In this case, Ms Henschel (wife) and Mr Sartre (husband) could not agree to the terms of property settlement. Not only did they dispute what those terms should be, but also the value of real estate. There was a dispute as to, among other things, the accuracy of single expert valuations.
On 24 November 2023, the husband filed an interim court application seeking court orders for leave (that is, permission) from the Court to adduce evidence from a shadow or adversarial expert (i.e. the husband’s own expert witness). For her part, the wife then sought court orders for the single expert witness to update its valuation(s).
Whilst the parties did not agree to each other’s position with respect to the evidence to be adduced from single expert witnesses, they each agreed that the real estate to be valued represented a significant portion of their combined total net assets (amount to approximately $21 million). The outcome of the valuation dispute may therefore have had a substantial impact on the outcome of the matter.
In determining the parties’ respective court applications, the Court reiterated the rationale for single expert witnesses. In so doing it, stated that:
Court Rules
The Court then identified the bases upon which this general rule may be departed from. It reiterated that the Court:
- Must be satisfied that the separate shadow or adversarial expert is, indeed, an expert.
- May permit separate adversarial 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; or
- another expert witness knows of matters not known to the single expert witness that may be necessary for determining the issue; or
- there is another special reason for adducing evidence from another expert witness.
In considering the foregoing, the Court traversed the differences in opinion between the single expert witness and that of the shadow or adversarial expert which the husband sought to rely upon. Among other things, the Court had regard to the assessment of the need to make compliant aspects of a property which were completed by an ‘owner builder’, comparable sales and rural property analysis (including by value per hectare). It concluded that there had been a difference in approach by the valuers such that there was a difference in opinion of valuation of $4.9 million.
The Court's decision
The Court ultimately determined that:
- In this case, the difference in opinion between the two expert witnesses did not satisfy the requirement of a ‘substantial body of contrary opinion).
- If the husband was to be successful, then it had to be because there were matters not known to the single expert witness or there was ‘another special reason’ for adducing the evidence.
- The husband wished to retain one of the properties the subject of this dispute.
- The single expert witness requirement must be subservient to the interests of justice.
- It was appropriate for the husband to be able to adduce expert evidence from his expert noting the different approaches adopted by each of the valuers and the outcome representing a substantial difference both in terms of a proportion of a property, but also in terms of the likely property of the parties (and thus outcome).
The Court further ordered, among other things, that there be a conference between the valuers to endeavour to resolve or (at least) narrow the differential in their respective opinions. In so ordering, the Court provided an opportunity to avoid the need for calling both expert witnesses at a final hearing.
Key takeaways
Henschel & Sartre is a timely reminder of the appropriateness to seek second opinions in relation to single expert evidence where there is a concern about that opinion. It identifies that the effect of the evidence to the justice of the matter must be at the forefront of parties’ and advisors’ minds when then advising parties how to proceed.
