Valentina & Malley
[2023] FedCFamC2F 1167
•28 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Valentina & Malley [2023] FedCFamC2F 1167
File number: MLC 3523 of 2022 Judgment of: JUDGE O'SHANNESSY Date of judgment: 28 August 2023 Catchwords: FAMILY LAW – interim procedural orders – application to adduce evidence from an adversarial expert contrary to the evidence of the jointly retained single expert – application adjourned – application for conference of experts. Legislation: Family Law Act 1975 (Cth)
Evidence Act1995 (Cth) s 144
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 7.08, 7.09, 7.10, 7.21
Cases cited: Artinos & Artinos (No 6) [2023] FedCFamC1F 652 Division: Division 2 Family Law Number of paragraphs: 24 Date of hearing: 28 August 2023 Place: Melbourne Counsel for the Applicant: Mr Gardiner Solicitor for the Applicant: Elias Hanna Family Lawyers Counsel for the Respondent: Ms Kildea Solicitor for the Respondent: Sayer Jones ORDERS
MLC 3523 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS VALENTINA
Applicant
AND: MR MALLEY
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
28 AUGUST 2023
THE COURT ORDERS THAT:
1.That by close of business 29 August 2023 the Applicant’s solicitor provide to the following documents:
(a)A copy of Mr B’s Report dated 29 March 2023 relating to the C Street, Suburb D property to Ms E; and
(b)A copy of Ms E’s Report dated 11 August 2023 to Mr B.
2.The parties forthwith instruct MR B and MS E (“the experts”) to:
(a)confer regarding the retrospective valuation of the C Street, Suburb D property as at late 2010 provided by each of them in their reports published on 29 March 2023 and 11 August 2023 respectively;
(b)endeavour to agree upon the retrospective valuation conclusion; and
(c)prepare a short and concise joint statement addressing the following questions:
(i)If practicable, their agreement as to the retrospective value of the Suburb D property as at late 2010;
(ii)If not practicable to reach agreement, then each expert set out in short summary:
A.Their opinion on the issue of valuation having regard to all relevant sales evidence and any other matters going to the formation of opinion as to value;
B.The factual basis and reasoning process in support of that opinion, including any reasons why the other expert’s opinion and reasoning process is not agreed; and
C.Identify what action, if any, may be taken to resolve this issue.
3.That the Application in a Case and Response to an Application in a Case filed 21 August and 25 August respectively be adjourned to the first day of Hearing currently listed on 11 September 2023.
4.That oral submissions regarding the question of the admissibility of adversarial evidence be limited to 10 minutes per Counsel.
5.The Applicant’s oral application to obtain an updated valuation of the Suburb F property is dismissed.
6.The Court certifies that this was a matter appropriate to brief counsel to appear this day.
7.The parties’ costs of and incidental to today’s Hearing be reserved.
AND THE COURT NOTES THAT:
A.The Final Hearing remains listed to commence on 11 September 2023 with an estimated hearing time of no more than four days.
B.A Country R interpreter has been requested for the Applicant at the Final Hearing.
C.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
D.Affected unrepresented parties may apply to the court and then to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing.
E.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
F.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
These are the settled reasons of a judgment delivered ex tempore. These reasons were delivered orally. These settled reasons have been corrected from the transcript where relevant to correct grammatical errors, to add citations and passages of authorities, and to attempt to make the orally delivered reasons easier to read. The substance is unchanged.
I have before me an application to adduce evidence from an adversarial expert contrary to the evidence of the jointly retained single expert.
The broad parameters as they appear to me are that the parties commenced cohabitation in Australia in late 2010 and they separated in November 2021. Proceedings were issued on 5 April 2022, and the parties have one child, who is 5 years old. The applicant de facto wife is 38 years old and a professional by occupation, and the respondent de facto husband is 53 years old and a professional by occupation. The proceedings are listed for final hearing before me from 11 to 14 September 2023.
On 21 August 2023, the applicant issued the application I have described. That application reads:
1. That this Application be listed for hearing before the presiding Trial Judge, Judge O'Shannessy at a date convenient to His Honour within 7 days.
2. That the Applicant serve a copy of this Application and supporting Affidavit upon the solicitor for the Respondent forthwith upon filing the Application.
3. That the Applicant be granted leave to file with the Court and rely upon the retrospective valuation report of [Ms E] of [G Company], dated August 2023 concerning the real property at [C Street, Suburb D] ("the [Suburb D] Property").
4. That pursuant to Rule 7. 08(2 )(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, the parties forthwith instruct [MR B] and [MS E] ("the experts") to:
(a) confer regarding the retrospective valuation of the [C Street, Suburb D] property as at [late] 2010 provided by each of them in their reports published in March 2023 and August 2023 respectively;
(b) endeavour to agree upon the retrospective valuation conclusion; and
(c) prepare a joint statement addressing the following questions:
(i) If practicable, their agreement as to the retrospective value of the [C Street, Suburb D] property as at [late] 2010;
(ii) If not practicable to reach agreement, then each expert:
A. State their opinion on the issue of valuation having regard to all relevant sales evidence and any other matters going to the formation of opinion as to value;
B. Set out the factual basis and reasoning process in support of that opinion, including any reasons why the other expert's opinion and reasoning process is not agreed; and
C. Identify what action, if any, may be taken to resolve this issue.
5. Such further Orders as this Honourable Court deems necessary.
6.That the Respondent pay the Applicant's costs of and incidental to this Application.
Helpfully, over the three hours this morning of debating this issue, I have been assisted by counsel and been referred by counsel for the respondent to the very recent decision of Strum J in Artinos & Artinos (No 6) [2023] FedCFamC1F 652, 8 August 2023. With the greatest respect, that decision is a very useful and thorough summary of the various authorities and principles on this point. I will not attempt to summarise that decision. It commands a full reading.
The relevant Rules pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 are as follows:
7.08 Appointing another expert witness
(1)If a single expert witness has been appointed to prepare a report or give evidence in relation to an issue, a party must not tender a report or adduce evidence from another expert witness on the same issue without the court’s permission.
(2)The court may allow a party to tender a report or 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 the contrary opinion is or may be necessary for determining the issue; or
(b)another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue; or
(c)there is another special reason for adducing evidence from another expert witness.
7.09 Cross‑examination of single expert witness
(1)A party wanting to cross‑examine a single expert witness at a hearing or trial must inform the expert witness in writing, at least 14 days before the date fixed for the hearing or trial, that the expert witness is required to attend.
(2)The court may limit the nature and length of cross‑examination of a single expert witness.
(3)Unless the court otherwise orders, a party who requires a single expert witness to attend court for cross‑examination must pay the reasonable fees and expenses of the single expert witness’s attendance.
Note:Rule 12.31 sets out the circumstances in which an amount paid for attendance by an expert at a hearing is a disbursement properly incurred in a proceeding.
Division 7.1.3—Permission for expert’s evidence
7.10 Permission for expert’s reports and evidence
(1)A party must apply for the court’s permission to tender a report or adduce evidence at a hearing or trial from an expert witness, other than a single expert witness.
(2)An independent children’s lawyer may tender a report or adduce evidence at a hearing or trial from one expert witness on an issue without the court’s permission.
…
7.21Form of expert’s report
(1)An expert’s report must:
(a)be addressed to the court and the party or parties instructing the expert witness; and
(b)have attached to it a summary of the instructions given to the expert witness and a list of any documents relied on in preparing the report; and
(c)be verified by an affidavit of the expert witness.
(2)The affidavit verifying the expert’s report must state the following:
I have made all the inquiries I believe are necessary and appropriate and to my knowledge there have not been any relevant matters omitted from this report, except as otherwise specifically stated in this report.
I believe that the facts within my knowledge that have been stated in this report are true.
The opinions I have expressed in this report are independent and impartial.
I have read and understand Divisions 7.1.4, 7.1.5 and 7.1.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and have used my best endeavours to comply with them.
I have complied with the requirements of the following professional codes of conduct or protocol, being [state the name of the code or protocol].
I understand my duty to the court and I have complied with it and will continue to do so.
The single expert retained by the parties prepared a number of reports relating to the current value of a suite of properties. A number of those properties have now been agreed to be sold, and the market will determine the value.
On the respondent's case, he brought in a swag of about six properties. He said that back in 2010 he had about $685,000 of equity. One of the factors in assessing that equity back then is the single expert valuation of Mr B, provided to the parties on 26 April 2023. Mr B opined that the value of one of the properties was, back then, $550,000. The single expert valuer had been retained on 20 March 2023. On 24 March 2023, the single expert inquired of the parties seeking further information. Following that inquiry, on 3 April 2023 and then again on 13 April 2023, the parties jointly provided further information to that valuer.
In the meantime and before receiving that further information, Mr B had inspected the property subject to this dispute in March 2023. After he had provided his report, the applicant asked questions of Mr B as to the current valuation and also as to the retrospective valuation. One of the points the applicant sought that Mr B take into account was the information about valuation of the property that had occurred after the date requested for retrospective valuation. Mr B was then asked questions by the applicant on 8 May 2023 and responded to those questions by 16 May 2023.
The parties attended mediation on 8 June 2023. On 6 July, the applicant commenced to agitate the current issue of further evidence on the basis that the single expert valuer had not referred, in compliance with the Rules, with the information provided. It is common ground that in the report provided on 26 April 2023 that the information of 3 April and 13 April was not referred to by Mr B. Mr Gardiner, on behalf of the applicant, points to that as a deficiency or a failure to comply with the Rules, which might be, he says, another special reason pursuant to 7.08(2)(c). Subsequent to that, Mr B has annexed to an affidavit both of those documents providing further information.
After seeking that another valuer provide a valuation on 6 July 2023 and this being promptly responded to, on 13 July 2023 orders were sensibly made by consent. Those orders read:
1. That the following properties be forthwith placed on the market for sale:
(a) [H Street, Suburb J];
(b) [C Street, Suburb D];
(c) [K Street, Suburb L];
(d) [M Street, Suburb N]; and
(e) [O Street, Suburb P] (“the investment properties”).
2.That for the purpose of the sale of the investment properties, the following shall apply:
(a)Both parties shall have the joint conduct of each of the sale of the Respondent’s interests in the properties;
(b)Both parties shall be copied into all correspondence with the selling agents and conveyancers, including all offers to purchase;
(c)No offer be accepted without the prior written consent of both parties; and
(d)The proceeds of sale from the Respondent’s interest in each of the above properties shall be held on trust for the parties, pending agreement.
3.That the Applicant have liberty to instruct a duly qualified property valuer to inspect the real property situate at and known as [C Street, Suburb D], subject to providing such notice to the occupying tenants as is required pursuant to Victorian residential tenancy laws.
4.That the Respondent forthwith authorise and direct the managing agent for the [Suburb D] property to grant access to the Applicant’s appointed valuer for the purposes of inspection and valuation, and provide a copy of such authorisation to the Applicant’s solicitors.
The orders provided for the respondent to make the property available so that an inspection and a valuation could be undertaken. That occurred. Subsequent to that inspection, the valuer retained by the applicant, Ms E, undertook a retrospective valuation of the now controversial property. Ms E was not provided with Mr B's single expert valuation. At this point in time, Mr B has not been provided with Ms E's valuation.
The respondent complains in his affidavit of what he sees as the snippy tone of the letter, pressing that it be agreed that the report go into evidence. The reality is that the solicitors on both sides have pretty snappily attended to matters to ensure that this matter is able to proceed to trial. There is a gap or lacuna in the applicant’s agitation of these issues from either 16 May 2023 to 7 July 2023, that being when the answers to the questions were provided, until the letter agitating another valuation or from 9 June 2023, the day after the mediation where the matter did not settle, until 6 July 2023.
The valuation of Ms E was provided to the wife on 15 August 2023 and then forwarded on to the respondent on 18 August together with a demand that it be agreed to go into evidence by 21 August or an application would be issued. The demand for attention in such short period of time no doubt irritated all concerned on the respondent's side. The other side of the coin is that this issue needed to be dealt with promptly.
Ms E's retrospective report, which is not in evidence for the trial but has been read for the purpose of this application, raises or points to six sales of property alleged to be comparable sales to the value of the subject property. Mr B, the single expert, had pointed to four sales described as comparable sales in his retrospective report released to the parties on 26 April 2023. Unfortunately, those sales overlap on one property only. Hence, at the moment, there could be debated at final hearing 10 comparable sales, where the parties only agree that one of those is an actual comparable sale, that being the property at Q Street.
The authorities point to the purpose of the single expert rules to avoid multiple experts. I raised with the parties the traditional nightmare of the past of almost every property dispute having competing valuations where, notwithstanding the integrity of valuers, it happened almost every time that the party who wished to retain the property somehow ended up with a lower valuation and the party that wanted, or was likely to get, a payout got a higher valuation. The single expert rules have, in my experience as counsel and as a judge, been a boon to litigants and have saved thousands of litigants thousands upon thousands of dollars.
The applicant points to the five comparable sales referred to by Ms E as being material within her report that, for the purposes of rule 7.08(2)(b), would be matters known to Ms E, not known to the single expert, that may be necessary for determining the issue. Ms Kildea makes the point that it cannot be inferred that the single expert does not know of those matters because they have not been referred to. At this point, properly and in accordance with the rules, Ms E's report and/or the sales that she refers to as comparable sales have not been made available to Mr B. The thrust of the authorities is that a party is not prohibited from challenging a single expert report and that this can be done by the art of advocacy in cross-examination.
The practical reality that I am faced with is that the matter is listed for four days to cover property and parenting issues and some discipline and efficiency of counsel will be required to ensure that the matter concludes in the four days available. It is also not the only matter listed in that week.
I am grateful to counsel for referring me to Strum J’s very helpful summary of the authorities in this case. They point to, over and over again, that a party can cross-examine. I am not convinced that the most efficient way to go is for Mr B to only learn of these matters, including on the basis of the comparable sales, during his inevitable cross-examination in the witness box without further order.
Ms Kildea, on behalf of the respondent, makes the point properly that the Rules are not suggestions, they are rules. Further, she points to the lack of proportionality of this dispute. The dispute between the parties at the moment, for today's purposes, is whether the value of the controversial property back in 2010 was $550,000 or $480,000. On the respondent’s case, in regard to something in the order of approximately $2.5 million of non-superannuation assets and $800,000 of superannuation, that is, a total pool of something in the order of $3 million, the initial contribution had a value of $685,000 spread over the half a dozen or so properties that he brought into the relationship. If the single expert is wrong and the property was worth $480,000, then it follows that the value of that initial contribution would be in the order of only $615,000, not $685,000. Hence, there is much weight in the point of lack of proportionality.
Nonetheless, I am troubled at the potential length of cross-examination while the competing points are explored and the single expert comes to grips with them in cross-examination. In the matter that Strum J dealt with, the competing experts had already conferred and prepared a report. I am satisfied that the more efficient conduct of the trial will proceed if Mr B is aware of in advance the substance of at least some of the matters that will be put to him. In those circumstances, notwithstanding the cost involved and in the circumstances, I am satisfied that I will be able to make costs orders if it turns out that this issue is reflective of a lack of proportionality of approach in the matter. I determine that I will order that there be a conference of experts.
I want Mr B to be provided with Ms E's report. I want the experts to confer to attempt to reach agreement and in the event they cannot, set out in short memorandum why they agree and disagree. I otherwise adjourn the application as to whether or not that will go into evidence to the morning of the first day of the trial where I propose, subject to applications at the time, to limit further debate as to whether or not there will be competing experts to oral submissions of 10 minutes for each side. I do so because I am concerned to maintain the integrity of a four-day listing and there may not be a dispute at all or, at least, the dispute between the parties may contract rather than expand.
I reserve the costs of this application today.
In terms of the oral application to revalue the matrimonial home, I am not satisfied on the evidence that there is a proper basis to do that. I think I can take notice through section 144 of the Evidence Act1995 (Cth) that there are competing views about whether the sky is falling in regard to property values with the cliff of rising interest rates or that property values have continued to or are recommencing to rise. But there is no proper evidence before me and I have got a trial in a couple of weeks and so I refuse that application.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 5 September 2023
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