Plaintiffs v Defendant

2 The defendants object to the admissibility of this evidence on three bases. First, the evidence is not admissible pursuant to s 56(2) of the Evidence Act 2008, because it is irrelevant. Second, if that submission be rejected, the evidence is of an opinion and is not admissible pursuant to s 76 of the Act on the basis that the evidence cannot satisfy the exception under s 79. Third, if I determine that the evidence is relevant and admissible, I should nevertheless refuse to admit it in the exercise of the general discretion pursuant to s 135 of the Act.

3 For the following reasons, the evidence is not admissible as irrelevant, pursuant to s 56(2) of the Act. It is convenient to begin by briefly identifying the applicable principles.

4 The test of relevance is set out in s 55(1) of the Act:

The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.

5 The extent to which evidence could rationally affect the assessment of the probability of the existence of a fact in issue is defined as the probative value of that evidence. Evidence which cannot rationally affect an assessment has no probative value. Whether a piece of evidence has any probative value is an exercise in logic;[1] does the evidence render a fact in issue more probable than it would be without the evidence. As Gleeson CJ, Heydon and Crennan JJ said in Washer:[2]

... Relevance depends upon whether the evidence could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceedings. That can be determined only by an analysis of the facts in issue in the proceedings, and the circumstances which bear upon the question of probability. It also requires consideration of the process of reasoning by which information as to the fact of the acquittal could rationally affect the assessment of the probabilities. The word "rationally" is significant in this context. In order to establish relevance, it is necessary to point to a process of reasoning by which the information in question could affect the jury's assessment of the probability of the existence of a fact in issue at the trial.

6 The test sets a low bar. The court assumes that the evidence will be accepted and the assessment is whether, by an identifiable process of reasoning, it could - not would - rationally affect the assessment of probative value. The s 55 inquiry is into the capacity of the evidence to affect probative value, rather than the extent to which it does so. The adverb 'rationally' is significant. It requires that there be a logical connection between the evidence and the fact in issue. If I am satisfied that there is that logical connection, then I must determine the evidence to be relevant. This determination does not involve the exercise of discretion, and the contested evidence is not to be assessed in isolation.[3] Whether a rational or logical connection exists between the piece of evidence and the fact in issue is an objective test grounded in human experience, on the application of which minds may differ.[4]

7 A 'fact in issue' is a fact which is to be determined as a matter of substantive law in the proceeding. There may be many issues of fact about facts relevant to those which must be so determined that will not be properly described as 'facts in issue'. The issues which must be established as a matter of substantive law in the present case are identified by the pleadings, although in these proceedings it is helpful to have regard to the Statement of Issues and Common Questions that were settled by my orders of 10 October 2024.[5] Further, in determining how the evidence may be relevant, I have the benefit that the plaintiffs have opened their case and explained how they seek to relate this evidence to the facts in issue.

8 The disputed evidence is opinion evidence. In Dasreef Pty Ltd v Hawchar,[6] the High Court explained the statutory context of the opinion rule (Part 3.3 of the Act). The exclusionary rule (s 76) assumes that evidence of an opinion is tendered 'to prove the existence of a fact' and the Part directs attention to why the party tendering the evidence says that it is relevant or, more particularly, to the finding which the tendering party will ask the tribunal of fact to make. This exercise requires identification of the fact in issue that the party tendering the evidence asserts the opinion proves or assists in proving or is probative of. It is only once this initial inquiry is resolved in favour of the tendering party that the court turns to consider whether the s 76 exclusionary rule is inapplicable by reason of the s 79(1) exception.

9 In their submissions, the plaintiffs identified the substance of the evidence of Professor Slonim, a behavioural economist, and its relationship to the issue in the proceedings in these terms. A brief summary is sufficient for present purposes. His evidence explains the effects of cognitive biases and weaknesses in decision-making, typical in sales environments with which these proceedings are concerned, drawing the link (through economic theory) between the loan system and its consequences for the plaintiffs. Professor Slonim identified an inherent risk to the plaintiffs and group members of their decision-making being compromised, creating a susceptibility to entering into loan contracts at inflated interest rates. This risk exposure was due to the 'car loan process'.

10 The plaintiffs emphasised three particular matters.

11 First, by employing or specifying the process of flex commissions, the defendants not only gave dealers a financial incentive to set higher interest rates on car loans, but also to take measures to increase the likelihood that customers would accept these loans by reducing the consumer's sensitivity or fully desensitising them to the interest rate.

12 Secondly, there were four predictable effects of the car loan process that were more likely to be a consequence of flex commissions and the car loan process. These effects permit the prediction, through economic theory, that each of these effects would cause consumers to be less sensitive or fully desensitised to the interest rate and consequently more likely to have accepted a car loan at a higher rate.

13 Professor Slonim identified the following predictable effects, from specialised economic knowledge and expertise in behavioural economics, that the pleaded features of the car loan process would influence the plaintiffs and reasonable persons in their position at the time of entry into their car loan contracts to -

(a) believe that they already owned the car;

(b) feel information overload;

(c) focus on terms other than the interest rate; and

(d) have been unaware of the flex commission scheme and to have felt positive about the dealership.

14 Professor Slonim also opines that Westpac and Macquarie's computer-based loan origination platforms (Sovereign and MacLease) permitted an inference that the banks wanted dealers to implement features of their car loan process to produce the effect of reducing the consumer's sensitivity to the interest rate. In this context, Professor Slonim suggested that the platforms provided a tool enabling dealers to readily investigate the interest rate that would give them the maximum flex commission; made it possible for dealers to conceal the interest rate on the screen from consumers; prompted the dealers to print car loan material only after the car loan had been approved, thereby encouraging dealers to dump voluminous documents on the consumer at the end of the process, heightening information overload; and included default settings (for example, a default interest rate of 14 per cent), which also had the identified effect.

15 Further Professor Slonim opines that behavioural economic theory explains that it would have been reasonable and logical for the plaintiffs and reasonable persons in their position to have assumed that the dealer was an intermediary, facilitating a loan between the consumer and a financial institution, and that the dealer had no financial incentive in relation to, or role in, choosing the interest rate.

16 Professor Slonim also opined that the car loan process, by providing dealers with the Sovereign/MacLease system:

(a) reduced the cost to dealers of finding the approximate maximum interest rate that would have approximately maximised the flex commission for each car loan;

(b) may have caused dealers to infer that the defendants were signalling to them to make consumers less sensitive or fully desensitised to the interest rate; and

(c) may have signalled to dealers to include higher interest rates on car loans than what they might have otherwise included.

17 The plaintiffs submitted that the following were the facts in issue the probability of existence of which could be rationally affected by this opinion evidence (references are to the Schedule of Issues and Common Questions):

(a) The plaintiffs were in a comparatively weaker position to [the defendants] and, or alternatively, the [dealers]. (Fox: Issues 21(a) and 82(a); Nathan: Issue 18(a).)

(b) Group members were in a comparatively weaker position (Fox: Common Question 10(f); Nathan: Common Question 10(f).) The issue is constrained. In the Fox proceeding, that question is stated in the following terms:

By the operation of Sovereign according to its terms, and leaving aside any fact relevant to the issues that are peculiar to a particular consumer

...

(f) in respect of the resulting car loan, was a consumer comparatively placed in a weaker position than Westpac/St George or, alternatively, the dealer.

The common question in the Nathan proceeding is in the same terms.

(c) The flex commission arrangements involved a technique that should not in good conscience have been used or was manipulative (Fox: Issues 26 and 86; Nathan: Issue 22(b)) in connection with the proceeding between the plaintiffs and the defendants, and the following common question (Fox: Common Question 16(c); Nathan: Common Question 15(c)):

In respect of loans originated through Sovereign, and leaving aside any fact relevant to the issues that are peculiar to a particular consumer;

...

(c) if the answer to CQ 10 is yes, did dealers engage in conduct that involved a technique that:

(i) should not in good conscience have been used; or

(ii) manipulated the consumer.

(d) The dealers set the interest rate on the plaintiffs' loans in circumstances in which the amount of the rate was influenced by the dealer's self-interest (Fox: Issues 16(b) and 77(b); Nathan: Issue 14(b)). The common question in each proceeding (Fox: CQ 9(b); Nathan: CQ 9(b)) is in the same terms.

(e) The plaintiffs were exposed to a car loan system that was unfair because it had the effects, or the risks of the effects, described by Professor Slonim (Fox: Issues 29 and 89; Nathan: Issue 25). This issue is expressed in conclusionary terms to be assessed by the answers to preceding questions, namely, those that I have just identified in these reasons.

(f) In respect of the position of group members, the common question that is posed on the question of unfairness (Fox: CQ 16(d); Nathan: CQ 15(d)) was qualified in the same manner, that is, the issue is confined to loans originating through [Sovereign or MacLease] and leaving aside any fact relevant to the issues that are peculiar to a particular consumer.

18 The plaintiffs submitted that the logical connection between these facts in issue and the opinions of Professor Slonim is that Professor Slonim's expertise provides the Court with an additional methodology and framework, an objective methodology grounded in well-established economic principle, to assist in an important aspect of that fact-finding, namely, the likely effects and consequences of the pleaded loan system on the understanding and behaviour of the plaintiffs.

19 The plaintiffs submitted that Professor Slonim was a leading expert in his field, which the defendants did not challenge. The professor described his field relevantly as follows:[7]

Behavioural economics starts from the premise that people are boundedly rational and cannot assess all relevant matters for every decision. Therefore, they rely on biases and heuristics. It involves thinking about psychology in economic contests and often challenges traditional economic assumptions. Behavioural economists analyse decision-making in an economic context and the discipline employs biases and heuristics.

These biases and heuristics are allocated a convenient descriptor, which I might call economic jargon. Professor Slonim referred to:

(a) Reference Effects including Reference Dependence and Loss Aversion;

(b) Status Quo Bias, the Endowment Effect and Omission-Commission Bias;

(c) Anticipated Regret Aversion and Fear of Missing Out;

(d) Present Bias;

(e) Risk and Ambiguity Aversions;

(f) Information Overload and its Consequential Filtering and Avoidance Biases; and

(g) Confirmation and Availability Biases.

When unpacked into plain English, each of these descriptors is of a category of reactions or responses that may be experienced by a consumer in a vehicle purchase transaction that can be readily comprehended without specialised knowledge of behavioural economics based on training, study or experience. They appear to comprise a structured analysis of the psychology of marketing as it affects a consumer or may be used by a salesperson. This is not to say that there may be some transactions that take place in circumstances that a judge may not properly understand, but a retail car sale with finance is not one of them.

20 The plaintiffs submitted that Professor Slonim had been accepted as an expert in two identified cases. In Australian Competition and Consumer Commission v Trivago NV,[8] the court accepted the relevance of Professor Slonim's opinions about the purchasing decisions of consumers in the context of evaluating, comparing, choosing and purchasing hotel accommodation online. The ACCC alleged that Trivago engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law through a television advertising campaign that directed consumers to visit the Trivago website. Relevantly, Moshinsky J concluded:[9]

Further, I would not characterise the parts of the report that I ruled to be admissible to be merely personal impressionistic views about the Trivago website. Rather, the report sets out Professor Slonim's expert opinions about the purchasing decisions of consumers in the context of evaluating, comparing, choosing and purchasing hotel accommodation online. Evidence of this nature is potentially of assistance in a case such as this in determining whether or not the alleged representations were conveyed by the website and whether or not consumers were likely to be misled. It cannot be assumed that, even if the Judge has used such websites on occasion, he or she is necessarily familiar with the way in which consumers generally, or a substantial portion of consumers, interact with such a website.

21 Australian Competition and Consumer Commission v Google LLC (No 2)[10] was a proceeding in which the ACCC contended that consumers generally were misled by reason of the way Google set up the operating system for mobile devices with Android operating systems. The court considered Professor Slonim's expert evidence to the effect that the appropriate framework for understanding how users approached the process of navigating the relevant screens on their devices involved a cost benefit analysis, subject to certain behavioural biases, and evidence on matters such as the 'low likelihood' of what 'typical users' might read and do. The trial judge stated that he was impressed and assisted by the opinion evidence from both Professor Slonim, called by the ACCC, and another expert called by Google.

22 In each case it is clear from the court's reasons[11] that this evidence was based on the same concepts that are described in Professor Slonim's reports in the present cases. In each of Trivago and Google the issue was whether conduct alleged to be misleading or deceptive arose operated on a particular class of persons at large as opposed to specific individuals in identified transactions. The court was required to assess the effect of the impugned conduct on ordinary or reasonable members of a class of prospective purchasers or users of a mass-marketed product.

23 The plaintiffs submitted that, as in Google and Trivago, Professor Slonim draws upon his expertise to make 'predictions'; meaning, what he considers to be 'the most likely ways' consumers and/or dealerships respond to the circumstances, information and incentives presented to them, based on the principles of traditional behavioural economics he considers to be engaged by the context, information and incentives under consideration. His analysis of these biases and heuristics is drawn from the academic literature and empirical research.

24 The defendants describe Professor Slonim's methodology as making 'predictions' as to the thoughts, feelings and actions of consumers and car dealers, being persons he has never met, in circumstances of which he has no personal knowledge. These predictions are based on assumptions about consumer circumstances that are not the subject of evidence, but rather, drawn from 'academic research'. His assumptions are not to be substantiated by evidence. It is by prediction that the Professor conveys his opinion that a substantial number of consumers and dealers are likely to respond in the way he predicts. However, Professor Slonim is unable to express conclusions about the magnitude of the effects predicted, and his assumptions are repeatedly described as ceteris paribus, a Latin expression meaning 'all else equal'. The defendants noted that Professor Slonim accepted that there may be relevant circumstances that he had not identified that could make consumers and dealers behave differently to his predictions. That consideration, alone or in combination with a lack of scientific robustness around his analysis of biases and heuristics, requires the Court to conclude that his evidence is irrelevant because it could not rationally affect the assessment of the probability of any fact in issue.

25 The defendants submitted that the Court would make findings of fact based on the evidence of the participants in each transaction raised by the pleadings, including by reference to analysis of all relevant documents. The relevant documents include those to which the plaintiffs refer to establish the car loan process and the operation of the loan origination platforms according to their terms. The defendants contended that, due to the differences between the court's approach to fact-finding and the academic approach, Professor Slonim's opinions based on theoretical predictions could not rationally affect either directly or indirectly the assessment that the court reaches about the existence of facts in issue by reference to evidence.

26 The defendants conceded that there was no great controversy about the biases and heuristics that were identified by Professor Slonim. I pause to note that this is hardly a surprising concession. They can readily be understood, and assessed by, the court.

27 Having reviewed Professor Slonim's report in the context of the plaintiffs' submissions, I have not been persuaded that his evidence is relevant in either proceeding.

28 For the reasons stated at the outset, the facts in issue are those identified on the pleadings. I do not propose to revisit the dispute about the content of the pleadings that I considered when settling the list of issues and common questions by Ruling No 1.[12]

29 There is a material distinction between these proceedings and Trivago and Google that, critically, demonstrates that evidence of the sort given by Professor Slonim can be relevant where there cannot be individual transactions before the court for analysis, but rather, it is necessary for the court to form a view about whether consumers, or a sub-group of them, have been, or are likely to have been, misled, either by marketing or by systems processes. As Moshinsky J observed in the citation extracted above,[13] it cannot be assumed that, even if the Judge has used such websites on occasion, he or she is necessarily familiar with the ways in which consumers generally, or a substantial portion of consumers, interact with such a website. Once the question must be lifted beyond the specifics of individual transactions, the relevance of expert opinions from behavioural economics can be seen, as it was by the court in those cases.

30 However, in these proceedings, three plaintiffs, by reference to specific transactions between themselves and the defendants, contend that they were in a comparatively weaker position to the defendants, who engaged in conduct in connection with the provision of a car loan to them that was unfair. Judges are familiar with the process of analysing evidence of sales transactions to identify whether, in the circumstances, a legal norm (unfairness of misleading conduct) has been transgressed.

31 It is important to note that whether the transaction was unfair is not an issue at large. That concept is to be understood in the context of the National Credit and Consumer Protection Act 2009 (Cth) ('NCCPA'). Each of the matters raised by Professor Slonim and described as a bias or a heuristic only required specialist knowledge and expertise to understand the label that has been assigned to it in the context of that discipline, although even that proposition may be open to some doubt. Once the concepts are unpacked, they are matters of common experience, or common knowledge, that are capable of being evaluated and assessed through the process of leading evidence about the circumstances of the transaction, with cross-examination and submissions. A judge is perfectly capable of considering every aspect of the issues raised by Professor Slonim to characterise the transactions between the plaintiffs and the defendants, and thus resolve those particular issues. This process does not require specialised knowledge.

32 The common questions require separate consideration. This proceeding is a group proceeding. In that context, the issues between the parties, in the sense of group members on the one part and the defendants on the other, are not at large. This matter was dealt with in an earlier ruling[14] and, as set out above, the common questions are limited to being assessed in the context of loans originated through Sovereign/MacLease used according to its terms and leaving aside any fact relevant to the issues that are peculiar to a particular group member. To the extent that issues can properly be resolved without any analysis of the circumstances of the dealings between a group member consumer and a dealer, a common question may be answered reducing the scope of issues that may arise during the second stage trials of the claims of group members. Those issues are materially different to the issues considered in Trivago and Google, and those cases must be distinguished. They do not stand as authority for the proposition that the expert opinion under discussion could rationally affect the assessment of the probability of the existence of facts in issue in these proceedings.

33 What should be noted is that the common questions are confined to the operation of the system identified by the plaintiffs as creating circumstances of statutory unfairness or being likely to mislead, divorced from evidence of the circumstances of the transactions between group members and the defendants, which will not be forthcoming at this trial. It remains to be seen whether any, or any meaningful finding can be made in answering these common questions. In the context of a group proceeding, evidence from group members in respect of elements of their cause of action is taken at a later stage. It is not subsumed into predictions based on academic theory in the first trial of the claims of the representative plaintiffs.

34 I do not look at the contested issues in isolation. At the highest, the opinions of Professor Slonim are not complete as is demonstrated by his repeated qualification ceteris paribus. A court examines 'all else', it does not assume it to be 'equal'. There is a fundamental difference between the process of judicial fact-finding based on the receipt and analysis of evidence and the expression of theoretical opinions based on academic research. Usually, opinion evidence is offered to assist the court to understand concepts that cannot be understood without specialist knowledge or expertise, and, as I have noted, that is not this case. There is not a logical connection between the expert evidence being proffered and the facts in issue such that it could be said that accepting the opinion evidence would rationally affect the court's assessment of the probability of the existence of a fact in issue.

35 There is nothing in Professor Slonim's reports that conveys how or why the benefit of his specialist knowledge would rationally affect my assessment. When pressed to explain the reasoning demonstrating the logical connection between the opinion evidence and the facts in issue, the plaintiffs accepted that the Court could resolve the identified issues in this proceeding by conventional judicial fact-finding techniques. The logical connection, they submitted, was that I would draw 'comfort' in finding in favour of the plaintiffs on these issues from the objective assessment by expert opinions based in the established discipline of behavioural economics expressed by an expert in the field.

36 That is not a rational or a relevant path of reasoning. Should I conclude in favour of the plaintiffs based on the evidence adduced about the transactions concerning the individual plaintiffs, it will not provide 'comfort' in the process of judicial fact-finding if conclusions supported by reasoning from the evidence happen to be consistent with the opinions expressed by an academic commentator in the field of behavioural economics. That coincidence is simply irrelevant. Expert opinion is not tendered to provide a judge with comfort. Opinion is irrelevant unless it is based on specialised knowledge and the term 'specialised' identifies knowledge beyond the common experiences, training or knowledge possessed by judges. No rational process of reasoning that could affect the assessment of the probability of the existence of the identified facts in issue has been shown. I do not think that the plaintiffs intended any implication that judicial fact-finding is not objective. That aspect of the submission is misconceived.

37 For these reasons, the reports of Professor Slonim in each proceeding are irrelevant and are not admissible in each proceeding by force of s 56(2) of the Act.

38 Having reached this conclusion, it is unnecessary to undertake the task of assessing whether the evidence is not exempted from exclusion by s 76 by reason of the operation of s 79. It further follows that it is unnecessary to consider the application to exclude the evidence in the exercise of discretion under s 135 of the Act.

39 Dr Cynthia Schneider has a specialised knowledge in linguistics.

40 In her opinion, the loan documentation provided by the defendants to the plaintiffs was overwhelming. It was particularly challenging by reason of the length of the documents, their poor presentation and the complexity of the language used. She assessed that Ms Fox would need 75 minutes, Ms Nastasi 72 minutes, Mr Nathan 55 minutes and Ms Nathan 51 minutes and a reasonable or typical member of the Australian public would need 67 minutes of uninterrupted reading time in ideal conditions to comprehend the loan documentation produced by the Sovereign/MacLease systems.[15] Further, feeling overwhelmed or uneasy by the amount of reading material, reading under time constraints, and reading under pressure to sign documents would have a negative impact on comprehension.

41 On her analysis of the structure and layout of the loan documentation, the complexity of the sentences, the font and the language used, she concludes that less than 40 per cent of reasonable or typical members of the Australian public would be capable of comprehending the loan documentation if provided sufficient time to read it. She conducts a similar analysis leading to a similar conclusion in respect of the documentation applicable in the Nathan proceeding.[16]

42 Dr Schneider then estimates that Ms Fox had less than a 40 per cent chance of comprehending the loan documentation if provided sufficient time to read it, and Ms Nastasi a less than 50 per cent chance.[17] Ms Nathan had a less than 60 per cent chance, while Mr Nathan had a less than 40 per cent chance.[18] Finally, Dr Schneider explains how the loan documentation is not sufficient to put a reasonable or typical member of the Australian public on notice that the contract rate and the term of the car loan had been set by the dealers. In fact, she explains that it would cause readers to do the opposite.

43 The plaintiffs submitted that Dr Schneider's opinions gave objective support to and allowed the Court to more readily determine the following issues:

(a) the loan documentation was not capable of bringing to the attention of the plaintiffs' material matters such as the flex commission arrangements or the interests of dealers in the interest rates (Fox: Issues 13(a) and 73(a); Nathan: Issue 11(a));

(b) the same issue is raised as a common question (Fox: CQ 7(b); Nathan: CQ 7(d));

(c) what a reasonable person in the plaintiffs' position would have understood or assumed at the time he or she entered into the loan as to whether the interest rate and/or alternatively the term of the plaintiffs' loans had been set solely by the defendant and that the dealer was merely a conduit between the plaintiff and the defendant, or that the dealer was disinterested in the interest rate (Fox: Issues 20 and 81; Nathan: Issue 17);

(d) the same issue arises as a common question which is to be answered in circumstances confined to the operation of Sovereign/MacLease according to its terms and leaving aside any fact relevant to the issues that are peculiar to a particular consumer;

(e) the plaintiffs and group members were in a comparatively weaker position to the defendants and, or alternatively, the dealers (Fox: Issues 21(a) and 82(a); Nathan: Issue 18(a));

(f) there is a common question to the same effect constrained in the same manner as discussed in the preceding sub-paragraph (Fox: CQ 10(f); Nathan: CQ 10(f));

(g) did the dealer engage in conduct in connection with the provision of a credit service that was unfair within the meaning of s 180A(1)(b) of the NCCPA because that conduct had the effect, or the risk of the effect, of the plaintiffs being unable to understand the loan documentation (Fox: Issues 29 and 89; Nathan: Issue 25);

(h) finally, the same issue as is described in the immediately preceding sub-paragraph arises as a common question subject to the constraints already described (Fox: CQ 16(d); Nathan: CQ 15(d)).

44 The plaintiffs further submitted they are entitled to test the implicit suggestion raised by Macquarie that the disclosures in its loan documentation were effective.

45 It is important to observe, as the defendants submit, that the loan documentation complied with the provisions of the NCCPA and that no allegation is raised in the pleadings that the loan documentation was incomprehensible. Further, Macquarie submitted that the assumptions Dr Schneider was invited to make were not based on the plaintiffs' evidence. Neither Mr Nathan nor Ms Nathan will state that they read the loan documentation, and it is plainly pointless to enquire as to whether they were capable of understanding something that they did not read.

46 Equally, the conclusions in respect of reasonable or typical members of the Australian public could not be relevant in relation to the common questions given the specific constraints imposed by the formulation of those common questions. The defendants further submitted that reviewing a document to identify whether it is comprehensible by reference to structure, form, language used and the other matters taken into account by the expert is not a task in which Dr Schneider has any advantage over the court, such that it cannot be said that her opinions would rationally affect the assessment that the Court will make on reviewing the documents and the evidence of the parties involved in the transaction for itself.

47 In seeking to persuade me that Dr Schneider's opinion was relevant, the plaintiffs could not avoid stepping beyond an analysis based in the claims of the individual plaintiffs and the documentation that they produce. To the extent that such an exercise is undertaken, it is clearly irrelevant to any issue raised in the proceedings. For example, in seeking to utilise Dr Schneider's opinion about the time that it would take readers of different educational backgrounds to understand the documentation, Dr Schneider proceeds on assumptions that will never be established by evidence. Moreover, whether a reasonable person would have understood the loan documentation is plainly a matter for assessment by the Court and not one to which expert evidence can properly be directed.

48 I do not propose to set out again the whole of my reasoning in respect of the behavioural economics expert which applies mutatis mutandis to Dr Schneider's evidence. The plaintiffs conceded that with the evidence of the plaintiffs being taken in the proceedings, the Court will be able to assess whether, in fact, they comprehended the loan documentation. The opinion of a linguistics expert cannot rationally affect that assessment. Courts commonly interpret written documents, both in the context of what was intended to be conveyed by the author and in the context of what might reasonably be understood by the reader. It is only in limited, and unusual, circumstances that the opinion of an expert in linguistics might assist in that process. This is not one of those cases.

49 Further, by requiring Dr Schneider to consider the whole of the loan documentation and the 'car loan process', which is identified for the common question as the operation of the loan origination platform according to its terms, Dr Schneider's opinions do not rationally assist in answering the issue of whether the transaction represented by such documentation was unfair in the context required by the law. In this sense, these opinions are misdirected and incapable of rationally affecting my assessment of the probability of the existence of the facts in issue material to the identified issues.

50 As in the case of the behavioural economist's reports, when pressed to explain the logical connection between Dr Schneider's opinions and the facts in issue, the plaintiffs submitted that I might more comfortably accept findings that I would otherwise make. As I have already stated, feeling comfortable with findings in favour of the plaintiffs because they correspond to Dr Schneider's assessment is not rational in the context of judicial fact-finding. The plaintiffs again submitted that Dr Schneider provided an objective methodology, although the implication of that submission for the methodology of judicial fact-finding was probably unintended and is misconceived. The plaintiffs submitted that this methodology identified the risks inherent where a person's decision-making in relation to a transaction is compromised by the complexity and volume of the documentation as a feature of unfairness. Whether those risks were present or operative in any given transaction or were a necessary part of an identified system are matters that are well within the bounds of the ordinary course of judicial fact-finding.

51 These submissions are entirely unpersuasive. In every respect, the issues can be determined by the Court objectively based on evidence, cross-examination and submissions, and that opinions based on specialised knowledge of linguistics, to the extent that it has genuinely been engaged, which is doubtful, has no logical connection with that process.

52 Dr Schneider's evidence is irrelevant and is inadmissible by the operation of s 56 of the Act.

53 That conclusion renders it unnecessary to consider whether this evidence would otherwise be excluded by the operation of s 76 because s 79 has not been properly engaged, or whether the discretion under s 135 of the Act should be exercised.

[1] DPP v Wise [2016] VSCA 173; DPP v Paulino [2017] VSCA 38; (2017) 54 VR 109, [64]-[67]; Danny Volpe v The Queen [2020] VSCA 268, [37].

[2] Washer v Western Australia (2007) 234 CLR 492 at 498, [5].

[3] Smith v The Queen [2001] HCA 50; (2001) 206 CLR 650, 653 [6]; Bailey v The Queen (2016) 260 A Crime R 1 [130]-[131]; Evans v The Queen [2007] HCA 59; (2007) 235 CLR 521, 568 [177].

[4] Harrington-Smith v Western Australia (No 2) [2003] FCA 893; (2003) 130 FCR 424, [11].

[5] Nathan v Macquarie Leasing; Fox v Westpac (No 1) [2024] VSC 625.

[6] [2011] HCA 21; (2011) 243 CLR 588, [30]-[32].

[7] Behavioural Economist Joint Report filed 29 July 2024, 17 (EXP.JNT.001.0001).

[8] [2020] FCA 16; (2020) 142 ACSR 338.

[10] [2021] FCA 367; (2021) 391 ALR 346.

[12] Nathan v Macquarie Leasing; Fox v Westpac (No 1) [2024] VSC 625.

[15] Expert Report of Cindy Schneider filed 30 June 2023, [7.2.5] (EXP.AFO.003.0001).