Hackshaw and Hackshaw

[2009] FamCA 1327

FAMILY COURT OF AUSTRALIA

HACKSHAW & HACKSHAW [2009] FamCA 1327

FAMILY LAW – PROPERTY SETTLEMENT – Admissibility of Expert Witnesses – Whether leave may be sought for more than one expert witness

Evidence Act 1995 (Qld) s 50
Family Law Act 1975 (Cth) s 79
Family Law Rules 2004, R. 15.42, 15.52

APPLICANT: Ms Hackshaw

RESPONDENT: Mr Hackshaw

FILE NUMBER: BRC 10904 of 2007

DATE DELIVERED: 17 December 2009

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 17 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Carew

SOLICITOR FOR THE APPLICANT: Lehns Solicitors

SOLICITOR FOR THE RESPONDENT:

Mr R.W. Blank of

Robert W Blank & Associates

Orders

IT IS ORDERED THAT:

1. The matter be listed for final hearing before Justice Murphy for 5 days commencing at 10.00am on 24 May 2010 in the Brisbane Registry of the Family Court of Australia.

2. Pursuant to Rule 15.52 of the Family Law Rules, permission be given to the wife to adduce evidence by way of a report from Mr NC with respect to the value of:

   a.The husband’s interest in the Hackshaw Family Trust, including the Trust’s interests in:

   i.Hackshaw A Pty Ltd

   ii.Hackshaw B Pty Ltd

   iii.Hackshaw C Pty Ltd

   iv.Hackshaw – E

   v.Hackshaw – F

   vi.Hackshaw – G

   vii.Hackshaw – H

   b.The husband’s interest in:

   i.Hackshaws Pty Ltd

   ii.Hackshaw Investment Properties Pty Ltd (trading as “HIP Company”)

   iii.Hackshaw Investment Properties Unit Trust

   iv.Hackshaw Retirement Pty Ltd

   v.Hackshaw Group No. 1 Superannuation Fund

   vi.Hackshaws (A) Pty Ltd

   vii.Hackshaw and MA partnership

   viii.Hackshaw and BN partnership

   ix.Hackshaw and RJ partnership

3. The husband is granted leave to rely upon the Affidavit of expert witness of Mr PB sworn 21 October 2009.

4. The application for orders sought in paragraph 8 of the Response filed by the husband on 2 September 2009 is dismissed.

5. Each party be granted leave to address questions in writing to the single expert witness, Mr TS, with respect to the proposed distribution outlined in the orders sought in paragraph 8 of the Response filed by the husband on 2 September 2009, and it is open to each of the parties to ask those questions or any related questions of their respective adversarial experts.

6. Mr TS, Mr PB and Mr NC shall confer, together with, if considered appropriate, the legal representatives of the parties with a view to identifying:

   a.those matters upon which they are agreed;

   b.those matters upon which they differ; and

   c.the foundations for the differences of opinion of each of them if any.

7. Any costs of Mr TS in respect of any such conference shall be borne equally by the parties.

IT IS DIRECTED THAT

1. The single expert, Mr TS be responsible for the preparation of a report consequent upon the conference between the experts and once signed by each of them, to forward same contemporaneously to the solicitors for the husband and wife.

2. The husband, through his solicitors, shall file the report in paragraph 7 above as soon as reasonably practicable after receipt.

3. Pursuant to s 50 of the Evidence Act 1995 the husband’s accountant, Mr NH, is permitted to prepare, and the husband to rely upon, schedules and summaries of financial transactions and dealings in relation to the husband’s expenditure, at and in relation to, his farm properties.

4. The legal representatives of the parties shall confer with a view to reaching amended consent on directions with respect to the filing of affidavit material, the tendering of documents, and all such other steps as are necessary so as to prepare this matter for final hearing, and:

   a.The parties will reduce such consent directions to writing and, by jointly signed correspondence, forward same by email to the Associate to Justice Murphy, in which case, if suitable to the court, such directions will be made by consent in chambers;

   b.In the event that consent directions are not received in chambers by 4.00pm on 26 February 2010, the matter will be listed for mention before Justice Murphy at a time and date to be advised.

IT IS FURTHER ORDERED THAT

1. The wife file and serve affidavit material upon which she seeks to rely, with the exception of the report by Mr NC, within 7 days of today.

2. The wife file and serve an affidavit and accompanying report by Mr NC 4.00pm 29 January 2010.

3. The husband file and serve an affidavit by him by 4.00pm 29 January 2010.

4. The husband file and serve an affidavit by Mr NH annexing s 50 summaries by 4.00pm on 29 January 2010.

5. The wife file and serve an affidavit in reply to matters raised in the affidavit of the husband by 4.00pm on 19 February 2010.

6. Registrar Coutts conduct a compliance check at a time and on a date to be advised after Friday 26 February 2010 and that such hearing take place by telephone link.

AND IT IS FURTHER ORDERED THAT

1. The further mention listed for 18 December 2009 be vacated.

IT IS NOTED that publication of this judgment under the pseudonym Hackshaw & Hackshaw is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 10904 of 2007

MS HACKSHAW

Applicant

And

MR HACKSHAW

Respondent

EX TEMPORE

REASONS FOR JUDGMENT  

1. An application is made by the wife to rely upon what can be termed an adversarial expert in the context of a property dispute involving a significant sum of money. 

2. The application relates to the use of expert evidence by a reporting accountant in respect of a number of entities and businesses essentially run by the husband.  Those valuations are the subject of evidence from a single expert, Mr TS. 

3. Subsequently the husband obtained a report from a Mr PB, and himself seeks leave to rely upon Mr PB’s evidence as, in effect, an adversarial expert for the purposes of the trial.  That application is not opposed by the wife.  The application by the wife, however, is opposed by the husband. 

4. The wife has complied, as it seems to me, with rule 15.52 of the Family Law Rules 2004 in terms of the material put before the court in support of the application and no submission is heard from the husband to the contrary. Accordingly, in determining the application the court is bound to consider the factors enumerated at rule 15.52(3) of the Rules.

5. The purpose of this Part of the rules is set out in rule 15.42. The general thrust of that part of the Rules is that expert evidence should be given by a single expert witness, save where circumstances suggest that, within the principle of proportionality and the exigencies of cost and delay, further expert evidence is warranted because of the particular circumstances of a particular case.

6. In this case, at this early stage, the intricacies of the dispute between the parties are not directly known or fully appreciated by the court.  Nevertheless, by reference to the material filed, and issues identified during various preliminary hearings of the matter, it is plain that the issues in this case are complex.  

7. As but one example, the wife is at present claiming what is commonly called “addbacks” in the sum of about $6 million.  The husband says if there are to be addbacks at all, it should be a figure closer to $300,000.

8. Furthermore, it is plain from the submissions made on behalf of the husband that significant issues in fact pertain to the evidence of Mr TS, which, his solicitor says, have been referred to in the report by Mr PB, whom he relies upon as an adversarial expert. 

9. Given the costs already expended in this case, the size of the pool and the impact that the appointment of Mr NC as an expert witness will have on any increase in costs incurred, in the scheme of things, a matter that should weigh heavily into account in precluding reliance by the wife upon than “her” expert.

10. Although there are a multiplicity of issues, it seems to me that the appointment of Mr NC is unlikely to delay the case.  Indeed, if, the appointment of Mr NC will lead – as I intend to order – to a conference between he, Mr TS, and Mr PB, with respect to all issues live between the parties or the expert, with a view to producing a document indicating the matters upon which they are agreed and the matters upon which they disagree, it seems to me highly likely that the issues in this case are likely to be further crystallised and clarified.

11. For that reason I also consider that the appointment of Mr NC will not have an adverse impact on the complexity of the issues in the case; it is more likely, in my view, to have the opposite effect. 

12. There are no particular reasons in this case, in circumstances where there is a single expert but whose opinion is commented upon by an adversarial expert by one party (the use of whom in the proceedings is not challenged by the wife) for precluding the wife from relying upon her own expert.

13. The matters referred to by Mr Blank in opposing the appointment are, in my view, all matters which, firstly, are dealt with by an order that there be a conference between experts. Secondly, in respect of areas of disagreement, they are not matters to be determined by the experts, but rather are matters to be determined by the court.

14. On what I know of the case, they are matters central to the determination of significant issues in the proceedings by the court, (as distinct from determination by one or other of the experts) and expert opinions are matters upon which a decision may need to be made, just as there are other matters upon which the court will need to decide.

15. For those reasons I propose to make orders in accordance with paragraph 4 of the Application in a Case filed by the wife on 25 November 2009.

16. In this matter the husband seeks an order, at paragraph 8 of a Response filed on 2 December 2009, that he be permitted to distribute the amount of $461,612 from Hackshaw Family Trust to Hackshaw Investments Properties Pty Ltd in respect of the financial year ended 30 June 2009. 

17. For the purposes of this interim application and the decision to be made within it, it is assumed that the transaction proposed by the husband is proposed for the legitimate purposes that he refers to in his own affidavit and in material annexed to the affidavit of his solicitor in respect of which leave has been granted to file and read today.

18. The application seeks to pay a sum of money from one entity to another entity within the group of entities that form the subject of these proceedings, and in particular, form the subject of valuation evidence adduced, and to be adduced, by experts. 

19. The trial of this matter will hopefully be held in approximately May or June next year. 

20. The evidence is to the effect that, once money is distributed from one entity to another, it will allow the husband to convert what is at the moment a potential taxation liability to a potential tax refund.  It is said in support of the application that not only is the transaction legitimate for a perfectly understandable, legitimate purpose, but that it also is being done transparently by reference to the husband's accountant and in circumstances where experts are providing reports to this court.

21. Be that as it may, the issue here is a larger one.  In a case where the pool is, in broad terms, estimated to be in the region of $7 million, the wife maintains a case for addbacks amounting to $6 million.  Plainly enough, both the amount, and, I gather, the adding back of any amount, is opposed by the husband.

22. Nevertheless, in an application of this type, brought on an interim basis before decisions can ultimately be made about the central factual assertions and counter-assertions between the parties, it is necessary to attempt to effect justice by not prejudicing either party until those central factual issues can be determined.

23. It seems to me that this specific consideration presents the husband with a difficulty on the current state of the evidence. 

24. The size of the asserted addback is, it will be observed, almost the total of the known approximate pool of property.  Plainly, if the wife is to receive anything upwards of 50 per cent by way of entitlement, then a real issue may emerge as to whether there is sufficient property to allow her to receive her just entitlement. 

25. In my view, as has been made clear by cases such as Zschokke & Zschokke and Harris & Harris, the so-called "reversibility" of any order made permitting “interim funds” to go to a particular party (or, in this case the transfer of funds from one entity to another), should be reversible in the sense that the ultimate decision to be made by a court pursuant to section 79, should be able to readily accommodate any such payment or distribution.

26. The evidence in that respect is, in my view, lacking in the current application.  That is all the more so in circumstances where, as I indicated earlier, in reasons relating to the appointment of an adversarial expert by the wife, I propose to order a conference between that adversarial expert, the husband's adversarial expert, and the single expert, Mr TS. 

27. All are accountants.  All will, presumably, as a result of the exercise of their expertise and the task with which they are charged, have examined the balance sheets and profit and loss statements of each of the entities forming part of the group, including the entity from which the husband seeks to withdraw money and the entity to which he seeks to pay money.

28. Accordingly it seems to me that justice requires that any such application as the husband makes seeking the transfer of what, on any view, is a very substantial sum of money, should at the very least await the outcome of that conference of experts prior to a determination being made on an interim basis. 

29. That is all the more so in circumstances where the husband, in affidavit material filed by him, does not point to any urgency for the need to effect the transaction and where the evidence from his accountant in that respect is to the effect that the taxation returns for the relevant year have to be lodged by not later than approximately mid May 2010.

30. If the parties can bring an end to the interlocutory issues between them, this matter will be placed on track for a trial, which I hope will take place at about the time earlier indicated, or shortly thereafter. 

31. Accordingly it seems to me that, at the very least, the application is premature and is at the moment not supported by sufficient evidence to persuade me that the balance of justice in this interim situation permits of the transfer of that very significant sum of money. 

32. In order though, to give effect to the indication earlier referred to, I will give each of the parties leave to address questions in writing to the single expert witness, Mr TS, with respect to this specific issue, and, of course, it is open to each of them to ask those questions, or any related questions, of their respective adversarial experts.

33. The application for the orders sought in paragraph 8 of the response filed by the husband on 2 December 2009 is dismissed.

I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate: 

Date:  9 February 2010