Plaintiffs : Mr M J McCusker QC, Dr J T Schoombee & Mr T Houweling

First Defendant : Mr K M Pettit SC & Ms F B Seaward

Second Defendant : Mr K M Pettit SC & Ms F B Seaward

First Defendant : State Solicitor for Western Australia

Second Defendant : State Solicitor for Western Australia

Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2007] FCA 1828; (2007) 245 ALR 15

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705

Mallard v The Queen [2003] WASCA 296; (2003) 28 WAR 1

Osland v The Queen [1998] HCA 75; (1998) 197 CLR 316

R v Bonython (1984) 38 SASR 45

(These reasons are an edited version of the reasons delivered extemporaneously on 17 November 2009.)

1 The defendants object to certain portions of the proposed evidence of Mr John Tucker. The objections go to whether some parts of the evidence are properly the subject of expert evidence and if so, whether Mr Tucker has the relevant expertise on the topics on which the objections are taken.

2 In applying the relevant legal principles I have had regard to the proposed evidence and, in particular, to the contents of Mr Tucker's witness statement, the curriculum vitae that is attached to the witness statement, and the oral evidence adduced in the voir dire. I do not propose to recite or summarise that in detail, having been taken through it by both counsel. In outline, Mr Tucker is a developer who has been involved in property development for more than 20 years. He is the managing director of Twin Ocean Property, which originated from Clough Property. He was the general manager of Clough Property from 2002 to 2007. In his evidence on the voir dire he described in some detail the approach taken by the Clough Group to decisions about property development. Much of the evidence to which objection is taken relates to the conduct and thinking of developers generally, or of a typical developer.

3 The test for the admissibility of expert evidence was stated by King CJ in R v Bonython (1984) 38 SASR 45, 46 - 47. This passage has been cited in many cases, including in Mallard v The Queen [2003] WASCA 296; (2003) 28 WAR 1 [253]. King CJ said that there were two questions.

The first is whether the subject matter of the opinion falls within the class of subjects upon which expert testimony is permissible. This first question may be divided into two parts: (a) whether the subject matter of the opinion is such that a person without instruction or experience in the area of knowledge or human experience would be able to form a sound judgment on the matter without the assistance of witnesses possessing special knowledge or experience in the area; and (b) whether the subject matter of the opinion forms part of a body of knowledge or experience which is sufficiently organised or recognised to be accepted as a reliable body of knowledge or experience, a special acquaintance with which by the witness would render his opinion of assistance to the court. The second question is whether the witness has acquired by study or experience sufficient knowledge of the subject to render his opinion of value in resolving the issues before the court.

4 I also refer to what was said by Gaudron and Gummow JJ in Osland v The Queen [1998] HCA 75; (1998) 197 CLR 316 [53] and cited in Mallard [242] as follows:

Expert evidence is admissible with respect to a relevant matter about which ordinary persons are '[not] able to form a sound judgment... without the assistance of [those] possessing special knowledge or experience in the area and which is the subject of a body of knowledge or experience which is sufficiently organised or recognised as a reliable body of knowledge or experience'.

5 In Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 Heydon JA said that:

If evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of 'specialised knowledge'; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert... [85].

6 The only decision relied on by the plaintiffs is the decision of Allsop J in Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2007] FCA 1828; (2007) 245 ALR 15. That case demonstrates that expert evidence may be able to be given about how people in a particular market behave or might be expected to behave. To my mind, that proposition is not in doubt.

7 Beyond that proposition, it seems to me that Gambro does not provide any substantial assistance to the plaintiffs, because that case is factually very different from the present case. In Gambro the witness had worked for nearly 30 years in a very specialised market referred to as haemodialysis. The witness had been involved in selling and marketing the relevant products and equipment, and had person-to-person contact with those who purchased and used the relevant equipment [11] - [13].

8 It was on the basis of that experience and the knowledge gained by it that Allsop J found that the witness was able to express an opinion on how customers in the market would have reacted to a particular postulated circumstance. In [26] his Honour concluded that the witness had a 'body of specialised knowledge of the activity of people, as well as the subject-matter of the activity of people, in a reasonably specialised and confined area of human and commercial behaviour'. Counsel for the plaintiffs submitted that the conclusions reached by Allsop J in [26] were conclusions that could similarly be reached in relation to this matter.

9 The witness in Gambro had relevant specialised knowledge of the people who both used the equipment and purchased the equipment. I am not satisfied by the evidence before me that like conclusions should be drawn in relation to Mr Tucker. By its nature, as a starting point, the work of a developer does not involve the same degree of direct contact with other developers in the course of doing work, as was the case with the work of the witness in Gambro. The witness in Gambro dealt with those in the relevant industry sector as his customers. More generally, I am not satisfied by Mr Tucker's evidence, witness statement and curriculum vitae that his work experience gives him any specialist insight into how other developers think in the respects dealt with in the evidence to which objection is taken. I will return to that later in these reasons.

10 Counsel for the plaintiffs suggested that there might be an analogy with evidence as to what a prudent professional, such as a solicitor, would do. In those cases however, it is either agreed or established by evidence that:

(a) there is a relevant branch of specialist knowledge, and

(b) the witness has some of that specialist knowledge.

11 It is those matters which are in dispute in relation to these objections.

12 The contents of Mr Tucker's witness statement, curriculum vitae and his oral evidence on the voir dire do not satisfy me that affirmative answers should be given to question 1(b) or question 2 as identified by King CJ in Bonython. In other words, I am not satisfied:

(a) first, as to the existence of a body of knowledge or experience that is sufficiently organised or recognised to be accepted as a reliable body of knowledge or experience, a special acquaintance with which by a witness would render his opinion of assistance to the court; and

(b) secondly, and I think most critically, to the extent that such a body of knowledge was shown to exist, I am not satisfied that this witness has acquired by his experience sufficient knowledge of the subject.

13 I am not satisfied that Mr Tucker's experience gives him specialist knowledge of the behaviour and way of thinking of the notional typical developer on the topics and in the respects that are the subject of his evidence to which objection is taken.

14 Counsel for the plaintiffs referred me to various passages in a number of witness statements or reports, mainly of witnesses proposed to be called by the defendants. The plaintiffs submitted that those passages supported a conclusion that there is an industry sector or section that can be referred to as 'developers'.

15 Whatever else might be said in response to that submission, it does not seem to me to say anything about whether Mr Tucker has specialist knowledge about the behaviour and thinking of the notional typical developer on the topics to which the objected to evidence relates.

16 Counsel for the plaintiffs also submitted that it was common cause that the hypothetical purchaser would be a developer and that, consequently, the proposed evidence assists in determining how that hypothetical purchaser would approach the possible purchase of the subject land. It seems to me that that submission would be an answer to an objection by the defendants on grounds of relevance, but that it is not an answer to an objection by the defendants on the grounds now under consideration.

Application of conclusions to Mr Turner's witness statement

17 I turn to apply those conclusions to the particular passages objected to by the defendants. It emerged in the course of argument that the same considerations apply to many of the passages to which objection is taken. I also deal with some objections on other grounds.

18 Paragraph 15 is expressed in terms of what Mr Tucker 'would pay' for land zoned rural with the potential to be zoned urban. Paragraph 16 is expressed to relate to the amount that 'we as developers would be prepared to pay'. These paragraphs are advanced by the plaintiffs not as evidence of what a particular individual alone would do but, rather, as evidence of what a notional typical developer would pay. Evidence of what a single person alone would or might do, in my opinion, would not anyway be relevant or admissible. I uphold the defendants' objection to these paragraphs. As I have said, I am not persuaded that Mr Tucker has any expertise in the relevant body of knowledge or experience as to the conduct and thinking of developers generally, assuming that a relevant body of knowledge or experience exists.

19 Further, there also seems to me to be merit in the defendants' contention that this evidence is in the realm of valuation evidence, although that was denied on behalf of the plaintiffs. In this context it is difficult to see any distinction between 'value' and what developers would be prepared to pay. That can be seen in part from the way in which par 15 and par 16 are expressed. Also, it is difficult to see the assistance to be derived from evidence of what developers would be prepared to pay if that is not said to be indicative of value.

20 Thirdly, if it were necessary to do so, I would uphold the objections to par 15 and par 16 on the basis that there is no adequate disclosure of the basis and reasoning to support the conclusions reached by Mr Tucker.

21 Paragraph 26 relates to what it is said that developers were doing, and the basis for it, as at July 2006. I apply the conclusion I have earlier stated, that Mr Tucker has no established expertise on that topic, and accordingly par 26 is struck out.

22 The first sentence of par 32 relates to what developers purchasing the land at July 2006 would have expected to occur in relation to the future zoning of the land. Assuming there is a body of specialist knowledge on that topic I am, as I have said, not satisfied that Mr Tucker has any expertise on that topic and accordingly, par 32 is disallowed.

23 Paragraphs 38 and 39 express Mr Tucker's view as to the potential of the subject land. Again, that is said to be indicative of the views of a typical developer. Insofar as it was an expression of his own view, it would not be relevant. For the reasons already given, I uphold the objection in relation to par 38 and par 39.

24 The same reasons lead to the upholding of the objection to the third and fourth sentence of par 40 and to the upholding of the objection to the words following 'capable of development' in par 42.

25 For those reasons, I uphold the defendants' objections as stated.