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[1991] FCA 430
Federal Court of Australia
1991-09-12
Pincus J, Mr J, Glass J
Original judgment source is linked above.
Evidence - expert's statements - swearing to the ultimate issue - whether evidence as to propriety or reasonableness of action is admissible.
with Mr P.D. McMurdo
Solicitors for the applicant: Morris Fletcher and Cross
Counsel for the respondent: Mr R.N. Chesterman QC
with Mr J.C. Sheahan
Solicitors for the respondent: Feez Ruthning
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
This is a point which I reserved yesterday, raised by Mr Chesterman QC, senior counsel for the respondent bank. The suit is one in which relief is claimed against the bank on the basis of allegations of misleading conduct concerning a loan taken out in Swiss francs by the applicant.
2. Objection has been taken by Mr Chesterman to certain passages in the statement of an expert, Mr Donnelly. He is to be called on behalf of the applicant to give his opinion on what is said to have been done by the respondent's officer in advising the applicant. In accordance with the usual practice, his evidence has been reduced to writing and presented to the respondent's solicitors in advance of the trial. There is a number of passages in Mr Donnelly's statement to which objection is taken, but they seem to me to all turn on the one point: may Mr Donnelly give evidence as to what it would have been proper or reasonable for an investment adviser to have told the applicant, assuming the circumstances to have been as the applicant says? It is perhaps enough to give one example.
3. The evidence in the case is that, at the time of the event the subject of the applicant's allegations, she had about A$900,000 on term deposit with the bank. Mr Donnelly says:
"In my view a reasonably prudent adviser would have suggested that
because of the risk involved in currency loans, for the reasons outlined
above, the client should make use of those funds as an alternative to
borrowing overseas".
4. One question which may be thought to arise, apart from the point taken by Mr Chesterman, is whether it is relevant to know what a prudent investment adviser would have done when the advice being given was that of a bank official to a customer. The respondent's counsel say that to allow Mr Donnelly's evidence in would be to breach the rule that "(a)n expert cannot be permitted to express an opinion upon an ultimate issue, if its determination depends upon the application of some legal standard" - Glass and McHugh, Seminars on Evidence, pp 153, 154. Mr Justice Glass also expressed the view, in Volume 3 of the Australian Bar Review at p 48, that it is:
"not permissible to ask an engineer whether a particular system of work
adopted was in accordance with safe practice or a doctor whether an
operation had been carried out in a proper manner. Questions as to the
safety of a practice and the propriety of an operative technique can
only be answered by the application of a standard which is irrelevant in
point of law ...".
5. Mr Chesterman also referred me to Midland Bank Trust Co. Ltd. v Hett, Stubbs and Kemp (1979) Ch 384 at 402 and to the Queensland case of R. v Tonkin and Montgomery (1975) Qd R 1 at 42, 43. I have not found those passages to be of much assistance in solving the particular problem before me. I should say, however, that in the Midland Bank case, a distinction is drawn, as I understand the reasons, between giving evidence of "some accepted standard of conduct which is ... sanctioned by common usage" and an expression of opinion as to what the expert thinks he would have done if he had been placed in the position of the defendants. I do not understand Mr Donnelly's evidence to fall precisely into the latter category; it is closer to the former.
6. A most useful and recent discussion of this subject is to be found in Volume 2 of the A.L.R.C. Report on Evidence (1985), paragraph 105 under the heading "The Ultimate Issue". After referring to various opinions on the question, the author remarks:
"Uncertainty is created by the gap between legal theory and practice.
Many examples exist of evidence on ultimate issues being admitted. ...
Evidence has also been accepted on the issue of the materiality of the
representation in an application for insurance, the issue in a marine
case of proper seamanship or the issue of negligence in malpractice
actions against professional men ... The effect of the proscription upon
evidence on questions of mixed law and fact, however, is no more than to
alter the form of the question asked of the expert by counsel so as to
ensure that the expert is confining himself to non-legal language that
will nevertheless establish the same point" (178-179).
7. I refer also to what seems to me to be a useful discussion in Mr A. Keane's book, The Modern Law of Evidence, at pp 385 and 386.
8. The position in some other countries, namely the United States and Canada, is discussed in Evidence: Principles and Problems by R.J. Delisle, 2nd ed., 1989 and I refer particularly to the author's remarks at pp 463 and 464. It is, perhaps, worth quoting part of it. At p 463, the author says:
"A broader formulation of the ultimate issue rule foreclosing other
opinion testimony, over and above opinions respecting guilt or
innocence, not only lacks justification but, in theory, is unworkable.
The doctrines of relevance and materiality dictate that all evidence
given at a trial must be with respect to matters that are necessary to
the prosecution or defence of the matter at issue. All testimony is
then with respect to an ultimate issue in the sense that failure of
proof with respect to anything necessary to a successful prosecution
must yield an acquittal. In theory then, no expert, bound by the rules
of relevancy and materiality, would be permitted to testify to anything
under a broad formulation of the ultimate issue rule. In practice, of
course, expert opinion testimony is received and the supposed ultimate
issue rule which developed in the nineteenth century is seen, to be
kind, as amorphous, and is applied or withheld with a great deal of
discretion".
"More recent decisions have expressly recognized the weaknesses of the
ultimate issue rule ...
The American courts as well seem to recognize the futility of a broad
ultimate issue rule" (463-464).
9. Apart from the effect of the authorities, which seems to me to be in a state of flux, I have had regard to the submissions made in Volume 1 of the A.L.R.C. Report (above), paragraph 359.
10. It can be seen that difficulties might arise in strict application of the rule where the question is one of negligence in some activity of which a judge or jury might have no knowledge at all - e.g. use of the more exotic kinds of medical equipment, computer programming or genetic engineering. In such cases, are expert witnesses to be prevented from criticising the acts complained of by describing them as mistaken or ill-judged or simply careless? The objection to the use of these expressions may be that they are too close to the notion of negligence - the ultimate issue. Yet it would seem rather absurd if the rule is simply one against use of such language, rather than expressions such as "contrary to good practice". That expression itself may be misleading, because the expert's judgment as to whether what was done was properly done may not be based, in truth, upon what is ordinarily done; the acts criticised may have been an attempt to do something quite unusual or experimental.
11. Whether or not, where negligence is in issue, there is a ban upon use of the word "negligence" itself and its synonyms in the framing and answering of questions of those called to give their opinion on what was done, I cannot accept that there is any longer an established practice preventing a suitably qualified expert from saying that what is complained of was not in accordance with good practice, was excessively risky, poorly conceived or other such criticisms. That is so, in my view, even if acceptance of evidence of that kind might lead fairly directly to a conclusion that what was done was negligent. Similarly, where the only issue in a contract case is: contract or no? and that depends upon whether a signature is a forgery, surely an expert can say whether he thinks the signature is or is not a forgery. He would, of course, have to back up his opinion by setting out the facts which lead to the conclusion. There now seems to be an established trade or business of advising on investments of various kinds and, assuming it to be relevant to know what an adviser might reasonably be expected to have done in the circumstances of this case, I think Mr Donnelly may approach that directly, as he has done. I say nothing, of course, as to the weight such evidence might have.
# Re Johanna Thannhauser
Westpac Banking Corporation \[1991\] FCA 430;
(1991) 104 ALR 485
(1991) 31 FCR 572