Dudley and Ryecroft

[2020] FamCA 664

FAMILY COURT OF AUSTRALIA

DUDLEY & RYECROFT [2020] FamCA 664

FAMILY LAW – EVIDENCE – Where the applicant de facto wife seeks to rely upon at trial two affidavits deposed to by her personal accountant – Where the respondent de facto husband objects to the de facto wife being permitted to rely upon the affidavits as he asserts that it is expert evidence not properly adduced pursuant to the Family Law Rules 2004 (Cth) – Where the de facto wife contends that the evidence is not expert evidence – Where the Court determines that the evidence contained in the two affidavits is expert evidence – Where permission to adduce the expert evidence is refused.

Family Law Rules 2004 (Cth), Pt 15.5

APPLICANT: Ms Dudley

RESPONDENT: Mr Ryecroft

FILE NUMBER: BRC 7473 of 2018

DATE DELIVERED: 24 July 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 24 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney QC

SOLICITOR FOR THE APPLICANT: N R Barbi Solicitor

COUNSEL FOR THE RESPONDENT: Mr Hackett

SOLICITOR FOR THE RESPONDENT: Hirst & Co Family Lawyers

Orders

1. That having determined that the evidence contained within the affidavits of Mr V filed on 9 June and 13 July 2020 is expert evidence, permission to adduce that evidence for the trial in this matter listed for hearing commencing next Tuesday, 28 July 2020 sought by the Applicant, is refused.

2. That the Respondent’s costs of and incidental to today’s hearing are reserved to the trial.

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 Dudley & Ryecroft 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 7473 of 2018

Ms Dudley

Applicant

And

Mr Ryecroft

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. These property adjustment proceedings between two persons who were previously in a de facto relationship for many years are listed for trial before me next Tuesday. Today I have been called on to determine a dispute that has arisen between the parties about some evidence the Applicant has filed in her case and wants to rely upon at the trial.

2. One of a number of significant issues in the case is dispute between the parties about the use of some of their capital by the Applicant over the last five or six years. The home in which the parties formerly lived together as a couple with the daughter of their relationship is registered in the sole name of the Applicant. The Respondent has continued to occupy it to the exclusion of the Applicant for several years now. The parties’ daughter has lived with the Applicant in other residences during that time.

3. The real property is encumbered by mortgage provided as security to a bank for a line of credit facility. The parties put that line of credit in place when still a couple and used it, apparently co-operatively during that time to fund property development activities that they conducted through a raft of companies and discretionary trusts. In short, the Applicant, in whose sole name the line of credit is provided by the bank (based on her sole registered proprietorship of the real property security), has been drawing against that line of credit to meet her financial needs including her legal fees, her rent and virtually all of her other living expenses for several years now. She concedes that the funds she has drawn from that capital (the equity in the mortgaged property) to pay her legal costs and outlays in the litigation between her and the Respondent are to be treated by the Court in the property adjustment proceedings as part of the property adjustment that she might be assessed by the Court as being justly and equitably entitled to.

4. However, the Respondent has never made any secret of the fact that he considers that she has used the remainder of the equity that she has drawn down from that line of credit over the years excessively and that he will be arguing at the trial that the balance of those drawings over and above the amount used to pay legal costs and outlays should also be regarded as part of the Applicant’s property adjustment entitlements already received by her.

5. In anticipation of the Respondent’s argument, the Applicant engaged the man who has been her personal accountant since September last year to undertake a task for her and to provide evidence about that to be relied upon by her at the trial. He did that and the totality of his evidence has been reduced to two affidavits that were filed on 9 June and 13 July consecutively this year. There were two affidavits as explained by the witness in the second affidavit because:

   Having reread my [first] affidavit, I have ascertained that my explanation of the documents I received and the tasks I performed is incomplete and may lead to confusion on the part of a reader. Accordingly, I set out below a more fulsome account of these matters. Nothing said in this affidavit is intended to alter the conclusions I had reached and which I had intended to report in my earlier affidavit. Insofar as I repeat facts in this affidavit I do so for the convenience of those reading this affidavit.

6. Essentially, as I understand the witness’s evidence, over time he was provided with all of the statements on the Applicant’s secured Line of Credit account from early 2014 to recent times, as well as all of the statements on the Applicant’s credit cards for the same period, as well as the content of those documents reduced to Excel spreadsheet format.  He used that information to create columns aligning the transactions to “enable categorisation and grouping” (taken from his second affidavit). He sent the resulting material back to the Applicant for her review and “to have categories applied”. He received them back from the Applicant, consolidated the credit card transactions and the line of credit transactions, and prepared a summary sheet, including listing the categories by type by year.  He conducted a review of the statements to compare to the Excel spreadsheets he had received and formed an opinion, which he expresses in the second affidavit, that the credit card Excel spreadsheets he had received from the Applicant reflected “the true nature of the expenditure”. Through both the affidavits of his that were filed, the documents he was provided with are also sought to be adduced into evidence and have all been provided to the other side. So too, the documents he was responsible for preparing. At the conclusion of his second affidavit, he says:

   Based on my analysis recorded in the results worksheet, [the Applicant’s] personal expenditure excluding rent in the period from April 2014 to May 2020 and the average monthly amount was as follows:

   [he then sets out a table with that information listed in it]

The Dispute now before me

1. The Respondent’s legal representatives informed the Applicant’s legal representatives that they objected to these two affidavits of this witness being able to be relied upon by the Applicant in her case. It is common ground that the objection to both affidavits is based on the assertion that there has been failure to comply with the provisions of the Family Law Rules 2004 (Cth) Part 15.5 in respect of this evidence and, further, in respect of the second affidavit at least, it was filed outside the time provided for in my trial management directions for the filing by the Applicant of her evidence upon which she relied at the trial.

2. This immediate dispute was brought before the Court by Application in a Case filed by the Applicant just a few days ago, in which the Applicant seeks an early determination of the Respondent’s objections pursuant to s 192A of the Evidence Act. Relevantly, there was no dispute at the hearing this morning that this was appropriate given the fact that the trial is listed for next week. 

3. To be clear at this point, Queen’s Counsel who appeared for the Applicant argued that these Expert Evidence provisions of the Family Law Rules do not apply to this evidence. I will return to that submission shortly.

The Relevant Rules

1. Relevantly, 15.42 of the Family Law Rules says:

   Purpose of Part 15.5

   The purpose of this Part is:

   (a)to ensure that parties obtain expert evidence only in relation to a significant issue in dispute;

   (b)to restrict expert evidence to that which is necessary to resolve or determine a case;

   (c)to ensure that, if practicable and without compromising the interests of justice, expert evidence is given on an issue by a single expert witness;

   (d)to avoid unnecessary costs arising from the appointment of more than one expert witness; and

   (e)to enable 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 15.43 sets out relevant definitions:

   “expert’s report” means a report by an expert witness, including a notice under subrule 15.59(5)

3. The Dictionary to the Rules defines the following terms:

   expert means an independent person who has relevant specialised knowledge, based on the person’s training, study or experience.

   expert witness means an expert who has been instructed to give or prepare independent evidence for the purpose of a case.

   single expert witness means an expert witness who is appointed by agreement between the parties or by the court to give evidence or prepare a report on an issue.

4. Rule 15.51(1) says:

   A party must apply for the court’s permission to tender a report or adduce evidence at a hearing or trial from an expert witness, except a single expert witness.

5. So the question for initial determination is whether or not that Rule applies requiring the Applicant to apply to the Court for the Court’s permission to adduce the evidence of the witness that is objected to.

6. Mr Looney QC for the Applicant conceded in his written submissions that this particular witness is an expert in that he has a body of specialised knowledge gained from his training and experience as an accountant. Indeed, in both of this witness’s affidavits, the witness sets out his academic and his professional accounting qualifications, and his considerable years of experience. His expertise as an accountant does not appear as if it could be disputed, and it was not.  At first blush then, one might think that given the witness is not a single expert witness as defined, that Rule 15.51 (1) does apply, obliging the Applicant to seek the Court’s permission to adduce the evidence. However, Mr Looney’s submission was that it does not and that it does not, essentially because, though an expert accountant, the witness is not giving “expert evidence”. Mr Looney’s submission is effectively that permission is only required to be sought from the Court to adduce evidence from a witness who is an expert if the evidence sought to be adduced can be described as “expert evidence”.

7. Curiously though, the term “expert report” is defined in the Rules as a report by an expert. “Expert” is defined and “expert witness” is defined, but the expression “expert evidence” is not. However, I am of the view that if an expert report is a report by an expert witness, then expert evidence must be evidence given by an expert witness.

8. This particular witness was retained by the Applicant and her solicitors to do a particular job and to provide his evidence about doing that, and, most importantly, to provide his evidence about the opinions and conclusions he ultimately arrived at after he did that job. He has done all that. His evidence includes express reference to his analysis, to his opinions and to his conclusions. I am quite satisfied that he was retained to undertake the task that he was, because of his expertise as an accountant, so as to get the task right but also to give it the legitimate credibility and weight that might attach to it as having been undertaken by an expert accountant. I respectfully reject the submission that his evidence is not expert evidence and that it is just evidence of a mechanical process that might have been undertaken by any person, thus being non-expert evidence given simply by arrangement by a witness who happens to be an expert. If that were to be a correct view of it, it might very well immediately bring into play some serious questions about the admissibility of his opinions and conclusions in any event due to the prohibition against opinion evidence being admissible contained within s 76 of the Evidence Act.

9. Accordingly, I am satisfied that the affidavits of evidence of this witness and their attachments may only be adduced into evidence with the Court’s permission first obtained.

10. Rule 15.52(1) provides for a party to seek such permission and sets out that which must be done which is by filing an Application in a Case in order to seek such permission. That process of course requires an affidavit to be filed in support. Rule 15.52(2) sets out what that affidavit must state:

    (a)whether the party has attempted to agree on the appointment of a single expert witness with the other party and, if not, why not;

    (b)the name of the expert witness;

    (c)the issue about which the expert witness’s evidence is to be given;

    (d)the reason the expert evidence is necessary in relation to that issue;

    (e)the field in which the expert witness is expert;

    (f)the expert witness’s training, study or experience that qualifies the expert witness as having specialised knowledge on the issue; and

    (g)whether there is any previous connection between the expert witness and the party.

11. Mr Looney made the alternative argument for the Applicant that if I determined the expert evidence point against the Applicant she then seeks the permission that rule 15.51 and rule 15.52 require her to seek. The Applicant did file a brief affidavit in which she set out evidence that I understand she set out in order to address the obligations imposed by rule 15.52(2) that I have just set out.

12. The Applicant tells the Court the now obvious facts that the witness is her personal accountant and has been since 23 September 2019. She tells the Court that his evidence consists of an analysis of the nature that I have already described based on information in the documents she provided him that I have already referred to. Critically, she tells the Court that she has not at any time sought the Respondent’s agreement to appoint this witness as a single expert as she did not consider him a single expert because she did not consider his evidence to be expert evidence. That last assertion, with all due respect, belies the fact that the two affidavits of the witness purposefully set out his qualifications and experience as I have already said, to set up his expertise and they also acknowledged that he had been provided with copies of the relevant Expert Witness provisions of the Rules as those Rules provide must be done when engaging an expert witness.

13. The explanation given, that a copy of those parts of the Rules were provided to him out of an abundance of caution to ensure that he understood his obligations as a witness (and I note it does not say “as an expert” witness, which is what the provision of a copy of the Rules is actually for) again, respectfully, does not persuade me that his evidence was simply not considered to be “expert evidence”.

14. As I have observed, the witness’s expertise is not in issue, though it appears his independence is. The Respondent objects to permission being given and refers to the fact that the witness is the Applicant’s personal accountant and cannot be considered to be a truly independent witness. He also confirms that he was never asked to join in instructing a single expert to provide analysis and opinion evidence on the issue that this witness was instructed to provide, and points out that there has been an expert accountant retained by both parties as a single expert throughout these proceedings for many long months. Apart from the evidence that the Applicant did not think the evidence the witness was giving was expert evidence, there is absolutely no evidence from the Applicant going to provision of an explanation as to why the single expert accountant was not also given the task of providing truly independent opinion on the issue.  Mr Looney did, however, make some reference from the Bar table to delay in that single expert witness’s provision of his report.  I do not accept that as evidence or even as a suitable explanation if it was in evidence, for failing to consider engaging the single expert accountant to provide the expert evidence that is sought to be adduced into evidence by this particular witness.

15. The Applicant says in her affidavit that if the evidence is not permitted to be adduced by her:

    it would be necessary for [her] to give evidence in relation to each transaction, tender the analysis and the source document and have submissions made to the Court in respect of each of the relevant transactions and how they are to be treated in the analysis.

16. That I will leave to the Applicant and her legal advisers at this point in time. What she now does as a consequence of what my decision on this point is will be a matter for her, after taking relevant legal advice. That assertion by her is not, in my view, dispositive of the matter.

17. Rule 15.52(3) sets out what must be taken into account in the discretionary exercise of determining the application for permission to adduce evidence from an expert witness.

    (a)the purpose of this Part (see rule 15.42);

    (b)the impact of the appointment of an expert witness on the costs of the case;

    (c)the likelihood of the appointment expediting or delaying the case;

    (d)the complexity of the issues in the case;

    (e)whether the evidence should be given by a single expert witness rather than an expert witness appointed by one party only; and

    (f)whether the expert witness has specialised knowledge, based on the person’s training, study or experience:

    (i)     relevant to the issue on which evidence is to be given; and

    (ii)    appropriate to the value, complexity and importance of the case.

18. The purpose of this particular part of the Rules as set out in 15.42, I have already set out. I have considered those matters. I have become concerned about this trial not finishing in the three days allocated to it, a duration agreed between the parties when the matter was set down for trial some seven months ago. The number of objections I have already seen that must be determined on the first day of the trial and the number of witnesses that are being relied upon in the case in totality give me cause for this concern. Giving permission for this particular evidence to be adduced and relied upon would likely increase the chances of the trial not concluding in the allotted time. That is not in the parties’ interests; the interests of other litigants awaiting trial; or the Court’s interests. I have read Outlines of Case filed by both parties ahead of the trial. I must say I am not persuaded that the evidence that the expert witness has given in his affidavits for which permission is sought, would be critical to a just and equitable determination of the case and that without it justice cannot be done.  In any event, if it was, it should have been given by a single expert properly appointed and instructed in a timely fashion given the matter has been awaiting trial for years and has had its trial dates in place since December 2019 and this particular issue or dispute between the parties has been a live one for as long as I can recall being involved in the case, which is now since 2018.

1. Accordingly, I make the following Orders.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 24 July 2020.

Associate: 

Date:  13 August 2020