Solicitors:
Pinsent Masons (Plaintiffs)
Wilshire Webb (First and Second Defendants)
File Number(s): 2023/105260
[2]
Judgment - EX TEMPORE (revised 28 March 2024)
Objection is taken to a liquidator giving evidence in the liquidator's own case, on the basis that the liquidator should have complied with the Expert Witness Code of Conduct ("Expert Witness Code") and, in particular, with Schedule 7 of the Uniform Civil Procedure Rules ("UCPR") which provides in paragraph 2, inter alia, that:
"An expert witness is not an advocate for a party and has a paramount duty, overriding any duty to the party in the proceedings or any other person retaining the expert witness, to assist the Court impartially on matters relevant to the area of expertise of the witness."
As I note below, this is not the first occasion on which such an objection has been taken relying on the relevant provisions of the UCPR and their predecessors.
It may be accepted, as a matter of general principle, that a liquidator as witness, and as plaintiff in his or her own case, should act with the independence required of a liquidator and in giving expert evidence as a witness in proceeding, approach the giving of evidence in the manner required by the Expert Witness Code. It is immediately apparent, however, that paragraph 2 of Schedule 7 contemplates that there is a retaining party, the plaintiff or defendant, and an expert who is retained, and that provision does not comfortably apply to the situation where the plaintiff is a witness in his or her own case.
It is also important to recognise, as appellate authority has recognised, that questions of this kind are answered by reference to the applicable provisions, not by glossing the case law. Here, the relevant provisions of the UCPR commence, in UCPR r 31.18, with a definition of "expert", who is a "person who has such knowledge or experience of, or in connection with, that issue, or issues of the character of that issue, that his or her opinion on that issue would be admissible in evidence". It is plain enough that the Second Plaintiff, Mr McKenna, is an expert, although large parts of his evidence have not been admitted as expert evidence, because they do not seek to establish the assumptions on which they are based or the reasoning process which would be necessary to admit them as expert evidence. However, r 31.23 of the UCPR, in respect of the Expert Witness Code, is not directed to a person who is an expert, as defined. It is instead directed to a person who is an "expert witness" as defined. The term "expert witness" is defined in UCPR r 31.18 as an expert, "engaged or appointed" for specified purposes. The short answer to this objection, although I will give a longer one below, is that it is plain that Mr McKenna is not an expert "engaged or appointed" by himself, to give evidence in these proceedings. There is no suggestion that he has sought to engage in the entirely artificial process of engaging or appointing himself for that purpose; instead, he simply gives evidence in his own case. While that evidence may be directed in part to matters which potentially fall within the scope of expert evidence, he is not an expert engaged or appointed for that purpose and UCPR r 31.23 does not apply to him. That is a sufficient basis for rejecting the objection to his affidavit on the basis of non-compliance with the Expert Witness Code.
I should also note that the result that I have reached as a matter of construction of UCPR rr 31,18 and 31.23 is consistent with the result that has been reached in the previous case law. In Collins Thomson v Clayton [2002] NSWSC 366, to which Ms King, who appears for the First and Second Defendants, fairly drew attention. Austin J there undertook a detail review of the case law, albeit in respect of predecessor rules to the UCPR, and expressed the view (at [32]) that the evidence of a liquidator was not, per se, inadmissible on grounds of lack of independence, either wholly or in part. His Honour also emphasised (at [36]), in an observation which has real force in matters in this List, that it would be undesirable to treat liquidators' evidence as inadmissible in matters of this kind, where that decision would impose an undue financial burden on the insolvent administration of companies generally. It is, of course, commonplace that liquidators give evidence in proceedings in this List; often, much of that evidence will go to questions of fact, but some of it may involve a liquidator's expertise. It would be unfortunate, to say the least, if every case in which a liquidator appears in this List required the liquidator to lead separate expert evidence, in respect of possibly uncontroversial matters within the scope of the liquidator's expertise. It would also be unfortunate if a single affidavit, being the liquidator's evidence, should have to be divided into multiple parts, with parts of it being excluded on the basis that those parts are within the scope of the Expert Witness Code, although the bulk of the affidavit is not.
Ms King also draws attention to Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 ("Sydney South"), which considered aspects of this question, albeit without reference to the definitional provision in UCPR r 31.18 to which I have pointed above. That decision, as I read it, emphasises the fact that a witness may be able to achieve the requisite independence, even when giving evidence in his or her own case. I accept that proposition, but that does not establish that the Expert Witness Code applies, in accordance with its terms, in these circumstances.
The decision in Chaina v Presbyterian Church (NSW) Property Trust (No 16) [2013] NSWSC 1494 ("Chaina"), to which I drew the parties' attention, is on point. There, the trial judge had initially excluded expert evidence on three grounds, one of which was that Mr Chaina, who claimed to have requisite expertise, had not acknowledged the Expert Witness Code or agreed to be bound by it. The trial judge there noted that he had erred in rejecting Mr Chaina's evidence by reference to his failure to acknowledge the Expert Witness Code and agree to be bound by it. His Honour there referred to Sydney South and to the definition in r 31.18 and r 31.23(3), and drew attention to the difference between the definition of "expert" and the definition of "expert witness" to which I referred above. His Honour noted (at [92]) that r 31.23 requires only that an expert witness, as defined, comply with the Expert Witness Code, although r 31.27, which is directed to the form of an expert's report, applied more widely as to the reports of an expert and not only the report of an expert witness. The result that I have reached is consistent with that reached in Chaina. For completeness, in Re Alsafe Security Products Pty Ltd atf The Alsafe Trust (in liq) [2016] NSWSC 377, I also dealt with aspects of this issue, albeit in a different context, and I also referred to it in Victory Projects Pty Ltd v AAA Self Storage Pty Ltd (25 August 2016), in the context of the report prepared by an investigating accountant. I had there noted that similar issues arose, from time to time, where a liquidator led expert evidence in a case that he or she brought, but could not maintain that he or she was strictly was independent in that case. I also there noted the possibility of the Court dispensing with compliance with UCPR r 31.23 in that situation.
For these reasons, UCPR r 31.23 does not apply to Mr McKenna's affidavit, because Mr McKenna is an "expert" but not an "expert witness" for the purposes of UCPR r 31.18. It is not necessary to dispense with the requirements of the Expert Witness Code, under UCPR r 31.23, although I would likely have done so, had I been asked to do so and had it been necessary to do so. Mr McKenna's affidavit can be read in its entirety, although I have had previously indicated, by way of preliminary rulings as to which the parties have been heard, and which I now confirm, that particular paragraphs should be admitted subject to limitations under s 136 of the Evidence Act 1995 (NSW).
[3]
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Decision last updated: 05 April 2024