Dis­agree with a val­u­a­tion by joint­ly instruct­ed sin­gle expert? What not to do!

The Fam­i­ly Law Act 1975 (Cth) sets out the gen­er­al prin­ci­ples the Court will con­sid­er when deter­min­ing finan­cial dis­putes after sep­a­ra­tion. The gen­er­al prin­ci­ples are the same regard­less of whether the par­ties were mar­ried or in a defac­to relationship.

The first ques­tion the Court needs to deter­mine in an appli­ca­tion for prop­er­ty alter­ation is whether it is just or equi­table to make any order adjust­ing the exist­ing legal and equi­table inter­ests of the par­ties in mat­ri­mo­ni­al property.

Pro­vid­ed the Court is sat­is­fied that it is ​‘just and equi­table’ to make any order at all, it will then take the fol­low­ing four steps:

1. Iden­ti­fy and val­ue the assets, lia­bil­i­ties and finan­cial resources of the parties.
2. Iden­ti­fy and assess the con­tri­bu­tions (finan­cial and non-finan­cial) made by the par­ties to the assets avail­able for division.
3. Con­sid­er whether there should be an adjust­ment made to the con­tri­bu­tion-based assess­ment; and
4. Assess whether the pro­posed out­come of the above three steps is just and equitable.

It is beyond the scope of this pub­li­ca­tion to address in detail each of the above steps, how­ev­er if you would like advice about your prop­er­ty set­tle­ment please do not hes­i­tate to get in touch with one of our Fam­i­ly Lawyers.

Iden­ti­fy­ing and valu­ing property

It does not mat­ter in whose name prop­er­ty may be held, as prop­er­ty is defined quite broad­ly and includes legal and equi­table inter­ests of the par­ties. Each par­ty pro­vides evi­dence as to the assets, lia­bil­i­ties and super­an­nu­a­tion of each of them (and any cor­po­rate struc­tures in which they or each of them have an inter­est) and the val­ues of the prop­er­ty. It is some­times nec­es­sary for par­ties to engage, or the Court will appoint, an expert to pro­vide a for­mal val­u­a­tion if val­ue can­not be agreed.

The recent deci­sion of Fors­burg & Stubbs[2019] is a good exam­ple of what not to do if, you and your for­mer spouse joint­ly appoint a sin­gle expert to val­ue prop­er­ty and you dis­agree and/​or dis­pute the for­mal valuation.

In this case, a sin­gle expert appoint­ed by the par­ties val­ued the dis­put­ed prop­er­ty at $265,000.

The wife, who dis­put­ed the val­u­a­tion went on to instruct her own shad­ow expert to pro­vide a sep­a­rate val­u­a­tion. In doing so, the wife pro­vid­ed instruc­tions to the shad­ow expert that were par­ti­san and con­tained numer­ous irrel­e­vant mat­ters. She then made an appli­ca­tion to the Court, seek­ing leave to rely upon the shad­ow expert’s val­u­a­tion. The wife’s shad­ow expert val­ued the prop­er­ty at $430,000.

The Court com­ment­ed on the wife’s behav­iour say­ing at [45] ​‘what [she] should have done was pose spe­cif­ic ques­tions to the expert before bring­ing an appli­ca­tion to call adver­sar­i­al evidence.’

What she should have done was engage the shad­ow expert to under­take the shad­ow report and ques­tions should have then been put to the sin­gle expert based on the shad­ow expert’s report.

This case is a good reminder that the law is quite spe­cif­ic when it comes to expert evidence. 

For more infor­ma­tion on the on expert evi­dence be sure to read our pub­li­ca­tion The Role of Expert Evi­dence in Fam­i­ly Law.

If you have any con­cerns regard­ing the val­ue of your assets or are unhap­py with a val­u­a­tion obtained in your fam­i­ly law mat­ter, please get in touch with our Fam­i­ly Lawyers today.