In this case, Ms Giacobetti (wife) applied to the Court for leave to adduce adversarial expert evidence in relation to a real property (the property). Mr Giacobetti (husband) opposed that application.
The property had initially been valued by the single expert witness in January 2023, when it was ascribed a value of $3.1 million. That valuation was updated in June 2023, by which time the value of the property had decreased, in the single expert’s opinion, to $2.3 million.
After receipt of the updated report in June 2023, the wife did not ask questions of the single expert valuer seeking to clarify the report (as she was entitled to do pursuant to the Court Rules). The wife said that she declined to do so as there would have been no utility in asking the expert about the correct methodology.
The Application
In support of her application, the wife contended that, firstly, there was a substantial body of opinion contrary to the opinion given by the single expert and that the opinion is or may be necessary for determining the issue, and secondly, she contends there is also special reason for adducing evidence from the other expert.
She submitted that, in summary:
- although both experts used a direct comparison model, they used different valuation methodologies such that '…a proper reading of both reports reveals a fundamental difference of opinion between the valuers as to how that methodology should be implemented when valuing a property such as this';
- the combination of three identified factors cumulatively constituted a special reason for adducing the evidence being the:
- significant drop in value between the two reports;
- magnitude of the difference as a proportion in the asset pool; and
- matters of differing methodology (or difference of view as to the way in which a direct comparison model should be applied to the type of property); and
- there was a risk that, in the event there was a testing of the single expert witness’ evidence alone, and the Court was then unable to accept it, there would be no value ascribed to the property for the purposes of the dispute.
The Court's decision
Before considering the specificity of the wife’s application, the Court reiterated the benefit and purpose for the single expert rules '…being to avoid a battle of experts.' Moreover, it reiterated that '…the capacity to put clarifying questions before seeking the appointment of an adversarial expert and that such procedures should be used.'
The Court then turned to consider the wife’s application and made an order for it to be dismissed. In so doing, the Court held that:
- Whilst not fatal to the wife’s application, the wife should have asked clarifying questions of the single expert witness. The Court considered and approved various decisions which reiterated the importance of such course of action having regard to, among other things, '…the administration of justice such as the timely disposal of proceedings, obligations to other litigants, and the importance of case management procedures.'
- Neither the adversarial report, nor the evidence read in support of the wife’s application provided any evidence of a ‘substantial body of opinion contrary to any opinion given by the single expert witness’ which would necessitate the admissibility of the adversarial expert evidence. In so finding, the Court reiterated that:
… The mere expression of an opinion as to value by another expert, no matter how substantially contrary it is to that of the single expert, does not in and of itself constitute “a substantial body of opinion” within the meaning of the rule. If such a contrary opinion is founded upon identified and accepted methodology recognised within the field, or some identified and recognised field of expertise different to that founding the single expert opinion, then the requirement of “a substantial body of opinion” will be fulfilled.
Indeed, the Court decided that to conclude that the single expert has applied a different methodology when reading the whole of the report, the multiple considerations identified and taken into account, the comparable properties and observations made of the unique nature of the subject property, and the rationale expressed, it is not open. That the experts have possibly given different weight to the dollars per square metre value, or per hectare value, in combination with other factors is something that could have been explored in clarifying questions (and was not), and is something that could be tested in cross-examination. - Whilst the significant differential is a factor that may favour allowing evidence from another expert, in the case at hand, that issue could be examined through cross-examination, particularly when the original value was $3.1 million, and the single expert explained in his updating report the basis for the reduced value. When tested in cross-examination, the differential or magnitude may not be maintained and may not be accepted by the Court.
- In relation to the wife’s final point as to the absence of evidence, it is not simply a matter for the Court to accept the single expert witness’ contested opinion, nor for the single expert witness to determine the value of the property as a finding of fact in a determination of the dispute. Rather, it is for the Court to determine, being free to form its own view as to the value of the property, having regard to all of the evidence, by the proper application of established principles of valuation.
Key Takeaway
Giacobetti & Giacobetti (No 2) is an important reminder for parties and their advisors to avail themselves of the opportunity to clarify single expert witness opinion before incurring the expense of seeking shadow or adversarial expert opinion. Not only will the Court expect a party to avail themselves of that opportunity, but it may resolve the issue(s). Further, careful consideration must be given to whether any issue(s) can be resolved via cross-examination as opposed to application to adduce shadow or adversarial expert evidence.
