Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : CLAMBAKE PTY LTD -v- TIPPERARY PROJECTS PTY LTD [No 2] [2007] WASC 244

Appeal - Interlocutory appeal - Whether leave should be granted - Order made by judge to facilitate proof - Order made that expert reports stand as prima facie evidence of facts relied on in expert reports - Parties at liberty to lead other evidence - Whether any substantial injustice if order not set aside - Whether Court of Appeal being asked to give advisory opinion

1 PULLIN JA: This is an application for leave to appeal against an interlocutory decision of EM Heenan J. His Honour ordered on 25 September 2007, that:

1. The expert reports relied upon by the Applicants stand as prima facie evidence of the facts relied upon in the expert reports as listed in paragraphs 1.1 to 1.4 of the Applicants minute of proposed orders of 18 September 2007, but restricted to those issues of fact identified in the table annexed to the affidavit of Michael Andreas Stork of 18 September 2007; subject to the authors of the various reports filing within 4 weeks and serving affidavits as to their belief in the various facts contained in the paragraphs identified and providing the best particulars which they are able to give as to the source and basis for that information and belief. Upon filing those affidavits, the Applicants are at liberty to adduce that evidence at trial.
2. In the event that any of the defendants in CIV 2093 of 2003 wish to adduce supplementary expert or other evidence on the issues in respect of which order 1 has been made, then statements of that evidence or any supplementary expert reports must be served within 6 weeks after the filing of the affidavits referred to in order 1, and after that response the defendants in CIV 2093 of 2003 shall have a further four weeks to apply for leave to adduce such supplementary evidence, and if so to what extent, notwithstanding that the time limits for exchanging expert reports have already expired.
3. There be liberty to apply generally.

2 The appellants have once before been to this court seeking leave to appeal against an interlocutory order of EM Heenan J. That order was also directed to facilitation of proof. In that appeal the appellants applied for a stay of the order, which application was dismissed. An application to review that decision was also dismissed and the appeal was then abandoned.

3 I will repeat what I said in my earlier draft reasons concerning the nature of the litigation:

The case concerns the consequences of a fire that destroyed a building at 205 to 207 Stirling Highway, Claremont on 22 December 2002. The building was owned by Clambake and leased to Tipperary and used as a warehouse. Owston and Tipperary are claiming damages from Clambake and Land Capital for the loss of antiques, second-hand carpets and paintings that were allegedly stored at the warehouse and destroyed in the fire. Land Capital trades as Churchill Knight Real Estate who are agents and managers of the Clambake property. Mr Cohen is a director of Clambake and Land Capital. Owston and Tipperary are alleging that the defendants made misleading misrepresentations or were negligent and that Clambake breached a term of the lease, all of which allegations are denied. In the other action, CIV 1707 of 2003, Clambake has claimed from Tipperary and Mr Anderson, unpaid rent.

For present purposes, Owston, Tipperary and Mr Anderson may be called the plaintiffs and Clambake, Land Capital and Mr Cohen, called the defendants.

The parties have exchanged expert evidence on the cause of the fire, the regulatory requirements for buildings and the alleged values of items allegedly lost. Some values about items lost have been agreed. The defendants have not agreed about all items claimed to have been in the warehouse or destroyed or their condition before destruction. The parties have not reached agreement on the cause of the fire or the value of many items claimed to have been lost.

The plaintiffs' total claim is not less than $17.9 million and at least $12 million is said to be still in dispute. A process of conferral has not resulted in the parties reaching agreement.

4 In his reasons relating to the orders under review in these proceedings, Heenan J has explained the steps taken to try and identify and reduce the issues and facilitate proof in what may be a very lengthy trial unless some means are adopted to try and reduce issues.

5 A selection of some of the paragraphs in his Honour's reasons explain the problems associated with keeping the trial manageable. Those paragraphs read:

For these reasons the Anderson parties claim damages for the destruction of their property, being the various artworks, valuable furniture, precious carpets and other objects of art which were destroyed by the fire. A large area of controversy, which has been the subject of much of the interlocutory process to date, concerns the attempt to reduce or limit the controversies over the value of these art objects at the date of destruction. The contrasting issues revolve around significant differences of opinion about the valuations of the various categories of property destroyed. Some, but only some, of these controversies and the expert evidence concerning estimates of valuation include:

(a) the identity of the artist of certain of the artworks;

(b) the reliability of sales evidence published in art sources and literature about prices fetched for those artists' work at auctions or other art sales;

(c) whether reported prices for the sale of a particular artist's work are for works produced by this artist or by his father, another prominent artist (whom the Clambake parties contend produced work fetching significantly higher prices);

(d) the type and provenance of certain oriental carpets and the reliability of comparative sales evidence identified by the expert valuers;

(e) whether the internal dividing wall within the warehouse needed to comply with certain regulations relating to fire-rating standards or not;

(f) whether the roller doors which formed part of the internal dividing wall complied with the applicable fire-rating standards or not; and

(g) whether the fire doors reported upon by the Anderson parties' expert dealing with fire-rating standards were in fact the fire doors which were located on the premises at the date of the fire.

This is only a small sample of the issues which are dividing the parties and in respect of which expert evidence has been exchanged pursuant to previous orders for directions made in the management of this case. [6]

At this stage of the action where, although the claims are well advanced, no final decisions or directions have been given about how or to what extent the trial of all the issues will be conducted, it is obviously desirable to take such steps as are proper to keep these bourgeoning issues in control and to attempt to facilitate proof, or at least to avoid controversy, in relation to issues which may not require a full adjudicative process. Particularly is this so where there is scope for resolution of controversies affecting valuation between the experienced experts retained by the various parties. With these objectives in mind I have, on several prior occasions, made a series of directions and rulings designed to narrow these issues and to facilitate proof of items of damage which one could reasonably expect to be within the scope of negotiation or agreement between one valuer and other experts. [7]

...

The question is whether the powers available to this court under RSC O 29 r 2(1), and within its statutory and inherent jurisdiction, permit orders facilitating proof, such as have been described in this present case. The applicants submit that they do, particularly having regard to the provisions of RSC O 1 r 4A and r 4B. I am inclined to agree with these submissions, at least at a general level, although the extent of the powers of the court in this regard no doubt remain to be worked out and any particular limits identified by the usual evolutionary process of principled decisions and the doctrine of precedent. [48]

By contrast, the respondents to this application, both the Clambake parties and Land Capital, submit that unless a matter is peripheral to a central issue in the litigation it will not usually attract the operation of O 29 r 2(1) and that in Bristile Holdings Ltd v Giacci Brothers Pty Ltd [2000] WASCA 48 and Deputy Commissioner of Taxation (Cth) v Robinswood Pty Ltd, the alternative proposed modes of proof and the specific evidence were clearly identified. They submit that the Anderson parties in the present litigation are seeking orders which would not only permit inadmissible evidence, but would dispense with proof altogether on vital issues in the case. [52]

...

The major proposition of the applicants is that the orders sought have been drawn in such a way as to ensure that only the statements of those facts which are not central to the case are taken as prima facie evidence of the facts. An example is given; namely, that the respondents repeatedly dispute sales' evidence on the sole basis that the sale is not comparable with the work valued, without putting up a contrary fact or opinion based on evidence said to be comparable. The applicants argue that the orders sought reserve the respondents' ability to contend at the trial that the opinion of the expert, based on such a sale, should not be accepted because the sale is not comparable, or should otherwise be afforded little weight. The applicants submit that the orders sought have the effect only that the fact of the sale, its occasion and price should be the subject of prima facie evidence, not that the sale is a sound basis on which an expert may form an opinion. Those examples do not cover every aspect of the facts to which objection has been taken, but they exemplify the characteristics of the objections which are now under scrutiny. [54]

In a case of this magnitude, I am satisfied that the court can, and should, exercise control over the scope of the issues and the method of proving them to ensure that the trial is conducted expeditiously, efficiently and fairly and with regard to all considerations, including those of costs, time and the use of scarce public resources. It seems to me that while a court must examine essential issues in the case as presented by the parties on the basis of admissible evidence, peripheral issues do not require or justify this degree of scrutiny. Consistently with the principles underlined in RSC O 29 and efficient case management, there comes a point where the question must be asked whether or not the parties should be permitted to put a particular fact in issue and demand strict proof and full cross-examination. Those are important and traditional rights associated with the trial of issues, but they assume, and have always assumed, that there are reasons justifying the putting of such allegations in issue. [55]

...

The result of these orders should be that the Anderson parties will be at liberty to rely upon the expert evidence as prima facie evidence of the fact or facts alleged, upon the author or authors of the particular reports making and filing an affidavit as to his or her belief in respect of that particular fact or facts, and giving the best particulars he or she is able to give as to the source of his or her information and belief for that particular fact or facts. Subject to obtaining leave to adduce further expert evidence, that would not prevent the Clambake parties or Land Capital from adducing evidence to reject or which is designed to reject or refute that alleged fact. However, it would mean that, in the absence of such other evidence, the alleged fact will be admissible as prima facie evidence and may be given such, if any, weight as may be considered proper after all other evidence in the case is heard. [60]

Twenty-nine expert reports have been filed in the proceedings.

6 The appellants seek leave to appeal on the following grounds:

1. The learned primary Judge erred in law in that:

1.1 Order 29 Rule 2 did not empower him to order as he did that assertions of fact shall be prima facie evidence or to purport to apply as he did the Rule to assumptions, conclusions, opinions or to matters that, are not 'particular' facts and are not peripheral or merely formal;

1.2 It is not just and expedient to make an order of general application, and Order 29 Rule 2 did not empower him to order, that assertions of fact on affidavit of belief shall be prima facie evidence merely because assertions had been disputed for lack of supporting evidence or for a reason that the Judge did not consider cogent;

1.3 He made orders without notice to the parties;

1.4 He did not apply the mandatory requirement of Order 59 Rule 1.

1. The learned primary Judge erred in law in the exercise of a discretionary judgment in that:

2.1 He did not analyse the pleaded case and each individual 'fact' and identify those facts that were peripheral to the principal issues in the case;

2.2 He wrongly held that the respondents required 'strict proof';

2.3 He failed to consider:

2.3.1 requiring the respondents' experts to depose to matters of information and belief with supporting material before he exercised the power under Order 29 Rule 2 for some 'particular facts', and if so

2.3.2 whether to render affidavit evidence merely admissible rather than prima facie evidence.

2.4 He failed to consider onus of proof and evidentiary burdens in civil litigation and that the result of his orders may be practical reversal of the onus of proof for facts that were not supported by cogent evidence, might not be readily disproved, but were proved by mere operation of his orders.

7 The question is whether leave should be granted. Section 60(1)(f) of the Supreme Court Act 1935 (WA) confers a general discretion to grant leave. There are no fixed rules which govern the grant of leave, but usually an appellant must show that the decision appealed against is wrong, or at least attended with sufficient doubt to justify the grant of leave, and that substantial injustice will be done by leaving the decision unreversed. See Wilson v Metaxas [1989] WAR 283.

8 It is necessary also to mention two other considerations. The first is that an interlocutory decision which affects the final order in a proceeding may be appealed against (with leave) after judgment in the trial. See Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478. The second consideration is that a tight rein needs to be kept on applications seeking to interfere with the interlocutory orders of judges at first instance. See Adam P Brown Male Fashion Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170; Sinclair v Minister for Health [2007] WASCA 253.

9 I will turn first to consider whether the decision is wrong or attended with doubt. It is clear enough that provisions in s 167 of the Supreme Court Act authorise the making of rules which permit departure from the common law rules of evidence. See Deputy Commissioner of Taxation for Commonwealth of Australia v Robinswood Pty Ltd [2001] WASC 191; (2001) 24 WAR 284. Heenan J mentions, in his reasons for decision, two paragraphs in s 167(1) of the Supreme Court Act which authorises such rules to be made. The Supreme Court has long operated with rules which modify the common law rules of evidence. See for example O 37 r 6(2) and O 14 r 2(1). These rules permit the giving of hearsay evidence in relation to interlocutory applications and in summary judgment applications.

10 Order 29 r 2(1)(c) authorises the court to direct the mode by which particular facts may be proved at trial. 'Mode' means the way of doing something, and so there is nothing obviously wrong with his Honour making orders concerning the way that particular facts may be proved at trial. Having said that, I recognise, however, that the rules of court are designed to facilitate justice and the making of an order may or may not be warranted depending upon the particular fact to be proved and in the light of all the evidence and the circumstances relating to it.

11 It is not possible to conclude that the order made by Heenan J is wrong or attended with doubt without a precise analysis of all the circumstances in relation to each piece of evidence it relates to. It will be impossible to assess all the relevant circumstances if this appeal is allowed to proceed, because the situation is presently fluid and will remain fluid until the conclusion of the trial. That is because the appellants have the right to adduce further evidence of their own and further evidence may be given at trial which bears upon issues regarding facts to which the first order relates. That is so because the order provides that the expert reports will stand as prima facie proof, but does not preclude the respondents nor the appellants by other means leading evidence to contravene the facts referred to in the reports. If that happens, then the effect of the order in relation to a particular fact may be overtaken by that alternative proof. A decision of this court may then be rendered, partly or even wholly, otiose. A decision of this court, at this stage, also runs the risk of producing an advisory opinion on what is not yet a 'concrete situation': Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at [48].

12 This court should therefore not be called on to determine whether the order operates unfairly by reference to the limited information presently available to this court. That alone would suggest that leave to appeal against the order should be refused.

13 In any event, it is the respondents who have pressed for the order and succeeded in obtaining it. It is therefore the respondents who take any risk associated with this method of proceeding. If the appellants later appeal and the court concludes that O 29 r 2 either does not confer power to make the order at all as the appellants contend, or if it was unjust to make the order in relation to proof of particular facts, then it is the respondents who will suffer the consequences of inadequate proof. There is no substantial injustice which the appellants will suffer if the orders are not set aside at this stage.

14 For those reasons, leave to appeal should be refused.