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Cite as: December 2009 83(12) LIJ, p.59


Adoption of report of special referee

Wenco Industrial Pty Ltd v WW Industries Pty Ltd & Anor [2009] VSCA 191 (unreported, 27 August 2009, No 7399/2004, Redlich and Bongiorno JJA and Beach AJA).

The applicant and the first respondent had carried on business in partnership (the second respondent was the sole director and secretary of the first respondent). In order, in essence, to take accounts between the parties, Teague J had made an order under r50.01 of the Supreme Court Rules for the appointment of a special referee to whom a list of questions was submitted.

The report of the special referee was submitted. The respondents applied under r50.04 for an order that the report be adopted. That rule is in the following terms:

“The Court may as the interests of justice require adopt the report of a special referee or decline to adopt the report in whole or in part, and make such order or give such judgment as it thinks fit”.

It was ordered by Smith J that the report be adopted with one exception not relevant for the purposes of the appeal. [The facts of the case are not significant but the case is important for its restatement of the legal principles applicable to the adoption of a special referee’s report.]

The applicant appealed. An initial question was whether leave to appeal was required. The applicant applied for leave out of time in the event that leave was necessary.

The Court of Appeal was of the view that leave to appeal was required. Reference was made to the decision of the Court of Appeal in Border Auto Wreckers (Wodonga) Pty Ltd v Strathdee [1997] 2 VR 49 and Dura (Australia) Constructions Pty Ltd v Victorian Managed Insurance Authority [2009] VSCA 171.

The Court said:

“The orders of Smith J adopting the referee’s report were interlocutory. There was no final disposition of the rights of the parties. The referee’s answers in response to the reference and the Court’s unqualified adoption of them were not decisive of the applicant’s proceedings. The report quantified certain matters prior to the determination of liability issues by the Court. Yet the parties were bound by the answers. They could not subsequently advance argument or adduce further evidence designed to demonstrate that the answers were wrongly determined. The only remedy the parties have is by way of appeal from the interlocutory order made”. [11] (endnote omitted)

The Court referred to the principles relevant to the adoption of a special referee’s report as follows:

“The approach to be taken in considering whether to adopt the report of a referee, has been the subject of extensive consideration by courts in different jurisdictions. Although the underlying rules are not always the same, the following propositions can be extracted from the cases. They provide a general guide as to how the question of the adoption of a referee’s report should be approached:

  1. First, in exercising the power conferred by r50.04 to adopt the report of a special referee, the Court has a wide power which is to be exercised ‘as the interests of justice require’. This broad mandate should not be the subject of restrictions laid down in advance of judges exercising it. Subject to what follows, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised.
  2. Secondly, the purpose of rules 50.01 and 50.04 is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation. Further, that purpose would be frustrated if the reference were to be treated as ‘some kind of warm-up for the real contest’.
  3. Thirdly, insofar as the subject matter of dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh.
  4. Fourthly, where a report shows a thorough, analytical and scientific approach to the assessment of the subject matter of the reference, the Court would have a disposition towards acceptance of the report, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for inquiry and report.
  5. Fifthly, if the referee’s report reveals some error of principle, absence or excess of jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection. In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from the according to particular aspects of it different weight; and perversity or manifest unreasonableness mean a conclusion that no reasonable tribunal of fact could have reached. The test denoted by these phrases is more stringent than ‘unsafe and unsatisfactory’.
  6. Sixthly, generally, the referee’s findings of fact should not be re-agitated in the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise. Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence.
  7. Seventhly, the purpose of r50.01 and r50.04 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based.
  8. Eighthly, the Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire.
  9. Ninthly, even if it were shown that the Court might have reached a different conclusion in some respect from that of the referee, it would not ordinarily be (in the absence of any of the matters referred to in sub para (e) above) a proper exercise of the discretion conferred by r50.04 to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report”. [17] (endnotes omitted)

The Court of Appeal examined the various submissions of the parties in relation to Smith J’s exercise of discretion and concluded that there had been no error.

The application for leave to appeal was refused.


PROFESSOR GREG REINHARDT is executive director of the Australasian Institute of Judicial Administration and a member of the Faculty of Law at Monash University, ph 9600 1311, email Gregory.Reinhardt@law.monash.edu.au. The numbers in square brackets in the text refer to the paragraph numbers in the judgment. The full version of this judgment can be found at www.austlii.edu.au/databases.html.

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