Henson & Marlin (No 2)
[2024] FedCFamC1F 488
•12 July 2024
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Henson & Marlin (No 2) [2024] FedCFamC1F 488
File number(s): BRC 10186 of 2020 Judgment of: HOGAN J Date of judgment: 12 July 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the Applicant sought leave to tender reports and rely upon evidence from a number of expert witnesses in respect of the valuation of properties in the parties’ property pool – Where the Respondent sought that the Application be dismissed – Where there was a significant difference in value of the properties and different methodology was used – Where it is ordered that leave be granted to the Applicant to rely upon additional expert evidence Legislation: Evidence Act 1995 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Neales & Neales (2022) FLC 94-079; [2022] FedCFamC1A 41 Division: First Instance Number of paragraphs: 47 Date of hearing: 12 July 2024 Place: Brisbane Counsel for the Applicant: Mr Drysdale of King’s Counsel with Mr Gordon of Counsel Solicitor for the Applicant: KLM Solicitors Counsel for the Respondent: Mr Ferrett of King’s Counsel with Ms Eviston of Counsel Solicitor for the Respondent: Parker Family Law ORDERS
BRC 10186 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HENSON
Applicant
AND: MR MARLIN
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
12 JULY 2024
THE COURT ORDERS THAT:
1.The Applicant has leave to tender a report and rely upon evidence from the expert witness, Mr K, Senior Property Valuer of J Property Services, in relation to the following commercial properties forming part of the parties’ property pool:
(a)L Street, Suburb M, Queensland; and
(b)2 Q Street, Suburb R, Queensland; and
(c)2 S Street, Suburb T, Queensland; and
(d)1 S Street, Suburb T, Queensland; and
(e)U Street, Suburb R, Queensland; and
(f)V Street, Suburb M, Queensland; and
(g)2 AA Street, Suburb T, Queensland; and
(h)3 AA Street, Suburb T, Queensland; and
(i)2 CC Street, Suburb T, Queensland; and
(j)1 AA Street, Suburb T, Queensland; and
(k)BB Street, Suburb T, Queensland; and
(l)1 CC Street, Suburb T.
2.The Applicant has leave to tender a report and rely upon evidence from the expert witness Mr W, Director of J Property Services, in relation to the following residential properties forming part of the parties’ property pool:
(a)1 DD Street, Suburb FF, Queensland; and
(b)2 DD Street, Suburb FF, Queensland; and
(c)2 GG Street, Suburb FF, Queensland; and
(d)1 GG Street, Suburb FF, Queensland; and
(e)1 Q Street, Suburb R, Queensland; and
(f)Lot 3 and Lot 4 Q Street of 5 Q Street, Suburb R, Queensland.
3.The Applicant has leave to tender a report and rely upon evidence from the expert witness Mr HH, Director of J Property Services, in relation to the Respondent’s residential property forming part of the parties’ property pool:
(a)H Street Property, Suburb JJ, Queensland.
4.The Applicant has leave to tender a report and rely upon evidence from the expert witness Mr KK, Associated Director of J Property Services, in relation to the Applicant’s residential property forming part of the parties’ property pool:
(a)LL Street, Suburb MM, Queensland.
5.Pursuant to r 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) the parties shall:
(a)arrange for the expert witnesses, Mr K, Mr W, Mr KK and Mr HH of J Property Services and Mr G of EE Company to confer at least 28 (twenty-eight) days prior to the first day of the trial listed for 16 September 2024; and
(b)give the respective expert witnesses, that each party has instructed, 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”.
6.At the conference, the expert witnesses must:
(a)identify the issues that are agreed and not agreed; and
(b)if practicable, reach agreement on any outstanding issue; and
(c)identify the reasons for disagreement on any issue; and
(d)identify what action (if an) may be taken to resolve any outstanding issue; and
(e)prepare a Joint Statement:
(i)specifying the matters referred to in Order 6(a) to 6(d); and
(ii)deliver a copy of the Statement to each party.
7.The Amended Application in a Proceeding filed 6 June 2024 is otherwise dismissed.
8.The costs of and incidental to the Amended Application in a Proceeding filed 6 June 2024 are reserved.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
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 Henson & Marlin has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTHOGAN J:
Ms Henson, the Applicant, seeks an order according her leave to rely on adversarial expert opinions in relation to the value of a large number of properties at the trial currently listed to commence on 16 September 2024.
If such leave is given, she seeks that the Court make ancillary orders to facilitate the experts conferring, in essence, in accordance with Rule 7.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), and requiring that the experts subsequently identify such issues as may be agreed between them, and insofar as there may be issues that are not agreed between them, provide reasons for such disagreement and that the experts also be required to prepare a joint statement, specifying the issues agreed, the issues which remain the subject of disagreement, and the reasons for such disagreement.
Whilst the Applicant also sought an order that B Group value and prepare a report about the valuation of any and all chattels in the possession, power and control of Mr Marlin, the Respondent, or any entity under his control, including household effects and furniture at H Street Property, Suburb JJ, and motor vehicles, as particularised in the Amended Application in a Proceeding,[1] she no longer presses for orders in relation to the valuing of household effects and furniture at H Street Property, Suburb JJ, given the evidence contained in the Respondent's most recent affidavit[2] read in this application.
[1] Filed 6 June 2024.
[2] Respondent’s affidavit filed 10 July 2024.
The Respondent opposes the Applicant's application in its entirety.
I have been assisted in my determination of the application by the contents of the Case Outline documents[3] filed on behalf of each of the parties, the oral submissions made by Counsel who appear for each of them, and the contents of Exhibits A and B.[4] The latter provides assistance in understanding the differences in value accorded to the various properties as between the single expert witness, Mr G, and the various valuing experts with J Property Services, whom I will collectively refer to as “the [J Property Services] valuers”.
[3]Applicant’s Outline of Case Document filed 11 July 2024; Respondent’s Outline of Case Document filed 11 July 2024.
[4] Marked as Exhibit A and Exhibit B on 12 July 2024.
Exhibit A also assists in appreciating that, in this particular case, the real property forms, or constitutes, a significant portion of the property of the parties, in terms of its contribution to the total value of the property of the parties. Save for the yet to be valued business interests of the Respondent, it seems to establish that, relatively speaking, the value of the property of the parties, other than the various real properties described in the Exhibits, is relatively minimal.
Consequently, the issue of the value to be attributed to the various properties, as helpfully summarised in the Exhibits and as dealt with by the single expert witness and the J Property Services valuers, is a significant one.
Applicable Rules and Principles
The receipt of expert evidence in proceedings such as this in this Court is governed by the Rules and the relevant provisions of the Evidence Act 1995 (Cth). Rule 7.02 of the Rules provides that the purpose of Part 7.1, which deals with experts and expert evidence, is as follows:
(a)to ensure that parties obtain expert evidence only in relation to a significant issue and dispute; and
(b)to restrict expert evidence to that which is necessary to resolve or determine a proceeding; and
(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; and
(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 that is necessary in the interests of justice.
It is clear that aspects of this Rule take up, and perhaps repeat, in a sense, the contents of Rule 1.04 of the Rules, which provides that the overarching purpose of the Rules is to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible. The emphasis upon the interests of justice and the just resolution of proceedings should not be overlooked.
Rule 7.08(1) provides that if a single expert witness is appointed (as is the case here, given the appointment of Mr G) a party must not tender a report or adduce evidence from another expert witness on the same issue without the Court's permission – hence the current application.
Rule 7.08(2) provides that the Court may allow a party to tender a report or adduce evidence from another expert witness on the same issue if satisfied of one of those matters prescribed. Here, the Applicant advances that the matters found at subrules (b) and (c) are enlivened. Subrule (b) provides that "another expert witness knows of matters not known to the single expert witness that may be necessary for determining the issue", whilst subrule (c) provides "there is another special reason for adducing evidence from another expert witness".
Mr Ferrett, who appeared for the Respondent, submitted that I would not be satisfied that the Applicant has established the matter prescribed in subrule (b). I accept that submission.
Applicant’s application for leave to adduce adversarial expert evidence at the trial
I turn then to consider whether the Applicant has persuaded me to be satisfied that there is another special reason for adducing evidence from other expert witnesses (here, the J Property Services valuers) and to permit her to adduce evidence from them given the existence of the evidence produced and adduced by the single expert witness.
In order to appreciate the circumstances in which the application arises, it is necessary to refer briefly to the chronology of matters. These are set out, helpfully, in the affidavit relied upon in the Applicant's case and may be summarised very briefly as follows.
On 6 October 2020, an order was made appointing Mr G as the single expert witness for the purpose of valuing real properties for the purpose of the proceedings. It appears that that exercise was undertaken on 8 December 2020, and a valuation filed on 2 June 2021.
On 4 October 2022, an order was made for the single expert witness to prepare updated valuations of the real properties.
On 22 February 2023, the Applicant filed an Application in a Proceeding seeking, amongst other things and in essence, an order that an alternative person be appointed as the single expert witness for the purpose of valuing the real property and motor vehicles of the parties.
It seems that the bases relied upon for the relief sought at that time included the assertion that the single expert witness’s valuations were significantly lower than the values apportioned to real properties by the Respondent's bank, the National Australia Bank, and it seems it was asserted that the difference between the single expert witness’s values and those advanced on behalf of the bank was over $2.5 million – even though this is said to have related only to 17 of the 22 properties valued by Mr G in December 2020.
On 5 October 2023, a Senior Judicial Registrar made a number of orders including, in essence and in substance, that Mr G remain as the single expert witness and that the orders made previously in relation to his appointment as such continue; in relation to valuations of real property and motor vehicles, various other orders were made on that day.
It appears that subsequent orders were made in December 2023 to facilitate the Applicant putting into effect her advised course of action to have valuations of the real properties prepared by other valuers or a valuer other than the single expert witness – in essence, by way of shadow evaluations.
It seems that Mr G conducted updated valuations of the real properties on 8 December 2023 and subsequently opined that the total value of the same was $36,270,000.
On 18 January 2024, an order was made for the parties to confer with the single expert witness in accordance with Rule 7.25. Other orders made on that day are perhaps not relevant to the current application.
It seems that the Applicant engaged J Property Services to provide her with preliminary reviews and opinions in relation to the valuations arrived at by the single expert witness for the purpose of assisting in the formulation of questions to be raised at the conference; such review occurred.
On the Applicant's evidence, what was described as "preliminary reviews" by the J Property Services valuers gave her cause for concern in relation to the valuations arrived at by the single expert witness. Subsequent to that, it seems that the J Property Services valuers were engaged to do what is described as a "desktop review" of the values of two particular properties: namely, the properties at V Street, Suburb M and 1 AA Street, Suburb T; the results of those reviews were such that the values attributed to those properties by the J Property Services valuers were significantly different to the values attributed to the same properties by the single expert witness.
The documents were, it seems, provided to Mr G at the conference in late February 2024; following an overnight opportunity to consider the contents of the same, the parties' solicitors, it seems, and the single expert witness conferred in late February 2024 and discussed, presumably, the contents of the single expert witness reports and the desktop reviews of the two properties prepared by the J Property Services valuers.
It is sufficient, at this stage, simply to note that it is perhaps apparent from this application, in any event, that the conference process did not assuage the Applicant's concerns; it seems she subsequently engaged the J Property Services valuers to value all real property other than two particular properties – namely, a unit at N Street, Suburb O and a property in Region P. Her evidence is to the effect that she undertook this decision because the J Property Services valuers advised of an opinion that the values arrived at by the single expert witness in relation to those two properties were generally within market parameters.
The consequence of the Applicant's approach is, as I understand it, then, that the J Property Services valuations in evidence for the purpose of this application are valuations of 20 of the 22 properties that are the subject of these proceedings.
The J Property Services valuers valued the relevant properties (namely, the 20 of the 22) as at 8 December 2023 and provided the reports as to their conclusions and opinions as to that value in mid-May 2024. The opinions of the J Property Services valuers is to the effect that, as at 8 December 2023 (namely, the same date on which the single expert witness undertook his valuations of the properties), the total value of the properties is $44,470,000.
The difference between the two sets of opinions, perhaps it is best to describe it as, is a little over $8 million.
The Applicant, via the submissions contained within the Case Outline document and those made orally by Mr Drysdale KC on her behalf, advances that this difference arises because of a difference in the methodology used by the single expert witness and the J Property Services valuers, at least in relation to their approach to the valuation of certain specified properties.
It is submitted, in essence, that the combination of the difference in methodology and the consequence in value, in dollar terms (in terms of the difference of the valuations arrived at) would, taken together, persuade the Court of the existence of the necessary circumstance in order to persuade of the making of an order granting leave to the Applicant to adduce this evidence from the J Property Services valuers – namely, that it would persuade the Court that there is another special reason for adducing evidence from an expert other than the single expert.[5]
[5] See r 7.08(2)(c) of the Rules.
I accept that in Neales & Neales,[6] the Full Court of this Court noted that a significant difference in the value of real property does not, of itself, warrant leave being granted pursuant to the Rules to adduce evidence from another expert on the same subject matter. However, the Court also identified that a difference in methodology, combined with a difference in value, may satisfy or constitute the requirement of "another special reason" for adducing evidence from an expert other than the single expert witness.
[6] (2022) FLC 94-079.
I am not persuaded by the submission that this case involves simply the J Property Services valuers having done a job differently to the manner in which the single expert witness has approached the discharge of his obligations.
I am satisfied that there is a difference in the methodology and that the difference in methodology appears, at this stage at least (within the confines of this application), to have resulted in a difference in value of some $8 million.
The importance of the values to be ascribed to the real property in the determination of the total net value of the property of the parties is, in this particular case, in my view, another factor which combines to persuade of the existence of special reason for permitting the Applicant to adduce evidence from the J Property Services valuers.
I accept the thrust of the submissions made by Mr Drysdale KC on behalf of the Applicant in support of the conclusion that the required “another special reason” is established here; in particular, I accept the submissions he made in relation to the differences in methodology used as between the single expert witness and the J Property Services valuers in undertaking the valuation task.
I accept the submission to the effect that the consequence of the application of different methodologies has been productive of a significant difference in the value to be ascribed to the real property in these proceedings.
I am therefore satisfied of the requirement about which I need to be required, as set out in Rule 7.08(2)(c) – namely, that there is another special reason for adducing evidence from the J Property Services valuers, and I intend to make orders permitting the Applicant to adduce the same.
I am not persuaded, though, that it is appropriate or just to limit the evidence to be given by the J Property Services valuers only to the properties identified by Mr Drysdale KC, in essence, during the course of the submissions that were about a fallback position on the part of his client.
I note that it appears, from reference to the Exhibits, that the J Property Services valuers valued the property that is, as I understand it, owned by the Applicant and accorded to it a value greater than the value accorded to it by the single expert witness. Consequently, I consider that it could be productive of unfairness to the Respondent to limit the evidence to be adduced from the J Property Services valuers in a way that excludes this property.
Whilst I accept that the conclusion I have reached has at least the prospect of adding witnesses to the current list of witnesses anticipated by the parties to be called in each of their respective cases and may have the prospect of increasing the length of the trial, I consider that that is no more than a prospect at this stage – noting that I also intend to make orders to facilitate the conferring of the experts. It may be that the issues between them are limited; it may be that the reporting by them, by way of the joint statement to be ordered, about any differences that remain, is such that any cross-examination to be undertaken of any of them on behalf of either of the parties can be relatively limited.
In any event, the length of a trial does not, in my view, override the requirement imposed on the Court to facilitate a just resolution of proceedings before it.
Applicant’s application that B Group value and prepare a report as to the value of any and all chattels within the possession, power and control of the Respondent or any entity controlled by the Respondent including the contents of H Street Property, Suburb JJ and any motor vehicles
As already noted, whilst initially sought, the Applicant did not press this given the contents of the most recent affidavit filed by the Respondent and relied on in this proceeding[7] and did not seek the relief in relation to the valuation of the contents of H Street Property, Suburb JJ.
[7] Respondent’s affidavit filed 10 July 2024.
I have proceeded, though, on the basis that the relief sought in relation to the orders facilitating the valuation of motor vehicles particularised in the Amended Application is persisted with.
The Respondent's evidence in relation to the motor vehicles may be summarised as follows:
(a)two of them have, he says, been gifted to his sons; and
(b)the third, which was driven at some stage by his partner, has been sold.
Given the Respondent's evidence as to the ownership of the vehicles said to have been gifted to his sons, the fact that those persons are not parties to the proceedings and that there is no evidence to suggest that they have been given notice of the orders sought in relation to property which is said, on the evidence before me, to be theirs, I decline to make orders in terms of the valuation of the motor vehicles.
For the reasons expressed, then, I will make orders in terms of paragraph 1, 2, 3, 4, 5, 6 of the orders particularised in the Case Outline document on behalf of the Applicant sealed 11 July 2024.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 30 July 2024
0