Atkins and Hunt and Ors - [2019] FamCA 821

FAMILY COURT OF AUSTRALIA

ATKINS & HUNT AND ORS

[2019] FamCA 821

FAMILY LAW – PROPERTY – EVIDENCE – Ruling on application pursuant to s 136 of the Evidence Act1995 (Cth)

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)

APPLICANT:

Ms Atkins

RESPONDENT:

Mr Hunt

2^nd RESPONDENT:

Mr J Hunt

3^rd RESPONDENT:

Mr D Hunt

4^th RESPONDENT:

N Pty Ltd

5^th RESPONDENT:

T Pty Ltd

6^th RESPONDENT:

H Pty Ltd

7^th RESPONDENT:

Mr EE Hunt

FILE NUMBER:

SYC

425

2012

DATE DELIVERED:

7 November 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

20 August 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Dura, counsel

SOLICITOR FOR THE APPLICANT:

Mills Oakley

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge, SC

SOLICITOR FOR THE RESPONDENT:

Sexton Family Law

COUNSEL FOR 2^ND – 7^TH RESPONDENTS

Mr Gray

SOLICITOR FOR 2^ND – 7^TH RESPONDENTS

HWL Ebsworth Solicitors

Orders

The application by the 2^nd to 7^th respondents to limit the use to which Exhibit 34 might be put is dismissed.
Exhibit 34 is to be provided by the applicant to Ms AAA and by the respondents to Ms BBB as soon as is practicable with a request for them each to prepare any statement that they wish, commenting upon Exhibit 34 (although I note that the part of Exhibit 34 which is the valuation of the minority interest in H Pty Ltd as at 30 June 2010 may not be controversial).
Any statement prepared pursuant to order 2 be provided to my associate in electronic form as soon as is practicable.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Atkins & Hunt and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 425 of 2014

Ms Atkins

Applicant

And

Mr Hunt

Respondent

And

Mr J Hunt

2^nd Respondent

And

Mr D Hunt

3^rd Respondent

And

N Pty Ltd

4^th Respondent

And

T Pty Ltd

5^th Respondent

And

H Pty Ltd

6^th Respondent

And

Mr EE Hunt

7^th Respondent

REASONS FOR JUDGMENT

On 20 August 2019, the wife tendered, without objection, two documents which became Exhibit 34.
The first is a letter dated 30 March 2011 written by Mr R of R Pty Ltd. The husband, having satisfied himself that Mr R was a person with appropriate experience to provide an opinion, asked Mr R to value the five A Class shares…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Atkins and Hunt and Ors

Details

AGLC: Atkins and Hunt and Ors [2019] FamCA 821
Case: [2019] FamCA 821
Decision Date: 7 November 2019

CaseChat Overview and Summary

In the matter of *Atkins and Hunt and Ors*, heard before Watts J, the dispute concerned the use of evidence, specifically Exhibit 34, which contained a valuation report. The applicants, the second to seventh respondents, sought to limit the use of this exhibit, arguing it would be unfairly prejudicial to them.

The primary legal issue before the court was whether the use of Exhibit 34 should be limited, pursuant to section 136 of the *Evidence Act 1995* (Cth). The respondents contended that unlimited use of the report would be unfairly prejudicial because they had not had the opportunity to challenge the report or cross-examine the author, Mr R, and because each party was intending to call expert evidence regarding the value of N Pty Ltd as at 2015.

Watts J considered the arguments and found that the opinion expressed in Mr R's report was clear and not misleading or confusing. The judge rejected the submission that the unlimited use of the report would be unfairly prejudicial. The court noted that the respondents' arguments were underpinned by their lack of opportunity to challenge the report and cross-examine Mr R, but ultimately found these concerns did not warrant limiting the use of the evidence. The court also observed that the valuation methodology used in Exhibit 34, an "Asset Approach" for N Pty Ltd, differed from the "Income Based Approach" used in another valuation for H Pty Ltd, but found this difference unremarkable given the nature of the companies.

The application by the second to seventh respondents to limit the use of Exhibit 34 was dismissed. The court ordered that Exhibit 34 be provided to Ms AAA and Ms BBB to allow them to prepare statements commenting on it, with any such statements to be provided to the court's associate in electronic form.

Orders

Orders of the court

The application by the 2nd to 7th respondents to limit the use to which Exhibit 34 might be put is dismissed.

Exhibit 34 is to be provided by the applicant to Ms AAA and by the respondents to Ms BBB as soon as is practicable with a request for them each to prepare any statement that they wish, commenting upon Exhibit 34 (although I note that the part of Exhibit 34 which is the valuation of the minority interest in H Pty Ltd as at 30 June 2010 may not be controversial).

Any statement prepared pursuant to order 2 be provided to my associate in electronic form as soon as is practicable.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Section 136 of the Evidence Act 1995 (Cth) (“the Evidence Act”) is in the following terms: General discretion to limit use of evidenceThe court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or(b) be misleading or confusing. Although counsel for the 2nd to 7th respondents relied on both limbs of s 136 of the Evidence Act, the arguments concentrated on the first limb, namely, the danger of the evidence being unfairly prejudicial to the 2nd to 7th respondents. I do not accept that the opinion expressed by Mr R is confusing or misleading in relation to what he thought N Pty Ltd was worth in 2011. The opinion as to value was quote clearly expressed. Underpinning the submission that the unlimited use of the report would be unfairly prejudicial to the 2nd to 7th respondents, are submissions that: a)The 2nd to 7th respondents have not had the benefit of challenging the report; b)The 2nd to 7th respondents have not had the opportunity of cross examining Mr R; andc)Each party is calling expert evidence at least as to the value of N Pty Ltd as at 2015. Mr R’s opinion is expressed in very short form. It is appropriate to set it out in full: On Mr Hunt’s instructions, we have valued the five A class shares held by Mr Hunt and one A class share held by T Pty Ltd. These shares are of equal pro rata value because Mr Hunt controls T Pty Ltd and is therefore the effective owner of all A class shares. All of the shareholders’ value in N Pty Ltd is attributed to the A class shares principally because they have all the voting power. Although they do not share in a winding up the prospect of a forced winding up is so remote that this prospect bears no impact on value. If members wished to voluntarily wind up the company, a decision which could only be made by the A shareholders, they would cash up the assets of N Pty Ltd and distribute fully franked dividends. It would be a decision of the A shareholders as to whom dividends would be distributed. We have used the realisation of assets method under the Asset Approach to valuation to value the A class shares. They are worth in the aggregate $11,333,701 and Mr Hunt’s shares are pro rata worth $5,666,850 and one T Pty Ltd share is worth $1,133,370. These shares have a high degree of marketability and could be sold to an external purchaser. At your request we have issued the shares in draft for your review particularly in light of the director real estate valuation. In our recent experience capital expenditure on premises at the behest of franchisors adds no value to the underlying real estate because rarely does the underlying viability of the franchise improve. Counsel for the 2nd to 7th respondents raised a number of issues in respect of this report. Firstly, he pointed to the different methodology used in the two valuations. When valuing N Pty Ltd, Mr R used an “Asset Approach”. He pointed out that in the second document, when valuing the minority interest in H Pty Ltd, the valuer had not adopted an “Asset Approach” but rather an “Income Based Approach”. It is not controversial that H Pty Ltd was the company which operated the Company 1 franchises at Town O and Town P. Adopting an income based approach to the trading company seems unremarkable.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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