Hopkins & Elliott (No 5)
[2023] FedCFamC1F 974
•15 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hopkins & Elliott (No 5) [2023] FedCFamC1F 974
File number: SYC 5636 of 2021 Judgment of: REES J Date of judgment: 15 November 2023 Catchwords: FAMILY LAW – PROCEDURAL – INTERIM ORDERS – Where the valuation of corporate and other entities is in dispute – Where previous orders have not been complied with – Where the wife seeks a forensic investigation of all the husband’s financial dealings – Where each party may instruct an adversarial expert to prepare a report in relation to corporate entities and other issues Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Rules 7.02, 7.08, 7.08(2)(c), 7.10 Division: Division 1 First Instance Number of paragraphs: 23 Date of hearing: 14 November 2023 Place: Sydney Counsel for the Applicant: Ms Rusiti Solicitor for the Applicant: Parker Law Respondent: In Person ORDERS
SYC 5636 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR HOPKINS
Applicant
AND: MS ELLIOTT
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
15 NOVEMBER 2023
THE COURT ORDERS:
1.That each party be permitted, pursuant to Rule 7.10 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, to instruct an adversarial expert to prepare a report in relation to the value of the corporate entities and in relation to any other issue.
2.That each party file and serve any affidavits, including affidavits by experts, upon which he or she seeks to rely, by 4pm on 19 February 2024, noting that each party will be permitted to rely on one affidavit only by him or herself and one affidavit only by each witness, including accountants.
3.That each party file an updated Financial Statement by 4pm on 19 February 2024.
4.That the parties instruct the single expert real estate valuer to prepare updated valuations on the real property at B Street, Suburb C and F Street, Suburb G and to file those updated valuations by 4pm on 19 February 2024.
5.That no further affidavits are to be filed after 19 February 2024 without the leave of the Court first obtained.
6.That the matter is placed in the Callover on 18 March 2024 at 9:30 am before the Honourable Justice Campton for allocation of a Judge for hearing in the Rolling List that day.
7.That, unless leave is granted for the filing of further material, this matter will proceed on the evidence filed in accordance with these directions.
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.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Hopkins & Elliott has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Mr Hopkins (“the husband”) and Ms Elliott (“the wife”) are engaged in financial proceedings which were instituted by the husband in August 2021.
Since that time, there have been numerous applications, interim hearings, reviews and two appeals.
The proceedings are listed before me today to make directions to get the matter ready for hearing. The contentious issue is that of valuation of corporate and other entities. Orders have been made for the appointment of a Single Expert valuer to value the two relevant pieces of real estate, those being the property at B Street, Suburb C which is owned by the husband and F Street, Suburb G which is owned by H Investments Pty Ltd as trustee for the H Unit Trust.
The husband contends that the entities to be valued are:
·D Pty Ltd
·Hopkins Group Pty Ltd
·H Investments Pty Ltd and the H Unit Trust
The husband contends that Hopkins Group Pty Ltd holds a 14 per cent interest in the H Unit Trust.
The wife agrees that those entities need to be valued but she also contends, if I understand her correctly, that the following entities are to be valued, and that there needs to be a forensic investigation of all of the husband’s financial dealings.
The entities that the wife wants valued are,
·H Investments Pty Ltd
·H Syndicate
·J Pty Ltd
·J Unit Trust
·J Syndicate
The husband contends that those entities either do not exist now or have never existed and, in any event, have not traded of recent times and have no assets or value.
Orders were made on 4 February 2022 for the appointment of a single expert to value the entities referred to in Paragraph 4 of these Reasons. Those orders provided for the wife to nominate three suitable experts and for the husband to select the single expert.
On 4 April 2022, when the matter was again before the Court, those orders had not been complied with. Further orders were made, including, relevantly,
3.By no later than 4.00pm on 11 April 2022, the parties are to send a joint letter of instruction to the joint expert forensic account [sic] and to the joint expert real estate valuer.
4.As the parties are in dispute as to the content of the joint letters, by no later than 4.00pm on 18 April 2022, the parties are each at liberty to provide their own letter to each joint expert setting out their positions, comments and any additional materials.
5.Each joint expert may consider all material provided to them, and may provide opinions based on alternative bases if they think that is necessary and appropriate.
The nature of the disagreement which then arose is not easy to ascertain because the wife, although she has filed voluminous material, has filed little admissible evidence.
However, doing the best I can and having regard to the Case Outline documents filed by both parties, I understand that the wife contends that the use of the words “forensic account” in order 3 made on 4 April 2022 conveys the intention that a forensic audit was to be undertaken as well as a valuation.
The wife proposed three suitably qualified accountants to audit and then value the entities. The accountants provided estimates of the costs involved of up to $90,000 or, alternately, were unable to provide an estimate because the scope of the work involved was not ascertainable.
Thus we are at an impasse. The entities need to be valued so that the matter can progress to hearing. The wife contends, but has not proved, that the husband’s dealings with the entities and the assets of the entities constitute fraud and that he has sought to hide or remove assets from the pool available for valuation. Her contentions are not particularised.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 govern the manner in which these proceedings are to be conducted.
Rule 7.02 provides:
7.02 Purpose of Part 7.1
The purpose of this Part is as follows:
(a)to ensure that parties obtain expert evidence only in relation to a significant issue in dispute;
(b)to restrict expert evidence to that which is necessary to resolve or determine a proceeding;
(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;
(d)to avoid unnecessary costs arising from the appointment of more than one expert witness;
(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.
The husband is required, pursuant to Rule 7.10, to seek the permission of the Court to appoint an adversarial expert and he does so in his Application in a Proceedings filed 8 November 2023 supported by an affidavit sworn by him on 8 November 2023 and an affidavit of his solicitor sworn on the same date. The history of the husband’s attempts to progress the appointment of a single expert is set out in the affidavit of the solicitor who deposes, inter alia, that, in May 2023, a named accountant declined to be appointed as single expert after receiving a 16 page letter from the wife with 11 pages of attachments.
Rule 7.08 provides:
7.08 Appointing another expert witness
(1)If a single expert witness has been appointed to prepare a report or give evidence in relation to an issue, a party must not tender a report or adduce evidence from another expert witness on the same issue without the court’s permission.
(2)The court may allow a party to tender a report or adduce evidence from another expert witness on the same issue if it is satisfied 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.
The husband relies on Rule 7.08(2)(c).
I accept the submission that, where the parties cannot agree on the instructions to be given to a single expert, and each party contends for the expert to carry out a different exercise, in this case the husband instructs for the expert to value and the wife instructs the expert to audit and then value, the position of the expert is impossible.
The only way to progress this matter to hearing is to allow each party to instruct an adversarial expert. Each can then instruct his or her chosen expert to prepare whatever report he or she instructs.
The orders will make directions for the instruction of adversarial experts and the filing of affidavit material with a view to listing the matter in the rolling list commencing on 18 March 2024.
I repeat the warning of Campton J in his reasons for judgement dated 29 June 2023.
The parties are placed on notice by these reasons that in the event they fail or neglect to comply with future orders or directions made or with the Rules, their substantive relief may be struck out consistent with the procedures identified in r 1.33 of the Rules permitting the other party to proceed to have the matter determined on an undefended basis.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 14 November 2023
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