Clarkson and Clarkson

[2007] FamCA 793

FAMILY COURT OF AUSTRALIA

CLARKSON & CLARKSON [2007] FamCA 793

FAMILY LAW - PROPERTY - Value of property - Expert evidence - Appointment of second expert witness

Family Law Act 1975 (Cth)

APPLICANT: MRS CLARKSON

RESPONDENT: MR CLARKSON

FILE NUMBER: MLF 2046 of 2005

DATE DELIVERED: 31 JULY 2007

PLACE DELIVERED: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 31 JULY 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR CROFTS

SOLICITOR FOR THE APPLICANT: WESTMINSTER LAWYERS

COUNSEL FOR THE RESPONDENT: MR SWEENEY

SOLICITOR FOR THE RESPONDENT: CLANCY & TRIADO

ORDERS

1. THAT the parties do all things to sell and convert into cash all listed securities held by the Y Unit Trust, J Pty Ltd and/or L Pty Ltd apart from those associated with L Pty Ltd as trustee for the C Superannuation Fund.

2. THAT the proceeds of the sales at Order 1 and any cash held by the Y Unit Trust, J Pty Ltd and/or L Pty Ltd apart from those associated with L Pty Ltd as trustee for the C Superannuation Fund, be divided between the parties and paid in equal amounts.

3. THAT the payments required by Order 2 are to be characterised by the Trial Judge.

4. THAT the whole of the affidavit prepared and filed on 26 July 2007 by the husband together with all Annexures thereto be uplifted and wholly removed from the Court file and Number 25 in the Court file index be deleted

5. THAT the husband forthwith provide all documents sought by the wife and Mr S including but not limited to the documents sought at Paragraphs 4 and 5 of the wife’s amended Form 2 Application filed 4 June 2007 and any and all information provided or subsequently provided by him or on his behalf to P Company.

6. THAT the husband forthwith sign the joint letter to Mr S that is part of Annexure “RC3” to the wife’s affidavit filed 4 June 2007.

7. THAT the wife forthwith provide to the husband bank account details for:

   (a)          The C Superannuation Fund;
   (b)         The Y unit Trust (Trustee J Pty Ltd);

   (c)L Pty Ltd (as Trustee of the L Investment Trust);

   for the financial year ended 30 June 2007.

8. THAT the husband be at liberty to market and sell the interest of X Ltd together with the related companies and trusts held by the “[C] Group” of entities valued by Mr S, Accountant of SG Pty Ltd, subject to:

   (a)the husband keeping the wife informed of the marketing and sale;

   (b)the business brokers being agreed prior to any marketing;

   (c)that the business brokers be jointly instructed to respond to all inquiries for information of the wife or her nominee and otherwise to keep the wife or her nominee appraised of progress on a regular basis; and

   (d)the net proceeds being held in an interest bearing account in the names of the parties pending trial.

9. THAT all affidavits on which the parties seek to rely at trial including updated statements of financial circumstances be filed and served by Monday 19 November 2007.

10. THAT there be a Pre-Trial Conference on 6 December 2007 at 11.00 a.m.

11. THAT all extant interim applications including the wife’s Form 2 filed 22 December 2006, the husband’s Form 2A filed 15 January 2007, the wife’s amended Form 2 filed 4 June 2007 and the amended or foreshadowed application of the husband set out at paragraph 17 of his affidavit filed 4 June 2007 be otherwise dismissed.

IT IS FURTHER ORDERED (NOT BY CONSENT)

1. THAT the husband at his cost instruct P Company to prepare a Report valuing the business entities (“the [P Company] Report”) and that the P Company Report be provided to:

   (a)          the wife’s legal practitioners; and
   (b)         Mr S, Accountant of SG Pty Ltd

   by 7 October 2007.

2. THAT in the course of preparing the P Company Report, P Company and Mr S liaise with a view to identifying and clarifying all issues arising from the business valuation.

3. THAT within twenty-one (21) days of the receipt of the P Company Report, P Company and Mr S confer to determine whether and if so what disagreement exists between them as to the value of the entities forming the “[C] Group of Companies”.

4. THAT within seven (7) days of the completion of the conference provided for by Order 14 the accountants prepare a joint report or individual reports as to:

   (a)any issues of agreement;

   (b)any issues of disagreement;

   (c)the reasons why there is any disagreement as to the makeup and value of the business assets within the matrimonial pool with such reasons to be itemised and explained (including the consequences thereof) by the accountants;

   and the report or individual reports to be filed with the Court.

IT IS NOTED

A.THAT the affidavit uplifted pursuant to Order 4 is to be held in safe keeping by solicitors for the husband

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2046 of 2005

MRS CLARKSON

Applicant

And

MR CLARKSON

Respondent

REASONS FOR JUDGMENT

1. This matter is listed in the interim defended judicial list for determination of procedural, valuation and other interim financial issues.

2. Mr Sweeney of counsel appears for the husband who has now recently instructed Messrs Clancy and Triado, Solicitors, Camberwell, on his behalf.  Mr Crofts appears as counsel for the wife.  The applications before the court are all interim and commence with the Form 2 application in a case filed by the wife on 22 December 2006, as was amended by her subsequent application of 4 June 2007.

3. The husband's response is contained in his Form 2A filed 15 January 2007. There were out of court discussions during the morning and the preliminary financial issues of child support being paid pursuant to section 139 of the Child Support Assessment Act, and otherwise issues of interim spousal maintenance were resolved by the parties in the form of consent orders that have now been provided to me.

4. A significant issue in this case related to the professional and financial evidence that is before the court as to the valuation of the business and entities of this married couple.  The parties have been partly able to conclude and otherwise I have determined what orders will be made in relation to the appointment of an additional single expert.

5. The consent order of 24 November 2005 provided for Mr S to be appointed a single expert witness and to value the various corporate entities, businesses and trusts of the parties.  An initial valuation report was prepared and is dated 21 November 2005 and that provides an indicative assessment of value.

6. It is before the court by way of an annexure to the wife's affidavit of 22 December 2006.  Subsequently an update of that indicative assessment of value is before the court by way of an annexure to the wife's further affidavit, filed 4 June 2007.  The husband, at a time when he was acting on his own behalf, commissioned a preliminary report from P Company of Adelaide. 

7. An interim report dated 5 July 2007, in letter form addressed to the husband, was then annexed by the husband to an affidavit which he filed on 26 July 2007.  Additionally annexed to that affidavit was the calculation of the interests of either the husband or the Clarkson family in various commercial entities or trusts and there was a further estimate of value from a Mr G, which was exhibit “B” to that report.

8. That affidavit raised a number of issues and suffice to say both the contents of the affidavit and its annexures were objected to by Mr Crofts.  Mr Sweeney adopted a very sensible pragmatic position and agreed to the withdrawal of that entire affidavit and all of its annexures from the court file.  It was number 25 in the court index of documents and I have instructed my court officer to delete that document from the index.

9. The document has been removed from the file and returned to Mr Sweeney but on the specific basis that his instructing solicitor will hold that affidavit in safe keeping should it be required as an original document.  I well understand that the affidavit has been sworn, filed and served and is available to the other party for the purposes of cross-examination. 

10. I express no further view on that topic but in taking steps to safeguard the location of the original document I express the firm view that it is best removed from the court file, as it contains a preliminary report or reports that, in the context of the Family Law Rules, should not at this stage be before the court.  The affidavit itself, from my brief reading thereof, is somewhat unhelpful in other issues and Mr Sweeney has identified that it made disclosure of certain without prejudice discussions.

11. The issue then before the court was whether the leave of the court should be given pursuant to Rule 15.49 for the appointment of another expert witness.  Having had submissions from experienced counsel for both parties I concluded, though in a modified form of order, that I would allow an additional professional opinion to be available to the parties and to the court.

12. The implementation of this order that I will require is that the husband, at his own cost and expense, can engage P Company.  They will prepare a report based on all the information, including their own professional knowledge and experience.  That report is to be available by no later than the first week of October 2007.

13. I have expressly required the author of that report to cooperate with, and discuss and liaise with, Mr S, as to professional issues that might develop and to try and limit conflicting evidence, advice and valuation outcomes.  I am not however trying to tie the hands of P Company and their report must be their own document, professionally done, and state their opinion of value and other matters in dispute.

14. I intend then for Mr S to have a period of 21 days upon receipt of that report and at which time he should have a working knowledge to then prepare any updated assessment of value or report and be then in a position to confer with his professional colleague and agree or disagree as to each of the issues of valuation or expert opinion.

15. I will require then an appropriate report, preferably a joint report but I leave that to the discretion of those professionals to identify issues of agreement and disagreement, to express a considered opinion as to valuation and to justify by logic and reason their report and preferred outcome.  At least then, and if and when the matter does come to trial in the new year, there will be a limited financial disagreement, hopefully, on matters in issue but with a clear expression of reason.

16. The basis of these updated reports is that the husband will be in a position to give all required information and to prepare and then lodge all financial and taxation returns to the year ended 30 June 2007.  It is vitally important that the material upon which any valuation report is based be as current and as accurate as is possible.  In that context, it is then important for the court to facilitate a hearing of this matter early in the New Year so that the information and valuations are current and reliable.

17. Accordingly I find, as required by Rule 15.49, that there is likely to be a body of professional opinion that may differ from one expert witness to the other and it is important for the court to have that information in proper form fully documented prior to the commencement of the case.  I also am of the view that, given the specialised nature and cycle of the wine industry, it is preferable to have the benefit of the contrasting expert opinions, subject to their agreement or disagreement.

18. It is an industry that, from what I have read in the documents and from what generally would be known to the community, is undergoing change and opinion as to valuation must be both informed and current.  I have therefore indicated to counsel that I will accept consent orders in respect of the number of matters that have been negotiated out of court, including as to the provision of documents and the availability of a lump sum to the parties to provide for interim financial relief.

19. Otherwise the orders will provide, not by consent, orders in accordance with that which I have determined in relation to the appointment and management of another expert witness.  I will appoint a Pre-Trial Conference to take place on 6 December 2007 at 11.00 a.m.

20. Otherwise all extant interim applications both as to the Form 2 application of the wife and the amended application, and the response of the husband, will otherwise be dismissed. 

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: 

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as CLARKSON & CLARKSON