In recent times, RICS DRS has seen a resurgence in the use of the Subcontractors’ Charges Act 1974 within the Queensland construction industry.
Section 10 of this Act requires that a Notice of claim of charge be certified by a ‘Qualified Person’.
The RICS DRS can provide the services of a ‘qualified person’ in the Brisbane CBD at short notice.
Please contact us here or alternatively call our office on 1300 953 459 should you require assistance.
RICS Dispute Resolution Service head office will be closing on 23rd December and re-open on 3rd January 2012.
Closure Dates
No staff will be available December 26th 2011 (Boxing Day) and December 27th 2011 (Christmas Day Public Holiday) and January 2nd 2012 (New Year’s Public Holiday).
Normal office hours resume on 3 January 2012.
In case of need:
Arrangements can be made for the service of documents.
You can still speak to a staff member by calling the phone numbers on 1300 953 459/(07) 3360 0256 or via email contact@ricsdrs.com.au
The online services that will remain available to users is the annotated online guide.
We would like to take this opportunity to thank our clients for your continued support and to wish you a happy Hanukkah, joyous Festivus, a very merry Christmas and a prosperous New Year!
In a very competitive market, we are appreciative of the continued recommendation of RICS Dispute Resolution Service.
May you and your family have a safe and happy holiday season.
With very warm regards,
RICS Dispute Resolution Service
A review of a recent and important Victorian Supreme Court case which reinforces and explains:
• the importance of disclosure and transparency of dealings before, during and after the preparation of an expert report.
• the need to minimise interference with the preparation of an expert report.
• the requirement that experts comply with not only Form 44 and Order 44 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (Code and Rules), but also the new overarching obligations under Part 2.3 of the Civil Procedure Act 2010 (Vic) (CPA).
It is important to know and understand these obligations, as a failure to comply may have significant consequences and result in the evidence being afforded little weight or, worse still, being excluded by the Court.
The Secretary to the Department of Business and Innovation v Murdesk Investments Pty Ltd [2011] VSC 581
The case arose after the compulsory acquisition of land owned by Murdesk Investments Pty Ltd (Murdesk) by the Victorian Government pursuant to the Land Acquisition and Compensation Act 1986 (Vic) (LAC Act).
In assessing compensation due to Murdesk, the LAC Act required that regard must be had to the market value of the land acquired. Consequently, Murdesk sought to rely upon the expert evidence of three certified valuers.
The Secretary to the Department of Business and Innovation (Applicant) challenged the admissibility of all Murdesk’s expert valuations on the grounds that they were not admissible under section 79(1) of the Evidence Act 2008 (Vic) because:
• the opinions expressed by them as to the value of the land were not “wholly or substantially” based upon their specialised knowledge.
• the evidence did not set out the basis or path of reasoning by which the valuer formed his opinion as to the value of the land.
The Applicant also argued that even if the evidence was admissible, it ought to be excluded on the basis that it breached the “overarching obligations” described in the CPA.
Matters giving rise to the Applicant’s claims
The Applicant challenged the admissibility of the valuers’ evidence on the following grounds:
• the evidence of the first valuer was unduly influenced by others, and accordingly the Court could not be satisfied that the opinions were “wholly or substantially” based on specialised knowledge. This claim was founded upon the fact that the valuer had provided draft parts of his report for comment to Murdesk’s legal advisors. The valuer had also attended a number of conferences with the legal advisors and had met separately with the client on one occasion. The notes from the conferences did not clearly detail “who said what”.
• the evidence of the second valuer provided no calculations to support the valuation given. The valuer had adopted an “unorthodox” approach to the valuation.
• the evidence of the third valuer was the result of a lengthy “course of dealing” between the valuer and the client. There had been exchanges of views and information between the valuer and the client before the date that the valuer received instructions to prepare the report. The Applicant claimed that the valuer’s opinion was the result of an “undisclosed process of collaboration”.
All three valuers gave evidence that the opinions contained in the reports were their own. Justice Emerton found that the opinions of the experts were “wholly or substantially” based upon their specialised knowledge and thus, the evidence of all experts was admissible. However, His Honour also noted that the matters raised by the Applicant were matters that would potentially go to the weight given to the evidence.
Implications for expert witnesses
In his judgment, Justice Emerton acknowledged the following:
• the challenges to the expert evidence did not relate to the qualifications of the experts, but rather to other factors that potentially undermined the cogency of the evidence. His Honour expressly recognised the specialised knowledge and expertise of the valuers, and the quality of the experts’ methodology in preparing their reports.
• there is a balancing task between ensuring the independence and impartiality of the expert, and the need to provide the expert with adequate instructions and information. The duty of disclosure as required by the Code and Rules is therefore important in managing this balance. His Honour stated that experts are not required “to disclose every detail of their dealings”, however “information or instructions relevant to the formation of their expert opinions” should be disclosed in the expert’s report. Similarly, reference should be made to “meetings and conferences that took place with the client and with other experts.” Insofar as those meetings and conferences “resulted in the provision of instructions or information on which the expert relied in forming his opinions”, that too should be stated in the report.
• experts providing opinion evidence must now address the new “overarching obligations” contained in the CPA. His Honour referred to the following relevant sections of the Act:
- section 16: provides for a paramount duty to the Court to further the administration of justice; and
- section 21: provides for an obligation not to engage in conduct, which is misleading, or deceptive or likely to mislead of deceive.
• although the evidence of an expert may be “wholly or substantially” based upon the expert’s specialised knowledge and thus admissible under s 79 (1) of theEvidence Act 2008 (Vic), matters relating to the impartiality of the expert may later be considered when weighing the cogency of the evidence.
Conclusion
When accepting a brief to act as an independent expert make sure that you, inter alia:
• comply with the Code and Rules;
• comply with the overarching obligations in the CPA;
• base your opinions “wholly or substantially” upon your specialised knowledge;
• set out clearly and succinctly the methodology, assumptions and instructions relevant to the preparation of your report; and
• set out in the body of your report:
- the information or instructions relevant to the formation of your expert opinions and,
- reference to meetings and conferences that took place with the client and with other experts insofar as those meetings and conferences resulted in the provision of instructions or information on which you relied to form your opinions.
Taking these steps will go a long way towards ensuring that your report is robust, admissible and ultimately, able to be relied upon by the Court.
For more information please contact
Philippa Murphy
Special Counsel
+61 3 9617 4309
philippa.murphy@bakermckenzie.com
www.bakermckenzie.com
This time of the year sees a spike in the number of progress claims as jobs wind down.
However in Queensland, all days between Christmas (25th December) and up to and including 1 January are classed as “non business days” according to section 36 of BCIPA. As such no one should be disadvantaged if they are serving a payment claim or payment schedule or other notice during the Christmas/New Year “non business day” period.
*** In the scenario above the calculation of days for postage has been worked on normal postal delivery in a metropolitan or same town service and as interpreted under the S39 of the Acts Interpretations Act 1954 for the service of documents, parties need to satisfy themselves in regards to calculating dates through the process.***
The Lighthouse Club (international construction charity) is establishing an Australian Branch and will have its inaugural Christmas get together on 2nd December 2011.
Join LHC at their inaugural Christmas party, a perfect corporate hospitality opportunity and a great way to start the festive season.
Starting with a drinks and canapés it will be followed by some great entertainment and a charity raffle.
Date: Friday, 2nd December 2011
Venue: Norton Rose Australia Level 17, 175 Eagle Street, Brisbane
Start: 5:00pm
For more information and details of sponsorship opportunities, please email paul.roberts@aquenta.com.au
For general information please visit the Lighthouse Club website
This decision is the leading authority in Australia on the admissibility of expert evidence and it states very clearly that an expert’s knowledge must relate to the specific subject matter of the proceeding and be specifically relevant to the precise question to be determined, rather than being generally relevant to the broad issues or questions.
It is therefore critical that experts make an assessment at the time of receipt of the brief, and as the case develops, as to their ability to provide an expert opinion on the central and critical issues to be determined by the Court or Tribunal.
If the questions being asked of the expert at any time take the expert outside their area of expertise they must inform their instructor and qualify their answers where necessary.
Dasreef Pty Ltd v Hawchar [2011] HCA 21 (Dasreef v Hawchar)
In the first instance
The case originated in the Dust Diseases Tribunal of New South Wales (the Tribunal). In the first instance, Mr Hawchar claimed damages for personal injury caused by contracting scleroderma and silicosis. In essence, Mr Hawchar alleged that due to Dasreef Pty Ltd’s (Dasreef’s) breach of its statutory duty, negligence and breach of contract, Mr Hawchar was exposed to unsafe levels of silica dust.
In finding that Dasreef was 20/23 parts responsible for Mr Hawchar contracting silicosis, the Tribunal relied on expert evidence tendered by Dr Kenneth Basden (Dr Basden) and its own experience derived from hearing cases in the specialist Tribunal.
The evidence in issue relates to an estimate made by Dr Basden about Mr Hawchar’s exposure to respirable silica. Dr Basden made the estimate with the express limitation that it was “only a ballpark” figure.
However, in finding that Mr Hawchar was exposed to unsafe levels of silica dust, the Tribunal used this limited-purpose estimate to calculate the levels of silica dust to which Mr Hawchar had been exposed to in the course of working for Dasreef.
In the Court of Appeal
Dasreef appealed the Tribunal’s decision to the New South Wales
Court of Appeal (the Court of Appeal). The central questions considered by the Court of Appeal were:
• whether or not Dr Basden had the relevant expertise to give an opinion concerning the measurement of silica dust; and
• whether or not the Tribunal had acted legitimately in drawing on its specialist experience to reach its decision.
The Court of Appeal found that while there was a lack of reasoning for Dr Baden’s opinion, that lack of reasoning did not render Dr Baden’s opinion inadmissible: it was for another expert to refute the opinion on the grounds that it was worthless, of little weight, or otherwise unreliable.
As to whether or not the Tribunal had erred in relying on its previous experience, the Court of Appeal found that it had not acted illegitimately.
The High Court’s decision
Both of the Court of Appeal’s findings were appealed to the High Court of Australia (High Court), which ultimately found that both conclusions were incorrect. The central issues considered by the High Court were:
• whether or not the opinion expressed was inadmissible in circumstances where the opinion was not based on any specialised knowledge Dr Basden had that was based on his training, study or experience; and
• whether or not the primary judge, when determining what caused Mr Hawchar’s silicosis, erred in taking into account his experience in other cases before the Tribunal.
A majority of the High Court found that Dr Basden’s evidence was not admissible and that the Tribunal’s use of Dr Basden’s provisional estimate as a building block to make another estimate, presented serious risks as to accuracy and did not afford the parties procedural fairness.
Further, the High Court noted that Dr Basden had not given any evidence asserting that his training, study or experience permitted him to give more than the “ballpark” estimate he proffered at the trial. Accordingly, this went to the admissibility of the evidence, and not merely its weight. Certainly, in this case, the absence of
reasoning led to the unavoidable conclusion that there was insufficient connection between the opinion and Dr Basden’s specialised knowledge.
In relation to the second issue considered by the High Court, the majority found that under the rules of evidence, the Tribunal was permitted to take account of matters not proved in evidence only if they were matters of which judicial notice could be taken. As the causes of silicosis were not suggested to be such matters, the High Court held that the primary judge erred in taking into account his previous experience derived from hearing cases in the Tribunal.
What is admissible? Technical requirements for an expert giving opinion evidence in Australian courts
The High Court majority reasons note that in order for an expert’s opinion to be admissible, it is necessary for the party tendering the evidence to:
• demonstrate that the expert has specialised knowledge based on his or her training, study or experience that permits him to make the opinion; and
• demonstrate that the opinion expressed by the expert is wholly or substantially based on that specialised knowledge.
Justice Heydon further enunciated some long-standing legal principles and rules relevant to the admissibility of expert evidence as follows:
• the expert must state the facts on which the opinion is based;
• the party relying on the opinion must admit evidence (whether from the expert or from some other source) which is capable of supporting findings of fact which are sufficiently similar to the factual assumptions on which the opinion is stated to be based; and
• the expert must state the reasoning by which the expert conclusion derived, flows from the facts provided or assumed by the expert, so as to reveal that the opinion is based on the expert’s expertise.
Additional implications for expert witnesses
In addition to the substantive requirements above, that while not new, were clarified and confirmed by the High Court, expert witnesses and their instructors ought also heed Justice Heydon’s reasoning on the need for these requirements, namely, to address perceived difficulties associated with expert evidence as follows:
• the perceived partiality of expert witnesses in some cases;
• delay and expense occasioned by the large volume of
expert evidence in certain cases;
• experts’ excessive influence on the conduct of cases and on judicial outcomes;
• advocacy by experts; and
• experts’ non-conformity with the rules of evidence.
Conclusion
The position in Australia therefore is that when an expert expresses an opinion not founded on any specialised knowledge, specific training, study or experience, the opinion expressed will not be admissible.
Accordingly, in order to ensure that courts and tribunals accept the evidence given in their capacity as an expert witness, it is essential that an expert’s report:
• clearly states the specialised skill and knowledge they have relating to each and every opinion they seek to give; and
• contains detailed reasoning to reveal that their opinion is wholly or substantially based on that specialised knowledge.
For more information
Philippa Murphy
Special Counsel
+61 3 9617 4309
philippa.murphy@bakermckenzie.com
OR
Naomita Royan
Associate
+61 3 9617 4280
naomita.royan@bakermckenzie.com
www.bakermckenzie.com
The ‘Building and Construction Industry Security of Payment Act 1999′ has bee in operation in NSW for almost 11 years and the ‘Building and Construction Industry (Security of Payment) Act 2009′ has been in operation in ACT since 1 July 2010.
What do you know? What are the differences between the two Acts?
Do the Acts apply to verbal contracts?
Do the Acts apply to consultancy contracts for architectural or engineering services and the like?
What is a ‘reference date’ under the Acts?
Can a claimant serve its Payment Claim under the Act by email?
Can the ‘Superintendent’ under the contract issue a Payment Schedule under the Act?
Do you have to state the amount you propose to pay in a Payment Schedule under the Acts?
Does the Contractor’s entitlement to make a Payment Claim under the Act cease?
When can a claimant suspend work under the Acts?
Once an Adjudication Determination is made, can a claimant re-agitate the same issues in subsequent Payment Claims and Adjudication Applications under the Acts, like it can under Western Australian legislation?
If you can’t answer these questions you should think about attending the ‘NSW/ACT BCISOPA One Day Intensive Training Course’ on 25 November 2011. Download a booking form.
AS2124-1992 General conditions of contract is arguably the most commonly used standard form throughout Australia.
What do you know?
Can the ‘Contract Sum’ pursuant to clause 1 be adjusted?
What form of ‘Security’ pursuant to clause 5 is more ‘secure’ for the Contractor?
If the Bills of Quantities contains an error to the value of $380, can the Contract Sum be adjusted for the amount of the error?
What is the difference between a ‘Selected’ and ‘Nominated’ subcontractor, pursuant to clause 10?
Can ‘Extreme weather conditions’ be considered a ‘Latent Condition’ pursuant to clause 12?
Does the ‘Superintendent’ pursuant to clause 23 need to hold a QBSA license?
Does the ‘Superintendent’s Representative’ pursuant to clause 24 need to hold a QBSA license?
In determining whether the contractor is or will be delayed in reaching Practical Completion pursuant to clause 35.5, who owns the float under the programme?
Can the ‘Superintendent’ pursuant to clause 23 issue a Payment Schedule under the BCIPA?
Does the Contractor’s entitlement to make a payment claim at the times stated in the Annexure pursuant to clause 42.1 cease at Practical Completion?
If you can’t answer these questions you should think seriously about attending our one day intensive training course on AS2124 / AS2545 on 5th December 2011. To download a booking form.
RICS DRS Oceania is pleased to announce that our organisation offers in house training for organisations wishing to undergo a tailor made training programme specific to their business requirements. Providing training in house allows you to train a large number of employees with minimum disruption to your business, at a reduced rate.
Please note, a minimum number of delegates is required if you wish to undergo training.
Ensure your organisation is equipped to respond to the ever changing demands of the current market by enhancing your service offerings to open new revenue streams for your business.
For more information, course content and cost on a tailor made training programme for your business please contact us here or alternatively call our office on 1300 953 459.
The ACCC has long asserted that the building and construction industry practice of “cover pricing” is cartel behaviour and therefore illegal. An assertion put to the test in its long running case against T.F. Woollam & son Pty Ltd, J.M. Kelly (Project builders) Pty Ltd and Carmichael Builder Pty Ltd and with which, in its recent ruling, the Federal Court in Brisbane has agreed.
It has been upheld by the Court that “cover pricing” (where one construction company seeks the price of a bid from another and competing construction company during a tender process) is a form of “bid rigging” and “amounts to controlling of the price at which services are to be supplied”. The matter has been adjourned for the hearing of submissions on penalties which can be expected to be substantial. In 2007 a record fine of $36 million was imposed upon The Visy Board Pty Ltd as a result of a similar case brought by the ACCC for price fixing.
So what are the ramifications for the industry as a result of this significant decision? Well, perhaps most importantly it has raised the issue of transparency during the tender process. Clear, transparent and fair tender processes need to be established. For example, probity audits should be conducted as a matter of course with particular attention paid to late bids, withdrawn bids and of course price differentials to name but three potential red flags. Establishing a companywide culture of intolerance to fraudulent and corrupt behaviour is critical in helping to stamp out these damaging activities. Part of this process should be to implement a whistleblower hotline which has proven to be an effective tool for identifying and preventing all forms of misconduct on both sides of the tender process. This list is by no means exhaustive but certainly represents some good “firsts steps”
If corruption and illegal behaviour in all their guises are to be eradicated from an industry in which it is estimated 10% of expenditure, some $250bn for 2011 in Australia alone, is lost to such damaging activity then the industry needs to address the issue of transparency and take these “first steps” to improving the culture and perception of its practices.
For more information on the above article please contact Chris Watson | Associate Director | Forensic and Investigation Services | Grant Thornton Australia on +61 (7) 3222 0200.