Expert evidence must have sure footings

In the ever-evolving landscape of the building and construction industry, legal practitioners and expert witnesses must remain vigilant to the nuances of expert evidence admissibility.

The recent case of Max Build Pty Ltd v Owners - Strata Plan No 54026 highlights the importance of an expert’s qualifications, the reliability of expert reports, the requirements of admissible expert opinion evidence, and the role of legal practitioners in shaping expert evidence.

The facts

The salient facts were as follows:

• In November 2020, Max Build was engaged by the Owner’s Corporation to perform remedial works on the heritage-listed Grace Brothers building in Broadway;

• In 2022, disputes arose when the Owner’s Corporation rejected two variations;

• In July 2022, the builder suspended works, leading to mediation efforts and the involvement of a quantity surveyor, Robert Madden, to review the quality of works and prepare reports;

• In October 2022, the Owner’s Corporation terminated the building contract unilaterally;

• In September 2023, Max Build commenced proceedings for lost profits flowing from termination of the contract and unpaid amounts owing under the contract;

• In December 2023, the Owner’s Corporation cross-claimed for defective works;

• In October/November 2024, the Owner’s Corporation served expert reports from Timothy Haynes (liability evidence), and David Madden (quantum evidence) in support of its cross-claim.

Understanding advance rulings

This case involved an advance ruling, which allows courts to determine the admissibility of evidence before the final hearing.

Advance rulings streamline the trial process by resolving evidentiary disputes in advance, thus preventing delays during the trial and ensuring that both parties can prepare their cases effectively.

In Max Build, the advance ruling focused on the admissibility of the expert reports relied upon by the Owner’s Corporation to substantiate its cross-claim. Each report was sequentially dependent on the previous one.

Expert reports in question

Robert Madden’s reports, prepared in September 2022 before proceedings were commenced, documented visual inspections of the site, noting defects and incomplete work. However, Robert Madden’s reports also ventured into providing opinions on building defects. Max Build contended that Robert Madden, a quantity surveyor, did not have relevant qualifications in this area.

Subsequently, Timothy Haynes, a person with experience in project management, was engaged by the Owner’s Corporation to provide expert liability evidence. Mr Haynes relied heavily on Robert Madden’s observations to ground his liability evidence.

The Court observed at [12] that:

“Mr Haynes relies on Robert Madden’s observations as to whether the building work was defective, incomplete, or demonstrated a failure to properly protect the works.”

Finally, David Madden, another quantity surveyor (unrelated to Robert Madden), was engaged to quantify the costs associated with rectifying the defects identified by Mr Haynes.

The Court’s findings

As to Mr Haynes’ report, the Court identified two issues, namely:

1. Mr Haynes relied heavily on Robert Madden’s observations; however, Robert Madden did not have qualifications enabling him to identify building defects or incomplete work.

2. Mr Haynes was highly qualified as a project manager, but did not have the expertise to identify building defects.

Consequently, the Court made an advance ruling that Mr Haynes’ opinion in his expert report was not admissible as expert evidence on the subject of defective works.  

In respect of David Madden’s report, the Court observed:

“The problem is then compounded as quantity surveyor David Madden (no relation to Robert, I am told) relies on Mr Haynes’ identification of defects, in circumstances where Mr Haynes has relied on Robert Madden’s identification of defects. The foundation on which David Madden’s work rests is itself defective.”

The fact that David Madden’s report was contingent on inadmissible opinion evidence on liability (ie. the Haynes Report) was enough for the Court to rule that material portions of David Madden’s report were also inadmissible.

Further, both Timothy Haynes and David Madden expressed views on matters of law. The Court said those views are, “interesting but of little assistance to the Court.”

The Court went on to say that this was not a criticism of either Timothy Haynes or David Madden because they were wrongly asked by the legal representative of the Owner’s Corporation to opine on those topics.

Lessons from Max Build

The case highlights several critical lessons for expert witnesses and legal practitioners:

1. Qualifications and expertise: experts should only provide opinions on matters within their qualifications and expertise. Otherwise they may undermine the entire evidentiary foundation for their client’s case.

2. Evidence of qualifications: whilst formal qualifications are not always necessary, experts should substantiate their specialised knowledge and experience through their curriculum vitae. There must be a nexus between that specialised knowledge and the matters in respect of which the expert is providing an opinion.

3. Independence: experts should ensure that their opinions are formed independently, based on their investigations and expertise, rather than relying on the opinions of others. If relying on another’s opinion, the expert should identify that other expert and the opinion on which they are relying.

4. Legal frameworks: experts should familiarise themselves with the rules governing expert opinion evidence, including s 76 of the Evidence Act.

5. Communication: it is important to have clear communication between the expert witnesses and the instructing solicitor. If there are matters on which an expert is not able to provide an opinion, then they should be brought to the solicitor’s attention.

Max Build case serves as a cautionary tale for those involved in disputes in the construction industry, illustrating the importance of ensuring expert evidence is built on strong foundations.

Authors: David Creais & James Duff

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.