Wednesday, 22 June 2016
James Maxwell Holdsworth and Heather Munro Ellison v RSCPA (VIC) Incorporated [2015] VCC 653


Our Forensic team considers a judgment which highlights issues in the evidence of two financial experts who assessed the loss resulting from RSCPA wrongly putting down cattle in a stud herd.
The judgment shows how issues of expertise and errors can result in expert evidence being held entirely inadmissible; and that issues of independence reduce the weight given. 
In this instance, all of the issues that impacted the acceptance of the evidence could likely have been identified before the experts were engaged or issued their reports.


There was a drought in the Warrnambool region of Victoria which led to the RSCPA putting down a number of the plaintiffs’ cattle in late May 2003.
As a result, the plaintiffs were left with too few breeding cattle, and they were required to sell calves to meet financial obligations. In late 2003, the drought broke which led to the recovery of the condition of the remaining cattle of the herd.

The Court found that the defendant was liable for wrongly putting down 131 cattle and the losses that resulted.

Expert issues

Four financial experts were engaged to quantify the loss suffered. Two of them were criticised in the judgment for a number of reasons, outlined below.

Mr D’s expert evidence

Mr D was engaged by the defendant. He provided multiple reports estimating the loss. The Court commented on three main issues with Mr D’s evidence:
1) The appropriateness of his expertise;
2) The number of errors in the reports, which resulted in three revised reports, and the calculation of loss more than doubling; and
3) The appropriateness of his instructions.
Appropriate expertise
Mr D’s first report was issued jointly with another partner from his firm, Mr L. Mr L was responsible for providing an opinion and commentary on variables used in calculating the loss. Mr L had expertise in large beef cattle enterprises including the purchase price of cattle, the costs of maintaining cattle, and birthing rates. 
Mr D issued three supplementary reports without Mr L as a signatory. Mr D’s curriculum vitae did not include any experience with large beef cattle enterprises.
The following issues in relation to Mr D’s expertise were outlined during the hearing:
1) He often referred to having had discussions with staff in the office regarding stud cattle because he was not an expert and “could not take things much further in relation to stud cattle”;
2) He often referred to other staff having spoken to unnamed stock agents concerning the costs of agistment and weaning rates. Mr D was not able to say who these agents were or whether they were commenting on data from the vicinity of the farm or the whole of New South Wales;
3) He said that his staff developed the financial models estimating loss;
4) He “unfairly” calculated agistment and fodder costs, so as to increase them; 
5) His opinions were based on insufficient data; 
6) He did not know the quality of the herd, the age of the cattle, their condition, their propensity to breed within the first year, how badly there were impacted by the drought, or the ability of the plaintiffs to manage a farm.
Errors in Mr D’s reports
The first report, issued jointly Mr D and Mr L, calculated a loss of $194,340. Supplementary reports were then issued by Mr D as a result of errors having been identified both by Mr D himself and during cross-examination:
1) The first supplementary report corrected “a few minor” mathematical errors relating to pre-judgment interest in the first report and increased the loss to $216,207.
2) The second supplementary report was required because approximately 96 calves were missing from the loss calculation for 2003. Additionally, Mr D had included sales expenses in 2003 when there had been no sales. The revision affected most calculations for 2003. The loss increased to $397,240.
3) The third supplementary report further corrected arithmetical errors. This revision increased the loss to $436,966.
After commenting on the level of expertise of Mr D (discussed above), Justice Bowman stated that “any remaining confidence which [he] had in the report of [Mr D] was further eroded by the number of errors that plagued the reports and the calculations”.
Additionally, he said “The complexity resulting from his errors is such that the whole of his evidence should be rejected”.

Appropriateness of instructions
A further issue in the proceedings was the quality of the cattle: whether they were commercial or stud cattle. Evidence was given by other experts regarding quality: it was established that they were of stud quality through having quality bloodlines.
Mr D’s report proceeded from instructions “to deal with the animals as being commercial and not stud animals, or stock that could become stud animals”. Mr D said that stud cattle (or potential stud cattle) would have a higher value than commercial cattle.
Justice Bowman said that Mr D’s “assumption that this was going to be a commercial herd and not a stud one seems to … be misplaced”; and “it seems to me to be unrealistic and contrary to evidence to assume that the stud project would not have gone ahead and to not even give mathematical consideration to losses on a possible stud cattle basis”.

Mr T’s expert evidence

Mr T was engaged by the plaintiffs to provide a loss estimate. The Court considered his independence to be compromised because:
1) When a university student, Mr T had worked on a farm owned by Mr Holdsworth (one of the plaintiffs). At that time, Mr T met the other plaintiff, and became a friend of the Holdsworth family, and their accountant in 2009;
2) Mr T was the accountant for the plaintiffs’ partnership;
3) Mr T was owed fees for accounting work;
4) Mr T’s brother had advanced to Mr Holdsworth a loan for payment of water rates; repayment had not yet occurred;
5) Mr T originally took instructions from the plaintiffs, rather than their solicitors;
6) Additionally, Mr T had had contact with the brother of one of the witnesses prior to contact with solicitors;
7) Mr T initially omitted from his initial calculations the plaintiffs’ artificial insemination operations, as he was not able to determine that they had been at a commercial stage. In subsequent reports, after receiving an email from the plaintiffs’ solicitors, he included an ‘extremely sizeable’ amount regarding artificial insemination;
8) Mr T’s calculations included estimates of the worth of each artificial insemination straw without having obtained expert evidence of their value; and
9) The plaintiffs’ solicitors had advised the solicitors for the defendant that Mr T’s report would not be put forward because he was the accountant for the plaintiffs, and was not independent.
Mr T’s loss calculation produced an amount that far exceeded that in the other experts’ reports (including the plaintiffs’ other experts). 
After considering all this, Justice Bowman said that Mr T “cannot be viewed as an independent expert witness. That does not mean that his evidence is to be totally ignored. However, … the weight to be attached to his evidence seems to me to be greatly reduced”.


The three shortcomings of Mr D’s expert evidence highlight the need for solicitors to mitigate the risk of their expert being criticised and the evidence being undermined. This can be achieved by ensuring that experts:
1) Have the appropriate level of expertise in the subject matter; 
2) Either prepare all of their report themselves; or are able to explain portions prepared by others under their supervision;
3) Report all sources of information;
4) Conduct quality assurance checks on the report to avoid the need for later revision ; and
5) Are provided with appropriate instructions.
Mr T’s lack of independence is a reminder that where an expert is perceived to have, or has an actual, conflict of interest, the weight given to his or her evidence will be significantly reduced.