TEN RULES FOR EXPERT EVIDENCE

1. TEN RULES FOR EXPERT EVIDENCE His Honour David Kent QC JUDGE OF THE District court of Queensland

2. Section 78 of the Evidence Act 1995 (Cth) S 78  Exception lay opinions The opinion rule does not apply to evidence of an opinion expressed by a person if: (a)  the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and (b)  evidence of the opinion is necessary to obtain an adequate account or understanding of the person’s perception of the matter or event.

3. Section 79 of the Evidence Act 1995 (Cth) S 79 Exception: opinions based on specialised knowledge (1) 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. (2) To avoid doubt, and without limiting subsection (1): (a) a reference in that subsection to specialised knowledge includes a reference to specialised knowledge of child development and child behaviour (including specialised knowledge of the impact of sexual abuse on children and their development and behaviour during and following the abuse); and (b) a reference in that subsection to an opinion of a person includes, if the person has specialised knowledge of the kind referred to in paragraph (a), a reference to an opinion relating to either or both of the following: (i) the development and behaviour of children generally; (ii) the development and behaviour of children who have been victims of sexual offences, or offences similar to sexual offences.

4. Clark v Ryan (1960) 103 CLR 486) p. 491 ‘…the kind driven by the defendant Clark do in practice behave, perhaps a witness or witnesses experienced in their actual use might have given admissible evidence, not of opinion, but of the fact. But Mr. Foster Joy did not possess that experience. If it had been desired to give technical evidence of the physics involved and of any relevant opinions deduced therefrom, possibly that might have been done by a qualified witness although one may doubt how intelligible to the jury the evidence would have been and what useful purpose it would have served. But it certainly does not appear that Mr. Foster Joy was qualified to give such testimony and in fact he did not essay to do so. What in truth occurred was to use the witness to argue the plaintiff's case and present it more vividly and cogently before the jury.’

5. Clark v Ryan (1960) 103 CLR 486) p. 491 ‘(cont) The rule of evidence relating to the admissibility of expert testimony as it affects the case cannot be put better than it was by J. W. Smith in the notes to Carter v. Boehm, 1 Smith L.C., 7th ed. (1876) p. 577. "On the one hand" that author wrote, "it appears to be admitted that the opinion of witnesses possessing peculiar skill is admissible whenever the subject-matter of inquiry is such that inexperienced persons are unlikely to prove capable of forming a correct judgment upon it without such assistance, in other words, when it so far partakes of the nature of a science as to require a course of previous habit, or study, in order to the attainment of a knowledge of it." Then after the citation of authority the author proceeds: "While on the other hand, it does not seem to be contended that the opinions of witnesses can be received when the inquiry is into a subject-matter the nature of which is not such as to require any peculiar habits or study in order to qualify a man to understand it." Adopted by Harding A.C.J. in Reg. v. Camm.’

6. Clark v Ryan (1960) 103 CLR 486) p. 491 ‘(cont) In R. v. Parker, one of the cases establishing the evidentiary use of finger prints to prove identity, Cussen J. in that connexion said that expert witnesses may give in evidence statements based on their own experience or study but that they cannot be permitted to attempt to point out to the jury matters which the jury could determine for themselves or to formulate their empirical knowledge as a universal law.’

7. Dasreef Pty Ltd v Hawchar(2011) 243 CLR 588 ‘[90] Function of the proof of assumption rule. The function of the proof of assumption rule is to highlight the irrelevance of expert opinion evidence resting on assumptions not backed by primary evidence. It is irrelevant because it stands in a void, unconnected with the issues thrown up by the evidence and the reasoning processes which the trier of fact may employ to resolve them. If the expert’s conclusion does not have some rational relationship with the facts proved, it is irrelevant. That is because in not tending to establish the conclusion asserted, it lacks probative capacity. Opinion evidence is a bridge between data in the form of primary evidence and a conclusion which cannot be reached without the application of expertise. The bridge cannot stand if the primary evidence end of it does not exist. The expert opinion is then only a misleading jumble, uselessly cluttering up the evidentiary scene.’

8. Makita (Australia) Pty Ltd v Sprowles(2001) 52 NSWLR 705, [85] ‘[85] In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of "specialised knowledge"; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be "wholly or substantially based on the witness's expert knowledge"; so far as the opinion is based on facts "observed" by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on "assumed" or "accepted" facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, 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.’

9. Makita (Australia) Pty Ltd v Sprowles(2001) 52 NSWLR 705, [85] ‘(cont) If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v R (1999) 197 CLR 414, on "a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise" (at [41]).’

10. HG v R (1999) 197 CLR 414, [41] ‘[41] If all that Mr McCombie had said was that, based on his study, training and experience, he considered that the behaviour of the complainant during 1992 and 1993, as recounted to him by others, appeared to be inconsistent with her having been sexually abused during that time, (the plausibility of such a proposition is not now in issue), then that might have been one thing. It would have required identification of the facts he was assuming to be true, so that they could be measured against the evidence; and it would have required or invited demonstration or examination of the scientific basis of the conclusion. However, that was not what the defence wanted from him; if it were, no question of s409B would have arisen. What defence counsel wanted was evidence of his opinion that, although the complainant had been abused, the abuse had occurred back in 1987 when, for a period of a month, she was in the custody of her father, and that it was the father who was the abuser.’

11. HG v R (1999) 197 CLR 414, [41] ‘(cont) That opinion was not shown to have been based, either wholly or substantially, on Mr McCombie's specialised knowledge as a psychologist. On the contrary, a reading of his report, and his evidence at the committal, reveals that it was based on a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise of a psychologist. He did not put to the complainant, for her comment, the suggestion that she had been abused by her father; the complainant told him she could not remember her father. He does not appear to have considered or investigated the possibility of abuse by some third party. He appears to have inferred, for no apparent reason, that the words "stop it daddy", attributed to the complainant by her mother, referred to sexual as distinct from some other form of abuse.’

12. Honeysett v The Queen [2014] HCA 29, [45] ‘[45] Professor Henneberg’s evidence gave the unwarranted appearance of science to the prosecution case that the appellant and Offender One share a number of physical characteristics.Among other things, the use of technical terms to describe those characteristics — Offender One and the appellant are both ectomorphic — was apt to suggest the existence of more telling similarity than to observe that each appeared to be skinny.’

13. R 426, Uniform Civil Procedure Rules 1999 (Qld) Duty of expert (1) A witness giving evidence in a proceeding as an expert has a duty to assist the court. (2) The duty overrides any obligation the witness may have to any party to the proceeding or to any person who is liable for the expert’s fee or expenses.

14. R 427, Uniform Civil Procedure Rules 1999 (Qld) Expert evidence (1) Subject to subrule (4), an expert may give evidence-in-chief in a proceeding only by a report. (2) The report may be tendered as evidence only if— (a) the report has been disclosed as required under rule 429; or (b) the court gives leave. (3) Any party to the proceeding may tender as evidence at the trial any expert’s report disclosed by any party, subject to producing the expert for cross-examination if required. (4) Oral evidence-in-chief may be given by an expert only— (a) in response to the report of another expert; or (b) if directed to issues that first emerged in the course of the trial; or (c) if the court gives leave.

15. R 428, Uniform Civil Procedure Rules 1999 (Qld) Requirements for report (1) An expert’s report must be addressed to the court and signed by the expert. (2) The report must include the following information— (a) the expert’s qualifications; (b) all material facts, whether written or oral, on which the report is based; (c) references to any literature or other material relied on by the expert to prepare the report;

16. R 428 (cont), Uniform Civil Procedure Rules 1999 (Qld) (2) [cont] (d) For any inspection, examination or experiment conducted, initiated, or relied on by the expert to prepare the report— (i) a description of what was done; and (ii) whether the inspection, examination or experiment was done by the expert or under the expert’s supervision; and (iii) the name and qualifications of any other person involved; and (iv) the result; (e) if there is a range of opinion on matters dealt with in the report, a summary of the range of opinion, and the reasons why the expert adopted a particular opinion;

17. R 428 (cont), Uniform Civil Procedure Rules 1999 (Qld) (2) [cont]: (f) a summary of the conclusions reached by the expert; (g) a statement about whether access to any readily ascertainable additional facts would assist the expert in reaching a more reliable conclusion.

18. R 428 (cont), Uniform Civil Procedure Rules 1999 (Qld) (3) The expert must confirm, at the end of the report— (a) the factual matters stated in the report are, as far as the expert knows, true; and (b) the expert has made all enquiries considered appropriate; and (c) the opinions stated in the report are genuinely held by the expert; and (d) the report contains reference to all matters the expert considers significant; and (e) the expert understands the expert’s duty to the court and has complied with the duty.

19. R 429, Uniform Civil Procedure Rules 1999 (Qld) Disclosure of report A party intending to rely on a report must, unless the court otherwise orders, disclose the report— (a) if the party is a plaintiff—within 90 days after the close of pleading; or (b) if the party is a defendant—within 120 days after the close of pleading; or (c) if the party is not a plaintiff or defendant—within 90 days after the close of pleading for the party.

20. R 429B, Uniform Civil Procedure Rules 1999 (Qld) Court may direct experts to meet (1) The court may, at any stage of a proceeding, direct experts to meet and— (a) identify the matters on which they agree; and (b) identify the matters on which they disagree and the reasons why; and (c) attempt to resolve any disagreement.

21. R 429B (cont), Uniform Civil Procedure Rules 1999 (Qld) (2) The court may, for the meeting— (a) set the agenda; and (b) specify the matters the experts must discuss; and (c) direct whether or not legal representatives may be present; and (d) give directions about the form of any report to be made to the court about the meeting; and (e) give any other directions the court considers appropriate. (3) Evidence of anything done or said, or an admission made, at the meeting is admissible at a trial of the proceeding only if all parties to the proceeding agree. (4) However, subrule (3) does not apply to a report made to the court about the meeting identifying the matters mentioned in subrule (1)(a) or (1)(b).

22. S 590AH(2) of the Criminal Code Disclosure that must always be made (g) a copy of any report of any test or forensic procedure relevant to the proceeding in the possession of the prosecution; (h) a written notice describing any test or forensic procedure, including a test or forensic procedure that is not yet completed, on which the prosecution intends to rely at the proceeding; (i) a written notice describing any original evidence on which the prosecution intends to rely at the proceeding; (j) a copy of anything else on which the prosecution intends to rely at the proceeding; (k) a written notice or copy of anything else in possession of the prosecution prescribed under a regulation. (2) For a relevant proceeding, the prosecution must give the accused person each of the following— (a) a copy of the bench charge sheet, complaint or indictment containing the charge against the person; (b) a copy of the accused person’s criminal history in the possession of the prosecution; (c) a copy of any statement of the accused person in the possession of the prosecution; (d) for each proposed witness for the prosecution who is, or may be, an affected child—a written notice naming the witness and describing why the proposed witness is, or may be, an affected child; (e) for each proposed witness for the prosecution other than a proposed witness mentioned in paragraph (d)— (i) a copy of any statement of the witness in the possession of the prosecution; or (ii) if there is no statement of the witness in the possession of the prosecution—a written notice naming the witness; (f) if the prosecution intends to adduce evidence of a representation under the Evidence Act 1977, section 93B, a written notice stating that intention and the matters mentioned in section 590C(2)(b) to (d);

23. S 590B of the Criminal Code Advance notice of expert evidence (1) If an accused person intends to adduce expert evidence in relation to an issue in the person’s trial, the person must— (a) as soon as practicable—give the other parties to the trial written notice of the name of the expert, and any finding or opinion he or she proposes to adduce; and (b) as soon as practicable before the trial date—give the other parties to the proceeding a copy of the expert report on which the finding or opinion is based. (2) The directions judge under section 590AA or trial judge may fix times for compliance with subsection (1).

24. ASIC v Drake (No 2) [2016] FCA 1552 [371] Mr Woolley was called as an expert witness by ASIC. He has degrees in economics and practical experience of more than 31 years in the financial services industry, mostly as an investment manager. He purported to give evidence concerning the approach of a prudent trustee including in relation to the 7 August 2012 decision to approve the August 2012 Variation. Unfortunately, he had paid scant attention to the key documents. And when confronted by matters which were inconsistent with ASIC’s case, many of his answers were preposterous. He displayed the worst characteristics of partisanship and could not, in any respect, be described as an independent expert. [372] After considering Mr Woolley’s evidence, ASIC chose not to rely on his evidence in any relevant respect. As a model litigant, ASIC quite properly accepted that it could not reasonably submit that the Court should accept his evidence except where the evidence remained essentially unchallenged ([6], [220]). The matters upon which ASIC placed weak reliance were sections of Mr Woolley’s report where he asserted that an independent feasibility analysis of the anticipated future cash flows from the Maddison Estate development ought to have been obtained. However, my concerns with Mr Woolley’s evidence are so significant that I do not consider that it is possible to fillet even those areas of his evidence. The extent of my concerns about his credibility and about his reliability combine to give the effect that none of his evidence is capable of acceptance. Apart from issues of demeanour and the general conduct of Mr Woolley’s evidence including his evasiveness and inability or unwillingness to answer simple questions, the reasons why his evidence was neither credible nor reliable are as follows. [373] First, Mr Woolley did not properly consider many basic documents or issues which should have been necessary for him to form an opinion. One example was the RPS or core economics analysis that was referred to in an email with which he was provided (ts 628–629). He accepted in cross-examination that the report contained important information (ts 629) but said that he did not ask for it to be provided because he assumed that ASIC would have provided him with everything relevant (ts 631). Another example was that despite the importance of their roles and their prominence in many of the emails, Mr Woolley did not know who Mr Tickner and Mr McDonald were (ts 626), and said he “wouldn’t have a clue who LM Investment Management [LMIM] was” (ts 625). He also could not remember what issues Ernst & Young had identified as being problematic with the development (ts 624). He offered his opinion on the scope of the auditors’ obligations although he did not know what they had been asked to do (ts 637).

25. ASIC v Drake (No 2) [2016] FCA 1552 [374] Secondly, Mr Woolley’s conclusions (pertaining, for example, to the risks presented to the MPF from the September 2011 variation and August 2012 Variation) were based upon some very basic misapprehensions about fundamental points. In relation to the August 2012 Variation, he said that between $240 million and $259 million of capital was at risk. He said that this was because $100 million would leave the MPF (ts 633). As I have explained, this assumption was incorrect. Only $16.5 million would leave the fund. After numerous questions, Mr Woolley finally conceded that he did not take into account that only around $16.5 million of capital would leave the fund, and that the difference between $16.5 million and $100 million was “significant” (ts 634). [375] Another example of a basic mistake made by Mr Woolley was that he did not appreciate that the joint venture arrangement for Maddison Estate was structured so that the profit from the development was passed through a special purpose vehicle as “interest” (ts 584). As I have explained, the loan agreement had an express provision to this effect. Mr Woolley read an investment memorandum which provided: To simplify investor taxation requirements by ensuring that Fund returns are passed to investors as income and not capital gains, the property related (joint venture) assets of this Fund are held as commercial loans.Mr Woolley said that he still didn’t realise that this was not an ordinary commercial loan. He thought it was “tax planning” (ts 584). [376] Another example is that Mr Woolley assessed the risk of capital loss on the incorrect premise that in September 2011 and August 2012 there was some value in the land which might be available to repay the Maddison Estate loan (ts 602). As he was inevitably required to accept, the existence of the Suncorp loan meant that, at least in September 2011, on the “as is” valuation of the Pimpama Land, there was no value which could have been realised by LMIM if the land were immediately sold (ts 606). [377] Thirdly, Mr Woolley’s report involved some large, and unsupported, leaps of logic. For instance, when assessing the advantages of an externally generated feasibility analysis he said that it would be “more likely… to result in… the trustee deciding to exit the investment in Maddison Estate development”. But he did not say what an independent feasibility report would have said (ts 87). In contrast, ASIC, quite properly, did not contend that an independent feasibility report would necessarily have been different in content from some of the internally produced feasibilities.

26. ASIC v Drake (No 2) [2016] FCA 1552 [378] Fourthly, when Mr Woolley was taken to documents which caused difficulty for his conclusions, he took preposterous positions in relation to them. For instance, Mr Woolley was referred to the February 2011 investment memorandum upon which he relied in his report. He said that he would have seen from the information memorandum that the mortgage securities in which LMIM invested were in excess of $200 million, that there were 14 mortgages involved, and that the largest loan was more than $113 million (ts 571). But he maintained that the commercial loan, of more than half of the portfolio, involving $113 million, could be low risk. His response was that he would need to consider all 14 loans (ts 571): in this case… you get a feel for the spread of risk. That’s what it is there for. Now, what if I said that largest loan happens to be to the Federal Police. I feel pretty comfortable with that loan because I know I’m going to get paid. [379] In other words, knowing that the MPF’s loan balance with Maddison Estate was around $115 million at that time, Mr Woolley speculated, without any basis at all, that the $113 million loan referred to in the information memorandum might have been made to the Federal Police. He later said that he had no information from which he could assess whether the largest loan was to Maddison Estate. Only after he was pressed did he concede that it was obvious that this loan was the Maddison Estate loan (ts 572). [380] His position became even more bizarre when he later suggested that, despite his earlier remarks about spread of risk, a single loan of $113 million, which comprised more than half the fund, was not necessarily indicative of anything other than a low risk profile for the fund. [381] Fifthly, Mr Woolley’s evidence was constantly shifting to try to support the outcome of imprudence that he had expressed. For instance, Mr Woolley was asked about views he had expressed about the opinions that would have been held by an “ordinary investor” or “potential investor” reading one of the MPF information memoranda. After being asked different versions of the question five times, Mr Woolley said that he took that investor to be the “average person” (ts 574). This was despite him explaining earlier that he was aware that the fund was marketed through investment advisers and only open to “wholesale” or sophisticated investors who, in his words, “met the threshold of half a million or 2.5 million net assets as certified by your accountant every six months” (ts 567).

27. The 10 rules • Ensure that the expert opinion is both admissible, for example, in terms of the legislation and authorities referred to, that is it is based on specialised knowledge in which the witness is expert by reason of specified training, study or expertise; • The appropriate expert is chosen, that is, someone who is truly expert in the appropriate field and preferably has experience in giving evidence and doing so hopefully with the required degree of intellectual independence rather than being a “hired gun”; • The expert is retained early enough that they can complete their investigations and report in a timely way so that court processes are not delayed; • The expert is well-informed of the expert witness requirements pursuant to the UCPR; • The expert is properly briefed, that is, with all relevant material, both favourable and unfavourable to the party’s case; • The expert, whether or not the case is a civil one, is aware of their obligations in relation to necessary inspections, examinations or experiments. These should be undertaken directly by the expert rather than by an employee in order to protect the witness from any challenge concerning such matters; • The report should be received in time for the solicitors and counsel to consider it, possibly confer with the expert and consider whether a supplementary report or further investigation or examination is necessary; and • Ensure as far as possible that the expert is thoroughly prepared for the giving of evidence, whether in a normal trial process, or a conclave; • When cross examining, attempt to challenge the factual underpinning of the opinion including (a) any assumptions made (b) any investigation or experiment not personally conducted by the expert; • If required to put a contrary opinion to an expert, do your homework and ensure you can delineate the basis of your expert’s opinion and precisely where it differs from the witness you are challenging.