Centurion Roller Shutters Pty Ltd v Automatic Technology

REASONS FOR DECISION ON MOTION IN RELATION TO SURVEY EVIDENCE 1 Centurion Roller Shutters Pty Ltd (Centurion), a manufacturer and retailer of mechanised garage doors, sues one of its suppliers, Automatic Technology (Australia) Pty Ltd (ATA). The action arises out of the supply of allegedly defective garage door opener systems, including hand held FM radio transmitters and mechanised tilt/sectional door openers. Pre-contractual representations by ATA are said to have been false and to have constituted misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (WA). The proceedings were commenced on 9 December 1998. Interlocutory directions have been given including directions for the provision of particulars and discovery which, in relation to issues of confidentiality, were the subject of a ruling published on 11 June 1999. 2 On 3 August 1999 Centurion filed a motion seeking an order for leave to adduce survey evidence at trial arising out of a survey questionnaire annexed to an affidavit which was filed with the motion. Such other directions as the Court might think fit to give in relation to the survey evidence were also sought. 3 Practice Note No 11, signed by the Chief Justice on 8 April 1994, deals with survey evidence in the following terms: "There are many problems in obtaining acceptable survey evidence including the use of relevant and unambiguous questions and whether the actual conduct of the survey (including methodology) is satisfactory. The admissibility of surveys is always a matter for the trial judge to determine but the risk of the survey being rejected or given little, if any, weight at the trial may be diminished if the following procedure is followed when a party seeks to have a survey conducted. Subject to other directions of the Court in the particular case, the Court expects that this practice will usually be followed: 1. Notice should be given in writing by the party seeking to have the survey conducted to the other parties to the proceeding. 2. The notice should give an outline of: (a) the purpose of the proposed survey; (b) the issue to which it is to be directed; (c) the proposed form and methodology; (d) the particular questions that will be asked; (e) the introductory statements or instructions that will be given to the persons conducting the survey; (f) other controls to be used in the interrogation process. 3. The parties should attempt to resolve any disagreement concerning the manner in which the survey is to be conducted and any of the matters mentioned in 2 above. 4. The matter of the survey should be raised with the Court at a directions hearing as soon as possible after the steps mentioned above have been taken." 4 It will readily be seen that the Practice Note sets out a procedure designed to throw up at an early stage objections which may be taken to the form and methodology and other aspects of a proposed survey. It does not however establish conditions for the admissibility of survey evidence. Admissibility may involve factual questions which can only be resolved by testing survey evidence at trial and, as the Practice Note makes clear, that is a matter for the trial judge to determine. Issues of implementation and departures from the planned methodology cannot be anticipated by the Court in dealing with a proposed questionnaire and process. The Centurion motion seeks leave to adduce evidence gathered from the proposed survey. In so far as it seeks a prospective ruling on admissibility, it cannot succeed. The purpose of the Practice Note on survey evidence is to minimise the risk at trial of time wasting challenges as to form and method which could have been raised upon their prior disclosure. That is the objective of the present exercise. 5 An attempt by a party at trial to raise an objection to survey evidence which could have been raised under the procedure for which the Practice Note provides is likely, at the least, to be visited by an adverse ruling as to costs thrown away possibly extending to the costs of the survey itself according to the circumstances of the case. Alternatively, there may be a question in such a case whether the objection will be permitted to be maintained at trial. 6 These observations should not, of course, be taken as an encouragement to parties to throw up at the directions stage ambit objections to proposed survey evidence in order to cover all possible contingencies. Professional and discriminating judgment is still required to ensure that only objections of substance are raised. 7 The Court will not determine in advance of a case that evidence of a proposed survey will be admissible. It may indicate that significant difficulties will attend the admissibility of such evidence where the form or methodology proposed throws up such difficulties. In this way the parties may be saved some time and expense. 8 The Practice Note emphasises the need for a co-operative rather than adversarial approach to the use of survey evidence. In the present case, Centurion's solicitors wrote to the solicitors for ATA and other respondents enclosing a draft of the proposed questionnaire. The solicitors for ATA asserted that they were unable to comment on the proposed survey until after receipt of particulars and discovery relating to the allegation of loss of goodwill. More detailed exchanges however followed about the proposed survey and further amendments to the draft questionnaire were made. 9 The survey evidence which is to be commissioned from Dr Mazzarol is to be used to assess the asserted loss in the value of the business of Centurion following from the alleged conduct of ATA. 10 In its statement of claim Centurion asserts that it enjoys and has at all material times enjoyed substantial goodwill and reputation in the State of Western Australia. In par 18 it asserts that as a direct result of the conduct of ATA, namely its misleading representations, the supply of defective goods and the unavailability of spare parts, Centurion has suffered a diminution of its goodwill and reputation. This is said to have been exacerbated by Centurion, in reliance upon ATA's representations, using its goodwill to promote goods supplied by ATA as reliable, high quality products supported by sufficient facilities for their repair and by the availability of spare parts. Centurion's solicitors say that the survey evidence to be commissioned from Dr. Mazzarol will be used in conjunction with a report from a chartered accountant to assess the loss in value of the business of Centurion. The loss in value of the business will be said to comprise not only a diminution of goodwill but also a loss in the value of other assets which have been affected. The proposed survey is intended to provide an objective measure of the extent of customer perception of Centurion products and ATA Securalift units. It is intended to offer a similar level of objective evidence regarding customer perceptions and attitudes towards repurchase of goods from Centurion. The impact of the difficulties with the Securalift Units on such decisions will be assessed with statistically reliable measures through a comparison of three sub-populations to be drawn from within the sample of persons interviewed as part of the survey. Those sub-populations will be as follows: 1. A first sub-population comprising approximately 3,000 customers who have purchased a door containing a Securalift Unit who have not registered any complaint. Two hundred of these customers will be surveyed. 2. A second sub-population comprising approximately 1,000 customers who have identified and acknowledged a fault in the Securalift Unit supplied by ATA. One hundred people from this sub-population will be surveyed. 3. A third sub-population comprising approximately 1,000 customers who purchased goods from Centurion not fitted with ATA's Securalift Unit. From this sub-population 100 will be surveyed. 11 Key issues to be addressed by the survey are said to be: