Wilson and Westcott
[2013] FamCA 766
•10 October 2013
FAMILY COURT OF AUSTRALIA
| WILSON & WESTCOTT | [2013] FamCA 766 |
| FAMILY LAW – EVIDENCE – Expert evidence – where the husband applied for leave to use an adversarial expert – consideration of whether the interests of justice would be adversely affected by refusing the husband’s application - application dismissed. |
| Family Law Rules 2004(Cth) r 15.43, 15.44, 15.49, 15.54, 15.59, 16.65 |
| Re Ronald Neville Mcgorm Ex Parte: the Co-Operative Building Society of South Australia [1989] FCA 87 (30 March 1989) Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (14 September 2001) Knight & Knight [2007] FamCA 263 (14 February 2007) Gemmell & Gemmell [2009] FamCA 29 (2 February 2009) Dasreef Pty Ltd v Hawchar [2011] HCA 21 (22 June 2011) |
| APPLICANT: | Mr Wilson |
| RESPONDENT: | Ms Westcott |
| FILE NUMBER: | MLC | 5835 | of | 2011 |
| DATE DELIVERED: | 10 October 2013 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 30 September 2013 and 4 October 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Holmes |
| SOLICITOR FOR THE APPLICANT: | Lander and Rogers |
| COUNSEL FOR THE RESPONDENT: | Mr Strum |
| SOLICITOR FOR THE RESPONDENT: | Kennedy Partners |
Orders
That the husband’s application in a case filed 18 September 2013 be dismissed.
That the husband and wife forthwith instruct Mr B of C Accountants to update his November 2012 report of the value of the wife’s interest in the business known as “D Pty Ltd” and any other business in which the wife has an interest as director or shareholder on the following basis:-
(a)The wife provide to Mr B financial records of her said business interests as may be reasonably requested by him or by the husband;
(b)Either party may make submissions in writing to Mr B with respect to the said valuation; and
(c)The stock of “H Pty Ltd” owned by the said business interests of the wife (the wife’s stock) are to be independently valued in accordance with the terms of paragraph 3 hereof.
That the husband and the wife do forthwith engage Mr E of E Pty Ltd of F Street, Suburb G in the State of Victoria or such other suitably qualified valuer as the parties may agree, as the jointly appointed single expert to assess the current market value of the wife’s stock on the following terms:-
(a)The wife provide to Mr E (or such other agreed expert) such information and documents, and allow Mr E to carry out such inspection of the wife’s stock as Mr E may reasonably request; and
(b)The husband and the wife do share equally in the cost of the Mr E’s valuation;
(c)At the election of the husband and at his sole expense, he be permitted to instruct Mr E (or such other valuer as the parties may agree) to consider and undertake an historical valuation of the stock of “H Pty Ltd” as at 30 June 2013 and/or any earlier financial year.
That within fourteen (14) days the husband do discover to the wife and make available for inspection (subject to the documents already having been provided or an indication given that they are not able to be provided):-
(a)Documents indicating the current value of the shareholdings held by the husband in public companies; and
(b)Documents indicating the shares in public companies bought and sold by the husband since 1 June 2007.
That within fourteen (14) days the wife do discover to the husband (subject to the documents already having been provided or an indication given that they are not able to be provided):-
(a)Each and every document set out in the letter by I Pty Ltd to Lander and Rogers dated 18 September 2013;
(b)Items 1, 4 (NAB Personal Account for the wife), 6, 7, 8,9, 10, 11, 13, 14 and 15 of the letter requesting discovery forwarded by Lander and Rogers to Kennedy Partners on 1 July 2013.
That not less than fourteen (14) days before the commencement of the final hearing, at their separate election, the husband and the wife are at liberty to appoint their own separate accountant as a single expert to report on the issues of the possible capital gains taxation payable arising from the proposals of either party in respect of the J Town property.
That the costs of the husband and the wife in respect of this application be reserved.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Wilson & Westcott has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT |
FILE NUMBER: MLC 5835 of 2011
| Mr Wilson |
Applicant
And
| Ms Westcott |
Respondent
REASONS FOR JUDGMENT
Introduction
By application in a case filed 18 September 2013 (the application), the husband seeks orders in the following terms:-
1.That leave be granted for this application to be heard and dealt with by the Court on 30 September 2013 pursuant to the order of this Court made 21 August 2013;
2.That pursuant to Rule 15.49 (1) of the Family Law Rules (2004), the husband have leave to adduce evidence from [Mr K], Chartered Accountant, in relation to the wife’s business known as [D Pty Ltd], and the report of [Mr B] the appointed single expert witness herein.
The said application was supported by an affidavit of Mr L (the husband’s solicitor) filed 18 September 2013 (the L affidavit). There was also filed a draft Minute of Order which became the focus of some discussion during the interlocutory hearing.
The wife opposes the husband’s application, seeking leave by the husband to adduce evidence from Mr K, Chartered Accountant of I Pty Ltd by way of separate adversarial evidence. In particular, paragraph 2 and 3 of the response are directly relevant to the gravamen of the application. The wife seeks the following orders:-
2.That the husband and the wife forthwith instruct [Mr B] of [C Accountants] to update his November 2012 “report” (my addition) of the wife’s business known as “[D Pty Ltd]” and any other business in which the wife has an interest as a director or shareholder, on the following basis:-
2.1The wife provides to [Mr B] financial records of her said business interests as may be reasonably requested by him or by the husband;
2.2Either party may make submissions in writing to [Mr B] with respect to the said valuation; and
2.3The stock of “[H Pty Ltd]” owned by the said business interests of the wife (the wife’s stock) are independently valued in accordance with the terms of paragraph 3 hereof.
3.That the husband and wife forthwith engage Mr E of E Pty Ltd of F Street, Suburb G in the State of Victoria as the jointly appointed single expert to assess the current market value of the wife’s stock on the following terms:-
3.1That the wife provide to [Mr E] such information and documents, and allow [Mr E] to carry out such inspection of the wife’s stock, as [Mr E] may reasonably request; and
3.2The husband pay for [Mr E’s] valuation in the first instance with liberty to seek contribution from the wife at the final hearing.
The matter is listed for trial in the week commencing 25 November 2013. Accordingly, the application needs to be determined at the earliest opportunity. Counsel for the parties both indicated that the retention of the current trial listing is a matter of priority for the parties.
Subject to the clear dispute between the parties as to the value of the wife’s interest in the business “D Pty Ltd” (D) the balance of the property held by each of the parties and as represented on the balance sheet provided to the Court on 21 August 2013, would not appear to be overly contentious.
The appointment of the single expert to value D has its genesis in the consent order made by Young J on 30 July 2012. The following order was made:-
7.That the parties sign all documents and do all things to appoint [Mr B] of [C Accountants] or such other valuer as may be agreed between the parties as the jointly appointed single expert for the purpose of valuation of the business “[D Pty Ltd]” and any other business in which the wife has an interest as director and/or shareholder (excluding [M Pty Ltd]) with the cost of the said valuation to be met equally by the parties.
The matter then came before me on 21 August 2013 at which time orders were made listing the matter for final hearing commencing Monday 25 November 2013. Counsel on that occasion raised an issue in respect of the appointment of the single expert and I made orders that required any application in a case seeking to discharge the appointment of a single expert (or for the tender of a report from a separate expert) be filed by 11 September 2013 for hearing on 30 September 2013. It is against a background of those orders and the application in a case and response that the proceedings were heard.
Background
I have referred to the balance sheet which was provided to me at the hearing on 21 August 2013. The purpose of that document was not necessarily to require the parties to commit to the valuation of their separate legal and equitable interests in property, but rather to identify any outstanding issues of contention between the parties and put in place a procedure to determine, either by way of agreement or otherwise, outstanding valuation issues.
The wife asserts that the value of her interest in D is $100,000, whereas the husband is uncertain but considers that the value could be as high as $730,000. Accordingly, the difference at least on the assertions of each of the parties is significant and remains a matter of dispute notwithstanding the publication of the report of Mr B dated 29 November 2012 (the B report).
It is common ground that the husband was not satisfied with the valuation outcome as determined by Mr B and after various meetings between the accountants for the husband and the wife, the husband’s accountant Mr N published a report dated 23 July 2013 which raised issues in respect of the alleged resistance to the provision of documents that would go directly to stock control. The short summary is that the husband alleges that the determination and ultimately the value of stock maintained by the business in each of the relevant financial years is inadequate, and if properly established, may have a direct consequence on the adjusted gross profit of the business, namely that the business may in fact be trading profitably with the result that a different valuation methodology would be used, in particular, the capitalisation of future maintainable earnings rather than an asset backing valuation ultimately adopted by Mr B.
There was no substantial reliance upon the report from Mr N other than that it provided the catalyst for the husband to seek a preliminary report from Mr K of I Pty Ltd (the K report).
It is the preliminary views expressed by Mr K in his report that promotes the basis for the application for leave pursuant to Rule 15.49 of the Family Law Rules (2004) for the husband to adduce separate adversarial evidence as to the value of the wife’s interest in D.
Pursuant to the Rules (and by consent of the parties notwithstanding a late request), questions were put to the single expert on 24 June 2013 with a response from the single expert on 1 July 2013.
The questions are set out as annexure ‘DMG3” to the affidavit of Mr L filed 18 September 2013 (the L affidavit). The matters covered by the questions were of relatively narrow compass. They focussed on the following matters:-
·The extent of information provided to Mr B by the wife (in particular documents evidencing the “point of sale system and “retail manager data files”;
·Whether Mr B had been provided with a “discount report” directed to the average discount given to stock items;
·If the EBIT (earning before interest and tax) for the business were adjusted to significantly higher earnings, would the valuer adopt a future maintainable earnings valuation methodology and if so, what would be the appropriate multiplier to be applied;
·Matters relating to the inter-relationship of D Pty Ltd (D), O Pty Ltd (O) and H Pty Ltd (H).
Following the preparation of the K Report, the husband’s solicitors sought the consent of the wife’s solicitors for Mr K to be a separate adversarial witness for the husband. There was no agreement by the wife’s solicitors to that proposal. Even if there had been, leave pursuant to Rule 15.49 would still have been required.
DMG7 and DMG8 as annexures to the L affidavit proposed that Mr B update his valuation and that any further documents that may be required (or referred to by Mr K) be presented and that in any event there needed to be a valuation of the stock comprising the business. Whilst the wife’s position, according to her solicitors, is that such a valuation is not required, given that it appeared to be the focus of the K Report, then it is a process that should be undertaken as a necessary precursor to any update report. The summary of the response is significant in that the husband considers that the stock level issue is but one of the complaints with the B Report, there are other matters of relevance. For completeness I set out the entirety of paragraph 14 of the L affidavit:-
14.Now produced and shown to me and marked with the letters DMG-7 and DMG-8 are the true copies of the letter to Kennedy Partners dated 11 September 2013 and their letter of response 13 September 2013. The suggestion as to a way forward by the wife’s solicitors cannot do justice to the husband’s position herein as it wrongly presupposes that [Mr B’s] report is only being challenged as to the stock level issue. The stock level issue is only one problem. There are a number of other relevant issues including the stewardship of the business, the involvement of the [O] business, the true figures as to the operating profit and the actual multiplier to be used. None of this is addressed by the solicitors for the wife in their letter.
The B Report
Mr B publishes his report dated 29 November 2012 following a joint letter of engagement dated 2 November 2012. Mr B appears to have had access to significant information, in particular the financial accounts of the business, the joint letter of instruction and the information contained therein and various written responses in relation to enquiries made to assist in the preparation of the report. The report is annexure FMW6 to the affidavit of Ms Westcott filed 27 September 2013. At 2.3 of the report Mr B sets out a summary of the financial performance of the business. This summary (with some further additions) is repeated in the K Report. The short summary of Mr B is to be found at Appendix 3.1, namely, that in his opinion there are “negative earnings” and not surprisingly, a future income based valuation methodology should not be applied. The default position is therefore a valuation methodology based on the value of the net assets based on a going concern basis which is set out in Appendix 4 of the report. It is from that appendix that Mr B adopts the “mid point” of the valuation range namely $100,000.
Importantly, Mr B considered the various approaches to valuation but ultimately determined that there should be an asset based valuation in circumstances where there was not a “commercial profit” (my words).
The answers to both the questions put by the husband to Mr B and correspondence dated 4 June 2013 and 27 June 2013, were given on 26 June 2013 and comprise annexure DMG4 to the L affidavit.
The answers provided by Mr B are informative. They set out the documents that were relied upon and clarify his position namely, that Mr B was not “requested to access or review D’S point of sale system”. He was not provided with any discount report, but was aware of a significant difference between the parties as to the stock value. Importantly, Mr B acknowledges that if the adjusted earnings were found to be the higher figure as put to him in the questions then “a future maintainable earnings (FME) basis of valuation may be possible.” Mr B considers that the appropriate multiple (or capitalisation rate) would be between 1.75 to 2.25.
The K Report
Mr K produced a preliminary report on 10 September 2013 being annexure DMG7 to the L affidavit. The focus of Mr K is summarised in paragraph 1.5 of the report namely:-
Appendix A includes a row titled daily COGS. This row divides the annual cost of the goods sold by 365. The last row in Appendix A is titled Days Stock on Hand. This row divides the closing stock by the daily cost of goods sold. As can be seen from Appendix A, [H] only had 190 days stock on hand at 30 June 2012, which is significantly below any previous year. This in fact indicates that [H] is now stocking fast moving stock, which is contrary to the explanation accepted by [C]. The only other plausible explanation that comes to mind is that stock at 30 June 2012 is understated. If this were the case, then the profit in the 2012 year would also be understated.
The issue is as to the effect of uncertain stock levels and therefore the valuation of stock on the profitability of the business. A higher level of profit may well invite a valuation methodology based upon a capitalisation of future maintainable earnings as opposed to an asset backing valuation.
The issue however appears to be one of empirical evidence rather than an error in approach. In any event, it would not appear that the matters raised in the K Report have been put to Mr B for further comment. Whilst the Rules allow questions to be put once only (Rule 16.65(2)), in the current circumstances I would not consider it objectionable if an application was made for further questions to be put to Mr B, or indeed the K Report.
I note in any event that the response of the wife seeks that Mr B update his report and that he be provided with further and update information including the ability of either party to make submissions in writing to Mr B in respect of the said valuation.
I note that Mr K is guarded in respect of the extent to which his “preliminary report” should be used and I assume that it would only be after the further documents as identified by Mr K (and presumably as referred to in paragraph 2 of the Minute of Order tendered) are produced.
The Law
The purpose of Part 15.5 of the Family Law Rules is to ensure that parties obtain expert evidence only in relation to a significant issue in dispute, to restrict expert evidence to that which is necessary to resolve or determine a case, to ensure that if practicable and without compromising the interests of justice, expert evidence is given on an issue by a single witness and to avoid unnecessary costs from the appointment of more than one expert witness.
Rule 15.43 of the Family Law Rules sets out the definitions. In particular, an expert is “defined to be an independent person who has relevant specialised knowledge, based on the person’s training, study or experience”.
Heydon J in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (14 September 2001) provided an analysis of the authorities in respect of expert evidence as follows:-
In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”, there just be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be wholly or substantially based on the witnesses expert knowledge; so far as the opinion is based on fact observed by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on assumed or accepted facts, they must be identified and provided in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusion reached, that is the expert’s evidence must explain how the field of specialised knowledge in which the witness is expert by reason of training, study or experience and on which the opinion is wholly or substantially based applies to the facts assumed or observed so as to produce the opinion propounded.
Accordingly, Rule 15.59 requires the expert witness to be independent and have a duty to the Court that goes beyond any duty to a party.
Parties may agree to jointly appoint a single expert witness to prepare a report in relation to a substantial matter in dispute (Rule 15.44 (1)).
Regard must be had to Rule 15.54 which provides the manner in which instructions to an expert witness must be given.
In summary, the witness must be given a copy of the most recent version of the Rules and a written report from the expert witness must be required.
Obviously the instructions to an expert witness must be in writing and must include the matters as set out in Rule 15.54 (2).
Rule 15.54 (3) provide that “the parties must give the expert an agreed statement of fact on which to base the report”.
Amendment, No 15 of 2011, (Rule 15.54) provides:-
However, if the parties do not agree on a statement of facts:-
(a)Unless the Court directs otherwise each of the parties must give to the expert a statement of facts on which to base the report; and
(b)The Court may give directions about the form and content of the statement of facts to be given to the expert.
Obviously the area of significant contention arises from the inability of a party to tender a report or adduce evidence from another expert witness if a single expert has been appointed whether jointly by the parties or by order of the Court. Rule 15.49 (2) provides three exceptions to the tendering of further evidence from another expert witness on an issue already addressed by a single expert witness:-
·If 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.
·If another expert witness knows of matters not known to the single expert, that may be necessary for determining the issue.
·If there is another special reason for adducing evidence from another expert witness.
A difficulty arises as to how “the substantial body of contrary opinion” is established before the Court. It cannot be that the evidence of the second expert satisfies the test merely by the filing of the application seeking leave to adduce the evidence. A substantial body of opinion cannot be information and belief of the view of the second expert but must include more than the view of that person and/or must have multiple support.
Rule 15.49 provides the procedures for the application for evidence to be adduced from an expert witness and requires an application in a case with an affidavit setting out the history of the use of the experts by the parties, the background of the expert whose appointment is sought and some assessment of the complexity, value and importance of the case and the expertise of the expert.
I raise these matters because an initial submission raised by the wife’s counsel is that the application for leave to adduce evidence from Mr K falls at the first hurdle namely, that the preliminary report of Mr K does not on the face of it set out his experience, expertise and connection with the issues to be determined ie. a “substantial body of contrary opinion”.
Obviously the Court is not privy to the communication and correspondence that pass between the parties in respect of the involvement of Mr K. It is however not controversial that the husband made it clear at an early stage that he was dissatisfied with the valuation of Mr B and that he would seek his own review of the B Report. The report of Mr K was prepared and the purpose of the report was not to provide a definitive alternative outcome to that of Mr B but to highlight that in the opinion of Mr K, there were deficiencies in the extent of the information that had been presented to Mr B and possibly an error in the B approach to the stock valuation issue audits possible effect on profit. There does not appear to be any argument raised in correspondence referred to following the publication of Mr K’s report that sought to challenge his underlying expertise and I consider the approach by the husband in commissioning the K Report to be no more than that which is immediately apparent on the fact of the document, namely that it is very much a preliminary statement. The clear implication is that the published report is not the final product but rather the document that sets the scene and supports the application.
Reference was made by Mr Strum to the decision of the High Court in Dasreef Pty Ltd v Hawchar [2011] HCA 21 (22 June 2011).
The summary of Mr Strum’s submission is to be found at paragraph 91 of the judgment:-
At common law there is no doubt that an expert opinion is inadmissible unless the expert states in chief the reasoning by which the expert conclusions arrived at flow from the facts proved or assumed by the expert so as to reveal that the opinion is based on the expert’s expertise. The Court does not have to be satisfied that the reasoning is correct; “the giving of correct expert evidence cannot be treated as a qualification necessary for the giving expert evidence”. But the reasoning must be stated. The opposing party is not to be left to find out about the expert’s thinking for the first time in cross examination.
At paragraph 98 the following is said:-
The respondent’s riposte is not correct. The requirement that the opinion be based wholly or substantially on specialised knowledge is an explicit precondition of admissibility. Like other preconditions under Section 79 (of the Evidence Act) it is to be established by the party tendering the evidence. It is to be established in examination in chief….
It is not immediately apparent in the absence of any direct reference to the qualifications and expertise (or lack thereof) of Mr K, but the objection taken on behalf of the wife is personal to Mr K. Rather, the objection appears to be that Mr K raises no issue that cannot be dealt with properly by Mr B and given the preliminary nature of the K Report, a more efficacious way forward would be for Mr B to prepare an update report with appropriate opportunities given to the parties to provide further information, documents and instruction (providing same is in writing) as they may each be advised.
Accordingly, I do not consider that the omission by Mr K and/or the husband’s solicitors (if it indeed be an omission) as to the provision of the professional qualifications, expertise and the connection between the proposed expert Mr K and the “substantial body of contrary opinion” is fatal.
The question remains therefore whether there is any other special reason for adducing evidence from another expert witness. It cannot be simply a difference of opinion. If that were to be the case, then it would make the provisions of Rule 15.49 meaningless.
The issue was considered in Knight & Knight [2007] FamCA 263 (14 February 2007) where Bryant CJ took into account that the parties had spent a large amount on legal fees and accounting fees and considered that permission should be granted to the wife to call separate adversarial evidence on the basis that the costs of the expert witness for the wife would initially be borne by her and the husband was not at risk in costs unless the wife’s evidence materially affected the valuation by the single expert. It was further noted that the wife’s proposed expert had already undertaken a substantial quantity of work as a shadow expert and that there would not be great delay in the wife obtaining a report from him; and the case had not been reached and would not be heard in the next few weeks.
There were significant issues in dispute which might impact on the valuation and Her Honour considered that there would be “a miscarriage of justice” if the wife were not given an opportunity to explore those issues.
Ultimately, the purpose of the Rules is to ensure that the interests of justice are properly served. A number of considerations must be brought into the factual matrix. The value of the asset pool should be considered, the extent to which if granted an order allowing the husband to call separate adversarial evidence would impact upon the trial date and any potential adjournment and obviously, the resultant costs likely to be further incurred by the parties in the delay of the case.
At this stage I am not of the view that the issues as between the parties in respect of the valuation of the business are necessarily complex. There is no suggestion that Mr B is anything other than an appropriately qualified accounting practitioner and indeed he would not have been the subject of joint instruction and appointment if there had been a concern as to his expertise and ability to undertake the task as instructed.
Mr K does not contend that Mr B has made an error in the application of the methodology but rather that if he had been presented with appropriate information, there would have been the potential for direct positive impact on the profitability of the business and therefore a valuation approach based on a capitalisation of future maintainable earnings than the ultimate methodology applied by Mr B namely, an asset backing valuation.
At present, Mr K is able to do no more than speculate that if the information was available there would be a different outcome. There is no assertion by Mr K that he has the information or that he has undertaken his own separate analysis resulting in a different outcome to Mr B in circumstances where Mr K knows of matters that are not known to Mr B. Mr K places some emphasis on the work undertaken by the husband’s accountant Mr N. However, Mr K has significant criticism of the ultimate opinion and view expressed by Mr N and on that basis I consider that it is not a matter of certain outcome as far as Mr K is concerned but rather, his report should be seen as no more than a preliminary view and if certain factual parameters are established there “may” be a different valuation outcome.
At this stage I do not consider that the matters raised by Mr K are such that the interests of justice would be adversely affected by refusing the husband’s application where on the wife’s response Mr B should do an update report in circumstances where the matters of concern as raised by the husband and the subject of comment by Mr K can be put.
I do not consider, as was the case in Gemmell & Gemmell [2009] FamCA 29 (2 February 2009) that:-
The Court is faced with a genuine disagreement between two appropriately qualified experts concerning the appropriate methodology.
At this stage I do not consider that there is any dispute or disagreement as to the methodology adopted by Mr B and commented upon by Mr K. Indeed at a preliminary stage, in circumstances where Mr K is not able to assert that the potential for increased profit exists, there is no issue as to methodology. It is reasonable to infer that if the higher net profit does not materialise then Mr K would agree that the only basis upon which a valuation could be conducted would be an asset based valuation rather than a future maintainable earnings based valuation.
Accordingly, I am of the view that the husband’s application should fail.
Conclusion
I note that each of the parties seeks further and better discovery from the other. Counsel put to me that there was various correspondence in relation to separate requests for further documents which were relatively speaking comprehensive of the topic. Obviously, the gravamen of the submissions were predominantly directed towards the issue of leave pursuant to Rule 15.49 and not the adequacy or otherwise of the discovery that each of the parties has sought and made. Accordingly, I intend to make the orders that each of the parties seeks, namely, as to the wife in paragraph 4 of the response and as to the husband, in terms of paragraph 2 of the proposed Minute of Order noting that if documents have already been provided and/or answers given to the effect that no such documents exist, then the parties do not need to go to the further cost of compliance. In that regard however I draw the parties attention to the decision of Re Ronald Neville Mcgorm Ex Parte: the Co-Operative Building Society of South Australia [1989] FCA 87 (30 March 1989) where at paragraph 5 the following was said:-
The obligation resting on a party obliged to give discovery requires that he make proper enquiries and efforts to identify and disclose all relevant documents that are not in his possession. The obligation extends to making enquiries from the person in whose possession the documents now are: See Mettens v Haigh [1863] EngR 633 at 531…It was said in the nineteenth century case of Taylor v Rudell [1841] EngR 256 at 433 by Lyndhurst LC “If it is in your power to give the discovery, you must give it, if not you must show that you have done your best to procure the means if giving it”.
In terms of order 5 of the wife’s response I declined to make an order that the parties appoint a single expert as to the determination of any capital gains tax issues that might arise from the approach to be taken by each of the parties to the J Town property, but I will grant leave to each of the parties to produce their own separate report in that regard. That approach was the subject of consent by counsel.
I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 10 October 2013.
Associate: P M Malone
Date: 10 October 2013
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