Buttrick and Buttrick - [2010] FMCAfam 906

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BUTTRICK & BUTTRICK

[2010] FMCAfam 906

FAMILY LAW – Property proceedings – valuation issues – application to adjourn final hearing – interests of justice.

Cheung v R. (1999) ALJR 1093

Applicant:

MS BUTTRICK

Respondent:

MR BUTTRICK

File Number:

ADC 1663 of 2008

Judgment of:

Brown FM

Hearing date:

1 June 2010

Date of Last Submission:

1 June 2010

Delivered at:

Adelaide

Delivered on:

1 June 2010

REPRESENTATION

Counsel for the Applicant:

Mr McGinn

Solicitors for the Applicant:

Barr Lawyers

Counsel for the Respondent:

Ms Morisini

Solicitors for the Respondent:

Di Morosini & Co

ORDERS

The application made for the final hearing listed before Federal Magistrate Brown on 31 May, 1 & 2 June 2010 be vacated is allowed and further consideration of this matter is adjourned to 4 June 2010 at 9:30am.
The matter is re-fixed for final hearing before Federal Magistrate Brown on 7 February 2011 at 10:00am NOTING 3 days are allowed.

IT IS NOTED that publication of this judgment under the pseudonym Buttrick & Buttrick is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADC 1663 of 2008

MS BUTTRICK

Applicant

And

MR BUTTRICK

Respondent

REASONS FOR JUDGMENT

This is a contested application for adjournment. The substantive proceedings are concerned with the division of matrimonial property. The applicant in the proceedings is Ms Buttrick. The respondent is

Mr Buttrick.
Ms Buttrick, to whom I will refer to as “the wife” for ease of delivering these reasons for judgment, seeks the adjournment of the final hearing of the parties’ completing applications. Mr Buttrick, the husband, seeks that the trial go ahead.
The issue of the adjournment turns on issues related to valuation evidence and how that evidence has been obtained and the overall fairness of that process.
The wife commenced these proceedings on 29 April 2008. At that stage she made a generic application for property orders, seeking a just and equitable settlement of property. In addition, she sought an indeterminate amount of spousal maintenance, as well as a departure from an administrative assessment of child support.
The husband responded to the application on 22 May 2008. He also sought orders that would see the wife receive an unspecified amount of money in settlement of her claim for property settlement.
In particular, he sought an order that the court award the wife an amount of money which it adjudged to be fair and equitable. In addition, he sought to retain the former family home at Property W. This property is known to each of the parties as Property W.
The parties married [in] 1982. They have six children, three of whom are over 18 and three of whom are aged 9, 10 and 16 respectively. The three youngest children live predominantly with the wife. The parties separated in September of 2007.
Accordingly, the proceedings have been on foot for some time now, and at this juncture it is a source of regret that they have not proceeded more speedily. However, from the court’s perspective, there is an explanation for the delay.
On 26 May 2008, which was the first mention of the matter, the parties were referred to a financial mediation conference, which was scheduled for 29 July 2008.
The parties own real estate of significant value. For present purposes, this real estate includes the following.
·Property W, to which I have already referred, which is jointly owned by the parties. It is a parcel of land of around 16 hectares. On it is built a homestead and around the homestead is planted around 7.5 hectares of vines. The property also has water licences related to it and is near [town omitted].
·The other property of relevance is known to the parties as Property H. It is a property of 21.47 hectares. It consists of flat alluvial land. It is also located near [town omitted] and it has on it a little over 5 hectares of vines and it too has water allocations related to it.
It is common ground between the parties that the husband has been significantly involved in the production of wine in the past. I will return to the significance of that issue in a moment, but the value of the land in question, for the production of wine, is central to the case.
For obvious reasons, for any financial mediation conference to be useful, the parties had to agree on the value of their matrimonial property, in particular, the real estate which was available for division between them.
Regrettably, it seems to be the case that the process of valuing the items of real estate took time and several financial mediation conferences were either rescheduled or proved abortive.
Anyway, it is common ground that, in November of 2008, Mr W, who is an experienced and well qualified valuer, particularly in respect of rural or primary production land, was appointed on the instructions of both the husband and the wife’s solicitors to value both Property W and Property H.
At that stage in November of 2008, he valued Property W at $1.436 million and Property H at $900,000. Once those valuations were to hand, a further financial mediation conference was listed for 29 January 2009 and there was yet another financial mediation conference on 23 April 2009.
The parties did not reach a resolution of the various issues between them and the matter came into court before myself, I think, on 12 May 2009. By that stage, of course, the proceedings were about a year old and the parties had been separated for around 18 months or perhaps a little more.
Anyway, at that stage, the parties were able to agree on an interim or partial property settlement and although in dollar terms I am not fully aware of what each received, it seems that each party received a sum slightly less than or in the vicinity of $800,000.
It is also, I think, the position that the husband has returned to live in the Property W property and the wife has been able to purchase a property for herself in the Adelaide area. Anyway, in May of 2009, the proceedings were fixed for final hearing. Three days were set aside for the matter on 11, 12 and 13 November 2009.
The next important thing that occurred, from the court’s perspective, is that on 28 October 2009, the court was informed that the matter had settled and for that reason the dates of 11, 12 and 13 November were vacated and another directions date was allocated on 20 November 2009, so that the appropriate arrangements could be made to formalise the agreement between the parties.
Anyway, on 20 November 2009, I was informed that the matter was not settled and hearing time was required and the matter was re-fixed for hearing for three days, commencing 31 May 2010.
That history indicates the waiting times for final hearings in this court. As I say, that the matter has been fixed for hearing on two occasions and in general terms the waiting time is somewhere in the vicinity of six months or so after the conclusion of the intermediary steps relating to conciliation and possible settlement.
When the matter was fixed for hearing, procedural orders were made requiring each party to file their material for trial. In the wife’s case, it was to be filed on or before 3 May 2010 and in the husband’s case on or before 17 May 2010.
The next thing of note that occurred, from the court’s perspective, is that on 6 April 2010, the wife’s former solicitor filed a notice of ceasing to act and on 1 April 2010, her present solicitors filed a notice of address for service.
It seems to be the case that the wife’s current solicitors were involved in the matter, perhaps a week or a fortnight prior to this date which obviously was fairly imminent, so far as the forthcoming trial was concerned.
The husband filed his affidavit material and an updated statement of his financial circumstances on 18 May 2010. It is interesting to note that in his statement of financial circumstances, he attributed a value of $900,000 to the Property H property, which I should say is registered in the name of a proprietary company, which I understand the husband controls, and he gave, as the value of his half-share in Property W, the sum of $718,000. So, in effect, he adopted the valuations put forward by Mr W in November 2008.
However, in his trial affidavit, he said this at paragraph 36:
“I say that I do not accept the value of the Property H vineyard in the sum of $900,000. It was valued in 2006 when I purchased it from [J] Proprietary Limited, as part of my settlement for the sum of $500,000. My brother [name omitted], in accordance with our agreement, has first right of refusal if the vineyard is to be sold and I have been informed by him and verily believe that he would not pay any more than $500,000 for it if it were to be sold. In any event, I seek to retain the vineyard. I understand, however, that the wife is having another valuation done on the land by Mr B who telephoned me recently. That was the first I had heard that she was taking such action but I have not, to date, received any further information regarding such evaluation.”
I will return to Mr B in a moment. In addition, in his affidavit material, Mr Buttrick, at paragraph 53, concedes that from a portion of the moneys received by him in settlement in May 2009, he had purchased a new motor vehicle and also installed a swimming pool at the

Property W property.
The wife filed her affidavit material for trial on 21 May 2010. In her statement of financial circumstances, she adopted the figures ascribed by Mr W for both Property W and Property H. She annexed Mr W’s valuations to her trial affidavit. Mr W’s report clearly indicates that he valued the Property H, Property W and another vineyard property, which has subsequently been sold, on the joint instructions of both the wife’s former solicitors and the husband’s current and long-term solicitors.
Anyway, Ms Buttrick, in her affidavit, indicated that she had some quibble with Mr W’s valuation in that she said that the Property H property had been valued by Mr W after the husband had stripped the vines, and she indicated her concern that this action had significantly reduced the value of the block.
On 31 May, as is commonly the case, the parties sought to have the matter stood down so they could discuss any prospect of resolving the matter. At that time, the wife’s counsel, Mr McGinn, handed to me an unfiled application which sought to adjourn the proceedings and a number of other ancillary applications. In support of the application was filed, or was presented, an affidavit of Shelley O’Connell. And

Ms O’Connell is the wife’s current solicitor.
Obviously, Ms Morisini, counsel for Mr Buttrick, had not had an opportunity to formally respond to that application. That application was no doubt a character in the wings whilst the parties discussed outstanding issues between them.
The parties have, in the past, apparently conducted extensive negotiations with one another and I have been told they have reached agreement. However a concrete settlement has never materialised. In those circumstances, I was, of course, content for the parties to discuss matters of settlement.
However, at 2.15 or thereabouts yesterday, I was told that the matter had not resolved and therefore Ms Buttrick’s application for adjournment would proceed and that Ms Morisini indicated that she opposed such application.
The history of – or the background to the adjournment application is set out in Ms O’Connell’s affidavit. I do not believe it is greatly controversial. Ms O’Connell deposes that on 28 May 2010, shortly after lunch, she received a letter from Ms Morisini – she is both

Mr Buttrick’s counsel in these proceedings and his solicitor and obviously 28 May was the Friday prior to the hearing commencing on the 31^st.
Anyway, with that letter were some documents likely to be particularly important in these proceedings. They were updated valuation of both Property W and Property H.
Those valuations had been conducted by Mr B, a certified practising valuer who has, as I understand it, experience of valuing rural and primary production properties in the past. I hasten to say there is no question concerning either his expertise or Mr W’s expertise to value vineyard properties of the nature concerned in these particular proceedings, so far as I know.
Ms O’Connell went on to depose that she was concerned to receive, from her perspective, out of the blue and at a late stage these valuations from Mr B. She deposes that she sent a letter to Ms Morisini, shortly prior to close of business on 28 May 2010, advising that her client was considering making an application to adjourn the trial and putting

Ms Morisini on notice that there may be an application for costs.
It is clear to me that Ms O’Connell, from Mr Barr’s office, became involved in the proceedings at a fairly late stage. One would imagine that she and her client would have been concerned about the currency of Mr W’s valuations and whether they remained accurate.
Ms O’Connell confirms that on 3 May, which is four weeks prior to the trial date, she contacted Mr W and asked if he would be able to update his valuation of both Property W and Property H. Mr W said he would not be able to do so because of pressure of work.
Ms O’Connell then considered other valuers, including Mr B, whom she telephoned on 6 May 2010. Ms O’Connell then deposes that Mr B disclosed to her that he and members of his family were friendly with the Buttrick family generally and he considered himself to be acquainted with Mr Buttrick, the respondent in these proceedings.
As a result of that Ms O’Connell spoke with the wife and was formally instructed by her that she did not wish Mr B to be appointed as the valuer to conduct an update of the valuations in respect of the two properties concerned.
At this point it perhaps would have been prudent for Ms O’Connell to have spoken with Ms Morisini about the issue. I say that because

Mr W was jointly instructed by the parties and ordinarily I would expect that if an update of his valuation was required, the parties would again jointly instruct Mr W to do the update, and in his absence perhaps make some arrangement to jointly instruct a replacement.
It seems, having read Mr Buttrick’s affidavit, to which I have already referred, that Mr B made some tentative arrangement with Mr Buttrick about the process of valuation and this, it would appear, although I am not precisely certain, is the source of Mr Buttrick’s view that Mr B had been retained by the wife to update at least the Property H property. No doubt Mr Buttrick informed Ms Morisini of this belief.
At any event, I have no reason to think anything other than that, to use the vernacular, the wires between Mr Barr’s office and Ms Morisini’s office had become crossed. Certainly, in a formal sense, Ms Morisini was not to know that the wife was uncomfortable with Mr B performing the valuations.
Indeed it was a false assumption that Mr Buttrick and perhaps

Ms Morisini had reached that Mr B was to do an updated valuation. In any event, Ms O’Connell contacted Mr W and advised him that the trial was proceeding and that he would be required to give evidence in the case. Arrangements were tentatively made for him to attend court on 2 June 2010, it being his position that he had professional engagements, in the far north of the state, on 31 May and 1 June.
What discussions there were between Mr Barr’s office and Ms Morisini’s office about the matter in the lead-up to the hearing scheduled for 31 May is unclear to me. I am not entitled to know, I think, if issues relating to settlement were discussed.
At any event, from Ms Morisini’s point of view, no doubt she was becoming increasingly concerned about the age of Mr W’s valuations. In those circumstances, and perhaps because she thought that

Ms Buttrick had no particular objection to Mr B, but I am not sure about that, she decided to formally engage Mr B herself. Accordingly, in the last week of May, Mr B visited the two properties concerned in [omitted].
He valued Property H as at 26 May 2010 at $550,000 and the Property W property as at 28 May 2010 at $1.2 million. So, accordingly, in the period of around 18 months or so the properties, according to Mr B have decreased in value by a sum of approaching $600,000.
Clearly, at first blush, Mr W and Mr B had a very different view of the value of the two properties concerned. This significant information was conveyed to Ms Buttrick’s solicitors on the Friday afternoon prior to the trial being scheduled.
As is often the case and as is mandated by the Family Law rules in case where there are competing experts involved in respect of some issue of expertise, Mr W and Mr B conferred with one another. As a consequence of this consultation, Mr W wrote a letter to Ms Morisini on 29 May 2010.
In his letter Mr W confirmed that he himself had not been able to review his previous valuations formally. He did, however, provide a clear indication that it was his opinion that the property values for vineyards and vineyard land had reduced considerably in more recent time as a result of what he described as the current crisis within the wine industry. The reasons for the crisis he attributed as follows: over supply of wine; the high value of the Australian dollar; competition from overseas producers; and a tightening of finance by the majority of the major banks
Mr W went on to say that he had not been able to carry out a thorough review of his previous valuations but based – which presumably would have been based on comparative sales information in [omitted] - he had formed the opinion that the value of the Property H property would be in the vicinity of $550,000 to $600,000 and the value of the Property W vineyard would be in the vicinity of $200,000 lower, presumably lower than his earlier estimation.
Mr W went on to say that he had been advised of Mr B’s views of the properties concerned. Mr W wrote that Mr B’s opinions were in line with his (Mr W’s) opinion of the current fair market value of these properties. Although he did put some caveat on that that he expected that any variance would be less than five per cent of both properties.
Mr W’s letter of 29 May 2010 which, of course, was prepared last Saturday morning followed a very brief email which he sent to Ms Morisini at 12.01 pm on 28 May 2010, in which he had confirmed that he had conferred with Mr B and agreed with his figures.
I have been provided with a copy of Mr B’s valuations, particularly in respect of the Property H property, Mr McGinn, the wife’s counsel, has drawn my attention to the penultimate page of Mr B’s report, in which he annexes market sales data which has been printed off from the South Australian Government database, and which contains comparative sales for what I understand is similar rural vineyard land in the area of [omitted], which are reasonably proximate to the Property H property.
Mr McGinn points out that the printout was printed at 11.50 am on 28 May 2010, and, of course, Mr B’s report is dated 28 May 2010. As such, it is Mr McGinn’s submission that, ipso facto, any conference between Mr W and Mr B must have been necessarily a fairly short conference.
By way of background, the parties have been able to amass property of significant value during their marriage, which is one in excess of 25 years in duration and which produced six children. As I understand it the property is valued at somewhere in the vicinity of $7 million, so from both parties’ perspectives there is much in material terms at stake in these proceedings.
The husband’s position is that he has made very significant direct financial contributions towards the accumulation of that sum. In particular, it is his position that he inherited or received significant moneys from his late father by way of vineyard properties, and when he settled some proceedings with his brother, this resulted in him putting a significant sum of money into the parties’ joint matrimonial property.

The wife, from her perspective, points to the length of the marriage and it is her case that she made significant contributions during the marriage, and she would oppose any submission that the husband has made an overwhelmingly greater contribution in financial terms.
Other issues arising between the parties concern their prospective needs. It is the wife’s position that the husband has extensive experience as a [occupation omitted] and is able therefore to earn a comfortable income. Whereas she has limited skills, and the responsibility to parent the parties’ children, one of whom – or two of whom, I should say, are of tender years and even the adult children are still requiring significant attention.
The husband’s position, as I understand it, is that he has been unwell, and it is not reasonable or viable for him to return to his previous occupation. As such, he believes the wife has overstated his capacity to earn. There are other issues regarding ongoing spousal maintenance, from the wife’s perspective, and a significant issue as to whether there should be a departure from the applicable administrative assessment of child support, it being the wife’s position that the current assessment does not properly reflect the income-earning capacity and financial resources of the husband.
I give that summary to present some of the background and complexity of the matter before dealing with the adjournment application specifically. The wife’s concerns about the process and her submission that the proceedings need to be adjourned, so that there can be a fair hearing in the matter can be summarised as follows.
She played no part in instructing Mr B. In fact, she objected to him. From her perspective, Mr B’s valuation comes very late in the piece and has resulted in a – if those valuations are accepted by the court - has resulted in a significant diminution of the parties’ pool of assets.
It is her case that she wanted to rely on Mr W’s November 2008 valuation which was jointly obtained by the parties. From her perspective, Mr W has, in effect, become a hostile witness because he has, ostensibly, recanted from the valuations on which she wishes to rely at trial.
It is her position that she has had scant time to prepare, through her counsel, to cross-examine, in effect, Mr W about his change of view and in particular she is concerned that she does not know the real basis as to why Mr W has changed his view and what was discussed between him and Mr B in what she believes was necessarily a hasty conference between the two valuers concerned.
In these circumstances, it is her position that she may seek to instruct a third valuer. She believes that Mr B may be biased against her and certainly it is her position that a reasonably fair-minded lay observer may form such a view given that she objected to Mr B. Mr B was told that she objected to him and yet, nonetheless, Mr B was content to take the instructions from Mr Buttrick’s solicitor to value the properties concerned.
In essence, it is Ms Buttrick’s position that the issue of valuation has been left to the last minute. The process has been rushed and has miscarried and therefore it would be fundamentally unfair, in effect, to foist upon her an expert with whom she disagrees and whom she had no wish to instruct and that, of itself, may bring the process of the court’s adjudication into some disrepute if the matter is forced on at this stage.
The husband’s position is that the proceedings have been on foot for a long time indeed, that justice delayed is justice denied, to use the old saw, that it is not uncommon for the court to have to deal with valuers who have different views about matters, and it is not uncommon for valuers in such circumstances to confer at the last minute prior to a hearing, and, in such conferences, the parties themselves have little, if any, input.
In addition, it is the husband’s position that Mr B has put forward a logical explanation for the decline in value of these two properties which Mr W has accepted and any issues arising from that aspect of the case are not, in themselves, intrinsically complicated and can be put by the wife’s capable and competent counsel to both Mr W and Mr B, and the court therefore will be able to perform the necessary task of ascribing a value to each of the properties concerned and accurately ascribe a value to the two properties concerned.
I should also say, and it is of some moment to the wife’s case, that ultimately Mr Buttrick seeks to retain both Property W and Property H, and it is the wife’s position that she seeks to be paid a sum of money in settlement of her claim.
Accordingly, for obvious reasons, it is in Mr Buttrick’s interests that the lowest possible value be ascribed to the two properties and, for equally obvious reasons, it is in the wife’s interests that the value be higher.
The law applicable to adjournment proceedings is not unnecessarily complicated and is most concisely set out by Kirby J in the court of Cheung v R[1] where his Honour, as he then was, said as follows:
“the court has both the expressed and implied power to grant an adjournment where it is necessary to do justice between the parties. Where a refusal would seriously prejudice a party, the adjournment is ordinarily be granted. At least, it ought to be granted if the opposing party can be adequately protected by orders as to costs, orders providing for a new hearing on dates suitable to it, or other order of a procedural character which take into account any prejudice which may be suffered by it.”
[1] See Cheung v R. (1999) ALJR 1093 at 1094-95
It may well be the case that ultimately, if it is required, it will be found that, regrettably, the value of the two properties concerned has significantly reduced as a result of what Mr W described as the crisis in the wine industry but I am not determining that issue at this stage.
What I am determining, essentially, is whether the interests of justice demand that there should be an adjournment of these proceedings and I have come to the conclusion that, notwithstanding the significant time these proceedings have been on foot, the interests of justice do demand that I should adjourn the proceedings.
I reach this conclusion because, from the wife’s perspective, I am satisfied that the issue of the valuation of the two properties concerned has miscarried and it would be unfair to force her to deal with what she sees as a miscarriage of the issue and, clearly in this case, the fact that there has been such a significant reduction in the value of these properties is a matter of some moment to her.
I accept that she did not want Mr B involved in the matter. His valuation came to her at a very late stage and she has not had an opportunity to deal forensically with it. And also, perhaps more importantly, she has not had a position to ascertain formally from

Mr W why he has changed his view so significantly. Clearly, from the husband’s point of view, he wishes the proceedings to be finalised.
However, this is not a case where he will be left in an impecunious position awaiting the hearing of the matter nor will the wife. Both parties are, as I understand it, comfortably housed and they have access to funds.
In those circumstances, I think it is in the interests of justice that the proceedings be adjourned so that from the wife’s perspective she is fully prepared to join issue with the husband in respect of all issues. In my view, the interests of justice fall in favour of adjourning the proceedings rather than forcing them on notwithstanding the delay in the proceedings to date which to some extent is attributable to the parties’ conduct.
So for those reasons I am going to adjourn the proceedings. That of itself raises issues. As I have already indicated the delay in allocating hearing dates is one about six months in this court and regrettably the earliest dates I can offer the parties at this stage – bearing in mind the Christmas vacation, are 7, 8 and 9 February 2011, and it may be – and I am not sure whether it is the case or not, that an earlier date could be obtained in the Family Court.
In terms of the dollars that are available to be distributed between the parties, there is an element of complexity in that sense, but the issues of contribution – apart from the magnitude of the contribution would not appear to be of perhaps special complexity.
The other issue is that I apprehend – one of the significant issues in the case is likely to be Mr Buttrick’s earning capacity. It was not put as an issue from Ms Morisini’s perspective but it may well be the case that she would want perhaps to provide more evidence in respect of that issue, but my impression is that the matter is not perhaps in as advanced state of preparedness from both party’s perspective as perhaps might be desirable. But that is my impression it is not my finding because I am not in a position to say.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Brown FM

Date: 1 June 2010