Swinley and Swinley

[2007] FamCA 1579

FAMILY COURT OF AUSTRALIA

SWINLEY & SWINLEY [2007] FamCA 1579

FAMILY LAW – PROPERTY – Adversarial witness – Non party disclosure

Family Law Act 1975 (Cth)

HUSBAND: Mr Swinley

WIFE: Ms Swinley

FILE NUMBER: MLF 3499 of 2004

DATE DELIVERED: 27 November 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Brown J

HEARING DATE: 27 November 2007

REPRESENTATION

COUNSEL FOR THE HUSBAND: Mr M. Maplestone

SOLICITOR FOR THE HUSBAND: Michael L. Maplestone

COUNSEL FOR THE WIFE: Ms M.L. Smallwood

SOLICITOR FOR THE WIFE: Middletons

Orders

1. That the husband have leave to file affidavits sworn by the following deponents, by 14 December, 2007:

   (a)the husband;

   (b)Ms. P; and

   (c)Ms. A.

2. That the wife have leave to file and serve an updating affidavit sworn by her and any other affidavits on which she intends to rely by 11 January, 2008.

3. That the husband have leave to subpoena Dr. B to attend and give evidence at the final hearing.

4. That the form 2 filed by the husband on 9 November, 2007 be dismissed. 

5. That as soon as practicable Ms P comply with the notice of non-party disclosure served on her and referred to in the letter from her solicitors Kliger Partners, dated 16 October, 2007.

6. That the wife pay all reasonable costs of compliance by Ms. P with the notice of non-party disclosure, the quantum of such costs to be agreed and failing agreement, to be determined by the court on a date to be fixed.

7. That all extant applications be adjourned for hearing before the Honourable Justice Brown on a date to be advised.

8. That Ms. P have liberty to apply on written notice to the parties. 

9. That the reasons for judgment this day be transcribed and that copies be made available to the parties.

10. That pursuant to Rule 19.50 of the Family Law Rules2004 this matter reasonably required the attendance of counsel and a solicitor appearing as counsel.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3499 of 2004

MR SWINLEY

Husband

And

MS SWINLEY  

Wife

REASONS FOR JUDGMENT

1. Before the court is an application filed by the husband on 9 November 2007 in which he seeks to be permitted to tender a report and to adduce evidence at the hearing from an adversarial expert witness, being Mr V of W Company, based in Melbourne.  The background to that application is this. 

2. The parties have been involved in litigation since the wife filed an application on 8 December 2004.  There have been numerous interim applications and determinations, some of which relate to valuation of assets in the parties' possession or control.  In May 2005, Mr M was retained as the single expert witness to prepare valuations in respect of four pieces of real estate.

3. One was the former matrimonial home in S, and it is that property to which this application relates.  Two of the properties valued by Mr M have since been sold.  One of the husband's complaints is that one, valued by Mr M in May 2005 at $255,000 was sold in February 2006 for $295,000, that being a property in K.  It is submitted on behalf of the wife that the other property, in G, sold for exactly the valuation figure.  The husband earlier obtained an order for a separate adversarial valuation of his professional rooms, they being the fourth property valued by Mr M. 

4. In support of his application the husband relies upon an affidavit sworn on 7 November 2007, to which his solicitor has referred.  At three points in it there is reference to an unnamed real estate agent, employed by C Real Estate, who, according to the husband, valued the S property at $1.5 million in March 2005, $2 million in May 2007, and between $2 million and $2.2 million in October 2007.  As I made clear, I do not rely on that evidence; indeed, the solicitor for the husband properly conceded that no reliance could be placed on it. 

5. The husband's complaints fall into two general areas.  The first are complaints about the initial valuation undertaken by Mr M, in which he valued the former matrimonial home in May 2005 at $1.4 million.  The husband complains that in his report Mr M stated that the security alarm system was not serviceable, which the husband denies, and that Mr M stated that the property "lacked formal car accommodation".  In respect of that the husband deposed that there is a corrugated iron double garage with a broadly paved driveway to the garage door in the rear north west corner of the property.

6. There is no evidence that the husband was present at the home, which is occupied by the wife, on the day the valuation inspection was undertaken.  There is no evidence of the basis on which he could assert that a security system, however sophisticated, and however many zones are hardwired into it, was or was not serviceable on that particular day.  The husband obtained a shadow valuation from Mr V and it is annexed to his affidavit.  It is of note that in that affidavit, Mr. V does not refer to any garage or “formal car accommodation”.  His valuation simply describes a metal shed at the rear of the property.  In those circumstances, these matters, raised by the husband to justify his complaints about Mr M's expertise, could not be said to carry any weight.

7. The husband further complains that Mr M was asked to update the valuation in February 2007 and, after an unexplained delay (a matter of no relevance) submitted a valuation of $1.6 million, in May 2007.  That represented a 14.3 per cent increase in two years.  There is no evidence as to whether a 14.3 per cent increase is or is not within the range of increases of properties in the particular area, save reference to an article in a leading newspaper, stating that house prices in S had increased 45 per cent in the previous year.  There is no evidence of the range which resulted in that figure or the number of sales on which it was computed. 

8. In June 2007, the husband deposed, Mr V was appointed to undertake a shadow valuation.  His solicitor has explained that the husband meant by that, that he asked Mr. V to do so.  Mr. V was, unsurprisingly, not able to gain access to the property, which is occupied by the wife.  In those circumstances, the husband made an application and his solicitor appeared before Registrar Hunt on 16 July, to seek a court order for the shadow evaluation. 

9. The husband deposed that the registrar determined that the shadow valuation should be undertaken by Mr V.  Again, that is not correct.  The order made by the registrar was an order allowing Mr V to attend and view the property.  That could be precursor to the preparation of an admissible valuation, and an application to rely on it, but insofar as the husband deposed that the registrar determined that a shadow valuation should be undertaken, and that by inference he should be able to rely upon it, that was not the gist of the order.

10. I make it clear that is not how Mr Maplestone has put his case.  By bringing this application today he has demonstrated his understanding that Registrar Hunt did not give leave to adduce evidence of a shadow expert. 

11. The husband's evidence is that on 23 July, Mr V valued the property in the sum of $1.9 million.  The husband refers to earlier complaints about the valuation of the professional rooms which, as I noted, were dealt with by other orders. 

12. The court needs to consider the purpose for which the single expert rules were introduced in 2004.  They came after years of litigation in this court in which, coincidentally, the valuations advanced by a party who wanted to keep a property and thus minimise its value, were low, and the valuations advanced by a party who did not want to keep a property, and wished to maximise its value, were high. 

13. The rules set out in some detail their purpose and the aim of avoiding the partisanship, lack of clarity and expense which decades of adversarial expert evidence had produced.  That does not mean that, in an appropriate case, an order will not be made for the introduction of evidence by one or more adversarial witnesses. 

14. I note that the valuation of Mr V, which is annexed to the husband's affidavit, also annexes an email which Mr V obtained from the husband.  Unlike the very specific rules regulating the instructions to be given to a single expert, and the need for the letter of instructions to be settled by both parties, this letter came not from Mr Maplestone but from the husband himself.  It included the paragraph:

    The valuation is required as part of a property settlement in the Family Court.  There is already a valuation which is regarded as flawed and we intend to challenge the result. 

    It went on to say:

    Would you mind ringing me as soon as you have made contact as I need to convey the fact that contact has been made to my legal team tomorrow.

15. It would be hard to signal more obviously to a valuer what one was after in a valuation.  No evidence adduced by the husband supports a finding that Mr M is not an independent valuer.  The husband objects to his valuation.  As I have said, a number of the matters raised by him could not carry weight. 

16. Nothing put before me satisfies me an adversarial expert’s evidence is necessary to do justice between the parties. 

17. Counsel for the wife has advised that on 17 October, the husband's solicitors foreshadowed an objection to the valuation of chattels undertaken by Mr J much earlier in the case.  If an application is made for an adversarial expert to value them, it will be dealt with, in due course, on its merits. 

18. The form 2 application will be dismissed.

19. There will be an order for an updated valuation to be prepared by Mr M.  Some considerable time has elapsed since the initial valuation.

20. I will grant leave to the husband to subpoena Dr B, as sought, and leave to file affidavits sworn by the husband, Ms P and Ms A by 14 December.  

DISCUSSION

1. I am now advised there is a live issue relating to financial dealings between Ms P and the husband.  On 16 August this year, orders were made in respect of an application of the wife, filed on 10 August, in which she sought to join Ms P as a third party.  Upon an undertaking given by the husband on 16 August that he would call Ms P to give evidence, and upon Ms. P undertaking to be available for cross‑examination, the wife's application was withdrawn on 18 August.  Subsequently, the wife sought disclosure of documents from Ms. P. In evidence is a letter from solicitors engaged by her, Cleaver Partners, addressed to the solicitors for the wife and dated 16 October 2007, which notes receipt of the notice of non-party disclosure. 

2. In that letter, information is given about a number of documents sought.  On some occasions it is put that no document exists, in others that documents are subject to confidentiality protocols and in others detailed information is provided about categories of documents referred to in the notice of non-party disclosure.  In that letter, the solicitors for Ms P advise that Ms P had incurred estimated personal costs of $2,450 in respect of more than 30 hours work to review, consider and obtain the documents requested.  She has incurred legal and counsel fees to provide her with appropriate advice in attending to third party discovery, estimated at $3,350 of which $1,650 is counsel fees inclusive of GST.

3. The solicitor advised that, on payment of those fees, the listed documents would be made available for inspection.  Although the letter refers to “the above fees”, only one figure related to a “fee”, being counsel's fee.  It appears, on reading the letter, that Ms. P’s solicitors are seeking the whole of the costs, most of which are estimated, rather than specifically quantified and some of which apparently relate to Ms. P’s own time. 

4. There is an obligation on a person who seeks third party disclosure to pay the reasonable costs of the person complying with the notice.  This case has a long history.  The application to join Ms P was discontinued, on the basis of certain undertakings.  It was withdrawn, and has thus not been determined.  If it is necessary to bring another application to join her, I will hear it in due course.  In the meantime I propose to order that Ms. P comply with the notice of non-party disclosure.  I will order that the wife pay the reasonable costs of such notice, the quantum to be agreed and, failing agreement, to be determined on a date to be fixed.  Ms. P will have liberty to apply.  I am mindful that she neither appears nor is represented today, but given the ambit of the dispute and the passing of more than three years since the litigation commenced, any perceived prejudice can be considered if Ms. P seeks to apply. 

I certify that the preceding 24 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Brown AM.

Associate

Date: 27 November 2007