Sanders & Sanders & Ors (No 2)
[2012] FamCAFC 190
•15 November 2012
FAMILY COURT OF AUSTRALIA
| SANDERS & SANDERS AND ORS (NO. 2) | [2012] FamCAFC 190 |
| FAMILY LAW – APPEAL – Application in an appeal – where additional matter to be forwarded to expert witness. |
| Family Law Act 1975 (Cth) |
| APPELLANT: | Ms Sanders |
| FIRST RESPONDENT: | Mr Sanders |
| SECOND RESPONDENT: | U Pty Ltd |
| THIRD RESPONDENT: | CG Pty Ltd |
| FOURTH RESPONDENT: | S Pty Ltd |
| FIFTH RESPONDENT: | K Pty Ltd |
| SIXTH RESPONDENT: | Y Pty Ltd |
| SEVENTH RESPONDENT: | N Pty Ltd |
| EIGHTH RESPONDENT: | Mr EB |
| NINTH RESPONDENT: | AS Pty Ltd |
| TENTH RESPONDENT: | Mr YY |
| FILE NUMBER: | SYC | 8576 | of | 2007 |
| APPEAL NUMBER: | EA | 142 | of | 2011 |
| DATE ORDERS MADE: | 15 November 2012 |
| DATE REASONS PUBLISHED: | 15 November 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Ainslie-Wallace & Rees JJ |
| HEARING DATE: | In Chambers |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 18 November 2011 |
| LOWER COURT MNC: | [2011] FamCA 881 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Paul |
| SOLICITOR FOR THE APPELLANT: | Paul & Paul Lawyers |
| FOR THE FIRST RESPONDENT: | Mr Sanders in person |
| FOR THE SECOND RESPONDENT: | Mr YY in person |
| FOR THE THIRD RESPONDENT: | W Sanders in person |
| FOR THE FOURTH RESPONDENT: | Mr YY in person |
| FOR THE FIFTH RESPONDENT: | G Sanders in person |
| FOR THE SIXTH RESPONDENT: | No appearance |
| FOR THE SEVENTH RESPONDENT: | No appearance |
| FOR THE EIGHTH RESPONDENT: | No appearance |
| FOR THE NINTH RESPONDENT: | No appearance |
| FOR THE TENTH RESPONDENT: | Mr YY in person |
Orders
That in addition to the material ordered to be prepared and forwarded to the single expert pursuant to order 7 of the Full Court made on 26 July 2012, the parties or each of them within 21 days of this order forward or cause to be forwarded to Mr E the following documents:
(a)Valuations prepared by Mr M and dated October 2010 and February 2011.
(b) Valuations prepared by Mr B dated August 2010 and March 2011.
(c) Transcript of evidence before Cleary J.
(d)Financial accounts and income tax returns of: Sanders-A Family Trust; Sanders Family Trust; Sanders Family Trust (I) and NPA for the financial years ending 30 June 2008 to 2012 inclusive.
(e)Financial accounts of NPA from 1 July 2010 to 23 August 2010.
(f)Valuations or agreed values of the property in North Sydney owned by the Sanders-A Family Trust at 31 August 2010 and 30 June 2012.
(g)Valuations or agreed values of any properties owned by the Sanders Family Trust and Sanders Family Trust (I) at 31 August 2010 and 30 June 2012.
(h)Copy of the partnership agreement of NPA and any agreement covering the admission of partners, exit of partners and any reconstruction or reconstitution of the partnership since its formation.
(i)Details of the sale of the property at V and the basis on which $1,457,000 was paid from the proceeds to the NAB in discharge of loans.
That within 21 days of receipt of an invoice or other document setting out his required fees, the parties each pay 20 per cent of that amount to Mr E or as he might direct.
No party shall have direct communication with Mr E unless that party first seeks the consent of the other parties having identified the subject matter of the communication or if it is a direct response to a question or request of the single expert in which event the party receiving the question or request from the single expert forward to the other parties copies of the request or question within 24 hours of receiving it.
Costs of the application are reserved.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sanders & Sanders and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 142 of 2011
File Number: SYC 8576 of 2007
| Ms Sanders |
Appellant
And
| Mr Sanders |
Respondent
And
| U Pty Ltd |
Respondent
And
| CG Pty Ltd |
Respondent
And
| S Pty Ltd |
Respondent
And
| K Pty Ltd |
Respondent
And
| Y Pty Ltd |
Respondent
And
| N Pty Ltd |
Respondent
And
| Mr EB |
Respondent
And
| AS Pty Ltd |
Respondent
And
| Mr YY |
Respondent
REASONS FOR JUDGMENT
Application in an appeal
This is a matter in which, after allowing the appeal, we made the following orders relevant to this application:
…
(2) That, by consent, further expert evidence in the proceedings be given by a single expert, Mr [E], chartered account (“the single expert”).
(3) That the single expert report on the interests of the husband and wife as at 31 August 2010 and 30 June 2012 in:
(a) [NPA] (“the partnership”);
(b) [Sanders-A] Family Trust;
(c)[Sanders] Family Trust; and
(d) [Sanders] Family Trust (I).
(4) That in carrying out the exercise in Order (3), the single expert consider and, if appropriate, take account of:
(a) the effect of the discharge by the husband and wife of the NAB loans secured over the former matrimonial home in the sum of $1,457,000; and
(b) in particular whether that discharge gives rise to a debt owed by the partnership to the husband and wife, and, if so, in what proportions.
(5) That, if the single expert concludes that the value of the partnership and other entities is a net deficit, he report on the capacity of the partners, jointly and severally, to meet the liabilities of the partnership, including any monies owed to the husband and wife.
(6) That the fees of the single expert be paid in the following proportions:
(a) 20 per cent by the wife;
(b) 20 per cent by the husband; and
(c) 20 per cent each by Mr [YY], Mr [W Sanders] and Mr [G Sanders], or the corporate entities that they represent (or in such other proportions as they agree).
(7) That each of the parties file and serve upon each other party and the single expert an affidavit on or before 26 August 2012 setting out their assets and liabilities, whether held personally, or by any corporate entity or trust, or by any other person or entity on their behalf.
(8) That, upon filing of the single expert report, the matter be listed before one of the members of the Bench for any further necessary directions as to re-exercise or other orders.
…
The respondents filed an Application in an Appeal on 15 August 2012 supported by affidavits of each of them. With the consent of all parties, we propose to consider the application, the supporting affidavits and the submissions on the matter made by the solicitor for the appellant wife and determine the matters raised in chambers without further need of appearance.
The application
The application seeks the following orders:
1.That the court order that none of the parties are to supply to the Single Expert any previous reports from previous hearings with specific reference to, but not limited to, those of Mr [B] and Mr [M] with the sole exception of the Single Expert’s own previous report of 2009.
2. That the court order that none of the parties are to supply the Single Expert with any transcripts from previous hearings of any written agreements/exhibits from previous hearings.
3. That the court order that the attorneys for the wife not supply any information to the Single Expert, either written or oral, other than the supply of the wife’s current affidavit/financial statement.
4.That the court order that all parties, namely the wife, the husband, Mr [YY], Mr [W. Sanders] and Mr [G. Sanders] all be on identical payment terms with regard to the payment of fees to the Single Expert. As per the court orders of 26/7/12 in which all 5 parties are ordered to pay 20% each of the Single Expert’s fees, we request that each of those parties pay their share into the trust account of the Single Expert.
5. That the court order that the wife’s attorney cease and desist from correspondence with the Single Expert, either written or oral, in which the wife’s attorney solicits the request for receipt of documents to b supplied by him to the Single Expert and/or demands that the Single Expert take receipt of documents supplied by him with the sole exception of the wife’s current affidavit/financial statement.
The affidavits of the respondents refer to contact between the wife’s solicitor and the expert appointed pursuant to our orders of July 2012. The respondents complain about not only the fact of the correspondence between the solicitor and the expert but to the contents of that correspondence which, they say, “was blatantly structured in such a way that it would “prompt” Mr [E], without Mr [E] realising, to request information that it was clear that the Court on 26/7/12 did not want before Mr [E]…”
In his submissions in response, the solicitor for the wife said, “…I appreciate that, whilst I copied each of the respondents into my communication, it is something that I should not have done and that rather, I should have sought a joint communication from all parties. I intended to do no more than advise
Mr [E] of his appointment”.Mr E responded to the solicitor’s letter setting out his costs and fees but also the information that he required in order to prepare his valuation. That letter is dated 9 August 2012 and is annexed to the submissions of the wife’s solicitor.
Since the respondents are not lawyers and given the tensions that attend this matter, we think it appropriate to provide some brief reasons for the orders that we propose to explain to them the necessary processes involved in retaining the single expert and associated matters.
Information to be provided to the Expert
The law recognises that experts, unlike lay witnesses, have specialised knowledge, experience and training that enables them to give evidence of their opinions. Expert witnesses then sit somewhat outside the usual constraints placed on lay witnesses. It is entirely usual and, often desirable, for experts being asked to value an asset to have available to them previous valuations, not so as to limit or suggest what their own opinions should be, but to enable them to obtain a sense of the history of the business through how valuations have changed and to have regard to the basis on which earlier valuations were made. In this matter, Mr M and Mr B both prepared valuations of the same business. It is, in our view, appropriate and necessary for Mr E to have those valuations and the documents on which the opinions were based as part of the information available to him.
Further, in this matter, an issue of significance on the question of valuation was the treatment of debtors in each financial year. The evidence of both Mr M and Mr B touched on this and it will be a matter that Mr E may wish to take into account. Thus, it is proper that Mr E receive the transcript of evidence of Mr B and Mr M as well as the other documents to which we have referred.
Another connected issue relating to the question of value of the partnership is the value of related entities. No evidence of the value of those entities was considered by the other valuers. Our orders contemplate these matters be considered by the single expert.
Of particular contention however is the minute of agreement between
Mr M and Mr B tendered before the trial Judge. As our earlier reasons explain, that minute was written immediately before Mr B was called to give evidence and he was cross-examined on it as was Mr M. We are aware that in the appeal an application was made by the respondents to bring further evidence being a statement by Mr M about the nature and terms of that agreement. In short, Mr M resiled from what was said to have been the agreed position of the valuers. That application was not allowed and thus the statement of Mr M was not considered by us on the appeal. However, we do observe that Mr M gave no evidence before the trial Judge that was inconsistent with the minute of agreement nor did he assert before her Honour that the minute was not an accurate reflection of the agreement reached with Mr B.Given the controversy that attended the minute, we do not propose to direct that the minute, which became an exhibit before her Honour, be forwarded to
Mr E because, unless the controversy is resolved, it can be of little assistance to him. We do note however that the transcript of evidence of Mr M and Mr B on that issue and others will be provided to Mr E. However, we observe that any agreement between Mr B and Mr M does not bind Mr E.We propose to make orders for those documents to be provided by Mr E and the other information sought by him in his letter of response to Mr Paul all of which is consistent with our orders of July 2012.
Payment of Single Expert
As is obvious from the orders we made, it is anticipated that each party will contribute equally to the costs of Mr E. We glean from the affidavit that the respondents have some anxiety that the whole of Mr E’s fee may not be paid promptly, perhaps at all, thus leading to some delay in the proceedings. To put the matter beyond argument, we propose to make a further order requiring each party to pay their ordered share of Mr E’s fee within 21 days of him rendering an invoice for that amount.
Communications with the Single Expert
As we have indicated, some concern was expressed by the solicitor for the wife having communication with the single expert. It is appropriate that we order no party have communication with the single expert unless that party first seeks the consent of the other parties having identified the subject matter of the communication or if it is a direct response to a question or request of the single expert in which event, the party receiving the question or request from the single expert forward to the other parties copies of the request or question within 24 hours of receiving it.
Costs
We took no submissions on the costs of the application and we will reserve the question of the costs to the final hearing of the matter or its final disposition.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Ainslie-Wallace & Rees JJ) delivered on 15 November 2012.
Associate:
Date: 15 November 2012
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