Henschel & Sartre (No 3)

Case [2023] FedCFamC1F 1081

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Henschel & Sartre (No 3) [2023] FedCFamC1F 1081

File number(s): SYC 6123 of 2020
Judgment of: BERMAN J
Date of judgment: 15 December 2023
Catchwords:

FAMILY LAW – PROPERTY – Value of property – Expert evidence – Where the husband seeks leave to adduce separate adversarial evidence – Where the wife opposes the application – Where the shadow expert’s report is not provided on the basis of a substantial body of contrary opinion – Where the valuation methods as between the single joint expert and shadow expert are different – Where the difference between the two alternate valuation methodologies is $4,900,000 – Leave provided.

FAMILY LAW – PROPERTY – Value of property – Expert evidence – Where the wife seeks orders for updated valuations from the single joint expert – Where a property was being under construction at the time of the valuation – Where the single expert did not inspect the property – Where the property was valued on an ‘as is’ basis – Where documents were produced by subpoena that supported an updated valuation – Where the Court considers it appropriate to revalue the property – orders.

Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1.05, 7.08, 7.18, 7.26
Cases cited:

Aon Risk Services Ltd v Australian National University [2009] HCA 27

Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705

Marcin & Marcin (2020) FLC 93-956

Salmon & Salmon [2020] FamCAFC 134

Division: Division 1 First Instance
Number of paragraphs: 87
Date of hearing: 5 December 2023
Place: Heard in Sydney, delivered in Adelaide
Counsel for the Applicant: Mr Kearney SC
Solicitor for the Applicant: Karras Partners Lawyers
Counsel for the Respondent: Ms Gillies SC
Solicitor for the Respondent: ATW Family Law

ORDERS

SYC 6123 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS HENSCHEL

Applicant
AND:

MR SARTRE

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

15 DECEMBER 2023

UPON NOTING THAT orders were made on 5 December 2023

THE COURT ORDERS THAT:

1.Pursuant to r 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the husband and wife shall arrange for Mr LL, valuer, and Mr MM, valuer, to confer at least fourteen (14) days prior to the resumption of the trial on 24 February 2024 and each party must give to the expert witnesses a copy of the court approved brochure entitled “Experts, conferences-guidelines for expert witnesses and those instructing them in proceedings in the Federal Circuit and Family Court of Australia”.

2.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 (a) to (d) and deliver a copy of the…

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AGLC
Henschel & Sartre (No 3) [2023] FedCFamC1F 1081
Case
[2023] FedCFamC1F 1081
Decision Date

CaseChat Overview and Summary

In the matter of Henschel & Sartre (No 3), the primary issue before the court was whether leave should be granted to the husband to adduce separate adversarial evidence from his proposed expert witness, Mr MM. The court also needed to determine whether to order updated valuations from the single joint expert, Mr LL. The husband, Mr Sartre, sought to call Mr MM, an expert valuer, to give evidence in relation to the valuation of certain properties. The wife, Ms Henschel, opposed this application, arguing that there was no substantial body of contrary opinion to warrant the appointment of a separate adversarial expert. The court examined the valuation methods used by both experts, which differed significantly, resulting in a $4,900,000 difference in valuation. The court considered the rules governing expert evidence and the importance of case management, but also recognised the paramount importance of the interests of justice. The court concluded that in light of the substantial difference in valuation methodologies and outcomes, leave should be granted to the husband to call Mr MM as a separate adversarial expert.

The court also considered the wife's application for updated valuations from the single joint expert, Mr LL. The property in question was under construction at the time of the initial valuation, and Mr LL had not inspected the property. The wife submitted documents that supported an updated valuation, and the court found it appropriate to revalue the property. The court ordered that Mr LL and Mr MM should confer and prepare a joint statement on the agreed and disagreed issues, reasons for disagreement, and any actions to resolve outstanding issues. The order also required the experts to deliver a copy of the joint statement to each party.

Orders

Orders of the court

SYC 6123 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS HENSCHEL

Applicant

AND:

MR SARTRE

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

15 DECEMBER 2023

UPON NOTING THAT orders were made on 5 December 2023

THE COURT ORDERS THAT:

1. Pursuant to r 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the husband and wife shall arrange for Mr LL, valuer, and Mr MM, valuer, to confer at least fourteen (14) days prior to the resumption of the trial on 24 February 2024 and each party must give to the expert witnesses a copy of the court approved brochure entitled “Experts, conferences-guidelines for expert witnesses and those instructing them in proceedings in the Federal Circuit and Family Court of Australia”.

2. 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 (a) to (d) and deliver a copy of the statement to each party.

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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

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Evidence

Evidence Before The Court

As a result of the necessity to determine the interlocutory proceedings relating to the value of Town O, Suburb J and Suburb W, Senior Counsel for each of the parties conceded that the matter was not ready to be heard and with some considerable reluctance, the substantive proceedings were adjourned to 24 February 2024 for final hearing. SHOULD LEAVE BE GIVEN TO ADDUCE SEPARATE ADVERSARIAL EVIDENCE? The rules dealing with expert evidence have, at their core, purpose to ensure that the parties obtain expert evidence only in relation to a significant issue in dispute, to restrict expert evidence to that which is necessary to resolve or determine a case and to ensure that if practicable and without comprising the interest of justice, expert evidence is given on an issue by a single expert and to avoid unnecessary cost from the appointment of more than one witness. Rule 1.05 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) sets out the relevant definitions. In particular, an expert is defined to be “an independent person who has relevant specialised knowledge, based on the person’s training, study or experience”. Heydon J, in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, provided an analysis of the authorities in respect of expert evidence as follows:-85.In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be “wholly or substantially based on the witness’s expert knowledge”; so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the opinion propounded. … Rule 7.18(3) of the Rules requires that the expert witness has a duty to be independent and r 7.18(2) provides that the duty of the proposed witness is a duty to the Court and goes beyond any duty to a party. I am satisfied that to the extent there is any issue as to the appropriate level of qualification, experience or expertise of Mr LL and Mr MM, they are both qualified to give expert evidence.

Decision

Reasons for decision

SUBURB J
The application of the summation method allows an assessment of the individual components of the property with a separate consideration of building improvements that add value to the land.CONCLUSION Leave to call a separate adversarial witness should only be given in limited circumstances and with caution. The Full Court in Marcin & Marcin (2020) FLC 93-956 said as follows:-33.Litigants are not permitted to call adversarial expert evidence which they consider to be more favourable simply because of their dissatisfaction with the evidence proffered by a single expert. It is also not controversial that “the mere expression of an opinion as to value by another expert, no matter how substantially contrary it is to that of the single expert, does not in and of itself constitute “a substantial body of opinion” within the meaning of the rule”. (See Salmon & Salmon [2020] FamCAFC 134 at [35]) It is readily expected that whilst there are a number of different valuation methodologies that can be applied, in the exercise of valuing the Town O property Mr LL considered that a comparison or comparable sales methodology was best suited to the exercise, whilst Mr MM had less confidence in the comparison methodology and adopted a summation method which focused on differing land types and the dollar value per hectare with the addition of an amount for improvements. The result is that two appropriately qualified experts have each considered the valuation approach differently and have given emphasis to alternate valuation methodologies, resulting in a difference of $4,900,000. The application of the Rules in respect of the focus on the appointment of a single expert has, at its core, a focus on case management and the efficient and expeditious determination of matters either by the parties being able to conclude a balance sheet of assets and liabilities and then consider a settlement or in, the absence of agreement, the more efficient conduct of proceedings. It is axiomatic that significant emphasis and weight must be given to case management however, as it was acknowledged by the High Court in Aon Risk Services Ltd v Australian National University [2009] HCA 27, there is an overarching consideration that considerations of case management with the further corollary that the application of the Rules relating to single expert evidence must be subservient to the interests of justice. Bringing to account the different approaches adopted by each of the valuers and the outcome representing a substantial difference both in terms of a proportion of the Town O property but also in terms of the likely property of the parties, it is appropriate that leave be given to the husband to call separate adversarial evidence from Mr MM. Whilst not a significant focus in the determination of the husband’s application, it is noted that Mr MM’s report is a concluded document and given that the proceedings are now listed part‑heard to February 2024, the issues are appropriately joined and there is not likely to be any prejudice caused to either of the parties.

Ratio Decidendi

Legal Principle Established

Established by: SUBURB J

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