Bernet and Bernet (No 2)

[2017] FamCA 598

FAMILY COURT OF AUSTRALIA

BERNET & BERNET (NO 2) [2017] FamCA 598

FAMILY LAW – EVIDENCE – RULING – expert evidence – whether opinion evidence can be given by an experienced farmer.

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

Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
HG v The Queen (1997) 197 CLR 414
Steinbrenner and Steinbrenner [2008] FamCAFC 192

APPLICANT: Ms Bernet

RESPONDENT: Mr Bernet

FILE NUMBER: MLC 6860 of 2015

DATE DELIVERED: 15 August 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 7, 8, 9, 10, 14 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Panna QC with Mr Meehan

SOLICITOR FOR THE APPLICANT: McKean Park Lawyers

COUNSEL FOR THE RESPONDENT: Mr Kirkham QC with Dr Ingleby

SOLICITOR FOR THE RESPONDENT: Saxbys Lawyers

Orders

1. Paragraph [48] of the husband’s affidavit filed 28 July 2017 is ruled admissible.

2. Paragraphs [82 and [83] of the same affidavit are ruled inadmissible.

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 Bernet & Bernet 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 MELBOURNE

FILE NUMBER: MLC 6860  of 2015

Ms Bernet

Applicant

And

Mr Bernet

Respondent

REASONS FOR RULING

1. Objection is raised by the wife to two pieces of evidence relied upon by the husband in this property proceeding.  The first piece of evidence commences at [76] of the husband’s trial affidavit in which he deposes to using farm plant and equipment owned by his parents.  At [78], the husband asserted that the free use of this machinery was of significant benefit in the parties’ farming operations enabling greater profit than if they had been required to pay for it. 

2. At [79] the husband said that when equipment went to his parents’ farms it was serviced and repaired by his parents’ entities.  Then, there were gifts of seed and so forth given by his parents including the use of his father’s labour force.

3. The wife’s concessions were that she and the husband worked on the father’s property without remuneration and that plant and equipment sent to the father’s property did not come back.  In relation to the parents’ plant and equipment, she conceded that the husband’s father was generous about the use of machinery as well as allowing them the use of his employees but she did not know about such things as fertilizer and chemicals. 

4. The synopsis just given, indicates there is a modest dispute about the assistance the husband and wife received.  The real controversy lies in the husband’s attribution of a value to that assistance.  His approach, to which objection has been taken, is at [82] et seq of his affidavit.  There, he calculated that during the relevant years, there was a saving to he and the wife of what he asserted was $1,014,090.

5. It was submitted by counsel for the husband that there was no “serious” challenge to the detail in the tables of calculations in the husband’s affidavit.  The wife’s position however was that the husband’s costs calculations were not admissible because they were caught by the expert opinion rule.

6. The husband’s evidence was said to be justified as admissible on his statement at [83] that his assessment was based on his 40 or more years of experience as a farmer.  He asserted his calculations were estimates containing a “reasonable degree of accuracy”. 

7. The approach to admissibility of evidence is found in the Evidence Act 1995 (Cth).

8. Section 75(1) of that Act provides:

   Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.

9. Section 79(1) of that same Act provides an exception to the rule.  It says:

   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.

10. In Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, the plurality of the judges of the High Court observed:

    (T)he opinion rule is expressed as it is in order to direct attention to why the party tendering the evidence says it is relevant. 

11. Their Honours then said:

    In considering the operation of s 79(1) it is thus necessary to identify why the evidence is relevant: why it is “evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding” that requires identification of the fact in issue that the party tendering the evidence asserts the opinion proves or assists in proving. (Citations omitted).

12. The evidence of the husband was led to establish his contribution within the meaning of s 79(4) of the Family Law Act 1975 (Cth) (“the Act”). As can be seen, the controversy lies in identifying some value to that. The fact in issue is that value here because it is the husband’s case that his contribution was greater than that of the wife. Thus, if admissible, the evidence of value may be important if in the final analysis, some yardstick is necessary (see Steinbrenner and Steinbrenner [2008] FamCAFC 192 per Coleman J at [234]).

13. The plurality in Dasreef went on to say at [32]:

    To be admissible under s 79(1) the evidence that is tendered must satisfy two criteria.  The first is that the witness who gives the evidence “has specialised knowledge based on the person’s training, study or experience”.  The second is that the opinion expressed in evidence by the witness “is wholly or substantially based on that knowledge”.

14. In hearing the submissions of counsel before me, reference was made to other authorities to justify the admissibility of this evidence, but I am conscious of what the High Court later said in Dasreef (supra) at [37]:

    The admission of opinion evidence is to be determined by application of the requirements of the Evidence Act rather than any attempt to parse and analysis particular statements in decided cases divorced from the context in which those statements were made.

15. Returning to s 79(1), the husband’s evidence about his knowledge is limited to his experience of forty years as a farmer.  He must show that his opinion arises from his specialised knowledge.  Specialised in this sense is used as being distinctly different from the knowledge generally held in the community (see HG v The Queen (1997) 197 CLR 414 per Gaudron J at [58]).

16. The same question about specialised knowledge arises in the second matter about equipment values but in this first one, that knowledge is relied upon to give an opinion (as can be seen from what follows in the husband’s language) but it is based on speculation (“the conservative cost of … farms…at today’s prices will be at least $450 per hectare”), inference (“the costs…on average, increase by five per cent per annum and generally speaking I experienced this to be the case…”) and vague calculation (“I am able to estimate the expenditure expected to be incurred…with a reasonable degree of accuracy”).

17. Whilst the accuracy of the annual expenditure was not challenged, the opinion about the “conservative costs” at “today’s prices” and the “increase by five percent” leaves the methodology open to debate which means the link with specialised knowledge is missing.  The evidence to support those variables mentioned by the husband in my view is missing and therefore, the opinion must be held to be outside of the specialised knowledge of a farmer even with forty years of experience.

18. Paragraphs [82] and [83] are therefore ruled inadmissible.

19. The second question arises from the husband’s evidence at [48]. There he said that in August 1998, he and his parents whilst walking around the farm, prepared a list of larger machinery used at Property D and recorded the “estimated agreed value”. This evidence was then extended to show that there was a distinction between the price he paid, matched against the agreed values. The difference is $202,000 (noting that this was using 1998 figures).

20. This piece of evidence was led for the same reason as the earlier evidence to show the contribution by the husband’s family and the benefit that the husband and the wife received.  In my view, this is different to the first question and should be admitted. 

21. The husband in this case, set out his specialised knowledge when he was being cross-examined.  He said he “lived machinery” buying magazines about “asking prices” and he had a good idea of what items were worth.  When challenged about the extent of the values, he added that he knew what these items cost. 

22. This evidence is the equivalent of what valuers undertake to assess the worth or value of plant and equipment.  Valuers identify the item, its quality and material state and then use comparable sales to affix a value.  That is what the husband did here.  It is not a retrospective valuation per se because it was done in 1998 for a specific purpose. 

23. I am satisfied that this opinion was drawn from the husband’s specialised knowledge of the value of plant and equipment in 1998.  I am satisfied the evidence is relevant because it asserts a fact in issue and the opinion assists in proving that fact.  The quantum of the benefit to the husband and wife can be concluded from the husband’s specialised knowledge drawn from his experience.

24. Thus, paragraph [48] is ruled admissible.

I certify that the preceding Twenty-Four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 15 August 2017.

Associate:

Date:  15 August 2017