YAVUZ & YAVUZ

[2012] FamCA 797

FAMILY COURT OF AUSTRALIA

YAVUZ & YAVUZ [2012] FamCA 797

FAMILY LAW – PRACTICE AND PROCEDURE – Application for the discharge of the single expert valuer – Application dismissed.

Family Law Act 1975 (Cth)

APPLICANT: Mr Yavuz

RESPONDENT: Ms Yavuz

FILE NUMBER: SYC 1202 of 2009

DATE DELIVERED: 30 August 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 30 August 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Maghami

SOLICITOR FOR THE APPLICANT: Farid Fanaian

COUNSEL FOR THE RESPONDENT: Mr Puckey

SOLICITOR FOR THE RESPONDENT: Pearsons Lawyers

Orders

1. That the husband’s application for an order to discharge Mr C as single expert is dismissed.

2. That the substantive property and parenting proceedings are listed for hearing for five (5) days commencing on 8 April 2013.

3. That the Court notes that Mr C will have his reports in updated form, forwarded to all parties, not later than 24 January 2013.

4. That the parties forthwith comply with the requests of Ms W to allow her valuation to be completed and available to the parties not later than 24 January 2013.

5. That both parties file and serve all affidavits in chief both in relation to property and parenting together with updated financial statements not later than 24 January 2013.

6. That these proceedings are otherwise adjourned for readiness check at 9:30 am on 30 January 2013 noting that Mr SC may attend by telephone and for this purpose:

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7. That all costs are reserved.

IN CHAMBERS

1. That pursuant to r 11(2)(b) of the Family Law Regulations 1984:

   8.1The applicant wife pay one half of the setting-down fee ($319), and one half of the hearing fee for each of days two ($319), three ($319), four ($319) and five ($319);

   8.2That the respondent husband pay one half of the setting-down fee ($319), and one half of the hearing fee for each of days two ($319), three ($319), four ($319) and five ($319).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Yavuz & Yavuz 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 SYDNEY

FILE NUMBER: SYC 1202 of 2009

Mr Yavuz

Applicant

And

Ms Yavuz

Respondent

REASONS FOR JUDGMENT

1. This is an application by Mr Yavuz (“the husband”) for an order in effect to discharge the orders which appointed Mr C as single expert to value items of real estate, which are the major part of the property in substantive property proceedings between the husband and Ms Yavuz (“the wife”).  In approximately 2010, in the Federal Magistrates Court, an order was made the effect of which was to appoint a single expert to value the 15 said items of real property. 

2. Subsequently, those proceedings were transferred to this Court.  When the matter first came before me, there had been an expert appointed, and reports had been prepared in accordance with that order, at least in a very broad sense.  The husband took issue with the valuations.  I pause to note that the husband conducts business as a real estate agent.  He has some experience with property. 

3. I was informed that there were difficulties with getting the single expert to respond to a number of questions.  There had been some issues concerning costs.  In any event, progress endeavouring to make directions and to have the substantive proceedings ready for hearing seemed to be bogged down by this issue about alleged difficulties with these valuations. 

4. In those circumstances, I decided that I would provide each of the parties with an opportunity to cross-examine the expert.  It seemed to me that until we could achieve some sort of ventilation in respect of those issues with the single expert, there would be real problems in having confidence that we would be able to have a trial and not arrive at some point in the trial where it would probably have to be adjourned to enable some further evidence in respect of these items of real estate. 

5. I was then informed that there was no affidavit by Mr C and I was informed that Mr C appeared to be somewhat reluctant to come along to court.  In considered it important for us to have Mr C come to court particularly in circumstances where approximately $38 000 had been invested in this quite extensive exercise. 

6. And Mr C has come to court today.  He has verified, on his oath, that he prepared these reports.  The reports came in to the evidence by virtue of an affidavit in accordance with that verification.  And then I invited each learned counsel to cross-examine Mr C in respect of the 15 reports. 

7. I was informed at a very early stage of the proceedings by Mr Maghami, counsel for the husband, that it would become readily apparent that there were voluminous problems in terms of errors in these reports, and, with respect, not very far down in the cross-examination by Mr Maghami of Mr C, that became abundantly clear. 

8. It was clear that Mr C did not express much knowledge of what was required under the Family Law Rules of single experts.  It is true that copies of the relevant rules were sent out in the letter of instructions.  That being a letter under the letterhead of Pearsons Barristers & Solicitors, dated 3 June 2010, that letter having been signed by the solicitors for each of the parties.  What became readily apparent and which Mr C readily conceded was that these reports contained a multitude of errors.

9. And the errors ranged from perhaps simple typographical errors to include, certainly, what appeared to be a very considerable number of errors which Mr C certainly gave me the impression were almost certainly attributable to difficulties in terms of the electronic processing.  Heavy reliance was placed on Excel spreadsheets.  There were figures from spreadsheets brought over into documents which were described as Word documents which most people in the room would have familiarity with, including myself. 

10. Unfortunately, in those reports there are a whole host of errors which appear not only in relation to things like identifying the wrong property as being the property which was being valued, using what appeared to be paragraphs from the methodology which Mr C used to arrive at his valuation in respect of other properties within the portfolio of 15 properties, the subject of the exercise, figures which were simply wrong, and even some matters which would go to methodology perhaps rather than form.  And, I have to say, a very detailed exercise has been done by way of analysis of these various errors in respect of each of these properties, and it is a very extensive exercise. 

11. I am told that there was a similar exercise undertaken when the reports first became available which I think was either in 2010 or 2011, and that, certainly, the exercise or at least part of the exercise of cross-examination which was undertaken by Mr Maghami and also by Mr Puckey for the wife has been based on this very detailed analysis. 

12. There was a very strong submission on behalf of the husband that, really, what this amounts to is a very negligent exercise by the single expert and, certainly, not something which comes anywhere near the sort of standard that would be required in order to fulfil the duty which is on the single expert.  The ultimate submission is that in the circumstances where there have been so many errors, what the court should do so that everybody, particularly the husband, in the proceedings can have confidence in the process is to discharge Mr C as the single expert and then appoint a new single expert to start again and complete the exercise in respect of each of the 15 properties, abiding by the single expert rules, using an appropriate methodology, and notwithstanding what would undoubtedly be very substantial costs to the parties.

13. It is said that such a course is imperative because, firstly, the single expert has failed to follow the single expert rules, he has failed to adopt an appropriate methodology despite being confronted by all the errors, and including the fact that many of the figures on the way through in the methodology used have not been correct.  Indeed, one of the matters that Mr C was taken to was the fact that, in respect of one of the properties, he formed a certain view about whether land tax would be payable.  He prepared his valuation in respect of the property on the basis that land tax was payable, only to be confronted with the likelihood that, in fact, a purchaser coming along to purchase that property might well be in the position of not having to pay land tax. 

14. Despite many other errors and similar errors and similar scenarios and what were described as being difficulties and problems having been brought to Mr C’s attention, Mr C said that while there were these errors by way of typographical errors and electronic processing errors and – yes, certainly, the matter in respect of land tax and the other matters that I am alluding to – notwithstanding those matters, he was quite confident about his valuation and, given appropriate opportunity, he would be able to correct all the errors of form.  And where there might be some weaknesses in terms of methodology, he would take on board that there would be ways to deal with that and that he would correct the reports without charge to the parties. 

15. It was submitted on behalf of the husband that, really, the court would have the opinion that even if it had the view that what was proposed would not operate as actual bias, there would be at least an apprehension of bias and the court ought not to embark on that course in fairness to both of the parties.  And it is said that, particularly in the light of so many errors, including some matters which must go to methodology, the court could not have confidence that the same sort of methodology would attach to whatever new exercise would be involved in the revision which Mr C has suggested he would be able to undertake. 

16. Mr C had indicated that he would be happy to attend to not only to correcting those reports which he has already prepared, but also to updating those reports for an amount of approximately $5000.  And one of the thoughts which occurred to be me about that was that whatever he said about his confidence in respect of the 2010 valuation, that that would not necessarily carry through to what the figures would be in terms of the updated valuation.  One would have thought that would be the case because Mr C offered the professional opinion that in respect of the commercial properties his professional view and experience has been that across the board there has been a general drop in commercial valuations in the area.  So that, of itself, it seems to me, would probably mean that we would have, at least, some different figures from those figures which were in the 2010 valuations.

17. The ultimate submission on behalf of the husband was that on the basis of what has transpired and given the very considerable number of errors there have occurred, the Court could not be confident that if this duty was left to Mr C, then Mr C would be able to provide a single expert’s report which would be reliable.

18. It was then submitted that the court would make orders discharging Mr C as single expert.  There would be, almost certainly, all sorts of costs, ramifications and consequences of that.  And that then the court should go about putting in place a process which would then enable a new single expert to be appointed.

19. On the other hand, Mr Puckey submitted that although there have been a very considerable number of errors, they are mainly errors which go to form rather than substance.  And this was really the major difference between the submissions.  Ultimately some judgment has to be made about that.  I must say, my overall impression about the errors, and both counsel have very capably taken me to many examples, is that, in large part, they are errors of form.

20. I am not persuaded, notwithstanding the very considerable numbers of errors in this very detailed document, that given the opportunity, Mr C would not be able to correct his errors and, where it was necessary, address some matters of methodology.  

21. And I am not persuaded that he would not be able to appropriately prepare updated valuations.

22. The alternative would be to condemn these parties to having to go through a further process of identifying a person as single expert.  There would be very considerable cost involved.  There might be, perhaps, a number of possibilities for further litigation in respect of the matters that go to valuation.  It is clearly the case that the wife is not in a position to be able to fund much, if anything at all, in terms of some further exercise.

23. In all the circumstances, in my view, this is not a matter where think this Court would regard it as being appropriate to make an order to discharge the expert.  Mr C needs to be given some directions which will assist him to update the valuations at an appropriate time.

24. In my view, the application to discharge the single expert should be dismissed. 

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 30 August 2012.

Associate: