She then referred (at [67]) to the Referee's approach that, in the absence of cross-examination of Mr Nixon, he would have regard to that evidence (1) insofar as it was corroborated by other evidence called by HSH; and (2) insofar as it was contradictory of other evidence called by Multiplex.
89 The primary judge then considered the evidence of Mr Pirrello and the Referee's findings with respect to it ([68]-[72]). In particular, she rejected the submission that, as a matter of fairness, the Multiplex witnesses should have given Mr Nixon the opportunity of answering criticisms of his opinions. Given the manner in which the hearing was conducted, I find that submission somewhat odd. As already noted, HSH first raised the defects issue in its statements filed in reply to Multiplex's case in chief. Multiplex then filed statements which clearly put in issue the opinions expressed by HSH's witnesses including Mr Nixon. No doubt, senior counsel for HSH contemplated that he would be cross-examining Multiplex's witnesses and that this would take place before his own witnesses were cross-examined, something which he also would have then contemplated. It may well have come as a surprise to him when senior counsel for Multiplex declined to cross-examine his witnesses on the defect issue. At that point, clearly, as the primary judge observed (at 65]) the parties had joined issue by the filing of competing statements. If at that point senior counsel for HSH considered that it was desirable or necessary to call Mr Nixon to rebut the criticisms of his report by the Multiplex witnesses, he could have done so.
90 Clearly, the Referee had no power to require Multiplex to cross-examine HSH's witnesses including Mr Nixon. On a factual issue such as the present, when the experts on each side cannot agree as to whether a particular defect is or is not minor, one can understand the Referee's suggestion (in [288]) that Multiplex may have taken the view that to cross-examine every witness about the definition of defects would be an unnecessary waste of time. It seemed to be common ground between the parties that even if the cross-examination were confined to Mrs Lapstun and Mr Nixon, to cross-examine on each and every alleged defect (there was said to be 16,000 of them) would have involved an inordinate amount of time.
91 The primary judge then dealt (at [73]-[79]) with HSH's criticism of the manner in which the Referee dealt with the evidence of Mr Andrews compared to that of Mr Nixon, the suggestion being that the Referee was not prepared to give any benefit of the doubt to HSH's witnesses as exemplified by his findings with respect to the evidence of Mrs Keys and to his alleged failure to refer more fully to the evidence of Mr Brady. I agree with her Honour that none of these challenges had substance for the reasons that she has given.
92 At [80]-[84], the primary judge dealt with HSH's complaint that the Referee failed to deal appropriately with the evidence of Ms Dickson. It was common ground that the Referee made no mention at all of Ms Dickson's evidence in his report. Her evidence related to alleged defects in the carpet. However, as her Honour observed at [84], there was ample reference in the report to the allegations made in relation to the carpet which made it apparent that the Referee clearly reviewed all the evidence with respect thereto. Complaint was made in HSH's written submissions that her Honour failed to address the submissions made to her regarding the Referee's rejection of the evidence of Mr Gaston, Mr Brady, Ms Dickson and Ms Browne. However, it is clear from her Honour's judgment that she certainly dealt with the evidence of Mr Brady and Mr Dickson. Her general comments to which I shall refer below, were, in my opinion, sufficient to rebut the submissions made by HSH with respect to the evidence of Mr Gaston and Ms Browne.
93 Thus, at [87] of her judgment, the primary judge referred to the submission that the Referee fell into error such that the report should be rejected by reason of Multiplex's failure to cross-examine HSH's witnesses and, in particular, Mr Nixon and the Referee's statement that there was no submission "based on" Browne v Dunn.
94 At [88] her Honour observed that the Referee was clearly cognisant of the fact that Mr Nixon had not been cross examined and decided to approach what he described as "this difficulty" in the manner set out in paragraphs [288]-[291] of the report. She noted that the Referee had not made a detailed comparison of the evidence given by Mr Nixon with the evidence given by each of Multiplex's witnesses to which he referred in his report; nor was Mr Nixon's evidence expressly analysed in conjunction with the evidence of other HSH witnesses. Nevertheless, as her Honour noted, it is clear that the Referee was aware of the care he needed to take in the absence of any cross-examination of Mr Nixon.
95 At [89] her Honour noted the submission, which was repeated on the appeal at least in HSH's written submissions, that Mr Nixon should have been given the opportunity to explain his reasoning process for reaching the conclusion he expressed in his reports and that the only way that could occur in the process before the Referee was by requiring Multiplex to cross-examine him as a prerequisite to an entitlement to impeach his opinions. Her Honour then referred (at [90]) to the suggestion in Hull (at [24]) that if HSH was to maintain that Mr Nixon had not been challenged at all and that there was no basis for doing anything other than accepting his opinions, the evidence of Mrs Lapstun was objectionable as raising what Rolfe A-JA referred to in Hull as a "false issue". However, having noted that her evidence was not objected to on that basis, her Honour acknowledged that that was understandable as Mrs Lapstun was cross-examined before HSH was aware that it was not intended to cross-examine Mr Nixon.
96 The primary judge then made the following observation (at [91]):
"Where there is unchallenged evidence called by a party and there is evidence that is called by the opposing party that the tribunal of fact accepts, notwithstanding a challenge to it, there is the necessity to weigh that evidence against the unchallenged evidence called by the first party. The examples of circumstances that Rolfe A-JA referred to in Hull v Thompson in which unchallenged evidence in a report may be rejected included where the report is ex facie illogical or inherently inconsistent; where it is based on an incorrect or incomplete history; or where the assumptions on which it is founded are not established (par 21). These were only examples and could hardly be said to be exhaustive. HSH submitted that none of these examples is referred to by the Referee in the Report as a basis for having rejected Mr Nixon's evidence. In the circumstances it was submitted that as Rolfe A-JA said in Hull v Thompson "there is no rational reason not to accept unchallenged evidence" of Mr Nixon."
97 At [92] her Honour referred to the comparison made by Mr Nixon between the photographs he took and those taken by Mrs Lapstun. Further, she recorded that the Referee analysed each aspect of Mr Nixon's report including that dealing with Mrs Lapstun's photographs. She concluded:
"It is obvious that the Referee reviewed Mr Nixon's photographs having regard to paragraphs 277 and 278 in the report. The Referee went further and assumed that had Mr Nixon been cross-examined, he would have maintained that the defects that observed were not minor."
98 The primary judge then referred (at [93]) to the fact that the Referee had two experts' opinions that were in conflict and that
"although one was cross-examined upon, the ultimate position was that neither had been effectively challenged. It was therefore important for the Referee to look at all the evidence and to find the facts."
99 In response to a submission that the Referee had not analysed Mr Nixon's evidence and that he had in fact failed to comply with the approach that he set himself in [291] of his report as well as with the principles enunciated in Hull, the primary judge (at [95]) observed that the reality was that the Referee reviewed the photographs for himself and came to the conclusion that it was a well-finished building, the defects appeared to be minor rather than otherwise, and there was a well-organised regime for the rectification of those defects. Her Honour then set out in full [278] of the report which recorded the Referee's observations with respect to a number of the photographs.
100 The primary judge then concluded her survey of the Referee's approach to the non-cross-examination of HSH's witnesses in the following terms:
"96. In the face of what were two competing effectively unchallenged experts' reports the Referee had to decide whether these defects were minor or not. Mr Nixon and Mrs Lapstun were only two witnesses out of a number of witnesses called in relation to the question of Completion. The finding made by the Referee that he preferred the evidence called by Multiplex and that the HSH evidence did not subject it to any doubt, is in my view consistent with him having considered all the evidence called and treated Mr Nixon's evidence as unchallenged but outweighed by the Multiplex evidence. The Referee did compare the evidence of the two experts and did not misapply the principles relevant to the "difficult" circumstance of Mr Nixon not having been cross-examined. It is clear that all the evidence called by Multiplex was, in the Referee's opinion, such as to outweigh the evidence called by HSH including Mr Nixon's evidence. I am not satisfied that the Report should be rejected based upon the submissions made on this Ground."
101 The submissions advanced by HSH on the appeal relating to the alleged unfairness of the Referee in preferring the evidence of the HSH witnesses and, in particular, that of Mrs Lapstun and Mr Johnson, over the unchallenged evidence of Mr Nixon were generally the same as those made to the primary judge, which she rejected. It was, however, submitted that her Honour's conclusion that the Referee's finding that he preferred the evidence called by Multiplex and that that called by HSH did not subject that evidence to any doubt, was consistent with the Referee having considered all the evidence called and as having treated Mr Nixon's evidence as unchallenged but outweighed by the evidence of Multiplex, was a conclusion that, in effect, was not open to her Honour. With respect, I disagree.
102 References have already been made to the obvious fact that Mrs Lapstun and Mr Nixon were at issue: the latter said the defects he identified in his photographs were not minor, whereas the former said that those defects either did not exist or, to the extent to which they did, they were minor. Mr Nixon and Mr Johnson were also at issue. As the Referee records in [336] of his report, Mr Johnson in his 8th statement of 8 November 2002 commented upon the two reports prepared by Mr Nixon and, in particular, expressed the view that the defects referred to by Mr Nixon in his Attachment C and photographed in his Attachment B, were either minor in nature or not present when Multiplex claimed completion had occurred or not defects at all.
103 Again, as recorded by the Referee in [341] of his report, Mr Johnson in his 13th statement of 8 November 2002, returned to a consideration of Mr Nixon's reports and expressed the view that the alleged defects described therein were minor and did not prevent the use of the building for its intended purpose. Although there was some cross-examination of Mr Johnson with respect to the alleged defective wardrobe doors, damaged aluminium door frames, sliding doors not closing properly, a missing balcony down-light in Unit 101 and stains and marks on the carpet at Levels 1-8, it being put to Mr Johnson that those defects were major which he denied, none of Mr Johnson's cross-examination was referenced to any defect disclosed in any of Mr Nixon's reports notwithstanding that Mr Johnson's 8th, 13th and 21st statements responded in detail to them. Quite clearly, it would have been a tediously impossible task for the cross examiner to take Mr Johnson through each and every defect alleged by Mr Nixon. It is no criticism of senior counsel for HSH that he did not do so.
104 As her Honour noted in [96] of her judgment, to all intents and purposes the evidence concerning defects and their characterisation on both sides - that of Mr Nixon for HSH and that of Mrs Lapstun and Mr Johnson for Multiplex - was effectively unchallenged.
105 It was acknowledged by HSH that the statement of principle relied upon in Hull provided a prima facie position only. Furthermore, as her Honour observed at [91] of her judgment, the examples given by Rolfe A-JA in [21] of Hull, of circumstances in which unchallenged expert evidence may be rejected, were not intended to be exhaustive. One can therefore accept that the prima facie position should prevail unless there are cogent reasons for rejecting the unchallenged evidence. However, it is clear that such reasons may be provided by credible evidence which contradicts that of the unchallenged witness in circumstances which are persuasive.
106 It was in this context that the Referee considered that it was appropriate to contrast the evidence of Mr Nixon with the totality of the tested evidence (including witnesses from both sides) to determine the extent to which Mr Nixon's views were corroborated on a particular issue. In my opinion, this is essentially what the Referee then did. The Referee was saying that to the extent to which Mr Nixon was corroborated by that evidence, including the evidence of other HSH witnesses, the more weight could be attached to it whereas to the extent to which it was not corroborated, justified his evidence being given less weight.
107 It was not suggested by HSH that the Referee erred in forming a prima facie view about the opinions of Mr Nixon in the light of his analysis of the evidence of Mrs Lapstun. Having recognised, however, that this was only a prima facie view because Mr Nixon had not been cross-examined, the Referee considered it appropriate to look at the balance of the evidence to see if Mr Nixon's opinions achieved greater or lesser acceptance depending upon whether they were corroborated or contradicted by a consideration of the evidence of the other witnesses.
108 In Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 at 563-564, Gleeson CJ made a number of observations with respect to the fact that firstly, an application under Part 72 rule 13 of the Rules was not an appeal and, secondly, the judge hearing the application has a judicial discretion to exercise in a manner which is consistent both with the object and purpose of the rules and with the wider setting in which they take their place. In particular, where neither a question of law nor the application of legal standards to establish facts is involved as in the present case, and after observing (at 563G) that it would frustrate the purpose of Part 72 to allow the reference to be treated as some kind of warm-up for the real contest, the Chief Justice said (omitting citations):
"On the other hand, if the Referee's report reveals some error of principle, some absence or excess of jurisdiction, or some patent misapprehension of the evidence, that would ordinarily be a reason for rejecting it. So also would perversity or manifest unreasonableness in fact-finding."
109 The Chief Justice (at 564) further held that on the particular question of the approach to be taken on disputed findings of fact, where there is shown to be evidence available to support such findings, or the issue involves a choice as between conflicting evidence, he agreed with the views of Giles J, the trial judge, that (at 555):
"…rejected the submission that he was obliged to reconsider, and determine for himself, every issue of fact or law in respect of which the builder was dissatisfied with the decision of the referee. He considered that such an approach would render virtually futile the whole procedure of sending matters to a referee, and was not required by the rules. On the contrary, his Honour approached the matter on the basis that he had a discretionary decision to make as to whether he adopted the referee's report in whole, or in part, and that in making that decision he, being satisfied that the referee had applied his mind to the task of fact finding required of him, carefully and in a manner consistent with legal principle, would not do more than ensure that the referee had addressed the appropriate questions, and that there was evidence capable of being accepted, which, if accepted, supported the findings of fact made."
110 The primary judge was familiar with these principles and cited them in [23] and [24] of her judgment. The Referee was particularly conscious of the fact that Mr Nixon had not been cross-examined and was no doubt well aware of what he had said, in a different capacity, in Hull. Accordingly, it was open to the Referee to prefer the totality of the evidence called by Multiplex to that called by HSH including that of Mr Nixon: see [586]-[587] of the report. I see no demonstrated error of principle on the part of the Referee let alone any patent misapprehension of the evidence or perversity or manifest unreasonableness in his fact finding. In my opinion the conclusion reached by the primary judge at [96] of her judgment was correct. HSH's challenge to the Referee's rejection of Mr Nixon's evidence did not lead to any relevant unfairness which would have justified her Honour in refusing to adopt the Referee's report.