Fernand & Fernand
[2025] FedCFamC1F 67
•11 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fernand & Fernand [2025] FedCFamC1F 67
File number(s): BRC 15612 of 2022 Judgment of: BAUMANN J Date of judgment: 11 February 2025 Catchwords: FAMILY LAW – PROPERTY– Where the Applicant seeks leave to adduce further evidence in respect of real property interests – Where the proceedings are set down for final hearing Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 7.02, 7.08, 7.31
Cases cited: Antonescu & Antonescu [2024] FedCFamC1F 468
Henschel & Sartre (No 3) [2023] FedCFamC1F 1081
Keevers & Keevers [2021] FedCFamC1F 338
Moretto & Cosola [2022] FedCFamC1F 433
Neales & Neales (2022) FLC 94-079
Sarka & Sarka [2024] FedCFamC1F 804
Division: Division 1 First Instance Number of paragraphs: 25 Date of hearing: 29 January 2025 Place: Brisbane Counsel for the Applicant: Mr T North SC Solicitor for the Applicant: Small Myers Hughes Counsel for the Respondent: Mr S Williams KC Solicitor for the Respondent: Barry Nilsson Lawyers ORDERS
BRC 15612 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FERNAND
Applicant
AND: MR FERNAND
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
11 FEBRUARY 2025
THE COURT ORDERS UNTIL FURTHER ORDER:
1.That leave be granted for the Applicant to adduce further evidence from Mr B of C Valuers in respect of the real properties situated at:
(a)1 D Street, City E; and
(b)2 D Street, City E.
2.That pursuant to Rule 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the Applicant and Respondent shall arrange for Mr F of G Valuers, and Mr B of C Valuers (“the expert witnesses”), to confer by no later than 9 May 2025, and each party must give to the expert witnesses a copy of the court approved brochure titled “Experts, conferences-guidelines for expert witnesses and those instructing them in proceedings in the Federal Circuit and Family Court of Australia”.
3.That at the conference, the expert witnesses must:
(a)identify the issues that are agreed and not agreed;
(b)if practicable, reach agreement on any outstanding issues;
(c)identify the reasons for disagreement on any issues;
(d)identify what action (if any) may be taken to resolve any outstanding issue; and
(e)prepare a joint statement specifying the matters referred to in Order 3(a) to (d) hereof and deliver a copy of the statement to each party.
4.That the parties shall share equally in the costs of the expert conference including the cost of the Experts, with the Applicant to solely bear the cost of the adversarial expert attending such conference.
5.That the application for leave to produce adversarial expert for the property at H Street, State J, United States of America is dismissed.
6.That the costs of the Application in a Proceeding filed 29 November 2024 are reserved for the trial judge.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fernand & Fernand has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODCUTION
A de-facto property dispute between Ms Fernand (“the Applicant”) and Mr Fernand (“the Respondent”) is listed for a final hearing commencing 9 June 2025.
Although the parties, competently represented by specialist family law firms, have engaged in mediation, the matter seems destined to proceed to trial.
In discussions and negotiations, the parties have continued to refine their positions in respect of the balance sheet of interests, which in a document filed 19 November 2024 identified a nett pool between $19,343,864 (the Applicant) and $14,334,612 (the Respondent). As the joint memorandum of issues filed also on 19 November 2024 set out, an issue was the value of the parties’ interests in three real properties, being:
(a)2 D Street, City E (“2 D Street”);
(b)1 D Street, City E (“1 D Street”); and
(c)H Street, State J, United States of America (“State J property”).
The joint memorandum acknowledged at that time that no leave had been granted for the Applicant to adduce further evidence from her expert – contrary to the evidence of the Court appointed Single Experts. That was remedied by the Application in a Proceeding filed 29 November 2024 seeking leave to adduce further evidence from Mr B in respect of both the 2 D Street and 1 D Street properties and further evidence from Mr K in respect of the State J property.
The Applicant further seeks, if her application is successful, that pursuant to Rule 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), the respective single expert and the adversarial expert shall confer with the view to the preparation of a joint statement.
By his Response, the Respondent seeks that the Application be dismissed.
On 29 January 2025, the Court received oral and written submissions (either in the outline of case document or separately) from Mr North of Senior Counsel for the Applicant and Mr Williams of King’s Counsel for the Respondent.
PRINCIPLES TO BE APPLIED
I adopt the succinct summary of rr 7.02 and 7.08 of the Rules set out by Schonell J in Sarka & Sarka [2024] FedCFamC1F 804 at [34]–[37] as follows:
34.Rule 7.02 of the Rules embodies the purpose of the Rules that deals with experts, namely, that a party should only obtain expert evidence in relation to a significant issue, that it should be restricted to that necessary to resolve or determine the proceedings and that without compromising the interests of justice, expert evidence is to be given by a single expert.
35.As the Court identified in Crowther & Abrahams [2024] FedCFamC1F 758 (“Crowther & Abrahams”) the choice of expert is very much a lottery. The parties do not know when they select their expert what the ultimate opinion might be. Despite some appearance to the contrary, there is no magic or exalted status that accrues to the single expert by virtue of the lottery that selects them. It is for that reason that the Rules permits a party to seek leave to tender and/or adduce evidence from another expert.
36.Rule 7.08 imposes a restriction on a party seeking to tender a report or adduce evidence from another expert subject to the Court being satisfied pursuant to r 7.08(2) that:
(a)there is a substantial body of opinion contrary to any opinion given by the single expert witness and the contrary opinion is or may be necessary for determining the issue; or
(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.
37.As observed in Crowther & Abrahams, sight must not be lost of the fact that the Court’s determination is to ensure justice is accorded to each of the parties. The Rules are not to be construed as a straitjacket restricting the interests of justice, rather, they are designed to serve the interests of justice. For that reason, r 7.08 cannot be read in isolation and must be read with r 7.02 and in particular r 7.02(c), which specifically provides:
(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.
(As per the original)
I was further directed by the Applicant to the Full Court decision in Neales & Neales (2022) (2022) FLC 94-079 (at [40]–[41]) and single judge decisions by Berman J in Henschel & Sartre (No 3) [2023] FedCFamC1F 1081 (at [58]–[61]); Riethmuller J in Moretto & Cosola [2022] FedCFamC1F 433 (at [15], [30], [31], [33]–[35]) and Campton J in Antonescu & Antonescu [2024] FedCFamC1F 468 (at [16]). The Respondent referred to the decision of Wilson J in Keevers & Keevers [2021] FedCFamC1F 338.
Clearly, I am being asked to exercise a discretion, open under the Rules and as the decisions quoted above reflect, that discretion is capable of application in the difference facts scenarios that arise.
For my part, considering the pool of assets and the fact that, rather than merely assert a significantly higher opinion of value (at least for the two City E properties), the wife has, at her cost, obtained an actual property valuation after putting certain propositions to the single expert, as the Rules permit, a significant issue as to the market value of the two City E properties exist and the Court should, in these circumstances, be careful not to “compromise the interests of justice in preventing potentially relevant evidence being placed before the Court” per Campton J in Antonescu & Antonescu supra.
I propose to deal with each property separately.
2 D Street
The Single Expert Mr F adopted a market value of $2.9 million applying a capitalisation approach based on a gross market rental of $222,837 per annum. The capitalisation rate adopted of 7.5% was within the range identified of 6.31% and 9.28%. He relied, as a further check method, on some historical data for comparable analysis. Mr F opined that he regarded the highest and best use to be a continuation of the established use, although there is medium term residential potential.
The Applicant’s proposed adversarial expert Mr B adopted a market value of $5 million applying a gross market rental of $326,185 per annum having opined that the income approach assessment used by Mr F was “not applicable” because the property did not represent an investment type asset and tends to be in a lower value than the “market approach”. Mr B made an assumption that the site had development potential given low site coverage and further the zoning applicable. Mr B referred, in comparable sales data, to development sites and recent similar (he says) industrial precincts.
In my assessment, the experts have given emphasis to their preferred methodology and either reduced the impact of potential development (Mr F) or emphasised the impact (Mr B). Although I accept a mere difference in opinion as to value is not determinative, it is still relevant. Whether the conference of experts causes some movement is uncertain, but in the final analysis, and in the exercise of my discretion, I believe the interests of justice are served by the Applicant having leave to adduce further evidence from Mr B, and I will so order.
1 D Street
Mr F adopted a market value based on a capitalisation approach (although was checked with comparable sales) of $1.3 million adopting a gross market rental of $196,425 per annum. The capitalisation rate adopted of 8.00% was at the higher end of the range identified (7.00% to 8.34%), Mr F opined that the highest and best use to be the current use, although he acknowledged some medium term residential potential.
The Applicant’s proposed adversarial expert Mr B opined the market value of $3 million (more than twice that calculated by Mr F), after adopting a significantly higher gross market rental ($290,180) and a higher capitalisation rate (8.5%).
In my view, similar to the analysis in respect of 2 D Street, I have reached the conclusion that the different emphasis in methodology and opinion, is persuasive that leave in the interests of justice should be given, and I will so order.
State J property
The appointed single expert Mr L opined that this rural property has a market value of USD$750,000 and that its evident usage as agricultural land is its “highest and best use”. Primarily the expert adopted a “comparable sales approach” and then checked his assessment adopting an alternative “cost approach”.
The wife’s proposed adversarial expert Mr K, in coming to an option that the land has a value of USD$1 million, then attributed a further component for improvements of USD$360,000 (a total of USD$1.36 million), and also used a comparable sales data methodology with reservation (page 86) and then seemingly at page 87 identified the alternate “cost approach” was more applicable not withstanding his stated view that “typically” improvements are given little or no value on sales.
In my assessment, the evidence of Mr K is confusing and fails to identify any further reasons for adducing evidence from another expert (r 7.08(2)(c)) or that there is a substantial body of opinion contrary to any opinions given by the single expert. I am not satisfied that the contrary opinion of Mr K is necessary to determine the valuation issue.
I further note that the Applicant has not, as she is entitled to do under the Rules, put questions to the single expert (perhaps based on what will be her shadow expert’s opinion).
For these reasons, the Applicant’s application to adduce adversarial evidence in respect of the State J property is dismissed.
CONCLUSION
The Court make orders as set out at the commencement of these Reasons permitting adversarial evidence to be adduced in respect of the two City E properties, together with orders for a conference of experts to be conducted, as set out in the Application in a Proceeding.
The costs of the Application shall be reserved to me, as the trial judge.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 11 February 2025
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