HIS HONOUR: The plaintiff (WGC) contracted with the first defendant (Bluescope) to design and construct Bluescope's Colorbond Centre (as I understand it, a manufacturing facility for Colorbond products) at Erskine Park. The work involved the design and construction of a number of cranes to be used to facilitate the movement of materials around the facility.
WGC claims that it has completed its obligations under the contract and that it is entitled to the return of the security of $1.5 million it has given. It commenced these proceedings to enforce that claimed entitlement.
Bluescope says the works were defective. In particular, Bluescope says, there were defects in the design and construction of the cranes.
The work was completed over 10 years ago (practical completion apparently having been certified on 27 February 2007). Since then, there have been disputes over, among other things, the structural adequacy of the cranes. Indeed, in 2012, WGC commenced proceedings against both Costin Roe Consulting and DME Kermac Welding and Engineering, who were respectively the designer and the builder of the cranes, in relation to alleged defects. Those proceedings were resolved at mediation.
Over the years, WGC has procured detailed investigations of the complaints as to the structural adequacy of the design of the cranes. In particular, it has procured a number of reports from SCP Consulting Pty Limited. Those reports have been made available to Bluescope. They form the basis of the detailed allegations of structural defects set out in Bluescope's Scott Schedule, the amended version of which was filed on 17 October 2016.
It is also apparent WGC has commissioned investigations by another independent expert, Dr Andrew Baigent. Dr Baigent's report (if any) has not been made available to Bluescope.
I am concerned today with Bluescope's notice of motion filed on 9 May 2017 seeking, pursuant to UCPR r 31.37, the appointment of a single expert in relation to defects issues and the appointment of a single expert in relation to cost of rectification. In each case, of course, the issues are qualified as being those alleged in the amended Scott Schedule.
Bluescope says that in the particular circumstances of this case, bearing in mind the detailed investigations carried out by SCP Consulting and the numerous and detailed reports produced by SCP Consulting, it is appropriate for the court to make some attempt to save costs and time by ordering that a single expert be appointed. Bluescope notes, in addition, that WGC has had the advantage of Dr Baigent's views as well as the views of SCP Consulting.
WGC opposes the appointment of single experts. It suggests there will be a real risk of "trial by single expert" rather than trial by a judge. It submits there would really be no saving of time or costs, because, at least from its perspective, it would consider it necessary to engage its own expert to consider and assess whatever it is any single expert produces.
In the ordinary way, I would be the first to agree with WGC's position that where there are detailed allegations of disputes and those detailed allegations are denied, the appointment of a single expert is unlikely to be productive of any real saving in time or costs. It may readily be conceded that the usual case where a single expert ought be appointed is the one where the matters calling for expert opinion are either essentially uncontentious or relatively uncomplicated, or (in some cases at least) relate only to the assessment of damages. Of course, the general discretion given by r 31.37 is not to be read as being, in some way, constrained by those typical situations where it is engaged. Nor can it be suggested that the general discretion conveyed by the rule can only be exercised where those considerations are engaged.
The exercise of the discretion conferred by r 31.37 is to be undertaken bearing in mind the overriding purpose set out in s 56 of the Civil Procedure Act 2005 (NSW). That is to say, the court is to consider whether exercising the discretion in the manner sought in this case by Bluescope is likely to facilitate the just, quick and cheap identification and resolution of the real issues in dispute.
Again, in the ordinary case, I would be the first to agree with WGC's submission that contentious structural questions are not usually suited to the single expert procedure. I say that because, as Mr Hicks of counsel (who appears for WGC) admitted, there may very well be differences of opinion and methodology between experts that the court would be required to consider following the usual process of conclave and joint report.
However, in my view, this is not the usual case. WGC has had every opportunity, over the past 10 years, of investigating the alleged structural defects. It has procured numerous reports, which have been made available to Bluescope and which form the basis of the Scott Schedule. It has, in addition, procured further investigations, as I have said, by Dr Baigent. It could hardly be said, in the circumstances of this case, that WGC does not know what are the parameters of the dispute as to defects.
One of the concerns to which Mr Hicks pointed to in the course of his submissions is that there are two separate although related issues. The first is whether there are defects and, to the extent that there are, how they might be rectified.
The other is whether rectification of those defects is reasonable or necessary, in circumstances where (it appears) the defects may not have had any significant adverse impact on the operation of the Colorbond facility. I say "it appears" because that seems to be an assumption or assertion made by WGC rather than a conceded fact. It may be assumed confidently that there will be evidence dealing with this issue.
However, as Mr Breakspear of counsel (for Bluescope) submits, the question whether the rectification work (if any) is reasonable and necessary is really a matter for analysis by the court guided by the authorities, including Bellgrove v Eldridge (1954) 90 CLR 613, Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 334, and considering the decisions of intermediate appellate courts and trial judges that analyse those decisions.
To put it another way, the extent to which any rectification work is, in the requisite sense, reasonable and necessary, is ultimately a matter for analysis on the basis of the evidence as a whole rather than for the expert to opine upon. Of course, if the expert is able to say that in his view a particular defect has no operational impact on whatever it is that Bluescope does with a particular crane, no doubt he or she can show that would be a matter to be considered by the court.
It must also be remembered that if a single expert is appointed and is instructed and prepares a report, that is not the end of the matter. The parties may seek clarification of the report (r 31.41), and they may cross-examine the expert (r 31.43).
Finally, in this context, the court has a discretion to permit a party to rely on other expert evidence (r 31.44). As Brereton J indicated in In the matter of Optimisation Australia Pty Limited [2015] NSWSC 2072 at [6], "the court should be relatively ready to grant leave to adduce evidence from a separate expert lest trial by single expert otherwise becomes substituted for trial by judge." His Honour added that the court "should be disposed to grant such leave" in circumstances where some arguable basis is shown for challenging the single expert report.
None of the steps contemplated by rr 31.41, 31.43 and 31.44 will be foreclosed if I make the orders sought. On the contrary, those procedural steps remain available in the event that, despite the significant expert investigation that has been undertaken to date, WGC were to have any real concern with the content of any single expert report that might be produced. Of course, exactly the same would apply if Bluescope were to have any real concern.
Further, there is nothing in subdivision 4 of pt 31 of the UCPR to prevent a party from engaging its own expert to advise it upon and to direct cross-examination of the report of a single expert. Of course, that would be done at the party's own risk as to costs; but the same may be said as to every step taken in preparation for litigation.
In the singular circumstances of this case, I think there is at least a reasonable prospect, and perhaps better than that, of achieving a significant saving in time or cost by the appointment of a single expert. I say that essentially because the long history of investigation suggests that the suggested defects have been clearly identified and, likewise, the proposed method of rectification.
I do not know why it is that, after so many extensive investigations, WGC takes the view that it does. However, it seems to me the appointment of a single expert is likely to cause WGC to reconsider its position in the event that the single expert expresses views substantially coincident with those of SCP Consulting. Of course, if the single expert suggests substantially different views, then one might think that WGC would be quite content to rely on that report.
I take into account also that, as I understand it and infer from such evidence as there is on the topic, WGC has been able to check the views of SCP through Dr Baigent. Dr Baigent's expertise and abilities are well-known.
Bluescope has gone so far as to suggest that it would accept Dr Baigent as the single expert. There is, apparently, some dispute as to whether Dr Baigent would be prepared to accept that appointment. All I can say is, that if he were prepared to accept the appointment, it would seem to me, from the little I know of the issues, that he would be eminently qualified to investigate and report. Further, in circumstances where Bluescope is prepared to accept his appointment, there can be even less reason than usual for suggesting that his independence might be in any way compromised by the fact of his previous appointment on the instructions of WGC.
That leaves a question, which arose somewhat towards the end of the debate, as to whether any appointment should be made now or later. The suggested reason for deferring any appointment was that WGC would like to see Bluescope's lay evidence, in particular as to the impact of any defects on the operation of the crane. However, for the reasons I have given, to the extent that it is a matter for an expert, the expert can comment regardless of what Bluescope's lay witnesses say; and to the extent that it is a question for the court, there is no reason for deferring the appointment.
The debate really focussed on the appointment of a single expert in relation to the structural defects. However, as I have said, the notice of motion sought also the appointment of a single expert in relation to the cost of rectification.
Presumably what is contemplated is that the single expert appointed in relation to costs (a quantity surveyor or some such other qualified person) would give a costing on any scope of rectification prepared by the single expert. That does seem to me to be an appropriate course to undertake.
For those reasons, I make orders in accordance with prayer 1 of the notice of motion filed on 9 May 2017. I am not in a position to direct the appointment of any particular expert, either as to the defects or as to cost of rectification, and it seems to me that the proper course is to stand the matter over for a period of time and to direct the parties to confer with the view to identifying appropriate experts (either one expert for each discipline or a panel of experts).
[4]
Amendments
05 June 2017 - corrected decision date in coversheet
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Decision last updated: 05 June 2017