Markwell and Markwell

[2010] FamCA 656

FAMILY COURT OF AUSTRALIA

MARKWELL & MARKWELL [2010] FamCA 656

FAMILY LAW – PROPERTY – Value of Property – Expert Evidence – Contested interlocutory issue about the single experts to be appointed to value real properties

Family Law Act 1975 (Cth)

APPLICANT: Ms Markwell

RESPONDENT: Mr Markwell

FILE NUMBER: SYC 2928 of 2009

DATE DELIVERED: 29 June 2010

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Justice Austin

HEARING DATE: 29 June 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Jillian Stibbard, Baker Love Lawyers

COUNSEL FOR THE RESPONDENT: Not Applicable

SOLICITOR FOR THE RESPONDENT: Ms Olsen, Boyd Olsen Lawyers

Orders

1. Mr H is appointed as the single expert witness to prepare a report as to the valuations of the quarrying properties identified in Annexure R to the affidavit of the wife filed on 22 June 2010.

2. Within seven days hereof the parties shall prepare and send to Mr H a letter of instructions consistent with the draft letter comprising Exhibit W2.

3. Ms M is appointed as the single expert witness to prepare a report as to the valuation of the real property situated at T, Queensland.

4. Within seven days hereof the parties shall prepare and send to Ms M a letter of instructions consistent with the draft letter comprising Exhibit W1, insofar as it refers to the property which she is engaged to value.

5. Mr O is appointed as the single expert witness to prepare a report as to the valuations of the following real properties:

   a.Unit 4, B, Queensland; and

   b.D, Queensland.

6. Within seven days hereof the parties shall prepare and send to Mr O a letter of instructions consistent with the draft letter comprising Exhibit W1, insofar as it refers to the properties which he is engaged to value.

7. Mr B is appointed as the single expert witness to prepare a report as to the valuations of the real properties identified in Attachment A to Annexure S to the affidavit of the wife filed on 22 June 2010, excepting the following Queensland properties:

   a.T, Queensland;

   b.Unit 4, B, Queensland; and

   c.D, Queensland.

8. Within seven days hereof the parties shall prepare and send to Mr B a letter of instructions consistent with the draft letter comprising Exhibit W1, modified by excision of reference to the said Queensland properties.

9. To facilitate preparation of the single expert reports:

   a.Each party must provide the single experts with reasonable access to inspect the properties and premises at any reasonable times nominated by the single experts; and

   b.Each party must provide to the single experts any documents required by the single experts to assist in the valuation process.

10. Each party has liberty to apply to relist the matter on seven days notice for further procedural orders.

BY CONSENT IT IS FURTHER ORDERED

1. The parties must within seven days confer for the purpose of agreeing upon the identity of the person to be appointed as the single expert witness for the purposes of preparation of a geological survey report upon the quarrying property described as “Portions […] and […] in DP […] and known as [G Quarry]”, for such report to be provided to Mr H for his assistance in valuing that said quarrying property pursuant to Order 1 hereof.

2. The parties shall bear the fees of the single expert witnesses for the preparation of reports pursuant to these orders in equal shares.

3. This matter is adjourned before Justice Austin at 9:30 am on Thursday, 28 October 2010, for the purposes of further procedural orders.

IT IS NOTED that publication of this judgment under the pseudonym Markwell & Markwell is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: SYC 2928  of 2009

MS MARKWELL

Applicant

And

MR MARKWELL

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

Introduction

1. The applicant wife and respondent husband are in dispute about the division of their property interests consequent upon the failure of their long marriage.

2. The parties separated long ago - in early 1995 according to the husband and in early 1998 according to the wife. 

3. These proceedings were commenced by the wife on 19 June 2009.

4. The proceedings are very complicated because of a vast array of corporations and trusts in which the parties have interests.

5. The parties are still a long way short of identifying and quantifying the matrimonial pool of property available for distribution between them.  The estimates of its value range up to $100,000,000.00.

6. The corporations in which the parties hold interests own a very large number of real properties, the valuation of which will bear upon the value of the corporations, and hence the value of the parties’ shareholdings in those corporations. 

7. The parties agree that the real properties need to be valued in the absence of agreement, but the parties cannot agree upon the identity of the various single experts who are to be appointed to undertake the valuations.  The Court now needs to determine that as an interlocutory issue.

Evidence and proposals

1. The applicant wife relies upon her affidavit filed on 22 June 2010 and the respondent husband relies upon his affidavit filed on 23 June 2010.

2. The parties are agreed about the identity of the many parcels of real property requiring valuation.  They are set out in schedules comprising Annexure L to the husband’s affidavit and Annexures R and S to the wife’s affidavit.  The real properties can be conveniently categorised into three groups:

   a)The quarrying properties, upon which corporations carry on quarrying business with either a freehold or leasehold interest;

   b)Other properties in New South Wales; and

   c)Three properties in Queensland.

3. The applicant wife proposes that Mr H value the quarrying properties and that Mr B values all other properties in New South Wales and Queensland.

4. The respondent husband proposes that Mr K value the quarrying properties and that a variety of other employees or subcontractors of Colliers value all other properties in New South Wales and Queensland.

The Quarrying properties

1. The parties agree that the quarries must be valued separately from the other two groups of properties. 

2. Since the parties put up only one valuer each, it is a choice between two on the available evidence. I consider it appropriate to appoint Mr H as the valuer of those properties for the following reasons.

3. The husband raises no objection to Mr H’s independence or qualifications, save for a bare submission that Mr H has no stated expertise to value unquarried rock.  The same may be said for the expert proposed by the husband, Mr K.  According to the evidence filed, Mr K does not even express expertise to value stockpiles of quarried material (Husband’s affidavit, page 78). The parties agree that the quarry valuations will entail valuation of both the unquarried stone and the quarried stockpiles of material on the various quarry sites.

4. The curriculum vitae of Mr K expresses no expertise in quarries.  He has the necessary qualification only by inference from his statements that he is a property consultant for a coal company (Husband’s affidavit, page 74) and has experience in “extractive industry” (Husband’s affidavit, page 75).  None of his recent assignments have involved quarries (Husband’s affidavit, page 75).

5. There is clear evidence that Mr H has had no prior dealings with the parties, but the evidence is not so clear for Mr K.  Mr H denies prior involvement with the parties (Wife’s affidavit, page 22).  Mr K was asked about his prior involvement with the parties (Husband’s affidavit, page 68), and he has never answered the question directly (Husband’s affidavit, page 78).

6. Mr H has clearly considered the ambit of the task at hand.  He considers that a geological survey report will be required to assist his valuation of one of the quarries (Wife’s affidavit, paragraph 7).  I impute that Mr H has given deeper consideration to the task than Mr K.

The Queensland properties

1. I accept the submission of the husband that where possible, local valuers are preferable for engagement in real estate valuations because of the potential for more thorough insight into movements in the value of local real estate.

2. The husband suggests Queensland valuers for the three parcels of property in Queensland.  The wife suggests a valuer from Sydney.

3. I do not accept the wife’s submission that the two Queensland valuers proposed by the husband have not disclosed their fees or their willingness to undertake the task.  The fees of the Queensland valuers are included on the schedule provided by the husband (Husband’s affidavit, page 31).  Whilst those fees are representative of the Queensland valuers undertaking the task as subcontractors to Colliers International, logic dictates that the fees would not be substantially different if they are engaged directly.

4. The willingness of the Queensland valuers to undertake the task is inferred from the expression of willingness made by Colliers, as head contractor, in correspondence to the husband.

5. The wife raises no issue about the qualifications and experience of the Queensland valuers. I therefore accede to the husband’s submissions to appoint those valuers to undertake valuations of the Queensland properties.

The residual new south wales properties

1. The husband proposes Colliers International and the wife proposes Mr B to value the remaining parcels of real estate throughout New South Wales.

2. The husband anticipates that three employees of Colliers will undertake the valuations and that the allocation of valuers to properties will fall within the discretion of Colliers.  It is not known which valuer will value which property.  It is not known whether the three valuers from Colliers have any local knowledge of any of the properties in question.

3. The wife proposes that Mr B undertakes all valuations singularly.  He is from Sydney.

4. It is preferable in my view to minimise the number of witnesses used, which inclines me to appoint Mr B.

5. There is nothing about the qualifications of the Colliers valuers or Mr B which renders one superior to the other.

6. The husband raises issue about Mr B’s qualifications being confined to Sydney and Parramatta, but that submission does not represent a balanced appraisal of his qualifications, which extend to the valuation of both coastal and rural areas throughout New South Wales (Wife’s affidavit, page 27).

7. The husband alleges Mr B is compromised by correspondence he has received from the wife setting out estimated valuations of the various parcels of real estate (Wife’s affidavit, pages 29 - 35).  I reject that submission.  The estimates of value are those of the husband, not the wife.  No advantage accrues to the wife through his appointment.

8. The wife has raised an issue about a prospective conflict of interest for Colliers in the event that that organisation is appointed.  On 23 April 2010, Colliers confirmed a conflict of interest in respect of the quarry properties (Husband’s affidavit, page 64).  They acted for a potential purchaser of the E Quarry and asserted that valuers had recently inspected the site and spoken to the husband. In a schedule prepared by Colliers (Wife’s affidavit, Annexure W), Colliers also included the F Quarries site within the ambit of their asserted conflict of interest.

9. The husband admits his discussions with persons some five to six months ago relating to the quarries (Husband’s affidavit, paragraph 15), but it is impossible to discern whether he is referring to conversations with valuers of Colliers.  He does not identify the persons to whom he spoke, his timing of the conversations suggests a different timeframe to the discussions referred to in the Colliers email, and the husband purports the conversation to have been about a prospective purchase of an adjoining property and not the prospective purchase of one of the subject quarries.

10. It is for the husband to clarify any ambiguity about that issue and he has not done so. The appointment of Colliers would lack the perception of complete impartiality and transparency which is desirable.

11. For those reasons I make the following orders.

I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin

Associate: 

Date:  29 June 2010