Expert Evidence and Disclosure

share on

Share on facebook
Share on twitter
Share on linkedin

Although expert evidence is made exempt from the Opinion Rule by Section 79 of the Evidence Act (NSW) 1995, it is still subject to the ‘basis rule’, which requires that expert to disclose properly the facts upon which the opinion is based (Trade Practices Commission v Arnotts Ltd (No 5) (1990) 21 FCR 324 at [330]).

Gooley v NSW Rural Assistance Authority (No 3) [2019] NSWSC 1314 is an example of a case in which expert evidence failed to identify the basis of the opinion and was rendered inadmissible as a result.

Background

The case involves a married couple (the Gooleys), who commenced proceedings against the Rural Assistance Authority (RAA), as well as the Bank of Western Australia (Bankwest) and the Commonwealth Bank of Australia (CBA). Bankwest and CBA are collectively referred to as the Bank in the proceedings.

The Gooleys took a loan from Bankwest to fund their farming operations and also required assistance from the RAA after a major flooding incident. The Gooleys were unable to meet their loan obligations and had to sell their farming properties. In June 2016, the RAA issued an FDMA certificate permitting the Bank to commence proceedings against the Gooleys.

Numerous cross-claims ensued, following the initial claim refuting the FDMA certificate. The Gooleys contended they were misled by the Bank, alleging breaches of the Banking Code of Practice, and misleading and deceptive conduct.

The Expert Evidence

The Gooleys enlisted the expertise of an economist, Mark McGovern, PhD, to comment on liability issues and on the Bank’s conduct.

Dr McGovern had been provided with the pleadings of the case; however, some documents had also been omitted, a fact mentioned in the letter of instruction:

The facts and matters which you should assume are set out in the Affidavits of the Plaintiffs and Defendants and miscellaneous documents enclosed.

Several exhibits relating to damage and loss have not been forwarded as in all probability they are not relevant and too voluminous.” [77]

The letter did not disclose what the “miscellaneous documents” were nor did it identify which exhibits were not sent to Dr McGovern or inquires as to whether he requested further exhibits.

Dr McGovern was given no specific questions for his report and was only asked for his “comment”. [79] In his report, the expert labelled the “premature” [80] termination of the Gooleys’ partnership with the bank “unconscionable conduct”.[84] He also deemed the financial product offered to the Gooleys to be not fit for purpose.

In addition, Dr McGovern’s opinion was based on the assumption that the Bank should have anticipated difficulties in the Gooleys’s capacity to make regular repayments. However, Dr McGovern had not disclosed any legal documents or assumptions on which he had based this opinion, nor did he specify which assumptions he had relied upon for any of his conclusions.

Justice Parker found the report to be too general and so discursive that it “made it impossible even to begin to undertake the s79 analysis”. [92] In fact, Dr McGovern’s report also failed in meeting the requirements of the Uniform Civil Procedure Rules (2005) NSW Expert Witness Code of Conduct, which outlines that an expert must state:

(h) the extent to which any opinion which the expert has expressed involves the acceptance of another person’s opinion, the identification of that other person and the opinion expressed by that other person, and

(k) whether any opinion expressed in the report is not a concluded opinion because of insufficient research or insufficient data or for any other reason

Claim Dismissed

The Court ultimately ruled in favour of the Bank. Due to the lack of clarity on the assumptions underlying the expert’s opinions, Justice Parker upheld the Defendants’ objections to the expert report and ruled Dr McGovern’s evidence inadmissible.

Takeaways

It is critical that expert evidence is supported by fully disclosed and admissible assumptions, or else it risks being deemed inadmissible. For the purpose of clearly indicating the assumptions upon which expert opinions have relied, parties and experts should take care to disclose or clearly indicate the following information:

  • The specific questions to which the expert needs to respond;
  • All documentation relevant as a possible basis for the expert’s opinion; and
  • All documentation and material facts of the matter which the expert has used to form the concluding expert opinions.

Your search for winning expert stops here.