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NSW Supreme Court rules complex modelling evidence inadmissible as insufficient reasoning provided

By Jennifer Hughes
Aug 15
4 min read

Updated: Sep 1


The NSW Supreme Court has recently found that joint expert reports on hydrological modelling were inadmissible on the basis that the reasoning process was insufficiently clear.

The proceedings involved a challenge by property owners on a flood plain to a determination by the Minister of their water entitlement under ‘replacement floodplain harvesting (regulated river) access licences’ under the Water Management Act 2000.


Such licences entitle a licence holder to use a particular share of the available water within their respective water management area. The Minister is required by the Water Management (General) Regulations 2018 to use three specified models when determining the share component under these licences. The property owners in these proceedings alleged the models used to determine their water entitlements had either been misapplied or applied by erroneous process or were themselves in error.


It was accordingly crucial for the Court to understand how the hydrological models worked and the data inputs that were used.


The experts in the proceedings prepared a joint expert report and then supplementary expert reports that addressed the issues in the proceedings in relation to specified models and the water entitlements.


The Department subsequently expressed concern that there were deficiencies in these expert reports. The following two further questions were then put to the experts:

Question 1 – What is the basis of your opinions contained in the original JER? Please set out the reasoning, facts and assumptions on which each opinion, per issue is based.

Question 2 – What are the calculations you used to arrive at the agreed total in Issue 7 in the JER? This will need to be contained in spreadsheets for each expert which are to be annexed to the supplementary JER.

Further supplementary expert reports were then prepared.


The Minister claimed that all of the expert reports were inadmissible and that further expert hydrology evidence was necessary to determine the issues in the proceedings.


The issue – the reasoning process leading to the formation of an expert’s opinion must be made clear

Section 79(1) of the Evidence Act 1995 (NSW) provides an exception to the general rule that evidence of an opinion is not admissible:

If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.


The requirement in s 79(1) that the expert’s opinion be based ‘wholly or substantially’ on their specialised knowledge means that the reasoning process leading to the formation of the opinion must be made clear.

The Court found that the expert reports were not admissible as:

  1. The experts had not adequately explained the basis for many of their opinions. In particular, the Court found that while there were generalised references to the sources on which the data was based, the inputs to each model were not adequately explained. 

  2. The experts had not adequately exposed their reasoning for any of their evaluative or modelling conclusions. The Court found that it was therefore left in the position where it was unable to discern whether the experts’ conclusions were based on their specialised knowledge.

  3. The joint expert reports used technical language which was not always explained and which did not correlate with the language used in the WM Regulations or the specified models. This Court found that this made it impossible to understand the reasoning in the reports.

  4. The reasoning provided by the experts did not identify the assumptions on which the conclusions were based, such that the Court was unable to determine which parts of the evidence were assumptions and which were conclusions.


The Court also found that:

  1. The experts had not attempted to identify how the models were understood to operate.

  2. A particular table had been supplied without any proper explanation of the meaning of the data, so that it was impossible to evaluate what the figures meant or whether they reflected assumptions or evaluations based on expertise.

  3. The conclusions drawn by the experts were not responsive to the questions that they were asked.

  4. No explanation or assistance was provided to enable the spreadsheets in the reports to be understood.


Key takeaways


This decision is a salient reminder of the need for experts to set out in their reports, including joint reports:

  1. the facts and assumptions of fact on which each of the opinions in the report are based; and

  2. the expert’s reasons for each opinion expressed.


It must be acknowledged that it can be quite challenging to comply with these requirements in some areas, especially where complex modelling is involved.


It is also tempting for experts preparing joint reports to record the outcome of their discussions during conferencing without explaining the reasoning that led to their conclusions, especially where they are in agreement on a particular issue.


Nevertheless, if the lawyers, any other experts who were not in joint conferencing or the Court are unable to determine or follow the reasoning process that led to the formation of an opinion, there is a risk that the evidence will be held to be inadmissible, potentially having significant consequences for the outcome of the litigation.



Authored by Jennifer Hughes, Partner at Beatty Hughes & Associates.


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Jennifer has over 25 years’ experience in environment and planning law, assisting industry, developers and government to manage environment incidents and on-going compliance, obtain development consents and environmental licences and acquire and divest industrial and contaminated land.


Jennifer is widely recognised as a leading advisor to the waste industry due to her in-depth understanding of issues unique to that sector. She also serves on the Board of the Australian Organics Recycling Association (AORA).

Jennifer was a partner at Baker & McKenzie before joining the firm. She is ranked in a number of directories as a leading environmental lawyer.

 
 
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