Preparation of expert evidence: no one size fits all approach

New Aim Pty Ltd v Leung [2023] FCAFC 67

New Aim Pty Ltd v Leung [2023] FCAFC 67

The Full Court of the Federal Court recently considered the principles governing the preparation of independent expert evidence in New Aim Pty Ltd v Leung [2023] FCAFC 67 (‘Appeal Decision’).

The case concerned allegations by New Aim Pty Ltd (‘New Aim’) that a former employee, Leung, misappropriated confidential information acquired in the course of his employment at New Aim, an e-commerce business.

New Aim’s solicitors, Corrs Chambers Westgarth, retained Ms Chen for the purpose of advising on the Chinese goods supplier industry. Ms Chen’s expert opinions were adduced for the purposes of determining whether the information used by Leung was confidential in nature.  

At first instance, Justice McElwaine rejected the entirety of Ms Chen’s report on the basis that His Honour could not be satisfied “that the opinions expressed in the report by Ms Chen truly represent her honest and independent opinions and that no matters of significance have been withheld” (New Aim Pty Ltd v Leung [2022] FCA 722 (‘Trial Decision‘) at [77]).

The appeal came before five Justices of the Full Court of the Federal Court, comprised of Justices Kenny, Moshinsky, Banks-Smith, Thawley and Cheeseman.

Trial Judge’s Decision

In rejecting the entirety of Ms Chen’s report, the Trial Judge found that he “had no confidence in the ability of Ms Chen to give credible, untainted and independent evidence” (Trial Decision at [78]). His Honour found that “most of the report was, at least initially, the product of drafting by the lawyers for [New Aim]” and that New Aim’s solicitors and Ms Chen had failed to comply with the Practice Note and the Code (Trial Decision at [70]-[72]; Expert Witness Practice Note cl 3.2; Harmonised Expert Witness Code of Conduct Cl 2). His Honour further concluded that New Aim’s solicitors’ conduct in preparing and delivering Ms Chen’s report was misleading and conveyed a “false representation” of Ms Chen’s independence (Trial Decision at [74]).

Full Court of the Federal Court’s Judgment

On appeal, the Full Court unanimously overturned Justice McElwaine’s judgment. The Court noted that there is “no one rule or practice which covers all experts or all situations” (Appeal Decision at [120]).

The Full Court stated that “[i]t is not unusual for a final letter of instructions containing the final form of the questions to be answered by an expert, to be prepared shortly before an expert report is finalised” (Appeal Decision at [87]).The Court approved Justice Lee’s observations in BrisConnections Finance Pty Ltd v Arup Pty Ltd (2017) 252 FCR 450, stating that “the process should be transparent so that what has occurred is clear” (Appeal Decision at [89]).

The Court further referred to the Federal Court Expert Witness Practice Note and the Harmonised Expert Code of Conduct in stating that, at the core of the ethical requirements on legal practitioners involved in the process of gathering or putting evidence into an appropriate form for hearing is the requirement not to influence a witness’ evidence.  This applies to lay and expert witnesses (Appeal Decision at [119]).

Contrary to the Trial Judgment, the Full Court stated that, although desirable, there is no legal requirement for practitioners to disclose their involvement in drafting an expert report, or the correspondence relating to the report’s preparation (Appeal Decision at [121]-[122]). Instead, the “legal and ethical necessity of this depends on all of the circumstances” (Appeal Decision at [123]). The Full Court further recognised that legal practitioners are often involved when recording an expert’s evidence, and there are various intersecting reasons why this may be so, be they “physical, language or resource difficulties” (Appeal Decision at [120]).

The Full Court was otherwise critical of the Trial Judge’s decision to exclude the entirety of Ms Chen’s report, considering paragraphs [1] to [55] of the report were factual in nature, and only paragraphs [56] to [60] contained opinion evidence (Appeal Decision at [124]-[126]).  The Full Court held that the rejection of the entire report was without “clear reasons,” especially because the report contained potentially relevant factual insights (Appeal Decision at [124]-[131]).

What this means for practitioners

The Full Court agreed with the trial judge’s observations that transparency is paramount when legal practitioners retain and correspond with experts.  The Court said that the material placed before the Court should make clear what has been provided to the expert and the questions that the expert was asked to address (Appeal Decision at [89]).

The Full Court set out the ways in which legal practitioners commonly gather and put evidence from witnesses of fact into appropriate forms (taking proofs of evidence and drafting affidavits from oral or written communications with the witness) and the ethical requirements involved in that process, noting that at the core of these is a requirement not to influence a witness’s evidence.  The Court observed that whilst it is less common for this to occur in the preparation of expert evidence, there are reasons why this might occur (Appeal Decision at [118]).

As such, practitioners should continue to look to the Code and the Practice Note when facilitating the production of expert reports. Whilst there is no ‘one size fits all approach’, the overriding requirement for practitioners continues to be preserving the independence of expert witnesses.