FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Artinos & Artinos (No 6) [2023] FedCFamC1F 652
File number(s): MLC 4132 of 2020 Judgment of: STRUM J Date of judgment: 8 August 2023 Catchwords: FAMILY LAW – EXPERT EVIDENCE – Where the first respondent husband seeks to adduce adversarial evidence as to the value of real estate – Where the single expert and the proposed adversarial expert have conferred and prepared a joint statement of the matters the subject of agreement and disagreement – Where the husband relies only on r 7.08(c) of the Federal Circuit and Family Court of Australia (Family Law Rules) 2021 – Discussion of ‘special reason’ for allowing adversarial evidence – Where cross-examination of the single expert at trial can be informed by the report of the proposed adversarial expert – Where there is no special reason for allowing adversarial evidence in addition to the evidence of the jointly appointed single expert – Where discretion to allow adversarial evidence would not be exercised even if a special reason was established due to defects in the report of the proposed adversarial expert. Legislation: Evidence Act 1995 (Cth) ss 76(1), 79(1)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 7.02, 7.08
Federal Circuit and Family Court of Australia, Central Practice Direction – Family Law Case Management, 1 September 2021, updated 28 November 2022 paras 3.14(d), 5.12(b)
Cases cited: Bass & Bass (2008) FLC 93-366; [2008] FamCAFC 67
Dasreef Pty Ltd v Hawchar (2011) CLR 588; [2011] HCA 21
Lambard & Lambard (No. 4) [2021] FamCA 47
Macvean & Manton [2022] FedCFamC1F 376
Moretto & Cosola [2022] FedCFamC1F 433
Neales & Neales (2022) FLC 94-079; [2022] FedCFamC1A 41
Salmon and Ors & Salmon [2020] FamCAFC 134
Simonsen & Simonsen [2009] FamCA 698
Tsoutsouvas & Tsoutsouvas and Ors [2012] FamCA 521
Division: Division 1 First Instance Number of paragraphs: 56 Date of hearing: 26 July 2023 Place: Melbourne Counsel for the Applicant: Mr Puckey KC with Mr Newland Solicitor for the Applicant: Blackwood Family Lawyers Counsel for the First Respondent: Mr Fary KC with Ms Borger Solicitor for the First Respondent: Belleli King and Associates The Second to Fourth Respondents The Second to Fourth Respondents did not appear ORDERS
MLC 4132 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ARTINOS
Applicant
AND: MR ARTINOS
First Respondent
C PTY LTD
Second Respondent
B PTY LTD (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
STRUM J
DATE OF ORDER:
8 AUGUST 2023
THE COURT ORDERS THAT:
1.Paragraph 3 of the First Respondent’s Application in a Proceeding filed 19 December 2022 (“Application”) be dismissed.
2.Paragraph 2 of the Application be adjourned to trial.
3.The Application be otherwise dismissed.
AND THE COURT NOTES THAT:
A.The final hearing commencing 16 October 2023 with an estimated duration of 10 days remains listed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy…
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Details
- Case
- [2023] FedCFamC1F 652
- Decision Date
CaseChat Overview and Summary
In the matter of Artinos & Artinos (No 6), the Federal Circuit and Family Court of Australia was tasked with deciding whether to allow the husband's expert witness to provide evidence at trial, as he sought to challenge the valuation provided by the wife's expert. The wife, who wished to retain the property, opposed the husband's application, arguing that the court should rely on the evidence of her expert alone. The legal issue before the court was whether the trial judge should permit evidence from another expert when there were considerable differences in the amounts in relevant valuations, and whether the interests of justice would be served by doing so. The court considered the potential for an evidential vacuum if the husband's application were refused, and whether the wife's opposition to the application was sufficient to warrant allowing the husband's expert to provide evidence.
The court found that, although the potential for an evidential vacuum was a significant consideration, the wife's opposition to the husband's application, and her awareness of the risk of a sale if the application were refused, were also important factors. The court noted that a trial judge is not bound to accept the evidence of a single expert, and can come to a figure that is different from that put forward by the experts if the evidence is properly approached. However, the judge cannot become a third valuer. The court concluded that, in this case, the difference in the valuations was not out of proportion to the likely additional costs of permitting the evidence to be adduced, and the interests of justice would be served by allowing the husband's expert to provide evidence at trial.
The court's reasoning was based on the need to avoid an evidential vacuum, particularly in valuation cases where the effective alternative of forcing a sale is a far from desirable option if one party wishes to retain a property. The court emphasised that the expertise of the valuer is in making a nuanced assessment of which sales are truly comparable and then forming a view as to a valuation after weighing the different comparable sale prices. Where the value contended by the party challenging the single expert is outside of the range identified by the single expert, the interests of justice would tend to weigh in favour of allowing evidence from the other expert, provided that such evidence is not obviously flawed and the difference involved is not out of proportion to the likely additional costs of permitting the evidence to be adduced.
The court's outcome was to permit the husband's expert to provide evidence at trial, as the difference in the valuations was not out of proportion to the likely additional costs of permitting the evidence to be adduced, and the interests of justice would be served by allowing the husband's expert to provide evidence at trial. The court's decision highlights the importance of considering the potential for an evidential vacuum and the need to avoid forcing a sale where one party wishes to retain a property. The court's decision also emphasises the importance of properly approaching the evidence and avoiding the situation where a judge becomes a third valuer.
The court found that, although the potential for an evidential vacuum was a significant consideration, the wife's opposition to the husband's application, and her awareness of the risk of a sale if the application were refused, were also important factors. The court noted that a trial judge is not bound to accept the evidence of a single expert, and can come to a figure that is different from that put forward by the experts if the evidence is properly approached. However, the judge cannot become a third valuer. The court concluded that, in this case, the difference in the valuations was not out of proportion to the likely additional costs of permitting the evidence to be adduced, and the interests of justice would be served by allowing the husband's expert to provide evidence at trial.
The court's reasoning was based on the need to avoid an evidential vacuum, particularly in valuation cases where the effective alternative of forcing a sale is a far from desirable option if one party wishes to retain a property. The court emphasised that the expertise of the valuer is in making a nuanced assessment of which sales are truly comparable and then forming a view as to a valuation after weighing the different comparable sale prices. Where the value contended by the party challenging the single expert is outside of the range identified by the single expert, the interests of justice would tend to weigh in favour of allowing evidence from the other expert, provided that such evidence is not obviously flawed and the difference involved is not out of proportion to the likely additional costs of permitting the evidence to be adduced.
The court's outcome was to permit the husband's expert to provide evidence at trial, as the difference in the valuations was not out of proportion to the likely additional costs of permitting the evidence to be adduced, and the interests of justice would be served by allowing the husband's expert to provide evidence at trial. The court's decision highlights the importance of considering the potential for an evidential vacuum and the need to avoid forcing a sale where one party wishes to retain a property. The court's decision also emphasises the importance of properly approaching the evidence and avoiding the situation where a judge becomes a third valuer.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
Riethmuller J further said:10Concerns as to potential injustice if parties are confined to a single expert witness, where there were considerable differences in the amounts in relevant valuations, were the basis of decisions permitting evidence from another expert in Pitt & Pitt [2009] FamCA 620, Verdon & Verdon (2020) 62 Fam LR 573, Jess & Garvey [2021] FedCFamC1F 189, and Carolan & Lawler [2021] FedCFamC1F 239. Although, in other decisions, even large differences in the valuation amounts have not been sufficient, on their own, to persuade the court to permit evidence from another expert: see, for example, Keevers & Keevers [2021] FedCFamC1F 338; and Padnall & Padnall (No 3) [2014] FamCA 904. However, as the Full Court noted in Neales & Neales [2022] FedCFamC1A 41 that it is erroneous to refuse leave when focusing only upon the difference in values: at [42]. Whilst these cases appear to indicate a diversity of judicial opinion, they may be better explained by reference to the reasons of Watts J in HRBH & IABH [2009] FamCA 1131, where his Honour noted the potential practical difficulty that may arise where the single expert’s evidence on an important factor is so undermined by cross-examination that there would then be “a vacuum in the evidence”: at [8]. 11An evidential “vacuum” is to be avoided, if possible, particularly in valuation cases where the effective alternative of forcing a sale, even if it is open to the court, is a far from desirable option if one party wishes to retain a property. …(Emphasis added) In the present case, it is the wife who wishes to retain the property; the husband contends that she will not be able to do so and that it should be sold. That is a matter for trial. If there were to be an evidential vacuum at trial, which I do not accept would necessarily be the case if the husband’s application were refused, it is the wife who will bear the risk of a sale. She opposes that application, in circumstances where she is legally represented, including by Senior Counsel, and is presumably aware of, and prepared to take, that risk. Riethmuller J continued:14Ultimately, a trial judge is not bound to accept the evidence of a single expert (Salmon at [41]), nor even any particular expert where there is more than one expert who gives evidence: see Borriello & Borriello (1989) FLC 92-049 at 77,558 and Goodwin and Goodwin Alpe (1991) FLC 92-192 at 78,275. Whilst a judge cannot simply average the values of differing experts (Commonwealth v Milledge (1953) 90 CLR 157 at 160–161; and Borriello at 77,558), a judge can nonetheless come to a figure that is different from that put forward by the experts, if the evidence is properly approached: see also Arcus Shopfitters Pty Ltd v Western Australian Planning Commission (2002) 125 LGERA 180 at [76]. However, the judge cannot become a third valuer: Players Pty Ltd v Corporation of City of Adelaide [2001] SASC 369 at [81]. In this context, the discussion of Kent J in Salmon (at [43]–[46]) as to the findings that may be open with respect to capitalisation rates and discounts for minority shareholdings is instructive.15In cases where the valuation is based upon the comparable sales method this distinction can be a fine one, however it must be recalled that the expertise of the valuer (which goes beyond a non-expert or real estate agent providing an appraisal) is in making a nuanced assessment of which sales are truly comparable and then forming a view as to a valuation after weighing the different comparable sale prices. Where the values for which each of the parties contend fall within the ambit of a broad range that the single expert identifies, cross-examination would ordinarily be a sufficient tool to avoid injustice. Where the value contended by the party challenging the single expert is outside of the range identified by the single expert (after making use of the right to send questions to the expert and a conference between experts) the interests of justice would tend to weigh in favour of allowing evidence from the other expert, provided that such evidence is not obviously flawed and the difference involved is not out of proportion to the likely additional costs of permitting the evidence to be adduced.
Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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