FAMILY LAW BASICS SERIES: WHAT IS A SINGLE EXPERT WITNESS’ ROLE IN FINANCIAL MATTERS?
In this series we will discuss the fundamental basics of Family Law, providing information and guidance that may answer questions you have throughout the Family Law process. In our previous article we explained the role of a Single Expert Witness in Children’s matters. This week we explore the Single Expert Witness’ role in financial matters.
Single Expert Witness
In financial matters, the Court must identify the asset pool in financial matters for distribution between the parties. When identifying the asset pool it is vital that the Court understands the value of the property. As the value of property can be a contentious and complex issue between the parties they must either provide disclosure evidencing the value or evidence from a Single Expert Witness appointed by the parties or in some cases by the Court. It is important to bear in mind that the parties to the proceedings will be required to pay for the Single Expert Witness’ reasonable fees incurred in preparing the report. Despite procedural similarities with Single Expert Witness’ reports in children’s matters, the nature of the report in financial matters are, of course, very different.
The Single Expert Witness reports sought in financial matters are most often used to determine the value of complex property. In many matters parties will be able to agree on the value of their property and the court will accept this agreed valuation, as they may not wish to incur the cost associated with appointing a professional valuer.
Parties usually turn their mind to the value of their property when their lawyer explains their duty of disclosure, prepares an assets and liabilities schedule (to consider the net asset pool) or starts to prepare a Form 13 Financial Statement. When parties are attempting to agree on a value of a particular item, such as a car, the negotiation can be uneventful because the parties may easily agree upon a ‘Redbook’ valuation, which can be accepted by the Court (Herbert [2006] FMCAfam 254 at [132]-[135]).
However, if the parties are not able to agree, they must obtain a valuation. It is important to note that the Family Law Rules require the parties to provide a market appraisal or opinion as to the value of any property that any party has an interest in, prior to a first Court date, as part of the parties’ disclosure.
Valuation of Properties
Slightly more complex valuation processes need to be engaged when parties own property and are unable to agree on the current value. In this scenario, parties will often attempt to determine the value of the home by obtaining appraisals from registered real estate agents and try to negotiate a common “midpoint” or average from these. Alternatively, parties jointly appoint a certified valuer to value their properties for which the values are in dispute.
Valuation of Businesses
Beyond the simple car and home valuation, more convoluted property needs to be considered like the family business and trusts. Not every husband and wife business partnership grasps the ins and outs of the family business or understands the full nature of their family trust and self managed superannuation fund. Further, the structure and consequent value of assets and liabilities between trusts, businesses and investments may not be clear from the disclosure that is actually provided. In these cases it is possible that the parties would disagree with the value presented by the other, as they may seek to portray the assets and liabilities in a way that benefits their depiction of the asset pool. In these cases, parties often jointly appoint an accountant to provide a valuation of the trust, business or investment. An accountant may be jointly engaged to identify or value the assets, liabilities and goodwill of the family business. Where complex and unclear property is an issue in financial matters, the report of a Single Expert Witness appointed by the parties or the Court can help to present a clearer picture.
The Report
Generally, a Single Expert Witness will prepare a written report identifying, valuing and explaining the issues in the financial dispute. Once complete, the Single Expert Witness will then either provide it to the Court, if Court appointed, or if appointed jointly by the parties in proceedings, provide it to each party. Depending on which Single Expert Witness prepares the report they may attend to filing their report with the Court, otherwise if they don’t the Applicant in the matter is then responsible for Filing the report with the Court. The Court is then not bound to accept what is contained in the report and each party is able to submit their evidence and arguments about the financial issues to the Court.
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*This information serves as a general guide and does not constitute legal advice. It is based on our research and experience at the time of publication. Please consult our knowledgeable Legal Team for any specific inquiries or advice relevant to your circumstances, as the content may not have been updated subsequently.
