Falker and Falker
[2017] FamCA 407
•9 June 2017
FAMILY COURT OF AUSTRALIA
| FALKER & FALKER | [2017] FamCA 407 |
| FAMILY LAW – PROPERTY – Valuation – Appointment of single experts – Where parties unable to agree on single experts to undertake valuations of business interests – Husband seeks orders for the Court to rely on previous valuation report prepared for the purpose obtaining a mortgage – Court cannot be satisfied provisions about single experts in Family Law Rules 2004 (Cth) satisfied – Orders for wife to provide names of suitable experts to husband and husband to choose expert from such list – Orders to confer for joint letter of instruction. |
| Family Law Act 1975 (Cth) s 79 |
| Family Law Rules 2004 (Cth) rr 15.45(3), 15.46, 15.54, 15.59, Part 15.5 Brogden v Metropolitan Railway Co (1877) 2 App. Cas. 666 | ||
| APPLICANT: | Mr Falker | |
| RESPONDENT: | Ms Falker |
| FILE NUMBER: | SYC | 6357 | of | 2013 |
| DATE DELIVERED: | 9 June 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 28 April 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Campton SC |
| SOLICITOR FOR THE APPLICANT: | Mills Oakley Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Lloyd SC |
| SOLICITOR FOR THE RESPONDENT: | Slater & Gordon Lawyers |
Orders
Within fourteen (14) days of the date of these Orders, the wife is to provide to the husband:
(a)A list containing the names of three (3) persons who, based on the persons’ specialised knowledge, training, study and/or experience, are appropriately qualified to provide a valuation report or updated valuation report in respect to the following properties:
(i)B Street, Suburb C NSW …
(ii)D Street, Suburb E NSW …
(iii)F Street, Suburb G
(b)A list containing the names of three (3) persons who, based on the persons’ specialised knowledge, training, study and/or experience, are appropriately qualified to provide a valuation report in respect to the following entities:
(i)The Falker Superannuation Fund;
(ii)The Falker Family Trust;
(iii)The H Unit Trust;
(iv)The I Unit Trust;
(v)J Pty Ltd;
(vi)K Pty Ltd;
(vii)L Pty Ltd;
(viii)M Pty Ltd;
(ix)N Pty Ltd;
(x)O Pty Ltd;
(xi)P Pty Ltd;
(xii)Q Pty Ltd;
(xiii)R Pty Ltd; and
(xiv)S Pty Ltd.
(c)A list containing the names of three (3) persons who, based on the persons’ specialised knowledge, training, study and/or experience, are appropriately qualified to provide a valuation report in respect to the value of the … equipment located at T Pty Ltd at F Street, Suburb G;
The lists referred to in Order 1 above should include details of the fees proposed to be charged in respect to that valuation report.
Within fourteen (14) days from the date of receipt of those lists of names provided by the wife in accordance with Order 1 above, the husband is to choose one person from each of those lists to prepare a valuation report in respect to the properties, entities and equipment.
Within twenty-one (21) days from the date of these Orders, the parties are to confer with a view to preparing a joint letter of instruction to be provided to each of the single experts appointed pursuant to Order 1 above.
Each party is granted liberty to apply on seven (7) days’ notice to the Court and to the other party, for the making of further procedural orders:
(a)in the event that the parties are unable to agree upon the selection of a single expert or experts or the joint letter of instruction to be provided to that single expert or experts; or,
(b)after the parties ascertain the date that the experts’ reports will be provided to the parties.
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 Falker & Falker 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 SYDNEY |
FILE NUMBER: SYC 6357 of 2013
Mr Falker
Applicant
And
| Ms Falker |
Respondent
REASONS FOR JUDGMENT
introduction
The parties are seeking orders for the adjustment of their matrimonial property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The major issue, at this stage of the proceedings, is the preparation of a balance sheet identifying the matrimonial property and the value to attach to that property. The matter was listed on 28 April 2016 for the first day Less Adversarial Trial for procedural orders to be made to progress the matter to final hearing.
The parties are in dispute as to the value of parties’ business interests. They are also in dispute as to the appointment of a single expert or experts to undertake valuations of these interests.
Background
The husband is 66 years of age and the wife is 64 years of age. The parties were married in 1974 and separated after 37 years of marriage on 3 December 2011.
The husband is a health professional who has been involved in developing business interests. The extent to which the wife has participated in those activities will be an issue for determination at final hearing. As noted, the primary issue at this stage of the proceedings is the valuation of those business interests.
The parties’ property
No issue was taken with the husband’s identification of the parties’ property which was summarised in the husband’s Case Outline document as follows:
REAL PROPERTY
o[Mr U] was appointed as the single real estate expert. He prepared valuations of the [Suburb C] property occupied by the husband and the [Suburb E] property occupied by the wife in October 2015. [Mr U] has now retired from professional practice.
oA Valuation of each piece of real estate will either need to be agreed for the purpose of the trial or updated by way of an alternate single expert.
THE [FALKER] FAMILY TRUST
a.This is a discretionary trust controlled and operated by the parties. [R Pty Limited] is the trustee;[1]
[1] The husband and the wife are the shareholders and directors of R Pty Limited.
b.The primary investments of the [Falker] Family Trust are:
a.Cash and a public share portfolio
b.An interest in the [H] Unit Trust. This trust operated an enterprise trading as “J”. That enterprise was sold by the [H] Unit Trust in October 2016 with the proceeds being distributed to unit holders. The distribution of capital from the disposal of the enterprise by the Unit Trust will be completed in the near future, and the Unit Trust then will be wound up in the 2017 tax year. The [Falker] Family Trust will distribute almost all, if not all, of the proceeds to the husband. This disposal of the asset of the Unit Trust, and its distribution to the [Falker] Family Trust, and then to the husband, will create a significant taxation liability payable by the husband in early 2018.
c.The [Falker Family] Trust further has an interest in the [N] at [Suburb G]. The [N] operates by way of two “stapled” entities being:
i.The [I] Unit Trust by way of its trustee, [L] Pty Limited – it owns the real property at [F Street, Suburb G]; and
ii.[N] Pty Limited (ACN: …) that operates the business of conducting [services] – currently licensed for a maximum of …:
1.There are 49(?) unrelated 3rd party stakeholders in the [N] enterprise;
2.The [Falker] Family Trust holds 4.88% interest in N.
THE [FALKER] SUPERANNUATION FUND
The parties are the sole members of the fund. The fund has investments by way of cash and listed shares, an interest in the H Unit Trust presently being liquidated, and a 4.40% interest in N.
As noted in the extract from the submission, a complication in respect to obtaining updated valuations of the Suburb C and Suburb E properties is that the previous valuer of those properties has retired from professional practice. The parties agree that arrangements will need to be put in place to appoint another single expert to provide updated valuations of those properties.
The major point of contention is in respect to the valuation of the parties’ interests in those entities that are operating as part of the N business at Suburb G.
By way of background, the development of the N business at Suburb G can broadly be described as follows:
·In March 2011 the legal entity in which the husband has an interest, L Pty Ltd as trustee for the I Unit Trust, purchased land and a building at Suburb V for the sum of $18.1 million. That property was acquired for the purpose of developing the N business at Suburb G.
·In March 2015, the N Pty Ltd (“N Pty Ltd”) commenced operation of Suburb G.
The extent to which the business has been operating and its future earning potential will be issues for determination at final hearing. Those issues, however, are relevant in so far as they create an additional level of complexity to the valuation process.
A further level of complication is that, in addition to the activities undertaken by N Pty Ltd, some services provided within the Suburb G business are conducted by other entities. These include O Pty Ltd and P Pty Ltd.
Applications
This application concerns the following orders proposed by the parties.
Orders proposed by the husband
In terms of the issue of valuation, the husband proposed the following orders:
1. That the valuation report prepared by [Mr W] of [W] Partners Dated 9 January 2017 as to the valuation of [T] through its entities – [M] Pty Ltd and of the [I] Trust by way of [L] Pty Ltd – be adopted and relied upon as a single expert report pursuant to chapter 15 of the Family Law Rules 2004 for the purpose of these proceedings, and that the opinion contained therein be incorporated in and form part of the foundation’s for the opinion of the interests of the parties in The [Falker] Family Trust and the [Falker] Superannuation Fund as opined by the single frenzied accountant appointed in these proceedings.
2. That in the alternative, that the Applicant Husband be granted leave to adduce and rely upon the valuation report prepared by [Mr W] of [W] Partners dated 9 January 2017 pursuant to rule 15.52 of the Family Law Rules to be incorporated and form part of the foundations for the opinion of the interests of the parties in The [Falker] Family Trust and the [Falker] Superfund as opined by the single frenzied accountant appointed in these proceedings .
Orders proposed by the wife:
The orders proposed by the wife in respect to valuation were as follows:
12. That [Ms Z] from [AA Valuers] be appointed as a single expert to expert [sic] to value the parties’ respective interests in the following entities:
a)The [Falker] Superannuation Fund;
b)The [Falker] Family Trust;
c)The [H] Unit Trust;
d)The [I] Unit Trust;
e)[J] Pty Ltd;
f)[K] Pty Ltd;
g)[L] Pty Ltd;
h)[M] Pty Ltd;
i)[N] Pty Ltd;
j)[O] Pty Ltd;
k)[P] Pty Ltd;
l)[Q] Pty Ltd;
m)[R] Pty Ltd; and
n)[S] Pty Ltd.
13. That the solicitors for the Wife cause the letter of instruction which is attached as Annexure “JF26” to the Wife’s Affidavit filed [sic] sworn 30 September 2016 to be forwarded to [Ms Z] within 48 hours of the date of these Orders.
14. At first instance, that the Husband be responsible for payment of the single expert’s valuation fees and shall forward into the Trust account the fees required by [Ms Z] within 48 hours of the date of these Orders with any payment by the Wife to be determined at the final hearing of this matter.
15. That [Mr BB] of [CC Valuers] be appointed as a single expert to value the following commercial property:
a)[X Street, Suburb Y];b)[F Street, Suburb G].
16. That the solicitors for the Wife cause a joint letter of instruction to be forwarded to [Mr BB] within 48 hours of the date of these Orders
17. At first instance, that the Husband be responsible for payment of the single expert’s valuation fees pursuant to Order 14 and shall forward into the Trust account of his legal representatives the fees required by [CC] Valuers within 48 hours of the date of these Orders with any payment by the Wife to be determined at the final hearing of this matter.
18. That a single expert be appointed to value the … equipment contained in:
a)[J] at [X Street, Suburb Y];
b)[T] at [F Street, Suburb G].
19. That the solicitors for the Wife cause a joint letter of instruction to be forwarded to the single expert valuing the …equipment within seven days of the date of these Orders.
20. At first instance, that the Husband be responsible for payment of the single expert’s valuation fees pursuant to Order 17 and shall forward into the Trust account of his legal representatives the fees required by the single expert within seven (7) days of receipt of the estimated fees with any payment by the Wife to be determined at the final hearing of this matter.
Contentions
Senior counsel for the husband spent some time outlining the nature of the business interests associated with both the Falker Family Trust and the Falker Superannuation Fund. The purpose for that was to inform the Court of the difficulties associated with valuing the businesses. That process essentially involves valuing the real property on which the business operates, which in turn requires valuation of fixtures, which includes sophisticated equipment. Senior counsel also referred to the complexities associated with the valuation of the entities that provide services within the business. In that respect, reference was made to complications in determining the potential value of the aggregated businesses as opposed to the total of the value of the individual entities.
A further complication arises in respect to attempting to forecast the future profitability of the business in circumstances where it currently only has what is known as Tier 2 approval. The approval process is one that involves insurance providers approving the business to provide services to a specified level. Tier 1 approval is the highest category. It was explained that Tier 1 approval has not been given to a similar business facility for a period of approximately two years. It was argued that this presents an additional complication for the valuer in attempting to predict if and when Tier 1 approval will be given and, if that approval is obtained, the impact that such approval will have on the future profitability of the business.
It was submitted that the valuer proposed by the husband, Mr W, has particular expertise in valuing similar providers, and in those circumstances is the appropriate valuer to be appointed as the single expert in this matter. In that respect, it was also submitted that Mr W has particular experience and expertise in determining rentals and returns in the context of service providers operating within this context.
Senior counsel for the husband also spent some time taking the Court through the Financial Statements and reports for the year ended 30 June 2016 of the following entities:
·[N] Group Aggregation;
·[N] Pty Ltd;
·[O] Pty Ltd;
·[P] Pty Ltd;
·[L] Pty Ltd as Trustee for I Trust.
It is unnecessary to refer to the information contained within those Financial Statements and reports. It is sufficient to note that the purpose of the exercise was to satisfy the Court of the veracity of the evidence set out at paragraphs 15 and 16 of the husband’s affidavit sworn 27 April 2017 which was as follows:
15. On the basis of the most recent valuation report for [N] completed by [Mr W] and the current balance of the loan, the equity in [N] is as follows:
Value of [N] as a going concern $55,000,000
Indebtedness to NAB $41,230,000
Total Equity $13,770,000
16. Accordingly, the interest of the Wife and I in N in total is 9.28% x $13,770,000 being a total of $1,277,856. Exhibited hereto and marked “JSF1-03” is a Balance Sheet as at 31 January 2017 of the matrimonial asset pool prepared by [Mr DD], Accountant, which I believe is an accurate representation of the pool.
As result of the husband concluding, by reference to the valuation of Mr W, that the value of the parties’ interest in the aggregated businesses, operating as or within the business, is $1,277,856 the husband contended that:[2]
…[H]aving another valuation of [N] in circumstances where [Mr W] has already completed three detailed valuations and is familiar with all aspects of the business is simply an outrageous waste of matrimonial funds.
[2] Paragraph 18 of the husband’s affidavit sworn 27 April 2017.
It was submitted that the estimated cost provided by the wife’s preferred valuer, Ms Z, at $45,000 – $50,000 was unrealistic. It was submitted that the cost would more likely to be in the range of approximately $100,000.
It was argued that Mr W is best placed to conduct the valuation of the parties’ business interests and, in the context of the potential value of those business interests, additional expense should not be incurred in retaining the services of another valuer or other valuers.
Consideration
The nature of the valuation
Even if the husband’s contentions are taken at their highest, the husband’s application must fail for the following reasons.
Rule 15.45(3) of the Family Law Rules 2004 (Cth) (“the Rules”) provides that the Court “may appoint a person as a single expert witness only if the person consents to the appointment.” There is no evidence that Mr W has provided such consent. Indeed, at page 68 of his valuation report dated 9 January 2017 it is stated that:
Neither the whole nor any part of this report, nor any reference thereto, may be included in any document, circular or statement, without our written approval of the form and context in which it will appear.
This valuation is for the use only of the party to whom it is addressed and for no other purpose. No responsibility is accepted to any third party who may use or rely on the whole or any part of the content of this valuation.
The first page of the valuation report makes it clear that the party to whom the report is addressed is the National Australia Bank Limited (“NAB”). Indeed, page 5 of that report notes that the instructions to the valuer were provided by the “Director,… National Australia Bank, Sydney”.
Accordingly, even if it can be inferred that, as result of previously having prepared a report at the request of the husband’s solicitors, Mr W consents to either or both being appointed as a single expert witness and to his report dated 9 January 2017 being admitted into evidence in the proceedings, there is no evidence that the entity for whom the report was prepared, that is NAB, similarly consents to that occurring.
Further, the husband’s case was, with respect, presented on the basis of a false premise. It was submitted that:
So the husband says, well, naturally [N] needed this valuation to be as high as it possibly could be because we’ve had to inject … funds, capital, to meet LVR ratios with NAB and so we need this to be as high as we can to afford further injections of capital. So he [the husband] says that the valuation is, in fact, very optimistic and the knock on effect to the parties is similar to increase of inflate their balance sheet. [3]
[3] Transcript of proceedings dated 28 April 2017, page 12.
As noted, contrary to that assertion, the valuation was prepared at the request of the lender (NAB) and not the borrower (N). At page 69 of his report, Mr W notes that his valuation is based “on the assumption that the Lender is providing mortgage financing at a conservative and prudent loan to value ratio.”
It is often said that “even the devil does not know what the thought of man is”[4] and I venture to say that he does not know what the corporate mind of a financial institution is. However, there was no evidence that NAB had requested Mr W to prepare an “optimistic” valuation of the property that it intends to hold as security for a multimillion dollar lending facility. The evidence suggests that it was more likely that NAB was seeking a conservative and prudent valuation.
[4] Lord Blackburn in Brogden v Metropolitan Railway Co (1877) 2 App. Cas. 666, at 692.
Absent the consent of the wife, it would be inappropriate to place her in a situation where the valuation of the parties’ business interests is one that has been prepared in the context of a financial institution fulfilling its prudential obligations in assessing the loan to value ratio for the purpose of determining whether to provide finance to those business interests, and not in the context of family law proceedings.
Accordingly, on that basis alone the husband’s alternative application to be granted leave to “adduce and rely upon” the valuation report prepared by Mr W dated 9 January 2017, either as evidence in these proceedings or as part of the foundation for a report by a single forensics accountant appointed in these proceedings, must be dismissed.
Instructions to the valuer
At page 5 of his report Mr W notes:
Our valuation has been prepared in accordance with the Australian Property Institute (API) Code of Professional Practice (2008), together with the standard instructions issued to panel valuers by National Australia Bank Limited.
Those documents are not before the Court. In their absence I am not in a position to determine whether the instructions to Mr W in preparing his report were in accordance with the requirements of the Rules of this Court.
In that respect, I note that the following Rules are of relevance:
15.54 Instructions to expert witness
(1) A party who instructs an expert witness to give an opinion for a case or an anticipated case must:
(a) ensure the expert witness has a copy of the most recent version of, and has read, Divisions 15.5.4, 15.5.5 and 15.5.6 of these Rules; and
(b) obtain a written report from the expert witness.
(2) All instructions to an expert witness must be in writing and must include:
(a) a request for a written report;
(b) advice that the report may be used in an anticipated or actual case;
(c) the issues about which the opinion is sought;
(d) a description of any matter to be investigated, or any experiment to be undertaken or issue to be reported on; and
(e) full and frank disclosure of information and documents that will help the expert witness to perform the expert witness's function.
(3) The parties must give the expert an agreed statement of facts on which to base the report.
(4) However, if the parties do not agree on a statement of facts:
(a) unless the court directs otherwise--each of the parties must give to the expert a statement of facts on which to base the report; and
(b) the court may give directions about the form and content of the statement of facts to be given to the expert.
In so far as r 15.54 requires that the expert witness be provided with Division 15.5.5 of the Rules it is noted that r 15.59(3) contained in that division provides:
(3) The expert witness has a duty to:
(a) give an objective and unbiased opinion that is also independent and impartial on matters that are within the expert witness's knowledge and capability;
(b) conduct the expert witness’s functions in a timely way;
(c) avoid acting on an instruction or request to withhold or avoid agreement when attending a conference of experts;
(d) consider all material facts, including those that may detract from the expert witness’s opinion;
(e) tell the court:
(i) if a particular question or issue falls outside the expert witness's expertise; and
(ii) if the expert witness believes that the report prepared by the expert witness:
(A) is based on incomplete research or inaccurate or incomplete information; or
(B) is incomplete or may be inaccurate, for any reason; and
(f) produce a written report that complies with rules 15.62 and 15.63.
The significance of comparable rules was considered by McDougall J in Investmentsource v Knox Street Apartments.[5] In that case, his Honour rejected an expert’s report for reasons that included the following:[6]
(1)[The expert] did not prepare his report with a conscious appreciation of the obligations imposed by Sch K (which was applicable at the time it was prepared) or Sch 7 (which is applicable now).
(2)There is a real difference between the role of an expert retained to advise a client and the role of an expert engaged to give evidence. The former owes his or her primary obligation to the client; the latter owes his or her primary obligation to the Court. It cannot be assumed that those obligations are identical, or that in any given case performance of them would lead to the same outcome in terms of opinion.
(3)For the reasons given by Einstein J in Cassegrain and Campbell J in United Rural Enterprises, there is a real risk that an expert who has not prepared a report under the discipline of the applicable Sch will form an opinion from which, thereafter, he or she would find it difficult to retreat, even if circumstances arise that might raise this as a possibility.
(4)An expert retained to advise a client is not usually confronted with alternative expert evidence. An expert retained to give evidence usually is. In the latter case, the expert’s obligations under the applicable schedule require that he or she consider the alternative material, and reconsider his or her position in its light.
(5)Under the usual order for hearing that applies in the Commercial and Technology and Construction Lists, experts are required to confer with a view to defining, refining and where possible limiting the real issues in dispute between them. The ordinary workings of the human mind to which Campbell J pointed in United Rural Enterprises at para [15] might make this process more difficult for an expert who did not start out with an appreciation of his or her obligations under the applicable schedule.
(6)In those circumstances, I think that there is a real risk of significant prejudice to Kimberly if the Colliers material is admitted to prove [the expert’s] opinions.
[5] [2007] NSWSC 1128.
[6] At [50].
In this case, Mr W specifically states that he has prepared his report in accordance with the API Code of Professional Practice and the standard instructions issued to panel valuers by NAB. It is reasonable to assume that if Mr W had prepared his report in accordance with the discipline set out in Part 15.5 of the Rules, he would have stated that in his report. In the absence of such a statement, I infer that the report was not prepared in accordance with the requirements of Part 15.5 of the Rules and, most significantly, without Mr W taking into consideration the duties that a single expert has to this Court pursuant to r 15.59.
For those reasons, I dismiss the husband’s application for his proposed alternative form of order.
For similar reasons, the husband’s primary application for Mr W to be appointed by the Court as the single expert to provide a valuation of the husband’s business interests must also be dismissed. This is because Mr W has conducted his valuation and expressed an opinion in respect to that valuation without having regard to the context of the discipline imposed by Part 15.5 of the Rules. In those circumstances there is a risk that Mr W would find it difficult to retreat from those opinions if he was asked to give evidence as a single expert in the context of the requirements of Part 15.5 of the Rules.
Further, it is of significance that Mr W has prepared his report on behalf of NAB in the context of that financial institution fulfilling its prudential requirements to ensure that the lending facility that it provides to N Pty Ltd, and its associated entities is based upon an appropriate, if not conservative, loan to value ratio. Having expressed his opinion in that context, there is a real risk that, in the event of Mr W being appointed as single expert witness in these proceedings, he would find it difficult to resile from the opinions that he has already provided in his report.
Accordingly, for these reasons, the husband’s application for Mr W to be appointed as the single expert witness to value the parties’ business interests in these proceedings must also be dismissed.
Appropriate orders
The Rules provide clear and practical guidance as to how parties can overcome a difference of opinion in respect to the appointment of an appropriately qualified single expert. Specifically, r 15.46 provides as follows:
15.46 Orders the court may make
The court may, in relation to the appointment of, instruction of, or conduct of a case involving, a single expert witness make an order, including an order:
(a) requiring the parties to confer for the purpose of agreeing on the person to be appointed as a single expert witness;
(b) that, if the parties cannot agree on who should be the single expert witness, the parties give the court a list stating:
(i) the names of people who are experts on the relevant issue and have consented to being appointed as an expert witness; and
(ii) the fee each expert will accept for preparing a report and attending court to give evidence;
(c) appointing a single expert witness from the list prepared by the parties or in some other way;
(d) determining any issue in dispute between the parties to ensure that clear instructions are given to the expert;
(e) that the parties:
(i) confer for the purpose of preparing an agreed letter of instructions to the expert; and
(ii) submit a draft letter of instructions for settling by the court;
(f) settling the instructions to be given to the expert;
(g) authorising and giving instructions about any inspection, test or experiment to be carried out for the purposes of the report; or
(h) that a report not be released to a person or that access to the report be restricted.
In the first instance, consistent with r 15.46(a) I propose to make orders requiring the parties to confer for the purpose of agreeing on the person to be appointed as a single expert witness to value the parties’ business interests. If, subsequent to the Orders which I propose to make, the parties are unable to agree, then additional measures can be considered.
I note that the wife has proposed that Ms Z be appointed as the single expert to value the parties’ business interests. The wife is, of course, entitled to propose Ms Z as one of the three proposed valuers that she presents to the husband. It is a matter for the husband whether he selects Ms Z or indicates preference for one of the other valuers included on the list of names.
I note that there was some disagreement between the parties as to those entities and items of equipment that should be valued. In the absence of evidence regarding the activities of the entities that are associated with the husband’s business interests, the Court is not in a position to identify those interests. Accordingly, I propose to make orders that are as expansive as possible to ensure that no entity is disregarded. Clearly, if it is the view of both the parties that a particular entity does not have any relevance to the parties’ matrimonial property, then it would be unnecessary for a valuation of that entity to be undertaken.
I note that r 15.46(1) provides that the parties “are equally liable to pay a single expert witness's reasonable fees and expenses incurred in preparing a report.” It is therefore unnecessary to make an order dealing with payment of the valuers’ fees as it is assumed that the parties will comply with this provision of the Rules.
Future matters
It would not be appropriate for this matter to be listed for final hearing until there is some certainty to the valuation process. Accordingly, I will grant leave to the parties to request that the matter be re-listed for further directions upon confirmation that valuers have been appointed and the dates on which it is anticipated the valuation reports will be available.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 9 June 2017.
Associate:
Date: 9 June 2017.
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