Smith and Smith

[2008] FamCA 1213

FAMILY COURT OF AUSTRALIA

SMITH & SMITH [2008] FamCA 1213

FAMILY LAW – PROPERTY – Expert evidence

APPLICANT: Mr Smith

RESPONDENT: Ms Smith

FILE NUMBER: ADC 3585 of 2007

DATE DELIVERED: 16 December 2008

PLACE DELIVERED: Adelaide

JUDGMENT OF: Strickland J

HEARING DATE: 16 December 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr B.W. McQuade

SOLICITOR FOR THE APPLICANT: David Fidler & Co

COUNSEL FOR THE RESPONDENT: Mr D.R.L. Whittle

SOLICITOR FOR THE RESPONDENT: Caldicott & Co

ORDERS

1. That pursuant to section 11F of the Family Law Act, the parties attend a conference with Dr A, family consultant, at 9:30am on 19 January 2009 and that the parties arrange for the child T born … October 1996, to attend that conference for the purposes of conferring in relation to the refusal by the child to spend time with her father.

2. That by 4:00pm on 24 December 2008 the wife file and serve a minute of order setting out all final orders that she seeks in relation to children's issues, property settlement and child support.

3. That the Application in a Case filed by the husband on 1 December 2008 be dismissed and removed from the active pending cases list.

4. That Mr C, accountant, prepare an updated valuation of S Pty Ltd and that, for the purposes of preparing that valuation, he be provided with the valuation undertaken by H Company of 10 November 2008, such other statements of position as may be required by Mr C and, if possible, the financial statements of S Pty Ltd for the financial year ended 30 June 2008.

5. That the updated valuation report of Mr C be filed and served by 9 February 2009.

6. That Mr K be appointed as the single expert to value the G vehicle which he has previously valued, on the basis of that G vehicle having a compliance plate, with his valuation report to be filed and served by 9 February 2009.

7. That the husband and the wife file and serve their affidavits of evidence in chief by 4:00pm on 9 February 2009.

8. That the husband file and serve the affidavits of evidence in chief of his mother, Mr N, Ms S, Mr F, and Mr H by 4:00pm on 9 February 2009.

9. That the wife file and serve the affidavits of evidence in chief of Ms G, Mr O,  accountant, Mr X, accountant, and Ms W by 4:00pm on 9 February 2009.

10. That the affidavit of evidence in chief of the husband's mother be limited to the issue of any debts either currently due to her by the husband or any debts that have previously been due but have been repaid by the husband.

11. That the affidavit of evidence in chief of Ms G be limited to the issue of the allegations made by the husband in relation to the consumption of alcohol by the wife.

12. That the affidavit of evidence in chief of Mr O be limited to the issue of the allegation made by the wife that not all motor vehicles were recorded in the books of the business operated by S Pty Ltd.

13. That leave is granted to the wife to issue a subpoena to the Registrar of Motor Vehicles seeking the production of documents in relation to the motor vehicles identified in the list annexed to this order, such subpoena to be returnable before a Registrar of this court at 9.30 am on 14 January 2009.

14. That this trial be adjourned part‑heard to resume at 9:00am on 16 February 2009 with a time estimate of one hour.

IT IS NOTED that publication of this judgment under the pseudonym Smith & Smith is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 3585 of 2007

MR SMITH

Applicant

And

MS SMITH

Respondent

EX TEMPORE REASONS

1. This is a matter that commenced before me yesterday as a trial.  It involves issues both in relation to children and financial matters.

2. The children's issues are automatically captured by Division 12A of the Family Law Act. The parties have also consented to the financial issues being heard pursuant to Division 12A, and, as I said yesterday, I thank them for that. That is a very positive step. It allows this case to be heard more expeditiously than otherwise. Thus both matters are proceeding under Division 12A.

3. In relation to the child issues, unfortunately we reached a stage where I considered that there was no value in pursuing the less adversarial process.  The parties were given the opportunity to use that process to progress the matter and to bring to finality the dispute in relation to their children, but that turned out to be impossible.  I will not repeat what I said about that yesterday.

4. In relation to the financial issues, unfortunately I was not able to complete addressing all matters that needed to be considered yesterday, and the matter has continued today, and I thank the parties and counsel for making themselves available today to conclude this part of the trial.  There are a number of matters that have been raised in relation to the financial issues, and I will deal with those individually in a moment.

5. Returning to the children's issues, Ms L has provided a report on the joint instructions of the parties, and that report is annexed to the affidavit of Mr Douglas filed on 13 November 2008.  I raised with counsel this afternoon that I considered it inappropriate for Ms L to annex to her report notes, both typewritten and handwritten, from one or both of the parties.  Mr Whittle tells me it is solely from the wife, but that does not affect the concern I have about it.  As I say, I consider it inappropriate for Ms L to annex those notes.  They are certainly notes that can be and should be - and obviously now are - available to the parties and can be used to cross‑examine Ms L or the other party, if so advised, but they should not be annexed and I propose to remove those notes from the report. Both counsel have indicated their agreement with that course. 

6. Next, one of the children, namely T, is not currently seeing her father, and that has been the case for some time now.  Attempts have been made at counselling to try and resolve the issues, but those attempts have been unsuccessful.  However, as I said earlier today, on what I was told I was not satisfied with those attempts to resolve that issue.  There was a dispute within a dispute with complaints and concerns that one of the counsellors was appointed by one of the parties, and the other party allegedly not being prepared to attend upon that counsellor which clearly militates against a resolution of the dispute involving T.  Counselling was certainly a good idea, but it seems that what was put in place was not helpful.

7. What I have raised with the parties today through their counsel is making an order pursuant to section 11F of the Family Law Act for the parties to attend upon Dr A, the Family Consultant who has a prepared a parents and issues assessment in this case, and for T also to attend that conference to see if Dr Q can advance that matter. She can counsel the parties and assist them to negotiate and resolve the issue - and also speak with T, obviously, for that purpose - but if necessary, she can refer the parties to outside counselling, which might provide a better outcome than the attempts that have been made at counselling to date.

8. I am pleased to say that both parties have indicated their willingness to be involved in that process.  At this stage, all I am looking for is Dr A to see the parties on one occasion, and then it will be up to Dr A as to whether she is able to pursue the matter or refers the parties to an outside agency.

9. In terms of the formal applications that are before the court, there is the wife's initiating application filed on 29 June 2007 and the husband's response filed on 13 August 2007.  The husband complied with the orders made by the Registrar for a minute of order to be prepared and presented for the purposes of the first day of the trial in this matter.  However, the wife did not.  The wife needs to set out the orders that she seeks, both by way of property settlement and in relation to the children.  Separate to that, Mr McQuade has made an oral application today for leave to amend the wife's application to include a departure order in relation to child support and an order for the payment of a lump sum by way of child support.

10. I need just to mention something about that.  There was an application in a case filed by the wife in November 2007 in the Federal Magistrates Court in which leave was sought to amend the application to include the orders that I have just referred to.  That application was ultimately heard in the Federal Magistrates Court on 9 January 2008, and on that day an order was made giving leave to amend the initiating application within 14 days in the terms sought.

11. That order was not complied with, and obviously the wife is now out of time to comply with it, and that is why I say that, in effect, Mr McQuade has now made an oral application for leave to amend. I am prepared to receive that application, and, although the husband does not consent to me granting leave, I have indicated that I am prepared to do that. My reason for that is that there is ample time for the husband to respond and to properly deal with and prepare his case in relation to that.  Thus there is no prejudice to him in me giving leave.

12. As discussed with counsel, I propose to allow the wife to file just a minute of order setting out the current orders that she seeks, including any orders that she seeks in relation to child support, because that is how the husband has dealt with the orders he now seeks.

13. There is an Application in a Case before me filed by the husband on 1 December 2008 seeking leave to adduce evidence from Mr B at trial in relation to the value of the former matrimonial home situated at C.  There is an affidavit filed in support of that application on the same date.  It is an affidavit of the husband's solicitor Mr Douglas.  The application was made pursuant to Rule 15.49 of the Family Law Rules.  That application is opposed.

14. I revisited the application today as a matter that needed to be determined, and Mr Whittle indicated that his client's position was that he sought an adjournment of that application to have Mr B provide a critique of the single expert witness's report, and that is a Mr I’s report, and to also allow some time to pass to see if a particular sale of which he is aware is settled and  which may provide better evidence and more up‑to‑date evidence of the value of the subject property, and to also consider seeking leave to extend the time to ask further questions of Mr I in relation to his report.  That application to adjourn is opposed. 

15. In my view, the application of 1 December was premature.  The supporting affidavit does not provide any basis for leave to be granted.  Looking at the affidavit - and in particular paragraph 8 - it seems that the sole reason identified in the affidavit for seeking the leave is the significant difference between the values attributed to the former matrimonial home in Mr B’s report, which is $890,000, and in Mr I’s report, which is $740,000.

16. Mr Whittle, in submissions, has elaborated on that and said, for example, that, given that large discrepancy it would be in the interests of justice to adjourn the application to allow the husband to do the things which I indicated he sought time to attend to, rather than dismiss this application here and now.  As I understood it, Mr Whittle even put to me that there was sufficient in the affidavit and in that submission to grant the leave today if pressed.

17. Mr McQuade, as I say, on behalf of the wife has opposed the adjournment and sought a dismissal of the application.  He has provided me with a list of authorities, some of which I am familiar with, some of which I am not.  The issue is, whether rule 15.49 of the Family Law Rules is satisfied. Subrule 15.49(2) provides that:

    The court may allow a party to adduce evidence from another expert witness on the same issue if it is 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.

    Pausing there, there is absolutely nothing in the affidavit in support of the application which suggests that there is a substantial body of opinion contrary to the opinion given by the single expert witness.  Continuing:

    (b)Another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue.

    Pausing there, again there is nothing - and I have not been referred to anything - in the affidavit which would satisfy that paragraph.  Mr B has provided a valuation on instructions from the husband and, relevantly, the husband's solicitors did ask certain questions, as they are entitled to under the rules, of Mr I in a letter of 26 November 2008, which is annexed to the affidavit filed by Mr Douglas in support of this application.  There are three questions that were asked.  One was - and I will summarise - "Here is the report of Mr [B].  Can you please comment in respect of the difference between the valuations."  The second question was, "Please confirm that, apart from [a property in the area of the former matrimonial home], there were no comparative sales in the area for 2008."  The third was, "Here is a copy of sales advertisements for [another property in the area], currently on the market.  Would this sale alter your view?"

18. Mr I, I am told, has not responded, although of course this letter was only sent on 26 November 2008.  The time frame by which the expert needs to respond is within 21 days of receiving it.  Some criticism was made at Mr I not responding, but I consider that is not justified, given that the 21 days may not have yet expired because the date of receipt of the letter is unknown, and in any event it is not yet so out of date that the husband might still not expect a response from Mr I.

19. In any event, the point of that was not to raise any issue about Mr I but to highlight the questions that were being asked at that time of Mr I in relation to Mr B’s report and relating that back to Rule 15.49(2).  These questions do not raise issues that could justify a claim that paragraph (b) is satisfied in this case.  Indeed, the first question at least was an entirely inappropriate question and was not justified by the rules.

20. Finally, paragraph (c):

    There is another special reason for adducing evidence from another expert witness.

21. Without saying it, I am assuming that that is what Mr Whittle is relying upon here, the special reason being that there is such a wide discrepancy between the valuations that it would be in the interests of justice to allow Mr B’s evidence to be led and for the issue of the valuation then to be determined in an adversarial way at trial.

22. However, in my view, that goes against the principles supporting the expert evidence rules themselves.  Just because there is another valuer who puts a different figure and just because that figure is far higher than the valuation of the single expert, in my view, does not create a special reason for adducing that evidence from the other expert.

23. The whole purpose of the expert evidence rules was to avoid the need to hear evidence from adversarial experts, each having their own opinion about a value of a particular item.  The process is that a single expert is either agreed upon by the parties or a single expert is ordered by the court.  In this case, as I understand it, Mr I was agreed, and on that basis he provided his report.  The husband did not like it.  He got his own valuation.  The valuation has come out higher.  There is nothing unusual or special or significant or different from the run‑of‑the‑mill case in that scenario.

24. I accept there is wide difference between the two figures, but in my view that alone should not permit an adversarial expert to give evidence at trial.  That does not prevent Mr I being cross‑examined on the basis of what is in Mr B’s report, and a decision can then be made about that at the end of the day.  Just because Mr I is a single expert does not mean necessarily that his valuation will be accepted by the trial judge.  If he is to be made available for cross‑examination, as he may be in this case, then the evidence has to be assessed and a decision made about the acceptance or otherwise of that single expert's evidence.

25. For those reasons, I propose to dismiss the application.  That said, it seems to me that it would be open to the husband to bring a further application, if so advised, after the husband explores the avenues that Mr Whittle identified to me that the husband wants to in terms of, as I say, a critique, awaiting the settlement of a further sale, and in that way gathering evidence which may - and I am making no finding about it yet, because the evidence is not before me - lead to a different result in terms of any application to call an adversarial expert.

26. To repeat, I am only making this decision on the evidence that is before me, and in my view the affidavit which has been filed simply does not satisfy the requirements of subrule 15.49(2). 

27. The next issue I want to turn to is an issue arising from the balance sheet, and that is item 4 of the balance sheet.  Mr C, accountant, was instructed as a single expert to provide a valuation of S Pty Ltd.  That valuation is to hand, although it has not yet been filed, and it provides a valuation of that entity as at 30 June 2007.

28. There is a need to update that valuation, and it is agreed today that Mr C will be instructed to do that.  It is also agreed that he will be provided with a valuation of various motor vehicles which has been undertaken by H Company and dated 10 November 2008. 

29. I am also told today that the husband will shortly be instructing an accountant to prepare the 2007/2008 financial accounts for the business.  The question, though, is when that will be attended to.  All I can say is that if they are completed in sufficient time obviously Mr C should be provided with those accounts, because they - prima facie at least, from my lay viewpoint - might assist Mr C in completing his updated valuation.  At this stage I am expecting Mr C to complete that update in time for the continuation of the hearing, which I will set for 16 February 2009.

30. The next issue is in relation to the valuation of a G vehicle.  The G vehicle has been valued by Mr K, as I understand it, on the basis that it does not have a compliance plate.  The wife's case is that it does have such a plate.  Thus, a valuation needs to be undertaken of it as though it does have a compliance plate.

31. I also propose to make orders for the filing of affidavits by the witnesses to be called in this case.  As I have said, either party can make an application to call further witnesses - there is Ms R that Mr McQuade has foreshadowed, Mr McQuade, for example - or to expand the topics of the evidence to be given by any of the witnesses identified already.  I am also going to leave Mr WN for the moment, because I will make an order about a subpoena for him once we have a date for the conclusion hearing.

I certify that the preceding 31 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered 16 December 2008.

Associate