated during due diligence

Same, but limited to any malthouses with policies and practices similar to Cargill

Referring to his experience in the malting industry

Referring to his experience in the malting industry

Stating that the use of non-compliant malting barley varieties was consistent with industry accepted practice

Stating that the use of Hindmarsh for customers that did not specify food grade barley as the only standard for the malting barley would not be to industry standard

Stating that the use of gibberellic acid in a non-compliant manner was consistent with accepted industry practice

Stating that the use of gibberellic acid in a non-compliant manner was consistent with accepted industry practice

Stating that the certificate of analysis practices were consistent with accepted industry practice

Referring to the way a prudent industry participant would go about implementing different certificate of analysis policies following acquisition

[1] As to the meaning given to "commercial malting industry" by the Viterra Parties, see par 32 below.

[2] Joe White is now known as Cargill Malt Asia Pacific Pty Ltd. Joe White is the second third party to this proceeding.

[3] This alleged non-compliance with contractual specifications falls into 2 broad categories. First, the alleged supply to customers of malt that was produced using barley varieties other than those specified by the customer. Secondly, the alleged use of gibberellic acid in the malt production process contrary to the terms of customer contracts.

[4] Certificates of analysis accompanied malt supplied by Joe White to its customers and included or purported to include details of testing that had been conducted in respect of the malt supplied.

[5] This is only a cursory account of some of the issues in the case. For a fuller account of the facts, see Cargill Australia Ltd v Viterra Malt Pty Ltd (No 2) [2017] VSC 283, [6]-[9] and Cargill Australia Ltd v Viterra Malt Pty Ltd [2017] VSC 126, [2]-[28] (Daly AsJ).

[6] See, for example, Cargill Australia Ltd v Viterra Malt Pty Ltd (No 18) [2018] VSC 772, [14]-[17].

[7] The Cargill Parties originally served objections on 18 April 2018, but did not file them. For reasons that could not be explained at the hearing, the court was not notified of these objections at the time.

[8] The objections to the Supplementary French Report have not been the subject of oral argument.

[9] The objections to the Hertrich Report were served on the Cargill Parties by the Viterra Parties on 27 April 2018, but not filed or otherwise provided to the court. Again, for reasons that could not be explained by senior counsel, the court was not made aware of the existence of these objections at the time.

[10] This report has not been the subject of further objections.

[11] Honeysett v The Queen (2014) 253 CLR 122, 132 [25] (French CJ, Kiefel, Bell, Gageler and Keane JJ).

[12] Ibid; Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 602 [31] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).

[13] Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 602-603 [32]; cf Neowarra v Western Australia [2003] FCA 1399; (2003) 134 FCR 208, 217 [21] (Sundberg J).

[14] Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 605 [42] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ), 626 [98] (Heydon J).

[15] Adler v Australian Securities and Investments Commission (2003) 179 FLR 1, 138 [631] (Giles J).

[16] Ibid, 603-604 [35] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ), 626 [98] (Heydon J).

[18] RW Miller & Co Pty Ltd v Krupp (Australia) Pty Ltd (1991) 34 NSWLR 129, 130F (Giles J); referred to with approval in Matthews v SPI Electricity Pty Ltd (Ruling No 9) [2012] VSC 340, [38] (J Forrest J) and in Hodgson v Amcor Ltd (No 3) [2011] VSC 272, [46] (Vickery J).

[19] Matthews v SPI Electricity Pty Ltd (Ruling No 9) [2012] VSC 340, [42] (J Forrest J).

[20] For a discussion on this issue, see Matthews v SPI Electricity Pty Ltd (Ruling No 9) [2012] VSC 340, [35]-[42] (J Forrest J). See also Matthews v SPI Electricity Pty Ltd (Ruling No 18) [2013] VSC 185, [19] (J Forrest J). See further the cases referred to in fn 59 below.

[21] Ritz Hotel Ltd v Charles of the Ritz (No 7) (1987) 14 NSWLR 104, 105D (McLelland J).

[22] Honeysett v The Queen (2014) 253 CLR 122, 131-132 [23] (French CJ, Kiefel, Bell, Gageler and Keane JJ); R v Tang [2006] NSWCCA 167; (2006) 65 NSWLR 681, 712-713 [138]-[139] (Spigelman CJ).

[23] Honeysett v The Queen (2014) 253 CLR 122, 131-132 [23] (French CJ, Kiefel, Bell, Gageler and Keane JJ), quoting from the Macquarie Dictionary.

[24] Nominal Defendant v Ismail [2014] NSWCA 432, [21]-[26] (Basten JA, with whom Barrett and Emmett JJA agreed).

[25] Honeysett v The Queen (2014) 253 CLR 122, 131-132 [23]. Cf Evidence Act, s 80(b), which provides opinion evidence is not inadmissible only because it is about a matter of common knowledge: Velevski v The Queen (2002) 187 ALR 233, 253 [82] (Gaudron J).

[26] Adler v Australian Securities and Investments Commission (2003) 179 FLR 1, 137-138 [629] (Giles JA, with whom Mason P and Beazley JA agreed), and the cases there cited. See also Australian Securities and Investment Commission v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, 294-295 [11] (Austin J).

[27] Adler v Australian Securities and Investments Commission (2003) 179 FLR 1, 137-138 [629].

[28] See pars 27-29 below.

[29] Idoport Pty Ltd v National Australia Bank Ltd [1999] NSWSC 828, [246] (Einstein J).

[30] Honeysett v The Queen (2014) 253 CLR 122, 131 [23] (French CJ, Kiefel, Bell, Gageler and Keane JJ).

[31] Australian Securities and Investments Commissions v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, 294-295 [11] (Austin J).

[32] Cf Clarke v Ryan [1960] HCA 42; (1960) 103 CLR 486, 491.5 (Dixon CJ).

[33] Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 605 [41]-[42] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); Nominal Defendant v Ismail [2014] NSWCA 432, [21]-[26] (Basten JA, with whom Barrett and Emmett JJA agreed); Idoport Pty Ltd v National Australia Bank Ltd [1999] NSWSC 828, [243], [272] (Einstein J).

[34] Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 604 [37] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ), citing Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705, 744 [85] (Heydon JA).

[35] Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588, 612 [61] (Heydon J).

[36] Ibid, 605 [41]-[42] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).

[37] Ibid, 622-624 [91]-[93], 625-628 [97]-[101] (Heydon J), and the cases there cited.

[38] Ibid, 604 [37]. See also Adler v Australian Securities and Investments Commission (2003) 179 FLR 1, 138 [632] (Giles J).

[39] Section 60(2) was introduced in response to Lee v The Queen [1998] HCA 60; (1998) 195 CLR 594.

[40] Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225, 237-238 [75] (Campbell JA, with whom Basten JA and Handley AJA agreed), and the cases there cited. See also Lei v Lei [2016] VSC 121; (2016) 50 VR 409, 414-415 [17]-[19] (Riordan J).

[41] Roach v Page (No 11) [2003] NSWSC 907, [74(j)] (Sperling J).

[43] Neowarra v Western Australia [2003] FCA 1399; (2003) 134 FCR 208, 223 [39] (Sundberg J).

[44] On 6 June 2018, the parties were directed to provide a list of issues based on the pleadings setting out the real issues in dispute. A list of issues was provided and has been subsequently amended on several occasions throughout the trial, with the most recent revision being provided on 2 November 2018.

[45] As a result, it was necessary to defer this ruling until the application for leave to amend was heard (in its final form) and determined.

[46] See Cargill Australia Ltd v Viterra Malt Pty Ltd (No 18) [2018] VSC 772.

[47] Leave has been granted more recently for a further amendment to the defence, but the detail of that amendment need not be discussed.

[48] Although not determinative to this ruling on admissibility, it should be noted that nowhere in the reply (or any other pleading) is it alleged that the commercial malting industry should properly be understood to include vertically integrated brewing company malt units, or to brewing companies generally.

[49] On the issue of relevance, see also Cargill Australia Ltd v Viterra Malt Pty Ltd (No 18) [2018] VSC 772, [14]-[17], [21], [27], [30], [35]. Further, the assumed existence of the Industry Practices is relied upon by the loss expert to be called by the Viterra Parties.

[50] The schedule is attached as annexure "A". The terms "industry", "malting industry", "commercial malting industry" and the like are used interchangeably in these reasons, unless the context makes clear otherwise.

[51] The date of 4 August 2013 is the date upon which the parties entered into the Acquisition Agreement: see par 5 above.

[52] This list, contained in submissions filed by the Cargill Parties, largely reflected the questions French was asked by the Viterra Parties to address in the French Report.

[53] See par 45 below.

[54] Although the Cargill Parties made objections in April 2018 to specific parts of the French Report, it was not until shortly before the hearing of the objections on 19 November 2018 that the global objections were made.

[55] Those companies were Great Western Malting in the United States of America, Canada Malting Co Limited in Canada and Schill Malz in Germany.

[56] Naturally, this finding is only for the purpose of ruling on admissibility based on the face of the French Report. A like observation is made with respect to the findings below concerning French's specialised knowledge.

[57] See pars 50(15) and (26) below.

[59] Anthony v Morton [2018] NSWSC 1884, [249], [467] (Ward CJ in Eq); Herridge v Electricity Networks Corporation (No 3) [2017] WASC 299, [7]-[8] (Le Miere J); DPN Solutions Pty Ltd v Tridant Pty Ltd [2014] VSC 511, [34] (Hargrave J); Chambers v Brice [2012] QSC 305, [23] (Peter Lyons J); Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357, 379 [68] (Heydon, Crennan and Bell JJ); Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2006] FCA 826; (2006) ATPR 42-123, 45,257-45,271, [511]-[594] (Allsop J); Australian Securities and Investments Commission v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, 295 [13], 296-297 [18]-[19] (Austin J).

[61] The Viterra Parties conceded the Cargill Parties' objections to par 11, the second sentence of par 16, the third sentence of par 21 and par 98.

[62] The Cargill Parties contended that the first sentence of paragraph 16 "falls away" if the remainder of the paragraph were to be disallowed.

[63] This opinion is not the subject of specific objection.

[64] For completeness, it follows that I reject the Cargill Parties' overarching submission that because French did not deal specifically with "the 3 limbs of the Viterra Practices" that was fatal to the French Report making any comparison between what French says is the Industry Practices and the Viterra Practices.

[65] The objection is confined to the italicised text. The factors listed are technical considerations such as "variability of analysis between bins" and "the method of calculation of the theoretical blend within the blending software".

[66] Dr Stewart is the sixth third party in the proceeding and was the general manager technical-malt for Viterra Ltd and Joe White at the relevant times.

[67] See par 50(13) and (30) below.

[68] Liam Ryan is a director of KordaMentha Forensic. He undertook an analysis of historical data, contained in a database known as the Laboratory Information Management System, relating to certificates of analysis produced by Joe White and barley varieties used by Joe White in specified malt orders between 1 January 2010 and 31 October 2013.

[69] There is a reference in par 43(b) to a "trendline of shipment analysis" with respect to some of the recorded data in the spreadsheet under consideration, but what this is referring to is also unclear.

[70] This is the date on which the Cargill Parties and the Viterra Parties entered the Acquisition Agreement.

[71] The use of "therefore" makes this plain.

[72] See pars 31-49 above.

[73] To the extent it may involve an opinion, see par 22 above.

[74] See par 50(26) below.

[75] On this issue, see par 50(19) below.

[76] See further par 50(26) below.

[77] See pars 17, 49 above.

[78] That is, not being of such notoriety that the fact or facts in question would attract the operation of s 144(1)(a) of the Evidence Act. See, for example, under the common law: Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48, 61.4-62.2 (Stephen J, with whom Menzies and Gibbs JJ agreed), and the authorities there referred to. See also Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226, 239.7-241.2 (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ), a case in which experts gave evidence of their knowledge of certain practices, from which the conclusion was made that it had not been established that the alleged custom was "so well known and acquiesced in that everyone" in a particular situation would reasonably be presumed to have imported a contractual term.

[80] See pars 22, 45-47 above.

[81] Specifically, the practices of "most malthouses" were not identified, and the basis of and criteria for the comparison were not identified.

[82] Specifically, the practices of "the industry" were not identified, and the basis of and criteria for the comparison were not identified.

[83] Specifically, the "practice of adjusting [certificate of analysis] results based on 2 standard deviations or by experience "was not described in a way that would allow the assertion to be tested.

[84] Cf Australian Securities and Investments Commission v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, 299 [27] (Austin J); Faucett v St George Bank Ltd [2003] NSWCA 43, [48] (Sheller JA, with whom Mason P and Meagher JA agreed), and the cases there cited; Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79, 83D (Lindgren J). See also par 50(15) above.

[86] See par 50(26) above.

[87] The table of the Cargill Parties' objections referred to par 86 rather than par 87, however, based on the contents of the objection it appears par 87 is the relevant paragraph.

[88] Specifically, the practices of "other malthouses which ensured that customers were satisfied with the malt they were receiving" were not identified.

[90] See pars 50(15), (26) and (27) above and par 50(32) below.

[91] See par 50(26) above.

[93] See pars 30-49 above.

[95] See pars 32-34 above.

[96] This limitation in his experience is expressly acknowledged by Hertrich: see, for example, par 70(20) below.

[97] See par 4 above.

[98] See Cargill Australia Ltd v Viterra Malt Pty Ltd (No 18) [2018] VSC 772, [13] (at par 44(b) of the defence), [25].

[99] Cf Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2006] FCA 826; (2006) ATPR 42-123, 45,266 [570] (Allsop J).

[100] The Cargill Parties partially conceded the objections to par 25, conceded the objection to the last sentence of par 35, and partially conceded the objection to the third sentence of par 40.

[101] See pars 31-35, 59 above.

[102] See par 59 above.

[103] See pars 65, 67-68 above.

[104] See par 22 above.

[105] This objection was not the subject of elaboration.

[106] See par 22 above.

[107] Although not referred to, see Evidence Act, s 190(1)(c) and (3)(a), noting s 79 forms part of Part 3.3 of the Act.

[108] See further par 70(13) below.

[109] See par 70(11) above.

[110] The Viterra Parties contended that the second sentence "falls away" if the objection to the first sentence was upheld.

[111] The objection to the second sentence was from and including the words "they understand the limits".

[112] See pars 31-35, 59 above.

[113] See par 70(3) above.

[114] See par 70(16) above.

[116] See par 70(16) and (17) above.

[117] See par 70(4) above.