Neales & Neales

Case [2022] FedCFamC1A 41

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Neales & Neales [2022] FedCFamC1A 41

Appeal from: Neales & Neales [2021] FamCA 525
Appeal number(s): EAA 90 of 2021
File number(s): CAC 959 of 2019
Judgment of: ALDRIDGE, TREE & SCHONELL JJ
Date of judgment: 28 March 2022
Catchwords: FAMILY LAW – APPEAL – Expert evidence – Appeal from orders dismissing the husband’s application to discharge the singe expert or in the alternative grant leave for an adversarial expert – Where there was a difference of about $11 million in valuations undertaken by the two experts – Where the husband sought to challenge the primary judge’s findings through contentions that the primary judge erred in failing to give sufficient reasons and in failing to properly consider the arguments advanced – Adequacy of reasons – Where the primary judge’s reasons are adequate – Where the husband asserted that the primary judge erred in applying r 15.49(2)(c) of the Family Law Rules 2004 (Cth) through adopting a “tick-and-flick” approach – Where the primary judge fell into error in confining the issue to differences in value as opposed to considering all the relevant matters in aggregate – Where the proposed adversarial expert did not have a substantial body of opinion – Where the single expert did not have a “closed mind” – Where the difference in value by itself was not sufficient for an adversarial expert – Where the primary judge fell into error by not considering the difference in value together with the other relevant matters such as the alternative methodologies used – Appeal allowed – Costs certificates issued to both parties.
Legislation:

Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9

Family Law Rules 2004 (Cth) r 15.49

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited:

DL v The Queen (2018) 266 CLR 1; [2018] HCA 26

Georgeson and Georgeson (1995) FLC 92-618; [1995] FamCA 62

House v The King (1936) 55 CLR 499; [1936] HCA 40

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34

Salmonand Ors & Salmon [2020] FamCAFC 134

Tsoutsouvas & Tsoutsouvas and Ors [2012] FamCA 521
Number of paragraphs: 65
Date of hearing: 3 March 2022
Place: Sydney
Counsel for the Appellant: Ms Gillies SC with Ms Seric
Solicitor for the Appellant: Macphillamy’s
Counsel for the Respondent: Mr Kearney SC
Solicitor for the Respondent: Farrar Gesini Dunn

ORDERS

EAA 90 of 2021
CAC 959 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MR NEALES

Appellant
AND:

MS NEALES

Respondent

ORDER MADE BY:

ALDRIDGE, TREE & SCHONELL JJ

DATE OF ORDER:

28 MARCH 2022

THE COURT ORDERS THAT:

1.Leave to appeal is granted.

2.The appeal is allowed.

3.The orders of the primary judge made on 21 July 2021 are set aside.

4.The appellant husband (“the husband”) is granted leave to adduce and rely upon the evidence of Mr D as another expert.

5.The husband is granted a costs certificate pursuant…

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Neales & Neales [2022] FedCFamC1A 41
Case
[2022] FedCFamC1A 41
Decision Date

CaseChat Overview and Summary

In the case of Neales & Neales, the husband sought to appeal from the orders dismissing his application to discharge the single expert or, in the alternative, grant leave for an adversarial expert. The husband's contentions were that the primary judge erred in failing to give sufficient reasons and in failing to properly consider the arguments advanced. The husband also asserted that the primary judge erred in applying rule 15.49(2)(c) of the Family Law Rules 2004 (Cth) through adopting a "tick-and-flick" approach and fell into error by not considering the difference in value together with the other relevant matters such as the alternative methodologies used.

The Full Court found that the husband had established sufficient doubt to warrant reconsideration of the primary judge’s determination. The Court found that the primary judge erred in not considering the difference in value together with the other relevant matters such as the alternative methodologies used. The Court also found that there was another special reason for appointing another expert as the two experts had adopted alternate methodologies, leading to a significantly different conclusion as to value. Additionally, the consequences of the significant difference in value may more adversely impact the husband than the wife, given that the wife seeks a cash payment and the husband will be left holding the properties.

The Full Court allowed the appeal and set aside the orders of the primary judge made on 21 July 2021. The Court granted the husband leave to adduce and rely upon the evidence of Mr D as another expert. The Court also granted both parties a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). The costs certificates were appropriate given that the appeal had succeeded on a question of law.

Orders

Orders of the court

EAA 90 of 2021

CAC 959 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR NEALES

Appellant

AND:

MS NEALES

Respondent

ORDER MADE BY:

ALDRIDGE, TREE & SCHONELL JJ

DATE OF ORDER:

28 MARCH 2022

THE COURT ORDERS THAT:

1. Leave to appeal is granted.

2. The appeal is allowed.

3. The orders of the primary judge made on 21 July 2021 are set aside.

4. The appellant husband (“the husband”) is granted leave to adduce and rely upon the evidence of Mr D as another expert.

5. The husband is granted a costs certificate pursuant to the provision of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payment in respect of the costs incurred by him in relation to the appeal.

6. The respondent wife (“the wife”) is granted a costs certificate pursuant to the provision of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payment in respect of the costs incurred by her in relation to the appeal.

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).

Background

Background to the litigation

For reasons which follow, leave to appeal will be granted, the appeal will be allowed, and leave given to the husband to rely upon another expert valuer.BACKGROUND AND RELEVANT PROCEDURAL HISTORY The parties married in June 1981 and separated in April 2016. They have two adult children. The asset pool includes the husband’s one-third shareholding in three entities that hold commercial properties in and around City X. Almost all of the properties are subject to established leases, including options to renew. On 24 May 2019, the husband commenced the proceedings. In late February 2020, the parties jointly instructed Mr B as a single expert to value the properties on the basis of: “Market Value (As Is) presuming a sale of the 100% Crown Leasehold interest/s subject to the existing lease agreements, or with vacant possession, as applicable” (Tender Bundle to the husband’s affidavit filed 31 March 2021, Annexure C). Mr B valued the properties as at July 2020 between $33.835 million and $34.190 million. In October and November 2020, the husband submitted various questions seeking clarification of matters pursuant to the Family Law Rules 2004 (Cth) (“the old Rules”). Mr B replied to those questions. In March 2021, the husband instructed Mr D to comment on Mr B’s valuations and provide his opinion as to the value of the properties. Mr D valued the properties in March 2021 at $22.465 million. On 31 March 2021, the husband filed an Application in a Case seeking to discharge Mr B as the single expert, leave to rely upon Mr D as another expert, and a conference of the experts. The hearing took place on 24 June 2021, and judgment was delivered on 21 July 2021 dismissing the application.LEAVE TO APPEAL AND GROUNDS OF APPEAL The facts relied upon by the husband that are said to ground leave were asserted errors in failing to give sufficient reasons and failing to properly consider the arguments advanced. This was said to give rise to a substantial injustice and a denial of natural justice. The path to success on appeal from an interlocutory decision requires the husband to establish to the satisfaction of this Court that the primary judge’s determination was attended by “sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong” (Medlow & Medlow (2016) FLC 93-692 at [57]). The determination of the primary judge is presumed to be correct unless it can be established that the discretion reposed in the primary judge miscarried in the terms articulated in House v The King (1936) 55 CLR 499 at 505. Whilst there were only four grounds of appeal, they each contained numerous sub-parts, which in many respects overlapped and were somewhat repetitive. The husband’s argument on the appeal did not address the grounds seriatim, but was in the main, responsive to questions raised by this Court. Senior counsel for the respondent wife (“the wife”) responded to matters raised by the husband and the Court. Each party relied upon and did not resile from their Summary of Argument.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

No error has been established in Ground 4. CONCLUSION We are satisfied that Ground 2.2 and the second limb of Ground 3.4 have merit.RE-EXERCISE OF DISCRETION We are persuaded for the reasons given earlier, that leave should be granted and the appeal allowed. In the exercise of our discretion, we would permit the husband to rely upon another expert as it is established that there is another special reason for appointing another expert. Our reasons for finding that there is another special reason are:(1)that as between the single expert and Mr D, they each have adopted an alternate methodology, which in part leads to a significantly different conclusion as to value;(2)that there are matters known to Mr D that were not known to the single expert, which in part lead to a significantly different value; and(3)that in circumstances where the wife seeks a cash payment and the husband will be left holding the properties, the consequences of the significant difference in value may more adversely impact the husband than the wife.COSTS Both parties sought a costs certificate pursuant to the Federal Proceedings (Costs) Act1981 (Cth) in the event that the appeal succeeded. Given that the appeal has succeeded on a question of law, such certificates are appropriate. We will make orders accordingly.

Ratio Decidendi

Legal Principle Established

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