Federal Court of Australia

Hams v Whyalla Ports Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed), in the matter of OneSteel Manufacturing Pty Limited (Administrators Appointed) [2025] FCA 949

ORDERS

THE COURT ORDERS THAT:

1.    Each of the objections contained in exhibit MFI-P6 is allowed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

O’CALLAGHAN J:

1    I have before me an application by the cross-claimant (WP) objecting to the admissibility of certain portions of expert evidence sought to be tendered on behalf of the cross-respondents, which for convenience I will call OneSteel.

2    The evidence to which objection is taken is contained in portions of two expert reports by Mr Richard Billett and one expert report of Mr David Mitchell. It is contended that those identified portions of those reports do not satisfy the second limb of s 79(1) of the Evidence Act 1995 (Cth) (Evidence Act) — that is to say, that the evidence sought to be proffered is not wholly or substantially based on the witnesses’ specialised knowledge.

3    Each of the objections contended for by WP is set out in exhibit MFI-P6.

4    Mr Billett is a mechanical engineer. He says in his report that in his 19 years as a professional engineer, he has investigated over 60 incidents involving cranes, EWPs, aircraft, marine and road vehicles, fires and personal injuries of workers, and has provided mining asset assessments for both construction and demolition. Mr Billett was asked a number of questions involving his opinion, only one of which is relevant for present purposes, namely: “What is the estimated cost of removing and/or dismantling the asset from the land and/or surrounding property or premises?”

5    In that part of his first report headed “Assumptions”, Mr Billett said:

The range of cost estimates for removal of assets I have provided is broad and may well be significantly higher. Time restraints limited the accuracy of these estimates.

6    WP did not contend that Mr Billett had not demonstrated relevant expertise. It complained that each answer he had given to the above question in respect of each asset the subject of this proceeding, which in every case was given as a range of estimated costs of removal (including in some instances a range of as much as $5 million to $10 million), did not state any grounds that led him to arrive at those estimates. It was submitted that the evidence was in substance valueless, and thus inadmissible, because it had not been shown to be based on the witness’ expertise.

7    Mr Pham for WP took me to the well-known decision of the High Court in Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 at 599 [19]–[20], 604 [36]–[37] and 604 [41]–[42]. I will not burden these reasons with those extracts. It is sufficient to note the following:

(1)    as a general rule, trial judges should rule on objections to the admissibility of evidence as soon as possible;

(2)    by directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, s 79 of the Evidence Act requires that the opinion is presented in a form which makes it possible to answer that question;

(3)    the expert’s evidence must explain how the field of specialised knowledge on which the opinion is wholly or substantially based applies so as to produce the opinion propounded; and

(4)    a failure to provide such an explanation goes to the admissibility of the evidence, not its weight.

8    Mr Mitchell is a certified practicing plant and machinery valuer. The objections to his report were along similar lines to those levelled against Mr Billett’s reports — that is to say, the portions of the report to which objection was taken did not state the grounds and reasoning that led to the identified opinions and were, therefore, inadmissible.

9    Mr McLachlan for OneSteel made the following submissions in response to the objections.

10    Although recognising that it was not put against OneSteel that their witnesses did not have relevant professional experience, and that the true complaint about the evidence objected to was that it provided no reasoning as to how the identified opinion was arrived at, he submitted nonetheless that the requisite connection between the relevant expertise of the witnesses and their conclusions was an implicit one.

11    In relation to Mr Mitchell’s report, it was also put that some of what he said at pages 24 to 25 of his affidavit could not be explained any further. I refer without reciting to the last two paragraphs at page 24 and the prices for the various cost components identified at page 25.

12    Mr McLachlan submitted that I should not rule on the objections at this point (which is to say before the witnesses go into the witness box) but should instead allow counsel for WP to cross-examine the witnesses as to the basis of their opinions.

13    Relatedly, he also submitted that the experts might instead, or in addition, be given leave to adduce further evidence in chief from the witness box.

14    I do not accept the submission that the grounds or reasoning for the evidence objected to is in any way implicit or to be inferred from the unchallenged expertise of the witnesses. The evidence about which objection is taken concerns the costs of disassembling and removing assets. I do not accept that a bald assertion about what such costs might amount to, roughly estimated or otherwise, is an expression of expert opinion that satisfies the second limb of s 79(1) of the Evidence Act simply by invoking general statements about the witnesses’ experience. It seems to me that to accept such a submission would fly in the face of the requirements of the second limb.

15    I also do not accept that it is appropriate to leave it to the cross-examiner to explore the question of whether there is any sufficient foundation for the relevant expressions of expert opinion. As the Full Court said in Cadbury Schweppes Pty Ltd v Darrell Lee Chocolate Shops Pty Ltd (2007) 159 FCR 397 at 420 [108], “[i]t should not be for a cross-examiner to endeavour to elicit the facts or assumptions upon which an opinion is expressed, and it would be unfair to leave such matters to the cross-examiner”.

16    As Heydon JA explained in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 731 [62], such a course would be unfair because it would involve compelling counsel, in this case counsel for WP, to “cross-examine in the dark, with the perils which usually face journeys into darkness …”.

17    As to the submission that the witnesses should be permitted to further explain their reasoning from the witness box in chief, I will not allow that. It is, quite apart from anything else, far too late in the day, inconsistent with s 37M of the Federal Court of Australia Act 1976 (Cth) and it would be unfair to WP.

18    As to the submission that the identified parts of Mr Mitchell’s report at pages 24 to 25 of the affidavit could not be explained further, I do not accept that submission either. In my view, the assertions that the cost of dismantling, segregating and transporting steel into a metal recycler would be expected to exceed the recoverable scrap value, or that scrap steel prices fluctuate, beg more questions than they answer. As to the typical range of labour costs, absent some connection between those costs and the various figures proffered at the top of page 24 (which compare relocation costs with new build costs), providing estimated ranges of costs without more does not advance the position.

19    I should also mention, lest it be thought that I overlooked it, that I do not read the reasons of Weinberg and Dowsett JJ in the Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 234 FCR 549, to which Mr McLachlan took me, as saying anything relevantly different to that which the High Court said in Dasreef. Even if it does, however, their Honours reasons were published ten years before Dasreef.

20    For those reasons, each of the objections contained in exhibit MFI-P6 is allowed.

Associate:

Dated:    13 August 2025

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