Suttram Pty Limited v Michelin Australia Pty Limited

CASES CITED: Australian Securities and Investments Commission v Rich [2005] NSWCA 152 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705

PARTIES: Suttram Pty Limited (Plaintiff) Michelin Australia Pty Limited (2nd defendant)

COUNSEL: J L Sharpe (Plaintiff) A R Vincent (Second defendant)

SOLICITORS: Fraser Clancy Lawyers (Plaintiff) Deacons (Second defendant)

1. This is a judgment on the question whether evidence tendered by one party falls within an exception to the opinion rule contained in the Evidence Act 1995.

2. This case concerns an accident involving a truck on a highway. The plaintiff, which is the owner of the truck, claims that the accident was the result of a defective tyre manufactured by the second defendant. The second defendant denies that claim. The second defendant is Michelin Australia Pty Ltd.

3. Counsel for Michelin has tendered three reports by a man named Henry Herzog together with correspondence with Mr Herzog. The three reports purport to contain Mr Herzog's opinions on questions said by Michelin to be relevant to the outcome of these proceedings. Because those reports contain opinions they are not admissible because of s 76 of the Evidence Act which provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.

4. However, Mr Vincent, who is counsel for Michelin, argues that the reports fall within an exception to the opinion rule, namely s 79 of the Evidence Act. Section 79 provides as follows: "If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge".
5. Mr Sharpe who appears for the plaintiff, Suttram Pty Ltd, argues that the reports do not fall within the s 79 exception and are therefore inadmissible because of the opinion rule. I heard evidence on the admissibility of the reports.

I heard evidence on the voir dire from Mr Herzog and I admitted into evidence on the voir dire the three reports together with their supporting documents.

Mr Sharpe raised an objection in addition to s 79 namely under s 135 of the Evidence Act arguing that the probative value of what was tendered would be substantially outweighed by the danger that the evidence might be unfairly prejudicial or misleading or confusing or result in undue waste of time. I will deal first with the argument concerning s 79.

Although he descended into a good amount of detail in his submissions, Mr Sharpe's arguments in my opinion can be expressed under four headings. The first is that there was no area of specialised knowledge which the witness Mr Herzog had. The second is that he lacked appropriate experience in any area of specialised knowledge. The third is that Mr Herzog failed to articulate reasons for the opinions expressed in the reports. The fourth is that in the reports Mr Herzog became an advocate for his client and attacked other experts, those experts being ones which had been called by Mr Sharpe for his client.

I deal first with the question of whether Mr Herzog has specialised knowledge. Mr Sharpe argues that Mr Herzog's specialised knowledge amounts to no more than a basic physics degree. He points out that Mr Herzog makes no reference to any literature or writings to support some area of specialised knowledge. He argues that Mr Herzog is no more than an expert a large and that there is nothing left so far as an area of specialised knowledge is concerned after one excludes areas which Mr Herzog admits that he is not specialised in. Those areas include car accidents, driving trucks or driving cars.

As I said, Mr Herzog was called to give evidence on the voir dire. He has an undergraduate degree in Engineering, his area of engineering is what he described as materials engineering. He undertook an honours thesis in an area not directly related to tyres or tyre failure. Describing what he studied in his materials engineering degree he said, at T369: "We studied from a fundamental level the behaviour of materials. That involved metals, plastics, ceramics. Rubbers come into the heading of polymers or plastics because they are manufactured from similar sort of materials, so we studied rubbers. We studied the properties of rubbers, we studied the structure of the molecules that go into the manufacture of rubbers, we studied the manufacturing process of rubber, we studied the behaviour, the mechanical and physical properties of rubber. Mechanical properties relate more to the strength, elasticity and so on. So we studied different types of rubbers and that was part and parcel of the undergraduate degree I did at Monash University". Describing the aspect of studying of materials he said, at T370: "We learned our application in engineering. So you just don't learn about rubber, how it behaves. We learn about rubber, how it's used in different applications in industry as well because, after all, it was an engineering degree that we did". In cross-examination he said at T386: "I am a materials engineer and I understand how materials behave, and I apply that knowledge to different materials used in different engineering applications including tyres, and I have looked at lots of tyres, I understand how they fail, I understand. I have been engaged by trucking companies when they have either had tyre failures or a tyre comes in and there is a dome in it, and they say, 'Speak to the driver about what happened', or the tyre fails and the truck goes off the road, so I speak to the driver to find out what happened. So I look at, I do my investigations, I want to find out what caused something to fail, that is my only aim, nothing else, and I use my knowledge and my understanding of materials".

In addition, Mr Herzog gave evidence as to time which he spent working with tyres. At T373 he said, about his time employed with a company in Victoria, in the late 70s and early 80s that: "We had a close relationship with Dunlop and I spent quite a bit of time at Dunlop looking at the manufacturing process, learning from their people about tyre failure examinations and set up a relationship with them. So I learnt a lot from that and then I was able to do my own tyre failures as well, tyre failure examinations and investigations as well. Dunlop them merged with Olympic and became South Pacific Tyres and I continued my relationship with them looking at tyre failures. They would recommend me to people who inquired with them to examine tyre failures if they didn't want to get involved because another manufacture". 11. Over his career which included being employed with a research company in Victoria and for the last 20 or so years being self employed as a consultant, Mr Herzog estimated that he had looked at at least 200 tyres. I accept that evidence, although challenged by Mr Sharpe by reference to the breakdown in estimates, on a yearly basis, which Mr Herzog gave. I accept that Mr Herzog was, in the breakdown on a yearly basis, attempting to give a general estimate rather than an accurate account of exactly how many tyres he had examined. Even if he had examined half the number of tyres than 200 I would regard that as a significant body of material.

12. Asked about his training and study as an engineer in cross-examination at T392, Mr Herzog said: "I have applied that knowledge and training to examine tyres which have failed or which have not failed also but have come off production lines and there could be a defect in them. I have also examined tyres which have been going into recapping, where new treads are applied, and I worked with one company, for example I spent a day with them looking at tyres to see how we could pick any defects in the tyre. So it would be a new tread wouldn't be put onto it because there were lots of problems where tyres which had already had a defect as a result of long service life, being subjected to fairly severe conditions, maybe a manufacturing defect, which were being recapped and then they were fitted to cars, and the tyre would fall apart. So that was something that must be avoided. And I did that work for an insurance work, for example".
13. In my opinion, Mr Herzog has specialised knowledge in an area articulated by Mr Vincent as tyres and tyre failure.

This brings me to Mr Sharpe's second point, that any such specialised knowledge does not have an appropriate nexus with any training, study or experience. Mr Sharpe argued that Mr Herzog's experience was more to do generally with rubber than specifically with tyres, at least his study was. He also argued that his experience was focussed on defective tyres rather than the manufacturing process and he argued that he had only examined a couple of hundred tyres at the most.

In my opinion Mr Herzog's specialised knowledge, which I have found that he has, is based upon primarily his experience, but also to some extent on training and study. His experience working on problems presented by the tyre industry over the years is, in my opinion, sufficient to provide him with the appropriate specialised knowledge. His experience does appear to have been mainly focussed upon defects in tyres but I note from his answer at T373 to a question put to him by Mr Vincent, that at Dunlop he was "looking at the manufacturing process". That answer was given by reference to tyre failure examinations but it does seem that he has some experience in the manufacturing process, although it may be limited. To the extent that Mr Sharpe argues that his experience is in defective tyres rather than the manufacturing of tyres, that may be an argument which he would make in submissions in comparing the weight which I should put on Mr Herzog's evidence with the weight which I should put on witnesses called by him, but in my opinion it does not result in Mr Herzog not having the appropriate experience to express an opinion on the questions in this case.

His experience, I have said already, if it was between 100 and 200 tyres, was, in my opinion, significant enough to provide the basis for specialised knowledge. That experience to which I have referred comes from some thirty years working as a material engineer both in employment in a research company and self-employed as a consultant. Although it is clear from his curriculum vitae that he has examined a wide range of problems other than tyre problems, it does not follow that his experience with tyres does not provide him with the requisite specialised knowledge. In my opinion, the experience of which he has given evidence - working with tyres associated with industry - and his occupation over the last thirty years provide a sufficient basis for his specialised knowledge. That experience is supplemented, in my opinion, by his university degree. I have already made reference to the evidence which he gave concerning what he studied at university.

In my opinion, what he studied in his materials engineering degree contributes to the specialised knowledge which he has. To some extent he has some training in that he has given evidence about attending tyre manufacturers and observing their processes, but that seems to be a relatively minor contributor to his specialised knowledge.

Mr Sharpe's third objection is that Mr Herzog fails to articulate his reasons for expressing the opinions which he purports to express in his reports. Mr Sharpe argues that Mr Herzog makes no reference to text books, authorities or the views of other experts in the field, apart from commenting on, or as he would say, attacking the views of the other experts in this case. Mr Sharpe referred me to the Court of Appeal's decision Australian Securities and Investments Commission v Rich [2005] NSWCA 152. The judgment in that case was delivered by Spigelman CJ with whom Giles and Ipp JJA agreed. The Chief Justice referred to the judgment in the Court of Appeal of Heydon JA, as his Honour then was, in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705. The Chief Justice said that as insofar as Makita dealt with principles to do with the opinion rule under the Evidence Act, the critical paragraph in Heydon JA's decision was [85]. The Chief Justice set out that paragraph in his own judgment, and Mr Sharpe argues this particular point by reference to part of that passage in Makita. The part relied upon or at least referred to in argument by Mr Sharpe is that "the expert's evidence must explain how the field of 'specialised knowledge' in which the witness is expert by reason of 'training, study or experience', and on which the opinion is 'wholly or substantially based', applies to the facts assumed or observed so as to produce the opinion propounded".

Mr Sharpe argues that on many and perhaps most or all occasions, Mr Herzog simply asserts his opinion on various topics without articulating how the field of specialised knowledge applies to the facts he was asked to assume or which he observed so as to produce the opinion. In argument, he took me to a number of examples of such passages in Mr Herzog's report.

Although there might be some force in that argument as a general submission about the weight to be put upon Mr Herzog's evidence, it is not an argument which, in my opinion, results in the reports not falling with in the exception to the opinion rule. Mr Herzog has, in the reports and in his evidence before me, explained his area of specialised knowledge and how it is based upon his training, study and experience. He is clearly very experienced in observing the behaviour of tyres and he is clearly qualified academically in an area relating to materials which include the main component of a tyre, namely rubber.

In my opinion, all of the opinions expressed by Mr Herzog in his reports are clearly founded on that experience and study with particular reference to his experience in observing the behaviour of a large number of tyres over many years. As Mr Vincent argues, it is not necessary for him to qualify every opinion he expresses by reference to the specialised knowledge based upon his training, study or experience. His evidence of his experience and study which, as I say, has provided him with specialised knowledge, provides, in my opinion, a sufficient articulation of how that specialised knowledge applies to the facts assumed or observed by him so as to produce the opinions which he has expressed.

Mr Sharpe's fourth objection concerns the form of the reports which he says amount to an attack on the other witnesses, or amount to no more than an attack on the other witnesses, and demonstrate that Mr Herzog has become an advocate rather than an expert. To my mind, those arguments do not go to the question of whether the reports fall within the s 79 exception to the opinion rule. Without commenting on those arguments at all, they may well be arguments which I will hear again when asked to make findings regarding the weight to be put on Mr Herzog's evidence.

Finally, Mr Sharpe's argument under s 135 of the Evidence Act does not, in my opinion, point to any basis upon which Mr Herzog's reports might be unfairly prejudicial to his client or cause or result in undue waste of time. My understanding is that he might argue that they are misleading or confusing in that they lack, in his submission, appropriate articulation of the reasoning process. Even accepting that argument in full, any such misleading or confusing aspect of the reports would not, in my opinion, be such as to result in the probative value of the reports being substantially outweighed by any such danger.

Accordingly, in my opinion, for the reasons which I have given, the opinion rule does not apply to opinions expressed by Mr Herzog in his reports and I decline to refuse to admit the evidence under s 135 of the Evidence Act. oOo

27/10/2008 - Typographical error - Paragraph(s) 0 29/10/2008 - Typographical error - Paragraph(s) Heading

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