Westbrook & Westbrook
[2024] FedCFamC1F 434
•26 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Westbrook & Westbrook [2024] FedCFamC1F 434
File number: SYC 5635 of 2022 Judgment of: CAMPTON J Date of judgment: 26 June 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the proceeding was recently transferred from Division 2 on the first day of the trial after it had been listed for hearing twelve months ago – Where the foundation for the transfer to this Court was specious – Application to adduce further evidence as to the value of a real property, where a single expert opinion has already been obtained pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) – Where the husband has not made out any of the matters as identified in r 7.08 of the Rules – Application in a Proceeding dismissed – Costs reserved to trial. Legislation: Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 50
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 7, Pt 7.1, rr 7.02, 7.08, 7.36
Cases cited: Bass & Bass (2008) FLC 93-366; [2008] FamCAFC 67
Caughey & Peckham (No 4) [2024] FedCFamC1F 197
Gilford & Cavaco [2024] FedCFamC1A 55
Simonsen & Simonsen [2009] FamCA 698
Division: Division 1 First Instance Number of paragraphs: 35 Date of hearing: 25 June 2024 Place: Sydney Counsel for the Applicant: Mr Knackstredt Solicitor for the Applicant: Pearson Emerson Family Lawyers Counsel for the Respondent: Ms Gillies SC Solicitor for the Respondent: Newnhams Solicitors ORDERS
SYC 5635 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR WESTBROOK
Applicant
AND: MS WESTBROOK
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
26 JUNE 2024
THE COURT ORDERS THAT:
1.The Application in a Proceeding of the husband filed 27 May 2024 is dismissed.
2.The costs of the Application in a Proceeding filed 27 May 2024 and the Response to the Application in a Proceeding filed 3 June 2024 be reserved to the final hearing listed to commence 15 July 2024.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 pseudonyms Westbrook & Westbrook has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
By way of an Initiating Application filed 15 August 2022, Ms Westbrook (“the wife”) commenced proceedings for the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) in the Federal Circuit and Family Court of Australia (Division 2). By way of a Response to an Initiating Application filed 16 November 2022, Mr Westbrook (“the husband”) sought different orders as to the adjustment of property.
On 5 June 2023, the s 79 dispute was listed for final hearing by the Division 2 trial judge before themself over three days, commencing twelve months later, on 4 June 2024. Trial directions were made for the filing of material for that final hearing.
On 27 May 2024, the husband filed an Application in a Proceeding seeking:
1.This Application in a Proceeding be made returnable to 4 June 2024, being the first day of the final hearing.
2.The Applicant Husband be granted leave to tender and rely on evidence from [Ms B] of [D Valuations], pursuant to rule 7.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, as an adversarial expert in these proceedings, as to the value of [1 C Street, Suburb E] which is subject to the valuation reports of [Mr F] of [G Valuers] dated 30 November 2022 and 23 April 2024.
(As per the original)
These reasons determine that Application in a Proceeding.
On 28 May 2024, the following notation was made by the trial judge:
F.The Respondent’s Application in a Proceeding filed 27 May 2024 seeking leave to tender and rely on evidence from [Ms B] of [D Valuations] as an adversarial expert has been listed on 4 June 2024 being the first day of the final hearing of this matter. As the final hearing is double listed, this interlocutory application will only be heard on that day in the event that the final hearing is reached.
On 30 May 2024, upon the case management event conducted by the trial judge, the following notation was made:
B.The Respondent filed an Application in a Proceeding on 27 May 2024 seeking to rely on the evidence of an adversarial expert witness valuer who had been engaged to conduct a valuation of the property located at [1 C Street Suburb E]. Counsel for the Respondent confirmed that whilst the adversarial valuation report was not yet complete, they have received an indication that the difference in value between the two reports was approximately $520,000. In circumstances where the value of the relevant property is significant, the Court encouraged the parties to resolve the valuation dispute for balance sheet purposes, noting the likelihood of an updated valuation being required if the final hearing is not reached.
No draft joint collaborative balance sheet identifying the property, liabilities and superannuation interests of the parties has been filed. Each party filed Case Outline documents on 3 June 2024. The husband’s document incorporated a contended incomplete balance sheet. The wife’s document did not. The trial directions made 5 June 2023 record:
15.By no later than 9:30am on the first day of the final hearing, the parties are to forward the following documents to Chambers by email […]:
a.a jointly prepared trial plan (assuming the matter is reached and commences by 2:15pm on the first listed day) outlining estimated time required for each witness and final submissions; and
b.a jointly prepared balance sheet (the form can be downloaded from the Court’s website [...].
16.All parties and legal representatives engage in discussions prior to the final hearing.
The parties currently own four real properties, one of which has been sold. That sale is yet to complete. They are in dispute as to the value of one of those properties, being 1 C Street, Suburb E (“the 1 C Street property”).
The value of all of the net property of the parties available for adjustment is not less than $11,000,000. The factual disputes in the proceeding are not overtly complex.
On 4 June 2024, the first day that the matter was listed for final hearing, the trial judge transferred the matter to the Federal Circuit and Family Court of Australia (Division 1), and made the following notations:
A.The parties jointly apply for the matter to be transferred to Division 1 for a final hearing date of 4-5 days.
B.The matter today was double listed with a parenting matter and whilst that matter ultimately resolved it did reduce the amount of time that was available to hear this matter.
C.Whilst it might have been the case that on an adjourned hearing date this matter would have been given priority that would be dependent upon the matter that it might have been double listed against in the future.
D.There are presently valuation issues outstanding and one of the valuers ([Mr F]) is presently overseas. Leaving aside the question of the Application in a Proceeding filed 28 May 2024 there would be a necessity to cross examine [Mr F].
E.Notations A to D herein, reflect an agreed proposal provided to Chambers by the parties, the original of which has been placed in the Court file.’
F.Noting the reasons set out above, the Court supports the parties’ request to jointly seek a transfer to Division 1 for the following reasons:
a.By way of the Application in a Proceeding filed on 27 May 2024, the husband seeks to admit and rely on the evidence of an adversarial expert appointed to prepare a valuation of the former matrimonial home at [1 C Street Suburb E]. The wife opposes the application. Whilst the parties acknowledged they would likely require updated valuations as a result of the adjournment, the husband maintained they would still seek to press their application. The wife further confirmed they would seek to cross-examine the husband’s adversarial expert if his permitted to rely on their evidence. The Court was concerned that the final hearing of the matter could not be contained to less than five days in circumstances where the experienced counsel assisting the parties estimated they would require a day and a half to cross-examine each party, and the parties would require the single expert valuer and the adversarial valuer to be cross-examined; and
b.Whilst neither party seeks parenting orders in relation to the parties’ three minor children, who currently reside with the mother, the Court notes that both parties give evidence in their trial material as to difficulties they have experienced in relation to their co-parenting relationship. In the event either party seeks to commence parenting proceedings, whilst the property proceedings remain active, the matter would require ultimately require a transfer to Division 1.
There is much that could be said about the asserted time estimate “that the matter could not be contained to less than five days” and the assertion that there may be a parenting application. At its highest, the estimate may be four days. With efficient trial management it would be contained to three days. Why the matter was not commenced and heard for the three available days allocated and if necessary, adjourned for a single fourth day, or why if adjourned it would not have priority on the next occasion, is not explained. Any suggestion that there could be a parenting amendment after transfer to Division 1 in Sydney may appear superficially plausible but is erroneous. The appellate division of this Court has determined that there is no jurisdiction to amend a s 79 cause in Division 1 to incorporate and commence a parenting cause. Any parenting application would need to be separately commenced in Division 2 (see Gilford & Cavaco [2024] FedCFamC1A 55 at [51]–[53]; s 50 of the Federal Circuit and Family Court of Australia Act 2021 (Cth)). The current judicial resources of the Sydney Registry of this Court are limited in circumstances where three judges are yet to be replaced. Directions were made yesterday listing the s 79 dispute for hearing over three days commencing on 15 July 2024 (being the same time estimate for the trial as identified in Division 2), before an interstate relief judge of this Court, in circumstances where the parties in this matter ought not to have been required to wait for a further twelve months to have the s 79 dispute heard.
THE APPLICATION TO ADDUCE EXPERT EVIDENCE AS TO THE VALUE OF A REAL PROPERTY OTHER THAN BY A SINGLE EXPERT
Earlier in the litigation the parties obtained opinions from a single expert witness real property valuer, Mr F, as to the value of their interest in their five real properties pursuant to Ch 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). That single expert opined that the value of one of those real properties, the 1 C Street property, was $4,500,000 on 14 November 2022.
On 4 April 2024, the single expert was instructed to prepare updated valuations. His updated opinion as to the value of the 1 C Street property was completed on 23 April 2024, ascribing a value of the property of $7,500,000 as of 21 April 2024.
The husband puts into issue the updated single expert opinion of the 1 C Street property for the purposes of the trial. The single expert’s opinions as to the current value of the remaining real property interests of the parties are not in dispute.
In support of his relief sought, the husband relies upon some relevant paragraphs of his trial affidavit filed 23 May 2024, his affidavit filed 27 May 2024, the affidavit of Ms B, a real property valuer he alone instructed, filed 3 June 2024, and a tender bundle, being Exhibit 1.
The husband’s affidavit annexes questions, dated 14 May 2024, directed to the single expert Mr F purportedly seeking to clarify his opinion as to the updated value of the 1 C Street property pursuant to r 7.26. The single expert’s answers to the questions, dated 3 June 2024, are contained in Exhibit 1.
Ms B’s affidavit records that on 14 May 2024 she received instructions from the husband by way of a letter from her solicitors requesting an expert valuation of the 1 C Street Property, and a critique of Mr F’s updating report. Ms B was also provided with the questions directed to Mr F by the husband’s solicitors pursuant to r 7.26. Ms B annexed to her affidavit a document entitled “Valuation Report” dated 27 May 2024. In that document, she opined that the value of the 1 C Street property as at that date was $6,970,000. Her critique of the single expert’s opinion of the subject property was not put into evidence.
On 3 June 2024, the wife filed a Response to the husband’s Application in a Proceeding seeking that it be dismissed and that the husband pay her costs of, and incidental to, the Application. She relied on her affidavit filed on 3 June 2024 in support of her Response.
CONSIDERATION
Rule 7.02 of the Rules specifies the purpose of Pt 7.1. One purpose is to ensure that, if practical and without compromising the interests of justice, expert evidence is given on an issue by one single expert witness (see r 7.02(c)). Rule 7.02(e) records another purpose of the part is to enable a party to apply for permission to tender a report, or adduce evidence from, an expert witness appointed by that party if it is in the interests of justice to do so.
Rule 7.08(1) of the Rules provides that if a single expert witness has been appointed to prepare 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. Rule 7.08(2) provides that the Court may allow a party to tender a report or adduce evidence from another expert witness on the same issue as the single expert witness if it is satisfied as to any of the matters set out in r 7.08(2) have application. They are 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.
In Simonsen & Simonsen [2009] FamCA 698, Murphy J referred to the decision of the Full Court in Bass & Bass (2008) FLC 93-366 and said:
12The general thrust of the Rules has been referred to by the Full Court in Bass & Bass (2008) FLC 93-366. As the court in that case made clear, the adducing of evidence from an additional expert, is not something which ought occur in the usual course, or simply by application made by a party. It simple terms, the word “special” as used in rule 15.49 has real meaning.
(Emphasis added)
That said, the Full Court has consistently not read down the circumstances where there are genuine issues in the proceedings that warrant the adducing of probative expert evidence. As such, the view often taken is that the permission rule must not be applied in a way that results in what may be a significant issue in the proceedings being foreclosed from effective challenge, or in a way that would compromise the interests of justice in preventing potentially relevant evidence being placed before the Court.
The expertise of Ms B does not substantially differ nor exceed those of Mr F.
The husband gives evidence that there were “errors” in Mr F’s valuation, including:
296.On 30 November 2022, [Mr F] valued [1 C Street] at $4.5 million. On 23 April 2024, being 16 months later, Mr F valued [1 C Street] at $7.5 million. [Mr F] increased his valuation of [1 C Street] by 67%, however only increased his valuation of [1 H Street] by 19% and did not change his valuation for [2 H Street] at all. The three properties are located on the same block in [Suburb E]; they share boundary fences.
297.The land values as published by the NSW Valuer General on the land tax assessments show that as [late] 2022, [1 C Street] was valued at $4.5 million. This is consistent with [Mr F’s] valuation at $4.5 million on 30 November 2022. The NSW Valuer General’s land values as at [late] 2023 value [1 C Street] at $4,710,000, being a 5% increase from the prior year. [Mr F’s] valuation as at April 2024, is $2,790,000 more than that value…
298.I disagree with [Mr F’s] use of [2 C Street, Suburb E] as a comparable sale. [2 C Street] is far superior to [1 C Street]. [2 C Street] is the one and only [housing of its kind] with an unrestricted view […]. It is one of a kind and was marked as [unique] and the ‘last remaining original home in [the area].’
299.There are only 5 properties on [C Street] with a comparable […] view to [2 C Street], namely the properties at [3 C Street], which are all […] north-facing properties with unobstructed views […]. Of those 5 properties, only 3 are houses […]. Of those 3 houses, only [3 C Street] is on a level block. Only [3 C Street] remains undeveloped, with the other two houses […] having had substantial renovation works.
300.Our [1 C Street], while [a few] doors up, has no views. It has no […] views or any views [in any direction]. It overlooks [another building] and carpark. It does not have any development potential to achieve […] views. It does not have a private backyard […]. [2 C Street] has a driveway, which [1 C Street] does not.
There were some differences between the reports of Mr F and the Ms B. Mr F describes the property as in “fair to poor” condition, whereas Ms B describes the external condition as “very poor to dilapidated”, and the internal condition as “dated and very poorly presented”. That said, each of Mr F and Ms B are broadly not in dispute as to the locational aspects, surrounding developments, title, zoning services and building description of the subject property.
Significantly, each expert agrees that the direct comparison methodology of valuation is appropriate. They each apply a discount factor by way of subjective assessment of detriments including the scope of the beach view and the shadowing of nearby developments to support a square metre value of the subject property.
The husband’s submissions focused on the content of Mr F’s answers to specific questions pursuant to the Rules, rather than the content of Ms B’s opinion in comparison to that of Mr F. The content of the questions posed to Mr F arising from his report were anchored from the husband’s affidavit evidence and contentions as identified earlier in these reasons, as opposed to that contained in Ms B’s opinion. The import of the husband’s submissions was that he was dissatisfied with the content of Mr F’s responses to his clarifying questions.
The husband has not established that Ms B’s report constitutes a “substantial body of opinion contrary to the opinion given by the existing expert”. Ms B merely expresses a differing opinion.
The husband has not established on the evidence that there were matters not known to Mr F, or that cannot be put to Mr F, including by way of differing comparable sales or attributes to and of the subject property generating discounts, that are known to Ms B. The differing comparable sales recorded and relied upon in her report are source from well-known data bases. She does not opine as to inspecting them. The difference between the opinions of the experts drills down to the weight to be afforded to differing attributes of the subject as exposed by comparable sales and from discounts to those assessments by way of specified detriments impacting on it.
That difference between the respective opinions is $530,000, being about 7 per cent of Mr F’s value or 7.5 per cent of Ms B’s value. This differential, when considered against the value of the property of the parties, does not constitute a special reason as envisaged by the rule to grant leave to adduce evidence from other than a single expert. The mere fact that two qualified valuation experts have reached diverging conclusions as to the value of a property does not amount to a special reason (see Caughey & Peckham (No 4) [2024] FedCFamC1F 197).
The husband expressed a concern as to the capacity to test the single expert’s reasoning that he contends was not adequately explained, and to challenge his concluding opinion. He will have that opportunity by way of the cross-examination of the single expert at trial. There is no reason to conclude that the single expert will not consider revising his opinion, if and when effectively tested at trial.
The husband seeks to retain the 1 C Street property. The wife, at this point, agrees that it ought to be transferred to the husband. If it is established, as asserted by the husband through cross‑examination, that there are fundamental “errors” in Mr F’s valuation, as opposed to legitimate differences of professional opinion, the Court may consider ordering a sale of the subject property to avoid an uncertainty as to its value thereby generating inequity.
The husband’s Application in a Proceeding will be dismissed. This will not prevent what the husband says is a significant issue in the proceedings being foreclosed from effective challenge at trial. It will not compromise the interests of justice in preventing potentially relevant evidence being placed before the court at that trial.
Submissions were not made as to costs of the Application in a Proceeding. It is appropriate that the costs of both parties be reserved to the trial.
For all of the above reasons, I make the orders as set out herein.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 26 June 2024
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