Saito & Eichel (No 3)
[2024] FedCFamC1F 247
•16 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Saito & Eichel (No 3) [2024] FedCFamC1F 247
File number: SYC 5342 of 2020 Judgment of: CAMPTON J Date of judgment: 16 April 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband seeks to pose questions to a single expert witness pursuant to r 7.26 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – Where the wife objects to the majority of the questions on the basis – Consideration as to the scope of the rule and the terms of the instructions provided to the expert – Questions objected to by the wife disallowed. Legislation: Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 7, div 7.1.6, rr 7.24, 7.26, and 7.27
Cases cited: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 69
Morris & Morris(No 5) [2023] FedCFamC1F 940
Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 31; [2006] HCA 12
Saito & Eichel (No 2) [2023] FedCFamC1F 997
Division: Division 1 First Instance Number of paragraphs: 22 Date of last submissions: 9 April 2024 Place: Sydney Solicitor for the Applicant: Broun Abrahams Burreket Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 5342 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SAITO
Applicant
AND: MR EICHEL
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
16 APRIL 2024
THE COURT ORDERS THAT:
1.Pursuant to r 7.26 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the husband:
(a)Be allowed to pose questions 1, 4, 5, 6, 9, and 10, to the single ch 7 foreign law expert, Ms D, as contained in the letter from his solicitors to the expert dated 19 March 2024; and
(b)Not be permitted to put questions 2, 3, 7, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 24, 25, and 26 to the expert as contained in that letter.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Saito & Eichel has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine a procedural dispute as to the content of questions in writing directed to a ch 7 foreign law single expert witness, Ms D, pursuant to r 7.26 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), in proceedings in the Major Complex Financial Proceedings List between Mr Eichel (“the husband”) and Ms Saito (“the wife”) scheduled for trial over ten days commencing on 6 May 2024.
The single expert was instructed to opine as to the content of law in the United States of America (“USA”). Orders made 23 November 2023 determined a dispute between the parties as to the form and content of the instructions to be provided to the expert. These reasons assume familiarity with that judgment (see Saito & Eichel (No 2) [2023] FedCFamC1F 997 (“Saito & Eichel (No 2)”). By way of background, the reasons in Saito & Eichel (No 2) record:
14The wife asserts that the interests of the parties in six of the trusts established by way of foreign law (“the [C Trusts]”) are the property of the parties and are amenable to s 79 orders, relying upon a long line of established authority as recited by the High Court in Kennon v Spry (2008) 238 CLR 366. The husband opposes this finding, contending that the said interests are not property for the purpose of s 79 of the Act. The wife seeks orders that directly affect the regulation of and the assets of the [C Trusts].
15It is the wife case that she and the husband jointly controlled of the assets of the [C Trusts] and the LLC’s prior to August 2020 and that steps taken by the husband between then and August 2021 have impacted on control of the trust’s assets such that it has shifted to others to whom it is reasonable to infer will act under the husband’s sole direction. These others include the husband’s fiancé and his friend. It is her case that they will each not act independently of the husband's direction.
16The parties agree that the [C Trusts’] structures are complex. They are in dispute as to questions as to the construction of the documents constituting the trusts and the consequential impact on the conduct of the trustees of the trusts…
The gravamen of the judgement in Saito & Eichel (No 2) is that the single expert is to opine as to the content of the law that would be applied in the USA. The content of that foreign law is a question of fact to be determined in this proceeding. That question of fact informs the determination of other facts during the dispute pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). There is a long held distinction between an expert opinion as to the content of a foreign law and an expert opinion as to the application of a foreign law once it has been ascertained, as identified by the High Court in Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 31 (“Neilson”) citing Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 69. That difference is often described as “content evidence” and “application evidence”. The High Court in Neilson (at [220]) held that “[t]he former is said to be admissible; the latter not”.
In Saito & Eichel (No 2), seven matters were identified as requiring an opinion from Ms D:
31I accept that the terms of the instruction to the single USA law expert requires an opinion as to:
•The content of the relevant law that would be applied by a USA Court with jurisdiction to decide the correctness of each disputed proposition, so that the Court in Australia is in a position to apply that law if the correctness of the disputed propositions needs to be determined in the proceedings;
•Identify and explain the principles of construction that would be applied by a USA Court to decide whether each proposition is correct;
•Identify and explain any principles of substantive law that would be applied by a USA Court to decide whether each proposition is correct;
•For each principle of construction or of general law identified in the report, identify any relevant authorities or provisions of legislation establishing or explaining those principles;
•To the extent any principles identified in the report are not the subject of any authority directly on point, give an opinion as to what a USA Court’s ruling would be if that particular principle arose for consideration;
•For any relevant provisions of legislation, identify any relevant authorities interpreting those provisions and the general principles of construction applied by a USA Court; and
•Explain the status of any identified authorities as a source of law.
Ms D produced her report on 29 February 2024 (Exhibit A in this application).
The husband seeks to administer 26 questions to the expert pursuant to r 7.26 of the Rules as contained in a letter from his solicitors provided to the single expert dated 19 March 2024 (Exhibit B). The wife objects to 20 of the questions posed by the husband. The questions not in contest are numbered 1, 4, 5, 6, 9, and 10. The questions subject to dispute are 2, 3, 7, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 24, 25, and 26.
By way of a letter emailed to chambers (Exhibit C), the parties jointly applied for the dispute, as to whether the husband can put the questions as posed in Exhibit B to Ms D pursuant to r 7.26, to be determined in chambers. Attached to that email were the written submissions of the husband (Exhibit D) and of the wife (Exhibit E).
THE LAW - THE NATURE AND SCOPE OF RULE 7.26
Division 7.1.6 of the Rules is entitled “clarification of single expert witness reports”.
Rule 7.24 provides:
7.24 Purpose of Division 7.1.6
(1)The purpose of this Division is to provide ways of clarifying a report prepared by a single expert witness.
(2)Clarification about a report may be obtained at a conference under rule 7.25 or by means of questions under rule 7.26.
Rule 7.26 provides:
7.26 Questions to single expert witness
(1) A party seeking to clarify the report of a single expert witness may ask questions of the single expert witness under this rule:
(a)within 7 days after a conference (if any) is held under rule 7.25; or
(b)if no conference is held under that rule—within 21 days after the party received the single expert witness’s report.
(2) The questions must:
…
(b) be only for the purpose of clarifying the single expert witness’s report;
Rule 7.27(4) provides that the questions and answers are “taken to be a part of the expert report”.
The judgment in Morris & Morris(No 5) [2023] FedCFamC1F 940 records:
34The purpose of Pt 7 Division 7.1.6 is to limit single expert opinions prior to trial to clarification and to not permit interrogation…
35The Rules do not permit the asking of simply any question, and the construction of the division in ch 7 is a narrow concept including to remove ambiguity.
36To “clarify” means “to make something clearer or easier to understand”. To my mind, the rule is constructed and expressly envisages questions that “clarify” contents of the report and do not permit questions that may be legitimately put to a witness in cross examination.
37The object in clarification is to make something clear from the opinion that is not clear on its face. The rule is not constructed to permit an expansion of the contents of a report or to challenge matters contained within the report.
CONSIDERATION
Both parties submit that the reasons for judgment and orders made 23 November 2023 in Saito & Eichel (No 2) and the nature and scope of r 7.26 scaffold this determination.
The wife submitted that the questions posed by the husband are a process of expanding the scope of the opinion or are designed to elicit opinions in a form that is inconsistent with reasoning of Saito & Eichel (No 2). She submits that the questions seek to re-agitate some of the issues determined previously, being that they impermissibly seek an opinion as to the application of foreign law to the facts, rather than an opinion as to the content of the foreign law alone.
The husband submitted that his questions go to the seven points identified in Satio & Eichel (No 2) as outlined above at [4], and that the questions “are very much of a clarifying nature and do not ask the expert to express a conclusion as to any of the propositions”.
The letter of instruction to the single expert recorded:
You are not instructed to provide an opinion in your report as to whether the Propositions are correct or to apply the principles you have identified to the Propositions or to the facts of the case. Your opinion in your First Report should be confined only to the matters expressly identified above. It is possible that you may subsequently be instructed to provide a further report giving your opinion as to whether or not the disputed Propositions, or some of them, are correct. If such a further report is required this will be the subject of separate instruction.
(Emphasis added)
An evaluation of questions 2, 3, 7, 8, 11, 12, 13, 18, 19, 24, 25 and 26 posed by the husband reveals them to be generally closed and leading in their construction, seeking to expand on matters that were not the subject of instructions to the expert. By way of limited contrasting examples, questions 4, 5, and 6 are open and non-leading, not being the subject of objection. This grouping of questions pose enquires grounded from foundations of subsidiary findings that may be made, including illustrative examples.
Questions 13 and 19 are crafted from assumptions made from the content and operation of specified documents.
Questions 14, 19, and 20 seek to engage the expert in an evaluative judgment.
Questions 15, 16, 17, 21, 22, and 23, in part request the expert to engage in evaluative judgments, and in part ask the expert to apply USA law to subsidiary facts to conclude a consequent question of fact that ought to be determined by this forum, not the expert.
Each of the above questions subject to objection comprise content not supported by the rule. They are not attempts to clarify the expert’s opinion. The husband’s contention that the purpose of the questions is to enable this forum to be “better informed” in making determinations on questions of fact in the litigation is not accepted. The husband will not be permitted to pose the questions subject to objection to the expert pursuant to r 7.26.
In the event this determination is in error, no apparent prejudice is identified. The process of admission into evidence and the testing the expert opinion in the orthodox way at trial, where each party will have the opportunity to put relevant and proper questions to the expert in cross‑examination.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 16 April 2024
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