New Aim Pty Ltd v Leung [2023] FCAFC 67 

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New Aim Pty Ltd v Leung [2023] FCAFC 67

In a long awaited appeal decision, the Full Court of the Federal Court has found that the primary judge in New Aim Pty Ltd v Leung [2022] FCA 722 (the Reasons) erred in rejecting the entirety of the evidence of New Aim Pty Ltd’s expert, Ms C based on factual findings concerning the preparation of the expert report.

The Full Court ruled that the reasoning adopted by McElwaine J at first instance for the rejection of the opinion evidence provided by Ms C contained factual errors and errors of approach which, if they had not occurred, might well have resulted in the evidence of Ms C not being rejected.


New Aim, an Australian ecommerce business, alleged that several of its former employees had shared identity and contact details of its Chinese suppliers, which New Aim identified as confidential information.

New Aim claimed that the respondents had breached equitable duties and duties under s 183 of the Corporations Act 2001 (Cth) not to disclose that confidential information.

The primary judge concluded that New Aim’s claims against the respondents based on breach of confidence, breach of contract, and contravention of s 183 of the Corporations Act should be dismissed. New Aim appealed the decision at first instance on a number of grounds. For present purposes, New Aim argued that McElwaine J erred in rejecting the entirety of Ms C’s evidence.

Expert Evidence

At trial, the primary judge ultimately decided to reject all of Ms C’s report, which included factual material (paragraphs 1 to 55) and expert opinion (paragraphs 56 to 58). McElwaine J took issue with:

  • Whether Ms C authored the report in 24 hours;
  • Uncertainty as to which parts of the reports were drafted by Ms C, and which parts were drafted by New Aim’s solicitors; and
  • The apparent failure to adhere with the statement of good practice contained in the Harmonised Expert Witness Code of Conduct and Clause 3.2 of the Practice Note.

Did Ms C author the report in 24 hours?

The primary judge initially approached the expert evidence with an understanding that Ms C was implicitly asserting that she had prepared the report within one day because the letter of instruction provided to her by New Aim’s solicitors had only been sent the day prior.

Citing Lee J in BrisConnections Finance Pty Ltd (Receivers and Managers Appointed v Arup Pty Ltd [2017] FCA 1268, the Full Court said at [89]:

We observe that it is not unusual in a number of contexts not to finalise the formulation of the question asked of the expert without first discussing the issues with the expert. It would be expected, for example, that a solicitor would engage with an expert in a specialised field of scientific knowledge about how to frame a question so as not to give rise to a nonsensical question or one which misses the real issues or one which fails to engage with all of the issues. This is not an inversion of a process which must be necessarily followed of first asking a question and then having its inadequacies pointed out. The laborious following of such a process is likely to result in increased costs and delay for the parties and ultimately a waste of the Court’s time.

The answer Ms C gave during cross-examination (i.e., “I prepared within 24 hours [sic]”. Reasons [48]) was “not intended as confirming that the process of drafting and finalising the report had occurred within 24 hours or that she was solely or primarily responsible for drafting it”. [92]

Uncertainty as to which parts of the reports were drafted by Ms C

Another concern for the court at first instance was a lack of certainty as to which parts of the report were drafted by Ms C, and which parts of the report were drafted by New Aim’s solicitors.

At trial, when pressed on the issue whether New Aim’s solicitors had suggested that she would make changes to her draft report, the primary judge found that “[t]o this simple question, she prevaricated and gave unsatisfactory and at times unresponsive answers” (Reasons [48]).

Further, McElwaine J observed that Ms C conceded that she had received emails from New Aim’s solicitors, the effect of which was to suggest that she make changes to her draft report (Reasons at [50]).

As such, his Honour concluded that “most of the report was, at least initially, the product of drafting by the lawyers for the applicant, albeit in reliance upon some material of a non-specific nature that Ms [C] provided to the lawyers” (Reasons at [70]).

On appeal, the Full Court stated that it was not clear how Ms C’s answers during cross-examination were pervaricative or unsatisfactory or unresponsive, especially in circumstances where she was not permitted by the cross-examiner to finish her answer. [98]

Further, the Full Court found no example of a written communication from New Aim’s solicitors in which they suggested a change to Ms C’s report. [107]

The Full Court held that the material which Ms C provided to New Aim’s solicitors was factual in nature and not comprising expert opinion evidence.

Contrary to the findings of McElwaine J, the Full Court also found that the material provided by Ms C to Corrs was not “non-specific”.[111]

Was the involvement of New Aim’s solicitors in the drafting of Ms C’s report inconsistent with good practice?

The primary judge’s reasoning for rejecting the entirety of Ms C’s evidence focussed on the last five paragraphs of the report, in particular paragraph 58, which might be regarded as providing expert opinion evidence. However, there was no separate explanation given by the primary judge as to why the factual material (in paragraphs 1 to 55) was rejected.

The primary judge stated that he could not “be satisfied that the opinions expressed in the report by Ms [C] truly represent her honest and independent opinions and that no matters of significance have been withheld”, thus he rejected “all opinions and other factual material as set out in her report of 8 March 2022” (Reasons at [77]).

To this sweeping statement, the Full Court said that it was not clear why the primary judge rejected paragraphs 1 to 55 of the report. There was substantial material before the primary judge which indicated that these paragraphs were drafted by reference to factual material, and on the basis of discussions between New Aim’s solicitors and Ms C during one or more video conferences in relation to a draft or drafts prepared by them. [125]

Further, there was substantial material to suggest that paragraphs 56 to 60 of the report were drafted on the basis of Ms C’s written and oral communications with New Aim’s solicitors. The the reasoning adopted by the primary judge for the rejection of the opinion evidence at paragraphs 56 to 60 contained a number of factual errors and errors of approach which, if they had not occurred, might well have resulted in the evidence not being rejected. [126]

The Full Court also considered the expectations of legal practitioners when engaging with independent expert witnesses as set out in the Expert Evidence Practice Note and the Harmonised Expert Witness Code of Conduct. It stated:

There are various ethical requirements on legal practitioners involved in the process of gathering or putting evidence into an appropriate form for hearing. At the core of these is a requirement not to influence a witness’s evidence. This applies both to witnesses of fact and expert witnesses providing opinion evidence. Legal practitioners commonly take proofs of evidence from, or draft affidavits of, witnesses of fact. These are commonly drafted from oral communications which occur in conference or written material provided by the witness or which are otherwise available. It is less common for this to occur in the preparation of expert evidence, but there are reasons why it might occur. Where a legal practitioner takes responsibility for the drafting of evidence, the perception may arise that the drafter may have influenced the content of the evidence, even subconsciously.” [119]

The order of the primary judge dismissing New Aim’s claims was set aside, and the claims will be remitted for retrial.

Key takeaways:

  • There is not one rule or means of engaging with an expert which covers all types of experts and all situations. Notwithstanding that there might be an expectation that a report would be drafted by the expert, there may be some situations were a legal practitioner is involved in the process of preparing the expert’s draft report.
  • In this situation, the report should be drafted from factual information communicated to the lawyer by the expert, or the expert’s opinion as communicated to the lawyer. Lawyers must take care to ensure that they do not suggest what the expert’s evidence should be in this process.
  • Notwithstanding that it might be desirable, forensically or otherwise, there is no legal obligation for the involvement of a lawyer in drafting an expert’s report to be disclosed in the report itself.

Read the full decision here.

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