PENNER & CONROY

In property adjustment proceedings before the Family Court of Australia, the Applicant Wife, Ms Penner, and the Respondent Husband, Mr Conroy, were involved in a dispute concerning the admissibility of expert evidence. The husband sought to rely on a report from an expert, Mr B, concerning potential capital gains tax (CGT) liability on the assets of a company he controlled. The wife opposed the admission of this evidence.

The central legal issue before the Court was whether to grant the husband leave to rely on Mr B's expert report, which had been served late and was alleged to lack proper disclosure and evidentiary foundation. The Court was required to consider the relevance and probative value of the proposed evidence, particularly in light of the fact that any CGT liability would not accrue for at least six years. Furthermore, the Court had to determine whether the late service and disclosure issues prejudiced the wife and impacted case management considerations.

The Court reasoned that the proposed CGT liability was speculative and would only accrue in the future, making its relevance limited for the purpose of valuing assets at the date of the hearing, as required by section 79 of the *Family Law Act 1975* (Cth). While acknowledging that future liabilities can be considered under section 75(2) of the Act, the Court found that the evidence of Mr B, being of limited relevance and served late without satisfactory explanation, coupled with inadequate disclosure of supporting documents, denied the wife procedural fairness. The Court also considered the significant case management implications of adjourning the proceedings to allow the wife to adequately respond to the late evidence, which would impact other litigants.

Ultimately, the Court reluctantly concluded that the prejudice to the wife and the case management difficulties outweighed the limited probative value of Mr B's report. Accordingly, the husband's application to rely on the expert evidence was dismissed.