Parkes and Parkes
[2015] FamCA 1210
•1 October 2015
FAMILY COURT OF AUSTRALIA
| PARKES & PARKES | [2015] FamCA 1210 |
| FAMILY LAW – EVIDENCE – Expert evidence – where the husband applies for leave to adduce evidence from an adversarial expert witness– fair and just to allow the application. |
| Family Law Rules 2004 (Cth), rr 1.04, 1.12, 15.42, 15.49, 15.65 |
| Gemmell & Gemmell [2009] FamCA 29 Lively & Lively [2014] FamCA 578 Wilson & Westcott [2013] FamCA 766 |
| APPLICANT: | Mr Parkes |
| RESPONDENT: | Ms Parkes |
| FILE NUMBER: | MLC | 5484 | of | 2014 |
| DATE DELIVERED: | 1 October 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | 1 October 2015 |
REPRESENTATION
| SOLICITOR APPEARING AS ADVOCATE FOR THE APPLICANT: | Mr Parker |
| SOLICITOR FOR THE APPLICANT: | Lander & Rogers |
| COUNSEL FOR THE RESPONDENT: | Mr Werner |
| SOLICITOR FOR THE RESPONDENT: | Taussig Cherrie Fildes |
Orders
IT IS ORDERED THAT
The Husband have leave to file and rely upon an affidavit of Mr M, sworn expert valuer, in relation to the value of B Street, Suburb C, in the State of Victoria.
As soon as practicable, the single expert and Mr M confer in respect of their respective valuations in an attempt to reach agreement and then provide a joint conferral note setting out:
(a) Those issues upon which they agree; and
(b) Any points of difference.
The parties' costs be reserved.
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 5484 of 2014
| Mr Parkes |
Applicant
And
| Ms Parkes |
Respondent
EX TEMPORE
REASONS FOR JUDGMENT
The husband’s application in a case filed 23 September 2015 in relation to Mr M, adversarial witness
The parties seek an alteration of interest in property of a marriage. They were married in 2005 and separated in November 2013. There are no children of the marriage.
A central issue in the trial will be the valuation of the former matrimonial home at B Street, Suburb C, which I refer to as “the Suburb C property”, which the wife proposes to retain. The trial is listed for four days on 12 October 2015, so there are approximately seven business days before trial. The appointment of a single expert occurred by way of default in agreement as to the value of the property in orders dated 5 August 2014, made by Registrar Kaur. An order was made on 28 May 2015 for an updated valuation report to be prepared by Mr L of CC Property and released to the parties on 12 August 2015.
The updated report of the single expert, Mr L, dated 4 August 2015, valued the Suburb C property at $1,775,000. On 18 August 2015, following receipt of the updated report from Mr L, the husband addressed a series of questions to the single expert to clarify his report, pursuant to rule 15.65 of the Family Law Rules. The single expert responded on 31 August 2015. I accept the argument of the applicant husband that the answers provided by the single expert were limited and perfunctory; the single expert refused to disclose the calculations of the summation method, utilised by him as a check method, referred to in his report.
After hearing submissions but just before delivering these reasons, I was informed from the bar table that those calculations have now only just been provided but they do not satisfy the husband. Both counsel sought that I proceed to deliver the ruling without any further evidence or submissions.
The husband subsequently commissioned a shadow report from a certified practising valuer, Mr M, dated 8 September 2015. This report values the Suburb C property at $1,900,000. Mr M released that report to the husband on 17 September 2015. The following day, on 18 September 2015, Mr M’s report was provided to the wife’s solicitors with a proposal that the experts convene for a conference.
On 21 September 2015 the wife’s solicitors informed the husband’s solicitors that the wife rejected the husband’s proposed conference of experts. On 28 September 2015, at a mention hearing, I made an order that the single expert witness, Mr L, provide the parties with details of the summation method analysis used for the valuation of the property. This was approximately 72 hours ago, and a written request was sent by the solicitors for the wife at 3.33 pm on the same day that the order was made.
Before me this morning there was no evidence of any response, although I have now heard from the bar table that in fact there has been a response which remains unsatisfactory on the submission of the husband’s counsel. I am satisfied on the state of the evidence before me, that the husband had exhausted the mechanisms under the Family Law Rules in relation to the single expert appointed.[1] At this stage, I have no further evidence about the latest response.
[1] Gemmell v Gemmell [2009] FamCA 29
The husband, by application in a case filed 23 September 2015, supported by an affidavit of the solicitor for the husband filed the same date, seeks leave pursuant to rule 15.49(1) of the Family Law Rules to adduce evidence from Mr M, a certified practising valuer, in relation to the Suburb C property and the report of Mr L, the appointed single expert witness. The application also seeks that the respondent to the application pay the costs of and incidental to the application.
Rule 15.49 refers to appointing another expert and provides as follows:
(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 satisfied that:
(a) there is a substantial body of opinion contrary to any opinion given by the single expert witness and that the 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; or
(c) there is another special reason for adducing evidence from another expert witness.
The husband relies upon the decision of Watts J in Lively & Lively [2014] FamCA 578, but I do not find that this decision is entirely similar on the facts. I accept that his Honour referred to being unaware as to whether four additional comparable sales were matters known about by the single expert, and that it appeared that the adversarial expert witness found comparables that the single expert witness did not have. However the difference in valuation, being $325,000 in that case, was more significant than here where the difference is $125,000.
That case is also distinguishable because the adversarial expert witness used an alternate methodology to carry out his valuations. There are similarities, but in the end no two cases are the same. I must determine this application on the facts before me.
The decision of Berman J in Wilson & Westcott [2013] FamCA 766 is helpful, at paragraph 49, where he refers to the fact that “ultimately, the purpose of the Rules is to ensure that the interests of justice are properly served”.
Berman J did not consider, in that case, that there was a genuine disagreement between two appropriately qualified experts concerning the appropriate methodology, referring to the decision of Gemmell & Gemmell.[2] The facts in Wilson & Westcott are distinguishable on a number of bases, including the preliminary nature of the report and the more speculative nature of the disputed valuation.
[2] [2009] FamCA 29
The considerations here include the value of the asset pool, the probative value of the evidence to be adduced by the husband, the extent to which, if granted, an order allowing the husband to adduce evidence from Mr M would impact on the trial date and any potential adjournment.
The value of the asset pool is disputed, but the most significant asset of the parties is the Suburb C property where the disputed difference is $125,000 on the basis of a detailed adversarial expert witness report which the husband seeks to adduce into evidence. The report is not “guarded” (I refer to the “guarded” report that applied in Wilson & Westcott) and it is not a preliminary valuation as was the case in the decision of Wilson & Westcott. So those cases are distinguishable.
I accept the submissions made on behalf of the husband that, in this case, there is a special reason for adducing evidence from another expert, being Mr M, as to the value of the principal property of the marriage: the Suburb C property. Rule 15.49(2) is couched in discretionary terms, and I am satisfied that subsection (c) applies here. Subsection (b) may also be relevant, but because there is no detail about the opinion that the comparable property being “far superior for a number of reasons” provided by Mr L about his reasons for dismissing the comparable sale, referred to by the husband’s adversarial expert, there is insufficient evidence to determine whether Mr M knows of matters not known to the single expert witness, Mr L, that may be necessary for determining the issue.
The special reason for adducing evidence from another expert witness is that whilst it might be argued that the issues raised by Mr M’s valuation could be the subject of cross-examination of the single expert, if the cross-examination were to demonstrate that the valuation is flawed, then the court would have no other evidence to determine the valuation. The difference in valuation might be regarded as modest, being $125,000, but it represents approximately seven per cent of the single expert valuation. The husband may well feel aggrieved without the opportunity to explore this difference by way of cross-examination and the introduction of his evidence.
The argument of counsel for the wife that the valuation of Mr M merely represents a difference of opinion in circumstances where the valuation of real estate is “an inexact science” has some attraction, and particularly where the purpose of the single expert rule is to address this very issue. However, there is a controversy in this case raised by Mr M’s detailed valuation and the husband’s questions of the single expert about the basis for his cross-referencing of the summation method and the comparable sales used for the primary method utilised by both valuers, which was the direct comparison approach.
An exploration of this issue in cross-examination alone, without any evidence being adduced by the husband, may lead to an injustice which is easily averted at this early stage where there is sufficient time for the expert witnesses to confer and ventilate the differences. This is not just a difference of opinion about the respective applications of the direct comparison approach in the selection of appropriately comparable real properties because the single expert does not address the questions raised by the husband about the foundation for his assertion that the properties are obviously far superior.
The single expert witness has refused to provide calculations for the secondary method by crosschecking, being the summation method. Perhaps these might be produced in cross-examination or a more detailed explanation provided as to why these calculations are unhelpful or unnecessary. However in the event that cross-examination sheds no further light on these issues, the husband will be in a position of having no evidence adduced in the trial as a basis for any determination.
This touches upon issues of fairness which may override the strict application of the Rules. If I am wrong in determining under rule 15.49 that there is another “special reason” for adducing evidence from the husband’s expert witness, sufficient to allow him to tender Mr M’s report or adduce expert evidence from him as a witness, I regard the interests of justice as an overriding principle which must be applied in these circumstances. To apply rule 15.49 strictly would preclude the husband from fairly ventilating the key issue of the valuation of the single most important asset of the parties.
This is the prejudice to the husband which can be identified here. The prejudice to the wife may be a longer trial, which is capable of being compensated in costs if the husband’s argument is rejected. There is also the prospect of an agreement being reached on valuation if both experts confer in accordance with the Rules. The danger of unnecessarily prolonging the proceedings, sought to be addressed by rule 15.49, because of the acceptance that there will be an inevitable variation in the differences of valuations where the “science is inexact”, must be weighed and balanced against questions of fairness and considerations of what prejudice might flow from the strict adherence to that rule.
There may be significant force in the wife’s argument, supported by helpful written submissions, however the prejudice which might be suffered by the husband if he were left with a vacuum in the evidence after cross-examination of the single expert, as he asserts, cannot be addressed in the trial. This has the potential to be a miscarriage of justice without the opportunity to adduce evidence on the disputed foundation for the methodology.
On the other hand, if the wife is prejudiced in the trial by additional evidence being led from the husband’s witness, Mr M, which is not accepted by the trial judge she may resort to an application for costs to remedy that prejudice.
Rule 1.04 of the Family Law Rules provides that the main purpose of the Rules is to ensure that each case is resolved in a just and timely manner at a cost which is reasonable in the circumstances of the case.
I have had regard to rule 15.42. This refers to the purpose of Part 15.5, which governs the single expert rule under rule 15.49. I have weighed these purposes carefully, and in particular rule 15.42(c), which provides as a purpose:
… to ensure that, if practicable and without compromising the interests of justice, expert evidence is given on an issue by a single expert.
I have also placed weight on rule 15.42(e) which provides as a purpose:
… to enable a party to apply for permission to tender a report or adduce evidence from an expert witness appointed by that party, if necessary in the interests of justice.
I consider that, in the circumstances of this case, to preclude the husband from adducing evidence from his shadow expert witness would compromise the interests of justice, and I consider it necessary to enable him to tender the report or adduce evidence from Mr M in the interests of justice. Rule 1.12 of the Family Law Rules also provides for a discretion to dispense with compliance of any of the rules at any time. The factors to be taken into account in dispensing with the rules include the administration of justice and the effect of granting relief on each party, and parties to other cases.[3]
[3] Family Law Rules 2004 (Cth), rr 1.12(b) and (e)
The overarching consideration here is one of fairness and justice between the parties. This is the general approach I have adopted, notwithstanding the carefully crafted, detailed submissions of the parties. I propose to grant the husband’s application to adduce evidence from Mr M on the same issue as the single expert, Mr L, pursuant to rule 15.49(2)(c) that there is another special reason for adducing that evidence, but even if that interpretation is incorrect the overarching principles of fairness and justice require that his application be granted. I propose to also make orders for the expert witnesses to confer.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 1 October 2015.
Associate:
Date: 5 February 2016
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