Setting Aside Existing Financial Orders After Revaluation of Property
In financial matters, the value of assets is assessed at the time of the final hearing. The final hearing may be held up to two years after proceedings were initiated and many years after the parties separated. It is also common for the trial judge to be delayed in delivering their reasons for judgment and this may not occur for many months after the final hearing and closing of the case. There are limited circumstances where matters can be re-opened as a result of a revaluation of property prior to a judgment being delivered.
Revaluation of property in Summit & Summit
The 2009 Family Court decision of Summit & Summit set out the following:
- The valuation of any asset is inherently arbitrary insofar as it is an assessment of value as at a particular point in time;
- There is always a delay between the date of a valuation and the date of a final hearing; and
- There is often an acceptance that economic factors during that delay will be ignored by the court.
The final hearing for this matter was in November 2008 and the husband made a further application to the court to present fresh evidence on the basis that the global financial crisis and the drought being experienced in Australia at the time had significantly reduced the value of the property in the asset pool. The husband argued that it would be unjust for the court to make a determination on the basis of the valuation prepared prior to the final hearing and that according to the revaluation of property, its value had decreased by $400,000.
The husband’s application was likely to negatively impact the wife’s case as the wife had borrowed a significant amount of money to fund the court proceedings and if the matter was to be re-opened she would likely not be able to fund a further hearing. The court said that in cases like these, the common law principles make it clear that the court has discretion to re-open these matters and that the discretion of the judicial officer is guided by the interests of justice. The court needs to be satisfied that should such an application be accepted that the court would be able to do greater justice in the facts and circumstances of the case than should the application not be granted. Where the reasons for judgment have not yet been delivered, the primary consideration should be whether embarrassment or prejudice would be caused to the other party.
The wife argued that at the time of the final hearing the Global Financial Crisis was already underway and so was the drought.
The court determined that the husband had been unable to present persuasive evidence to demonstrate that the facts or factors impacting the value of the property were different from what they had been at the date of the final hearing and that this needed to be considered to prevent injustice. It refused to grant the husband’s application as doing so would not serve the interests of justice.
Pilcher v Pilcher
In the 2017 case of Pilcher v Pilcher, the court also refused to re-open proceedings and admit new evidence. The court set out a list of factors relevant to their discretion to permit the presentation of fresh evidence after the case was closed. The factors included the following:
- The nature of the proceeding;
- Whether the occasion for calling further evidence ought reasonably to have been foreseen;
- The importance of the issue on which the further evidence is sought to be adduced;
- The degree of relevance and probative value of the further evidence;
- The prejudice to the other party;
- The public interest in the timely conclusion of litigation; and
- The explanation offered for not having called the evidence.
In this matter, the final hearing occurred in March 2017 and the court heard evidence from the parties in relation to their respective cases over three days. In September 2017, the wife made an application to the court seeking to present new evidence in relation to the value of the property and sought an order that the parties engage the single expert witness in the matter to prepare a revaluation of property. The wife’s application included an affidavit by her solicitor who set out that the price of the real estate in the particular area had significantly increased due to an increase in demand in the market. The affidavit included two annexures which were market appraisals of the property prepared by local estate agents. These appraisals set the value of the property to be $250,000 and $350,000 higher than the value of the property by the single expert witness for the purposes of the final hearing. The wife’s solicitor argued that relying on the previous value would be a miscarriage of justice because the value of the asset pool was inaccurate.
The husband opposed the application made by the wife and argued that re-opening the matter would be a “great injustice” to him as there would be a further delay in court providing their reasons for judgement and he would incur significant legal costs.
The judge considered both arguments and determined that it was foreseeable that the value of a property would continue to rise in the current Melbourne real estate market noting the volatility of the market and that she advised the parties at the conclusion of the trial that her reasons were unlikely to be delivered for a further 6 months.
The judge also expressed concerned that the evidence led by the wife’s court documents did not establish or prove the argument and that it was immaterial and inadmissible as the appraisals were hearsay evidence because the solicitor for the wife could not swear to the contents of the appraisals as they were undertaken by other persons. The wudge was not persuaded that any further delay would be in the public interest nor was it in the interests of justice to exercise her discretion in this matter.
If you require legal advice or representation in any legal matter, please contact Armstrong Legal.