Khilani & Khilani
[2025] FedCFamC2F 792
•6 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Khilani & Khilani [2025] FedCFamC2F 792
File number(s): MLC 1959 of 2023 Judgment of: JUDGE O'SHANNESSY Date of judgment: 6 May 2025 Catchwords: FAMILY LAW – Property – Continuing property trial – Expert evidence – Where husband seeks to rely on affidavit of adversarial witness regarding valuation of property – Orders for single expert valuation of properties did not provide unless all properties valued, none are to be – Where affidavit not in proper form of expert witness valuation – Where both husband and wife allege insufficient disclosure of the other’s property interests – Where wife made no objection to reliance upon adversarial witness report until just before trial – Benefit to administration of justice of single expert valuer rules – Held in the interests of justice to permit husband to rely on report. Legislation: Family Law Act 1975 (Cth) s 79(4)(a), (b) and (c)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Part 7.1
Cases cited: Lister & Lister [2014] FamCA 606 Division: Division 2 Family Law Number of paragraphs: 26 Date of hearing: 6 May 2025 Place: Melbourne Counsel for the Applicant: Mr Singh Solicitor for the Applicant: Opal Legal Counsel for the Respondent: Mr Smith Solicitor for the Respondent: KPM Lawyers ORDERS
MLC 1959 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR KHILANI
Applicant
AND: MS KHILANI
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
6 MAY 2025
THE COURT ORDERS THAT:
1.The applicant husband, MR KHILANI (‘the Husband’), be and is permitted to rely on the affidavit of Mr B filed 10 October 2024.
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
Judge O’Shannessy
These are the settled reasons of a judgment delivered ex tempore. These reasons were delivered orally. These settled reasons have been corrected from the transcript where appropriate to correct grammatical errors, to add citations, passages of authorities and evidence, and to attempt to make the orally delivered reasons easier to read. The substance is unchanged.
INTRODUCTION
In the case of Khilani, on the second day of the final hearing (though the first was interrupted because I was hearing two cases on the same day), it is necessary for me to determine the issue of whether the affidavit of one Mr B should be accepted into evidence in the sense that the applicant husband, Mr Khilani (‘the Husband’), should be permitted to rely upon it. The short background would be apparent from the discussion between counsel, and I do not propose to give very detailed reasons but only the shortest of reasons so I can get on with the trial.
The context of the reliance upon this affidavit is that prior to marriage, the respondent wife, Ms Khilani (‘the Wife’), was given valuable property in C State in the Republic of India, and she maintained ownership of that property in India throughout the relationship of the parties, which endured from February 2009 until separation in January 2023.
Dual carriageway alleged: the record & the cash
The Husband issued these proceedings on 28 February 2023, and the Husband asserts that shortly prior to separation, back on 25 November 2022, the Wife discussed with him a proposal about selling the C State property in accordance with what he alleges is, an at least not uncommon, practice in the Republic of India of the sale of real property, being in a dual carriageway. In one carriageway being on the record, through bank account funds, and the other carriageway being a cash component. The Husband further says that on or about 25 November 2022, that is, shortly before separation, he was party to a conversation between an accountant, the Wife and he, where the consequences and manner of selling the C State property and transacting it in partly on the record and partly in undisclosed cash was discussed.
Shortly after that alleged conversation the parties separated and as indicated, the Husband issued the proceedings. On 23 May 2023, the matter was before the Court, and there was an order for single expert valuation of a number of properties in India that, effectively, fell into two categories:
·the bundle of properties that the Husband acknowledged that he owned or had an interest in; and
·the property the Wife then owned, the C State property.
That order for single expert valuations has never been discharged.
On 23 June 2023, in compliance with the order, the Husband’s solicitors proposed specific values of a number of the properties in India, including the C State property. The Husband proposed and asserted the value of $612,000, and in that letter, proposed that:
If your client does not agree to such values[1] which our client has estimated in respect of all the real estate, our client would propose the following Indian government registered valuers:
and in regard to the C State property, the Husband proposed specific valuers, or rather three of them.
[1] Including the $612,000 estimated value of the C State property.
That letter further pressed:
Accordingly, we seek your client’s urgent instructions so that a joint letter of instructions can be prepared on an urgent basis in accordance with the Orders made. Given the mediation is scheduled on 28 July 2023, time is of the essence, and we do not want any delays in relation to Mediation.
There is no evidence of any response to that letter proposing three valuers for the C State property to be valued but, at a date that the Husband says has not been disclosed, not long after that, the Wife sold the property. In July 2023, the Wife’s solicitors complained that details of the addresses of what is known as “the Ancestral Properties”, alleged by her to be properties the Husband had an interest in, had not been disclosed. It is clear enough that by 15 November 2023, the Husband was pressing for single expert valuations of his Ancestral Properties using the addresses that he had disclosed, and it appears not to be disputed that, ultimately, the Ancestral Properties (where he says he does not have any interest) were, ultimately, valued using those addresses.
On 3 October 2023, the Husband received oral advice that the wife had sold the C State property. On 6 October, he obtained details from publicly available records, which are exhibited, or tendered, in the case. The publicly available record of what the property was sold for by the Wife shows that in regard to that sale price, some tax was paid to the government, and the balance in two funds was paid to the Wife. The long and the short of that is that the Husband says he found out about the details of the sale as follows:
215.On 3 October 2023, during the previous Court event, [Ms Khilani]’s solicitor informed the Court and our office for the first time that in fact [Ms Khilani] had unilaterally sold the [C State] Property, without any prior notification or my consent, and further despite there being ongoing proceedings and Court Orders requiring the valuation for the [C State] Property. Alarmed, my solicitors requested Orders that the Wife disclose the full extent of her property interests.
216.On 17 October 2023, the Wife’s solicitor sent me open correspondence that provided the following passage:
Our client also owned a property in [Suburb D, City E], India, and your client is aware of this property and [Ms Khilani]’s ownership of it. This property was sold in 2023 for approximately $189,000. It’s important to note that the sale amount of $189,000 includes a tax of approximately $43,150, which was not received by [Ms Khilani] but was instead paid directly to the government.
It is clear that on 15 November 2023, the Husband was pressing for a single expert valuation of the C State property, notwithstanding that it had been sold and the sale settled. It is clear that that matter was raised, but no order was made. On 15 November, consistent with the Wife’s position that the identification of the Husband’s property was insufficient, orders were made as follows:
32.Within 7 days the Husband shall provide to the Wife the full address details of all properties in India in which he has an interest, either by direct ownership, or as a beneficiary or other form of indirect interest.
33. That the Respondent Wife forthwith provide the documents mentioned in Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), to facilitate a full and frank exchange of disclosure, including exchange of the following:
(a)That the Respondent Wife forthwith provides to the Applicant Husband a list of real properties owned by her for which she holds, or has held since the commencement of the relationship, an interest, both from within and outside the Commonwealth of Australia.
(b)All documents (if any) within the possession or control of the Respondent Wife in relation to her sale of the real property located at [F Street, Suburb D, City E, C State], India, […], that have not to date previously been provided including all bank accounts to demonstrate the receipt of all sale proceeds.
(c)All bank account statements held by or on behalf of the Respondent Wife from June 2023 until present.
(d)All documents held by or on behalf of the Respondent Wife that are in relation to real property interests held by or on behalf of the Wife in Australia or Overseas that have not previously been disclosed (if any).
But the order for a single expert valuation of the C State property was not made again. I infer the order was not made because of the Wife’s opposition to that. The Wife’s position had been, back in July, that she required details of identification of all of the properties to her satisfaction so that all of the properties could be valued at the same time. It needs to be noted that the orders do not provide that unless all properties are valued, none are to be valued, or some can be left out. The orders simply command that the parties do all acts and things to obtain single expert valuations of a number of properties.
One inference is that the Wife was unhappy and understood that the details of the Husband’s Ancestral Properties was insufficient for them to be valued, and it would appear that that is the context to which she did not cooperate with the valuation of the C State property by a single expert witness. The matter was agitated again on 30 January 2024. Again, it is clear enough that the Husband was agitating for a single expert valuation of the C State property. It can be readily understood why he would, because he had originally proposed a valuation, he says, that arose from his inquiries as to the market value of the C State property in the order of the equivalent of AUD$612,000, but that the property purported to have been sold for something in the order of AUD$189,000. That is, less than a third of the value that he had attributed to it. That combined with what he says was discussed about the sale of the property for the “on the record part”, and cash as to part would have provided powerful motivation by him for agitation for a single expert witness.
In any event, no further orders were made after 30 January 2024. But somehow, the four properties of the Husband that he acknowledged were his in India were able to be valued by a single expert witness, as well as the four properties known as “the Ancestral Properties” that the Wife agitated were the property of the Husband and the Husband, for various reasons, says that is not so. Hence, in regard to properties the Husband has, both the non-contentious bundle of properties in India had a single expert witness valuation, and the contentious Ancestral Properties had a single expert valuation, but there was no single expert valuation of the C State property. It is quite clear that after the court event of 30 January 2024, the Wife did not draft or provide or demand that a draft joint letter of instructions to the single expert witness in regard to the C State property be provided by her.
It is quite clear that the Husband falls in the same position. He, after 30 January 2024, did not draft and provide a draft joint letter of instruction to a single expert witness in regard to the C State property, nor did he press for the Wife to do the same. And it looks like neither party did anything further. But the Husband retained Mr B, said to be an expert valuer.
Adversarial valuation served October 2024
For whatever reason, Mr B is not one of the three valuers that was proposed by the Husband back on 23 June 2023. That adversarial valuation was filed and provided to the Wife on or about 11 October 2024. That was on the eve of the trial listed to proceed before another Judge on 14 October 2024. In addition to filing that affidavit, the Husband filed an application for that witness to give evidence via electronic communication, and at the last minute, in less than 24 hours about being asked whether there was an objection, the Wife’s solicitors indicated that there was no objection to the proposed witness giving evidence by electronic communication from India.
Judge disqualifies herself
The parties negotiated over day 1, the Monday, and day 2, the following Tuesday, and sensibly reached agreement about the living arrangements for their children. On the third day of the final hearing before the Judge in October 2024, the parties proceeded to commence agitating the property dispute before the Judge, and, somehow, the negotiations in regard to property were disclosed to the Judge who, unsurprisingly and entirely appropriately, I say with respect, disqualified herself from hearing the matter further.
No objection to adversarial valuation 7 months ago
I am satisfied there was no objection at that time to the Husband’s reliance upon the adversarial witness in regard to the C State property. On 17 October 2024, orders were made adjourning the property dispute, and an order was made that a single expert be retained in regard to the law of India and the Husband’s interest in the Ancestral Properties. But the issue of a single expert witness of the market value of the C State property, or the adversarial valuation thereof, was not further addressed. But from shortly before the trial and during the trial process (7 months ago), both parties were on notice that the Husband proposed to rely upon the adversarial witness report that he had obtained and served.
Impressing why that report should be permitted, Mr Singh, counsel for the Husband, carefully took me through a long chain of events, demonstrated how this came about, to corroborate the Husband’s assertion that he was driven to provide and obtain an adversarial valuation because the Wife would not cooperate with the obtaining of the single expert valuation of the property that she had sold.
Mr Singh puts it bluntly: That instead of cooperating with the single expert process of the valuation of the C State property, the Wife sold the property and then further failed to cooperate with the process of obtaining a single expert valuation. Mr Smith, counsel on behalf of the Wife, who was not the counsel briefed at the prior trial listing in October, takes me to the rules and points to the obligation being on the Husband to make application, supported by affidavit, in support of the reliance upon the affidavit of the adversarial witness. Mr Smith makes the point that the Husband has not made such an application, but simply filed the document and, effectively, announced an intention to rely upon it. The Wife’s case is that the failure to comply with the procedure for obtaining the single expert valuation is fatal to the Husband’s application. The Wife does not press for an adjournment so that the parties can obtain a single expert witness valuation at this point.
Mr Smith takes me to the matter of Lister & Lister [2014] FamCA 606 at paragraph 18, where Watts J described at length the purpose of the single expert rules. As discussed with counsel, I experienced as a practitioner for many years the frustration, and vicariously the frustration of judges, in the circumstances that prior to the single expert rules, it was frequently the case that ordinary, everyday items of property, like suburban real estate in capital cities, were subject to competing valuations, higher or lower depending what suited the party advocating one or other valuation. I raised with counsel my anecdotal observation that once single expert rules were introduced, such unprofitable disputes about valuation of everyday property substantially reduced, and the settlement rate increased, and even where it was not completely settled, the time involved in a contested property proceeding was frequently reduced.
I accept Mr Smith’s submissions about one of the purposes being to reduce the temptation or likelihood of an adversarial valuation being partisan to the party that has retained the valuer. Or, in my words, the single expert witness process straightens up the expert valuer, because that valuer is valuing the property on behalf of both parties and is retained and paid by both parties. The purpose and practice of the rules usually is admirable. In this case, it is the Husband’s position that instead of valuing the property, the Wife, without being pressed to do so, unilaterally sold the property and recorded one-third of its market value. In that circumstance, he says, given her lack of cooperation with the single expert witness order, he was driven to provide the adversarial valuation. I acknowledge he did not draft a joint letter of instruction in regard to the single expert witness of the C State property at any time, nor did he make application to the Court for that to come forward.
I also refer to Part 7.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 which counsel for both parties took me to, and it is unnecessary to recite those rules here.
An overriding consideration in the expert witness rules, which have a presumptive position of expert evidence being only given by a single expert witness, is the interests of justice. I also take into account Mr Smith’s criticisms of the form of the report, including that it falls short of the requirements of an expert report.
I balance all those matters and take into account that the single expert witness will be available for cross-examination by the parties.
I am satisfied in this case that it is in the interests of justice to permit the Husband to rely upon the adversarial valuation that has been before the other party since October. I add that since October last year, there has been no movement on the station, so to speak, by either party for the retention of a single expert witness. Whether or not the Father was entitled to assume that there was no objection to reliance upon that report, in the absence of any formal objection (that is, until Wednesday of last week), the clear evidence that is available is that the Wife has had, since October last year, to grasp the nettle of what to do about the market value of the C State property.
For all of those reasons, I am satisfied it is in the interests of justice to permit the Husband to rely on that report. I add that the Wife’s outline of case had taken a position in regard to section 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (‘the Act’) contributions of those being about equal. In the context of the sum that she said she received for the C State property (or that she reported as receiving for the property, being about a third of what the Husband and this adversarial witness assert the value of the property is) I raised contributions with the parties. If I find (and I do not know what I will find yet) that the property actually was worth in the order of $650,000 as pressed by the adversarial expert, Mr B, it is difficult to see how the contribution position could be one of equality, when that would mean that the Wife will have brought in a very substantial part of the property pool by way of initial contribution. However, I make no finding about that but merely put on the record the consequences both ways, were I to find that the Husband’s case is made out and that the Wife has sold the property and recorded about a third of its value and there is two-thirds still somewhere in someone’s pocket.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 12 June 2025
0