When an expert is appointed for The Single Expert Report
In family law matters, parties often cannot agree on the value of assets such as real property or businesses during their property settlement. In these circumstances, the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 require the parties to obtain an independent expert report to determine the value.
Pursuant to the Rules, the parties may agree to jointly appoint a single expert witness, or the Court may, on the application or on its own initiative, order that expert evidence be given by a single expert witness.
Unless the parties agree otherwise or the Court otherwise orders, the parties are equally liable to pay a single expert witness’s reasonable fees and expenses incurred in preparing a report. Usually, one party will be happier with the valuation report compared to the other.
If you are not satisfied
If you are the party that is not satisfied with the valuation, there are several avenues to pursue that are set out in the Rules.
Firstly, within 21 days after receiving the report of a single expert witness, parties may enter into a written agreement about conferring with the expert witness for the purpose of clarifying the report. The agreement may provide for the parties, or for one of the party’s, to confer with the expert witness.
Secondly, a party may ask questions of the single expert witness within 7 days after a conference, or if no conference is held, within 21 days after the party received the single expert witness’s report. The questions can only be put once and cannot be vexatious or oppressive, and cannot take the expert an unreasonable amount of work to answer. A copy of any questions must be provided to the other party.
The final option is to appoint another expert witness, known as a “shadow expert”. However, this can only be done with the Court’s permission. The recent 2022 Federal Circuit and Family Court of Australia decision Neales & Neales demonstrate the high threshold that parties are required to meet to be able to get leave from the Court to engage a shadow expert.
In this decision, the parties jointly instructed a single expert to value the properties. The expert valued the properties at between $33.835 million and $34.190 million. The husband engaged another expert to comment on the initial valuation and provide his own valuation of the properties. The expert valued the properties at $22.465 million.
The primary judge concluded that contrary to the submissions of the husband, there was not a substantial body of contrary opinion, but rather an alternate opinion. It was observed that to permit another expert just because of a divergence in value, even if substantial, was inconsistent with the purpose of the Rules.
However, the Full Court found that the following arguments made by the husband satisfied as a special reason to permit another expert:
That the experts adopted alternative methodologies;
That not all matters were known to the jointly appointed single expert;
That whilst recognising that the significant difference in the value of over $11 million does not of itself warrant another expert if it arises as a result of a difference in methodology and information, it warrants consideration; and
In circumstances where the husband is a minority shareholder in the entities that hold the real estate, and given that the wife seeks a cash payment, it is the husband who will be left with the consequences of the findings as to value.
The Full Court granted leave for the husband to rely on his adversarial expert. This decision reinforces the importance of engaging an expert that is reputable and specialises in the correct field.
If you require any assistance with the single expert report, please contact the Brisbane Family lawyers team at James Noble Law today for a free 20-minute consultation. To schedule an appointment with one of our Qualified and experienced Family lawyers Brisbane.
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