Lively & Lively
[2014] FamCA 578
•21 July 2014
FAMILY COURT OF AUSTRALIA
| LIVELY & LIVELY | [2014] FamCA 578 |
FAMILY LAW – PROPERTY – where the wife seeks to adduce evidence from an adversarial expert in relation to two properties – where a single expert witness has previously been appointed by consent – where the father opposed that application – where the provisions of Rule 15.49(2) of the Family Law Rules 2004 were satisfied in respect to one of the properties– where the single expert and adversarial expert are to participate in a joint conference.
Family Law Rules 2004
| APPLICANT: | Ms Lively |
| RESPONDENT: | Mr Lively |
| FILE NUMBER: | SYC | 953 | of | 2013 |
| DATE DELIVERED: | 21 July 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 21 July 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr R. Schonell SC |
| SOLICITOR FOR THE APPLICANT: | Karras Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Campton |
| SOLICITOR FOR THE RESPONDENT: | Family Law Solutions |
Orders
Leave be granted to the wife to adduce alternate property valuation evidence from Mr. Mr B of C Valuers, such evidence to be limited to the current fair market value of the property known as D Street, Suburb F.
Mr. B and Mr. G participate as soon as possible in a joint conference with the aim of, as soon as is practicable, producing a joint statement setting out in summary form the points of agreement and differences between them and why the view of one expert should be preferred over the view of another. If there is a remaining controversy between them, they are to give concurrent evidence during the hearing.
In the event that Mr. G is to be cross examined by the wife about his opinion in respect of the value of I Town, that notice should be given as soon as is practicable.
In the event that either party intends to take objections to the report of either expert, they are to serve those objections with the case summary (by close of business Wednesday 23 July 2014).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Lively & Lively has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
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| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 953 of 2013
| Ms Lively |
Applicant
And
| Mr Lively |
Respondent
REASONS FOR JUDGMENT
The wife filed an application in a case on 16 July 2014 to be granted leave pursuant to the Family Law Rules 2004 (“the Rules”) to adduce evidence from another expert in relation to valuation of two properties: one at D Street, Suburb F (“the Suburb F property”); the other at H Street, I Town (“the I Town property”). The Rules provide that the Court may allow a party to adduce evidence from another expert witness on the same issue if (a) it’s satisfied that there is a substantial body of opinion contrary to an opinion given by the single expert and that that contrary opinion is or may be necessary for determining the issue; (b) another expert witness knows of matters not known to the single expert witness that may be necessary for determining the issue; and (c) there is another special reason for adducing evidence from another expert witness.
The single expert valued the I Town property at $550,000. That property is most likely going to be retained by the husband when orders are finally made. The expert in respect of whom leave is sought, Mr B, indicates that in his view that property is worth $610, 000 if the valuation is made on the basis of the current non arm’s length lease that exists in respect of the property. The registered proprietor of the property is an entity connected to the husband. Or alternatively the property is worth $575,000 if the non arm’s length nature of the lease is ignored.
The difference between the single expert’s valuation at $575,000 and the adversarial expert’s valuation at $550,000, so far as I can tell, results from the adoption of a slightly different net rent and a slightly different capitalisation rate. However, and importantly, Mr B uses an alternate method, by way of a secondary check to that used by Mr G and primarily by himself. Using that alternate direct comparison method Mr B opines that Mr G was at the lower end of market tolerances based on sales evidence. In other words Mr B concluded by way of his cross check that Mr G was within the ballpark in relation to his valuation.
The parties only have a one half interest in I Town. If those valuations are $25,000 apart then the effect upon the pool of assets is a difference of $12,500. Given the size of the pool of assets, that is a relevant matter to take into account under rule 15.49(2)(c). Counsel for the wife relied upon correspondence with the single expert (exhibit 6) to suggest the single expert was in some way prejudiced given his reaction to a request to answer questions out of time. I am unable to conclude the single expert displayed prejudice.
I am of a view that leave should not be granted in relation to an alternate argument about the value of the I Town property.
The differences in valuation in respect of the Suburb F property are far more significant. It is anticipated that the wife will retain that property. That is certainly her application. The adversarial expert that the wife has obtained values the property at $325,000 less than the single expert. He does so using a different analysis in terms of the comparables used by the single expert and he adds four new comparable sales to his considerations. I am unaware as to whether those four additional comparable sales were matters known about by the single expert. They are not referred to in his valuation. I don’t know whether or not the single expert accepts them as appropriate comparables, but on the face of it it appears that Mr B found comparables that Mr G did not have.
In addition Mr B uses an alternate methodology to carry out his valuations. In relation to that methodology counsel for the husband submits that the basis of Mr B’s valuation of the improvements/building costs is not clear on the face of the report. On the face of his valuation Mr B appears to assume that building costs were $916,000. This figure may be what he thought the parties had spent on construction (rounded to $900,000). It may well be that the evidence when tested will not support that conclusion but I cannot say on a prima facie basis that Mr B’s opinion cannot be supported.
There certainly is enough in Mr B’s report, as to the value of Suburb F, to satisfy the requirements of rule 15.49.The adversarial expert adopts an alternate methodology: he uses additional comparables not contained in the single experts report and reaches a conclusion in relation to the valuation which represents a difference in opinion with a single expert which could have a significant impact upon the value of the potential pool of assets and I therefore make an order in the terms sought in respect of Suburb F.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 21 July 2014.
Associate:
Date: 24 July 2014
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