Conrad & Conrad

[2018] FamCA 363

FAMILY COURT OF AUSTRALIA

CONRAD & CONRAD AND ANOR [2018] FamCA 363

FAMILY LAW – EVIDENCE – Expert Evidence – Where the wife’s application seeking leave to adduce additional expert evidence in the trial was heard on the first day of the scheduled trial – Where the application was opposed by the husband and the husband’s sister – Where the application is dismissed, the trial dates are vacated and the matter is listed for case management.

FAMILY LAW – COSTS – Where the husband and the husband’s sister made an oral application for the wife to pay the husband’s costs due to the adjournment – Where a decision is reserved until a schedule of those costs has been provided to the court.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms Conrad

FIRST RESPONDENT: Mr Conrad

SECOND RESPONDENT: Ms Stocks

INTERVENER: Lynn & Rowland Solicitors

FILE NUMBER: BRC 5264 of 2013

DATE DELIVERED: 23 May 2018

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 21 May 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Matthews QC
with Mr Bunning

SOLICITOR FOR THE APPLICANT: Simonidis Steele

COUNSEL FOR THE FIRST RESPONDENT: Mr Hackett

COUNSEL FOR THE SECOND RESPONDENT: Mr Hackett

SOLICITOR FOR THE SECOND RESPONDENT: Holloway Jenkins

Orders (made on 21 May 2018)

1. The intervener and counsel for the intervener are excused from appearing at the trial in this matter.

2. Leave is granted to the applicant wife to file and read her affidavit sworn today.

3. The applicant wife’s Further Amended Application in a Case filed by leave on 14 May 2018 be dismissed, with written reasons to be delivered on a future date.

4. The trial dates of 22, 23 and 24 May 2018 be vacated.

5. The matter be listed for case management at 10.00 am on Thursday, 24 May 2018.

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 Conrad & Conrad and Anor 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 BRISBANE

FILE NUMBER: BRC 5264 of 2013

Ms Conrad

Applicant

And

Mr Conrad

First Respondent

And

Ms Stocks

Second Respondent

And

Lynn & Rowland Solicitors

Intervener

REASONS FOR JUDGMENT

1. On Monday, 21 May 2018, a trial of the wife’s property adjustment and spousal maintenance applications was listed to commence and be heard over four days. Listed for hearing also was the husband’s application for review of a Registrar’s decision in respect of existing interim maintenance orders.

2. At the outset of the hearing, the wife, through Queen’s Counsel and junior counsel, pressed an application seeking leave to adduce evidence in the trial from an expert accounting witness engaged by her. I heard that application and dismissed it. I then adjourned the trial to be heard on dates to be fixed.

3. These are my reasons for that decision.

The Background

1. The proceedings were first commenced by the wife in the Federal Circuit Court in 2013. The issues in the property adjustment proceedings are many and varied. They include issues surrounding a family discretionary trust. Those issues, and others, have drawn the husband’s sister into the proceedings as the Second Respondent.

2. The wife has had a number of firms of solicitors represent her during the course of the proceedings to date. The husband, who is a solicitor himself, originally had solicitors representing him before becoming and remaining unrepresented for a long time. He secured counsel to appear for him on a ‘direct access’ brief for the trial. That barrister also appeared for the husband’s sister, on the instructions of a firm of solicitors that has been acting for her since she came into the proceedings.

3. In 2013, the valuation of the family discretionary trust was sought by the wife’s solicitors. Initially, the husband nominated a firm of accountants taken from a list of potential experts nominated by the wife to undertake the valuation, but the valuation was not obtained then for some reason not known to this Court. In late November 2013, a Federal Circuit Court Judge made orders providing for the appointment of a “joint expert” as agreed between the parties or chosen by the wife from a panel of three proposed experts provided by the husband. The orders provided for the husband to choose the “joint expert” in default of the wife doing so within the requisite time period given.  The husband exercised that right on the wife’s apparent default and Mr J of K Valuers was chosen and appointed as the “joint expert”.

4. There is evidence that the wife, through the solicitors then acting for her, wrote unilaterally to the joint expert informing him, prior to the issue of his report, of concerns the wife had in respect of loan account balances recorded in the financial records of the trust.

5. Mr J issued his report on 14 March 2014 valuing the trust as at 30 June 2013. A copy of that report is exhibited to the affidavit of the wife filed 20 February 2017. Mr J set out the limit of instructions he had been given by the husband and the wife (who he called “the applicants”) at page 4 of that report.  He said:

   2.1)The applicants have engaged me to prepare this report at the “Limited Business Valuation” level.  It must be understood that the applicants have explicitly opted out of the minimum methods and procedures I would ordinary (sic) undertake for a formal business valuation engagement.  The report must be read in this context.  I am available to undertake the necessary additional scope of works to upgrade this report to a formal valuation if required.

6. Relevantly, he also said at page 17 of that report:

   5.63)It is assumed that the loan owing from [Mr Conrad] is correctly recorded at the balance date and legally enforceable.  This loan is therefore assumed to be an asset of the trust and has increased the value of the trust accordingly.  This is on the basis that the trust could be entitled to call in the loan at some point in the future and convert it to a cash balance or something else of value.  It is outside the scope of this engagement to provide further scrutiny in relation to the recoverability of loans, however this could be undertaken as a separate engagement.  Be careful to note that this amount should equate to a corresponding liability from [Mr Conrad’s] perspective and should be treated as such when determining his personal financial situation.  If the loan was to be written off from the trust’s balance sheet it would also be removed from the personal perspective.

   5.64)It is assumed that the loan owing to [Ms Stocks] is correctly recorded at the balance date and legally enforceable.  This loan is therefore assumed to be a liability of the trust and has decreased the value of the trust accordingly.  This is on the basis that [Ms Stocks] could be entitled to call in the loan at some point in the future forcing the trust to make good with cash or something else of value.  It is outside the scope of this engagement to provide further scrutiny in relation to the enforceability of loans, however this could be undertaken as a separate engagement.  We note that there is no written agreement in place for this loan and no interest has been charged.  Further scrutiny may be required in relation to this loan.

7. Soon after receipt of the report, the wife’s solicitors wrote to the husband’s solicitors. They referred to Mr J’s report and noted that the trust had been valued including the “alleged loan” from the husband’s sister. They included this paragraph in their letter:

   Should we not receive adequate disclosure or explanations and evidence of the above issues and queries we advise that we hold instructions to engage a forensic accountant in order to clarify some of the issues that remain uncertain in the valuation and the financial position of your client and his sister.

8. In May 2014, the proceedings were transferred to this Court. On 28 October 2014, a Registrar made an order about the issue of the loan accounts of the husband and his sister in the trust as follows:

   That within 21 days the Applicant [wife] file and serve any Application in a Case and supporting affidavit she requires, seeking the appointment of a Single Expert to prepare a valuation or report regarding the loans asserted to be repayable and/or which have been repaid in part to the Second Respondent by [the trust] or any other relevant entity, to include specific details of the intended purpose, scope and content of the valuation or report together with the details of three (willing) expert or experts proposed and anticipated costs and timeframe.

9. On 24 November 2014, the wife filed an Application in a Case seeking the appointment of a forensic accountant in relation to the loan account issue supported by an affidavit of the applicant.

10. On 23 December 2014, the Registrar made an Order in the following terms:

    Valuation:

    2.That the time for the Applicant to address questions to the Single Expert (K Valuers) pursuant to Rule 15.65 of the Family Law Rules 2004 (the Rules) be extended to 16 February 2015 regarding their valuation report dated 14 March 2014 and the Applicant be at liberty to provide to the Single Expert such further disclosure documents relevant to clarification of the report as they require provided that a copy of such communication/s and/or documents (if not already provided or held), be provided to the Respondents in accord with the Rules.

    General:

    3.That the Application in a case filed by [MS CONRAD] on 24 November 2014 be otherwise dismissed and costs of the First and Second Respondents reserved to the Trial Judge.

4.        …

Notations:

A.That these orders issued following consideration of the documents filed on behalf of the Applicant and First and Second Respondents, and their oral submissions on 19 December 2014. This matter was transferred from the Federal Circuit Court of Australia to the Family Court of Australia on 7 May 2014.

B.       That consideration was given, but not limited, to the following:

(a)The Application on behalf of the wife did not address all matters required by paragraph 1 of the orders made 28 October 2014;

(b)The basis and benefit of the appointment of a forensic accountant as sought in the circumstances of this case is unclear, given the Applicant's position that disclosure remains incomplete together with the representations of the Respondent/s variously that further disclosure is not possible due to lapse of time, destruction/damage or removal of records, non-retention of historical documents, non-existence of records;

(b)A court expert was appointed jointly by the parties when the Federal Circuit Court Rules were applicable - refer:

i.Orders of Judge Purdon-Sully dated 21 November 2013 (paras. 9 - 15 inclusive);

ii.Paragraph 12. of the Applicant's Affidavit filed 24 November 2014;

iii.A copy of the report is annexed to the Applicant's Affidavit filed 24 November 2014.

(c)It was represented that the Applicant did not seek the appointment of another (adversarial) expert witness under Rule 15.49 of the Rules;

(d)The application was not made under Rule 15.51 of the Rules whereby the Applicant seeks to tender a report or adduce evidence from an expert witness, not being a single expert witness.

C.Orders have been made in respect to further disclosure and to allow the Applicant to clarify if possible with the court expert matters in dispute concerning the existence, nature and extent of any loan asserted to be owed to the Second Respondent and its effect on the value of the asset pool available for distribution between the Applicant and First Respondent, pursuant to the Rules.

D.That the Second Respondent's duty of disclosure is limited by Rule 13.02(2) of the Rules to the extent that her financial circumstances are relevant to the issues in dispute.

E.If no further clarification is possible in respect to the matters of valuation, all issues will be a matter of evidence at any Trial listed in these proceedings.

1. There is no dispute that the wife did not direct any questions at Mr J in accordance with paragraph 2 of the Registrar’s orders.

2. The solicitors currently acting for the wife filed a Notice of Address for Service in the proceedings in February 2015.

3. In July 2015, those solicitors wrote to the husband asking for specific further disclosure of documents going to the issue of the loan accounts in the trust. In November 2015, those solicitors for the wife filed an Application in a Case seeking further disclosure and in which the solicitor carrying the matter said that, on the wife’s instructions, there “is a dispute as to the existence of any debt by the husband to the Trust or by the Trust to [the husband’s sister]”.

4. On 28 January 2016, I made orders for further disclosure directed to the loan account issue.

5. In May 2016, the wife’s solicitors wrote to the husband and said:

   Our client is now in possession of at least some of the relevant documentation to enable her to further her investigations. Our client is currently in the process of engaging an accountant to assist her with her enquiries. Our client anticipates that she will be in a position to further particularise her application once she has received the appropriate advice from her accountant.

6. In June 2016, the husband wrote back and said:

   I note that your client is still considering “engaging an accountant” some 3 years or more after commencement of proceedings.

   … Your client represented to the court that she intended to engage an accountant in August 2014 (some 21 months ago) and apparently has done nothing since.

7. The wife’s solicitors wrote back and said:

   Our client has engaged [Mr L] of [M Accountants] as an adversarial expert.

8. On 2 September 2016, the husband wrote back and said:

   Given that a single expert has been appointed to value the [trust] I am of the view that the single expert should deal with any issue relating to the trust.

9. On 9 September 2016, Mr L issued a draft report to the wife’s solicitors. His first report, in final form, issued on 24 October 2016. As pointed out by counsel for the husband, that report does not disclose Mr L’s instructions. However, on its face, it is clear that he was provided with documents that Mr J had not been provided with and that his principal task was to provide his opinion with respect to the accuracy and legitimacy of the loan account balances recorded in Mr J’s report.

10. In February 2017, the wife filed an Application in a Case seeking an expedited trial on medical grounds and seeking an order that she be able to adduce into evidence for the trial Mr L’s expert report. That application was supported by an affidavit in which she said a number of things supporting her application to adduce evidence from Mr L but in which she also said:

    Even if [the husband] was to agree for [K Valuers] to undertake the same task as Mr L has undertaken, my solicitors inform me that they are unaware whether or not that is a job [K Valuers] do, particularly in circumstances where the terms of their engagement was to prepare a business valuation and not an adversarial type of valuation which does not take the financial reports at face value.

    …

    Should there need to be a further valuation of the business then I am prepared for [K Valuers] to undertake the valuation provided it is done on a full formal basis and not on what was stated as a limited basis for the previous valuation.

11. Of course, as part of the application process, the husband and his sister were served with copies of Mr L’s first report. The husband subsequently asked the wife’s solicitors for a copy of the instructions that had been provided to Mr L. The wife’s solicitors wrote back to him and asked him to “clarify on what basis do you say [the wife] is duty bound to disclose her communications with [M Accountants].”

12. In June 2017, the wife’s solicitors filed an Amended Application in a Case seeking an expedited trial and, yet again, to be able to adduce Mr L’s report into evidence for the trial. It was common ground that the Registrar dealing with it informed the parties that the application to adduce the report of Mr L into evidence was a matter for a judge to determine. The same Registrar made orders dismissing an application by the husband to discharge existing interim spousal maintenance orders and other procedural orders, including one listing the proceedings before me for Judge Management on 9 February 2018.

13. The husband and his sister filed further interim applications in the period between the making of those Orders by the Registrar and the Judge management event of 9 February 2018.

14. On 9 February 2018, at the Judge management event before me, the wife was represented by counsel. The husband and his sister were also represented by counsel. There was discussion between me and counsel that day about the matter and the competing positions adopted by the parties, its readiness for trial and outstanding disclosure and valuation issues. Each party wanted to press applications for interim orders and each party wanted the trial listed for hearing as soon as possible. Counsel for the wife raised the application to adduce the expert evidence of Mr L.  I recall informing counsel for the wife, without knowing the full extent of the differences between the reports of Mr J and Mr L, that I considered the application to adduce evidence from Mr L, an adversarial expert, in respect to issues pertaining to the trust and its value to be premature having regard to the expert evidence rules of the Family Court Rules and given that it was proposed by all parties that Mr J, the single expert, prepare an updated report on the valuation of the trust.

15. After discussion outside of Court between the barristers, they informed the Court that they had agreed to the Court’s offer to list the matter for trial in May 2018. I told them that I could only give the matter four days. They told the Court that they considered the trial could be heard and concluded in four days and, on that basis, as noted in the orders I made that day, the matter was listed for trial for four days commencing on Monday, 21 May.

16. Relevantly, the parties asked me to make an order by consent in the following terms:

    5.That within seven (7) days of the date of this Order, the parties are to jointly instruct [K Valuers] (“[KV]”) to prepare a full and formal business valuation of [the trust] and for that purpose:

    (a)each party is to provide [KV] with a copy of any documents [KV] asks be provided to them, excluding any report prepared by [Mr L], within seventy-two (72) hours of such request;

    (b)the wife shall bear the costs of the [KV] business valuation in the first instance with the determination of the ultimate responsibility for those costs to be reserved to the Trial Judge.

30.The orders also included one adjourning the husband’s Amended Application in a Case filed 23 January 2018, which sought review of the Registrar’s decision to dismiss his application to discharge the interim spousal maintenance orders. It was adjourned to the trial. There was no order adjourning the wife’s application to adduce Mr L’s report into evidence to the start of the trial, but I recall telling counsel for the wife that it was a matter for him, his instructing solicitors and the wife to consider having regard to the expert evidence provisions of Family Law Rules 2004 (“the Rules”), bearing in mind an updated valuation of the trust was agreed to be sought from Mr J.

1. Shortly after 9 February 2018, Mr J was provided with fresh instructions by the parties to update his valuation of the trust. Significantly, he was not provided with all of the material that Mr L had been provided with before doing his report and he was not asked to provide opinion on the highly disputed issue of the accuracy and legitimacy of the loan account balances recorded in the trust’s balance sheets. Expressly, he was not to be provided with Mr L’s report. The barristers had agreed on that.

2. The wife’s solicitor wrote to Mr J on 7 March 2018, copying the email to the husband and his sister’s solicitors. He told Mr J that the husband’s sister objected to provision of “the financial information sought by you”. He also foreshadowed that the matter might have to be “determined by way of application to the court” and that until it was, he could not provide the information Mr J asked for. I have not seen any evidence of Mr J’s request referred to by the wife’s solicitor.

3. That communication by the wife’s solicitor with the single expert drew objection from the husband. He reminded the wife’s solicitor that he had previously objected to unilateral communication with the single expert and that communication with the single expert had to be done in accordance with the Rules. The wife’s solicitor wrote back explaining himself and committed to not doing it again.

34.On 20 April 2018, the wife’s solicitors wrote to the husband informing him that the wife was still seeking to adduce evidence from Mr L “with respect to the proper amount of the loan accounts” in the trust. The letter then refers to Rule 15.69 of the Rules which provides for the parties to arrange for their expert witnesses to confer before a trial in circumstances where two or more parties intend to tender an expert’s report or adduce evidence from different experts about the same, or a similar, question. However, no application by the wife for leave to adduce Mr L’s report into evidence had actually been heard. The husband and his sister had made it clear that they were opposed to that and would oppose any such application whenever it might be heard.

1. Mr J’s updated report issued on 26 April 2018. Relevantly, he said at page 18:

   5.44It is assumed that the loans provided to [the husband] and [the husband’s sister] are recorded correctly and recoverable at their book value.

2. On 26 April 2018, the wife’s solicitors served on the husband and his sister an updated report of Mr L.  Again, it did not disclose his instructions.

3. On 27 April 2018, the husband’s sister’s solicitors wrote back to the wife’s solicitors and informed them in the following certain terms of their client’s position:

   Our client maintains that [Mr L] is not an expert in these proceedings. Accordingly, your call for a conference is meaningless.

4. On Tuesday, 8 May 2018, less than two weeks prior to the scheduled commencement of the trial, the wife’s solicitors wrote to the husband and the husband’s sister’s solicitors again. This time they wrote:

   We confirm that neither [the husband] nor [his sister] agrees for [Mr L] to confer with [Mr J] prior to the trial in this matter.

   …

   Please advise whether or not you agree to our client or the parties jointly conferring with [Mr J] prior to the trial pursuant to rule 15.64B to clarify whether or not [Mr J’s] valuation of the loan accounts of the parties in the Trust would change (and if so, to what extent) in light of the information relied upon by [Mr L] in his report and further in light of the opinions expressed by [Mr L].

   In the event you do not agree to our client conferring with [Mr J] as to the matters raised above, please advise by 11 May 2018 whether or not any objection is taken to our client writing to [Mr J] pursuant to rule 15.65 to clarify whether or not [Mr J’s] valuation of the loan accounts of the parties in the Trust would change ( and if so, to what extent) in light of the information relied upon by [Mr L] in his report and further in light of the opinions expressed by [Mr L].

   It is proposed [Mr J] would be provided with a copy of [Mr L’s] report and the material relied upon by [Mr L].

   … we request your earliest response to this correspondence …

   In the event we have not received your response prior to the compliance mention of this matter on 14 May 2018 then our client will request counsel raise the issue with His Honour Justice Forrest on that day.

5. No response was provided by either the husband or his sister’s solicitor.

6. The matter was mentioned by me on Monday 14 May 2018 for a compliance check. Queen’s Counsel and junior counsel appeared for the wife and counsel appeared for the husband and his sister. A Further Amended Application in a Case was filed by the wife that day with leave of the Court. It sought permission to tender the April 2018 of Mr L pursuant to r 15.52 of the Rules and permission to adduce evidence from Mr L as an expert witness at the trial with respect to the issue of the proper quantification of the loan accounts of the trust.

7. With respect to the wife and her legal representatives, whilst they seem to have been of the belief that I had previously adjourned the hearing of an extant application for leave to adduce Mr L’s report into evidence at the trial to day 1 of the trial, no order I have previously made in this matter did that. Nor did any order I have seen of the Senior Registrar in 2017.  I am of the view that such application was effectively disposed of on 9 February by the orders that were made that day by consent and that the wife’s counsel was informed that the wife could reconsider the issue and the need for any fresh application in due course.

8. In any event, though opposed by the husband and his sister, no point was taken that it should have been a fresh Application in a Case rather than a Further Amended Application in a Case and, in those circumstances, having heard the application, I do not consider that it matters that the application was filed as it was rather than in a fresh Application in a Case.

9. It was proposed that the application be adjourned to the morning of the first day of the trial. No argument was put by Queen’s Counsel for the wife or counsel for the husband and his sister that the application should be heard and determined before the first day of the trial. Accordingly, it was adjourned to be heard on that day. Queen’s Counsel did tell the Court that he was concerned the trial would not finish in the four days allocated. Counsel for the husband told the Court he thought the matter could finish in the four days.

10. At the commencement of the trial, on Monday 21 May, there was some discussion about the application and the estimated length of time the trial would likely take. Queen’s Counsel for the wife told the Court that he still thought the trial would likely exceed four days. He also told the Court that he considered that Mr L and Mr J should be required to confer if the wife’s application to adduce evidence from Mr L was successful. He also said that Mr L’s report would likely have to be provided to Mr J as well as all the material that Mr L had been provided with.

11. After some discussion between counsel for the parties outside the Court, the application was pressed by Queen’s Counsel for the wife. It was opposed by the husband and the husband’s sister. I had the benefit of written submissions provided in advance by each side.

12. Ultimately, when the application was pressed by Queen’s Counsel for the wife, he informed the Court that if the Court refused leave to adduce the report of Mr L that alternative relief was sought in the form of orders providing for Mr J to be provided with the same information that Mr L was provided with and to be instructed to provide his expert opinion on the same issue that Mr L’s report went to. Counsel for the husband and the husband’s sister said that would not be opposed.

The Expert Witness Provisions of the Family Court Rules

1. Part 15.5 of the Rules deals with expert evidence. Rule 15.42 set out the purpose of the Part. The purpose is said to include restricting expert evidence to that which is necessary to resolve or determine a case; ensuring that, if practicable and without compromising the interests of justice, expert evidence is given on an issue by a single expert witness; and enabling a party to apply for permission to tender a report or adduce evidence from an expert witness appointed by that party, if necessary in the interests of justice.

2. Rule 15.44 permits parties to agree that a single expert witness be jointly appointed to prepare a report in relation to a substantial issue in a case. If they do that, they do not need the Court’s permission to tender a report from that single expert. Relevantly, r 15.45 provides for the Court on application or its own initiative to order that expert evidence be given by a single expert and r 15.46 provides that the Court may make orders in relation to the appointment of, instruction of, or conduct of a case involving a single expert witness. Those orders may include determining any issue in dispute between the parties to ensure that clear instructions are given to the expert and that the parties confer for the purpose of preparing an agreed letter of instructions to the expert or submit a draft letter of instructions for settling by the Court and settling the instructions to be given to the expert.

3. If a single expert witness has been appointed to prepare a report or to give evidence in relation to an issue, r 15.49 prevents a party from tendering a report or adducing evidence from another expert on the same issue without the Court’s permission. The Court may give that permission if it is satisfied of one or more pre-conditions, namely:

   (a)There is a substantial body of opinion contrary to any opinion given by the single expert witness and that the contrary opinion is or may be necessary for determining the issue;

   (b)Another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue; or

   (c)There is another special reason for adducing evidence from another expert witness.

4. If a party seeks to adduce evidence from an expert on an issue upon which a single expert has not been appointed to give evidence about, r 15.52 requires the party to still seek permission to tender a report or adduce evidence from that expert. An application must be accompanied by evidence about whether the party has attempted to agree on the appointment of a single expert witness with the other party and, if not, why not. There must be evidence of the issue about which the expert’s opinion is to be given and the reason why the expert evidence is necessary in relation to that issue and also evidence qualifying the proposed expert. When considering whether to permit a party to tender a report or adduce evidence from an expert witness, the court may take into account a number of listed things, including, relevantly, the likelihood of the appointment expediting or delaying the case, and whether the evidence should be given by a single expert witness rather than an expert witness appointed by one party only.

5. Division 15.5.6 sets out provisions by which a single expert’s report can be clarified.  Firstly, a conference with the single expert may be agreed upon or, in default of agreement, may be ordered by the Court. Questions may be put to the single expert in writing with a view to clarifying the report and they must not be vexatious or oppressive.

The Competing Submissions

1. The submissions for the wife referred to r 15.49 and r 15.52. It was submitted that the evidence established that Mr J and Mr L differed in their findings as to the loan account balances in the trust but that Mr J only had the Financial Statements and Tax returns of the trust to consider whilst Mr L had source documents being MYOB ledgers as well as the affidavit evidence of the husband and his sister as to the nature of the agreement between them in respect of funds advanced to the trust and the way they managed their loan accounts in the trust.

2. Accordingly, it was submitted that the fact that Mr L knew of matters that Mr J did not know of was a reason why Mr L’s report should be permitted to be tendered into evidence. It was pointed out that the source documents provided to Mr L before he prepared his first report in 2016 were only disclosed by the husband after Mr J had done his first report and that therefore Mr L’s report was more soundly based and clearly based on matters not known to the single expert.

3. It was also submitted that as the husband and his sister had rejected attempts by the wife’s solicitors to arrange for Mr J to confer with Mr L or be provided with the source material that Mr L had been provided with, that amounted to sufficient grounds to permit Mr L’s evidence to be adduced and relied upon. It was submitted that the wife ought to be permitted to adduce the report in the interests of justice as Mr L expressed opinions that the accounting practices applied in determining their loan account balances were very unusual.

4. For the husband and the husband’s sister it was submitted that permission should not be granted to tender Mr L’s report into evidence as the single expert, Mr J, had never been jointly instructed to provide his opinion on the particular issue and had not been provided with the same material as Mr L had by the wife’s solicitors and that it clearly was possible to do that when Mr J was jointly instructed to update his valuation of the trust earlier this year.

5. There is absolutely no evidence from the wife or her solicitors explaining the reasons why there was no effort made to reach agreement with the husband and the husband’s sister to jointly instruct Mr J to provide the opinion on the same issue that Mr L did. There is no evidence that Mr J could not provide the opinion or did not have the qualifications or expertise to do so. The evidence was that the husband had maintained from early in the matter that Mr J was the expert who should be asked to provide the opinion on the issue and clearly he had not been asked to do so – not even for his second, updating report.

6. Counsel submitted that the only reason My L can be said to know of matters different to the single expert is because of the instructions and documents he was provided with by the wife that Mr J was never provided with.

7. Counsel for the husband and the husband’s sister pointed out that the wife’s legal representatives had not only not sought to have the single expert instructed to provide his opinion on the relevant issue when he was jointly instructed to provide an updated valuation report on the value of the trust, but also had not taken the opportunity to submit questions to him pursuant to the Rules seeking to clarify this aspect of the report after he had provided his latest report.

8. Although the evidence showed that the wife’s solicitors had sought the other parties’ agreement to having a conference with the single expert or alternatively to presenting material to him to consider, including Mr L’s report, and that the other parties had clearly chosen not to respond to those requests, the Rules permitted the wife’s solicitors to write questions seeking clarification and, as the wife’s solicitors identified themselves, an application could have been made for any orders that were considered necessary apart from simply seeking to adduce Mr L’s report into evidence.

9. Counsel for the husband and the husband’s sister also submitted that each of the husband, his sister and Mr J could be cross-examined by the applicant’s counsel with the benefit of Mr L’s report and all of the information that had been provided to Mr L in any event. It was effectively submitted that is a common feature of trials when a shadow or adversarial expert is retained by a party and that such ability is very relevant in the determination of the application.

10. It was further submitted that permitting Mr L’s report to be adduced into evidence would prejudice the respondents such that they would likely need to apply for the trial to be adjourned to permit them to obtain their own adversarial expert advice on the issue.

My Conclusions

1. I considered that there was merit in the submissions of counsel for the husband and his sister in respect to the point that the wife and her legal representatives never took advantage of the opportunity to cause the single expert, Mr J, to be jointly instructed to provide his expert opinion on the very same matters that Mr L provided his opinion on and that they never sought that Mr J be provided with the very same documents that Mr L had been.

2. I am completely satisfied that the opportunity to seek agreement or, failing agreement, an order of the Court providing for those joint instructions to be given to the single expert was clearly available to the wife and her legal representatives prior to and on 9 February 2018, and even in the days thereafter. Even if the husband and his sister had objected (and on the evidence, the husband had actually proposed the same many months before), the wife could have brought application to achieve that outcome if necessary. The wife put absolutely no evidence before the Court explaining why no attempts were made to have Mr J instructed to provide opinion on the relevant issue before he prepared his April 2018 report. The wife put no evidence before the Court that would support a finding that Mr J is not qualified to provide the opinion or that he would not or could not do it, such that an alternative expert opinion was needed.

3. The wife agreed on 9 February this year to Mr J being jointly instructed to update his valuation opinion but with no reference, in the consent orders made, to any joint instructions to provide opinion on the loan accounts. That is what, in my judgment, should have happened before the application to press for the tender of Mr L’s report should have been pursued. Why it did not happen has not been explained to the Court’s satisfaction.

4. The wife did not put questions to the single expert in writing in the way that the Rules permit and for which she did not need the husband’s consent. This, too, should have happened, in my judgment, before pressing for the tender into evidence of Mr L’s report. Why that did not happen has also not been explained to the Court’s satisfaction.

5. So, with respect to the wife’s legal representatives, I simply do not accept that there is merit in the submission that because their proposed expert witness was possessed of information that was not known to the single expert witness that is a “special” enough reason to permit his report to be adduced into evidence. That he was solely possessed of such information might be factually true, but it is only true because there was no reasonable attempt made, at the appropriate time, for the single expert to be given the same information and no good reason has been established as to why that reasonable attempt was not made or should not have been made.

6. Whilst it can be said that the husband and his sister have known for nearly two years that the wife would be seeking to rely upon Mr L’s report and, consequently, could have sought their own adversarial advice on the issue that Mr L has opined upon, it has to be accepted that the expert witness rules are purposed to prevent the necessity for “duelling experts” and, in this case, there has always been a single expert involved with apparently suitable credentials and expertise to have provided opinion on the subject issue, if instructed to.

7. The husband has always made clear his opposition to Mr L’s report being admitted into evidence and his preference for Mr J to be instructed to provide opinion on the issue. He has, with reference to the purpose of the Rules, been entitled to do that and to refrain from potentially having to obtain his own adversarial advice until it was clear as to whether Mr L’s report would be allowed into evidence or not. That fact is very relevant when it comes to determining an application such as this on the morning of the commencement of the trial. Allowing a party to tender evidence from his or her own adversarial expert on an issue at the commencement of the trial creates an imbalance in that only one of the parties has his or her own expert whilst the other party has only the evidence of the single expert to rely on.

1. I was also very troubled by the prospect that allowing Mr L’s report into evidence on the morning of the commencement of the trial might be completely unfair to Mr J given that it was being suggested that Mr L and Mr J should then confer and that Mr J should be provided with all of the same material that Mr L was provided with. There was no evidence from which I could be satisfied that Mr J could process all of that and be ready for such a conference without the need for the trial to be adjourned anyway.

2. In the end, the concession by the husband and the husband’s sister that Mr J should be provided with the same information that Mr L was provided with and that he should also be asked to provide his opinion on the issue made it easy for me to determine that the wife should not be given leave to tender Mr L’s report into evidence at this juncture.

3. However, the concern about the time it would likely take for this task to be accomplished, the fact that all of the first day allocated for the hearing had already been used up on this application, and the fact that Queen’s Counsel for the wife still maintained the assertion that the trial would not finish on Thursday afternoon of this week and would likely take significantly longer, all caused me to determine that the matter should be adjourned without even starting it. I determined to adjourn the trial to a date to be fixed after further consideration of a joint draft trial plan.

4. I told the parties that I dismissed the wife’s application for Mr L’s report to be adduced into evidence, but that I would give them my written reasons when they were prepared. The Court was then told that the parties would like a couple of days to be able to try to reach agreement on instructions now to be jointly given to Mr J and the Court was asked to list the matter for further mention at 10:00 am on Thursday, 24 May 2018 to either make orders as to the joint instructions to be given to Mr J by consent or to determine any remaining dispute about that. I agreed that I would facilitate that. I also told the parties that I expected to be provided at the same time with a jointly drafted trial plan so that I could reserve later dates for the trial. They agreed that they would do that.

Costs

1. Counsel for the husband and the husband’s sister made oral application for the wife to pay the husband’s costs thrown away by the adjournment principally caused by the application that was dismissed and the need to now instruct Mr J to provide opinion on the issue in dispute relating to the loan accounts in the trust.

2. He submitted that the concern for his clients is that on the wife’s best case she would not even be able to meet any costs order that is made, though he hastened to submit that is not a good reason why costs should not be granted. His submission was that the wife had been wholly unsuccessful in her application and that the husband had always made his position clear about having Mr J provide the expert opinion on the matter in issue. In these circumstances, he submitted, making a costs order in favour of his clients would be justified.

3. Queen’s Counsel submitted that the costs should be reserved to the trial so that it can be determined whether there is merit in the wife’s position as contended for by seeking to rely upon Mr L’s report, a matter that would be relevant to a determination of the justice of the circumstances.

4. When Counsel for the husband and the husband’s sister was asked if his client’s costs thrown away by the adjourned proceedings could be specifically quantified, he told the Court that a schedule of those costs asserted to have been thrown away could be prepared by 10:00 am on Thursday morning, 24 May 2018. I told him the Court would appreciate that and I reserved my decision on the costs application.

I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 23 May 2018.

Associate:

Date:  23 May 2018