Jointly Appointed Experts On BC Family Financial Issues
The BC family asset and Vancouver family property division lawyers at MacLean Law deal with all types of family property division and valuation cases. It’s critical both the parties and the court have accurate and fair values for assets so proper family property division can be made. Jointly appointed financial experts may include real estate appraisers, art valuators and business valuators amongst others.
The 2014 BC Court of Appeal case of Hilborn v. Wright points out pitfalls that can occur when parties fail to follow the BC Supreme Court family Rules on providing expert valuation evidence on a financial issue. The BC Court of Appeal ordered a new joint appraisal concerning the division of a family home between an unmarried couple living in a marriage like relationship.
The parties cohabited in a common law relationship from January 2005 until October 2009. The parties cohabited in a house on West 5th Avenue, Vancouver, which they purchased in their joint names. All but $1,000 of the $92,095 down payment came from an investment account in the name of the respondent, Holly Tiffany Hilborn. The balance of the $784,030 purchase price borrowed.
The Court of Appeal allowed the husband’s appeal that the court had wrongly used the date of separation value for his half share being bought out as opposed to a higher current value. The Court also pointed out the parties had not used a neutral joint financuial expert as required by the BC Family Law Rules. Lorne Maclean, Q.C. leads our complex family law asset valauation and division department and he can be reached at 604 602 9000.
Lorne MacLean, Q.C. joint financial expert trial and appeal lawyer in front of 29th floor of MacLean Law’s new Vancouver Office.
[48] Before I set out my conclusion and the order that should replace the trial judge’s order, I need to discuss one other difficulty with the admissible evidence before the judge in respect of the value of the property. Each party had put a form of valuation before the court. Ms. Hilborn put before the court an opinion of a realtor expressed in January 2010 that the property should be listed for sale at a price of $1,250,000 (this is the value chosen by the trial judge). Mr. Wright put before the court an appraisal report of Campbell & Pound Ltd. in the amount of $1,550,000 as of May 17, 2012.
[49] The principal problem with these valuation reports was that they did not comply with Rule 13-3(2) of the Supreme Court Family Rules, which requires that, unless the court otherwise orders or the parties otherwise agree, expert opinion evidence on a financial issue must be presented by means of a jointly appointed expert. This problem also applied to the expert financial report tendered by Ms. Hilborn with respect to the financial contributions made by the parties towards the property, and the judge heard extensive submissions with respect to the admissibility of that report at the commencement of the trial. The problem was also identified with respect to the valuation reports during the examination of Ms. Hilborn, but the judge did not make an order under Rule 13-3(2) or expressly rule them to be admissible. In my view, there was no admissible opinion evidence with respect to the value of the property. In addition, neither of the valuation reports before the court purported to value the property at or near the date of the trial.
[50] In light of the absence of admissible opinion evidence with respect to the value of the property, it is my opinion that it will be necessary to have the property valued in accordance with Rule 13-3(2). As it is necessary in the circumstances to have a valuation conducted after the trial and as Mr. Wright continued to be a one-half owner of the property until his interest was transferred to Ms. Hilborn, the appropriate time for the valuation is, in my view, the date of the transfer.
Conclusion
[51] I would allow the appeal, set aside the order dated May 28, 2013 and substitute in its place an order dismissing Ms. Hilborn’s claim and Mr. Wright’s counterclaim. I would also order that:
(a) the parties jointly appoint an expert to value the property as at the date on which Mr. Wright’s interest was transferred to Ms. Hilborn and, failing agreement between the parties, either party may apply to the Supreme Court for the appointment of an expert;
(b) within 45 days of the date of the expert valuation report or such other period as the Supreme Court may allow upon application, Ms. Hilborn is to pay Mr. Wright one-half of the difference between the expert’s valuation and the sum of $1,250,000, together with the amount paid or credited by Mr. Wright in respect of the two lines of credit in the name of Ms. Hilborn, but less the amount Ms. Hilborn paid Mr. Wright in respect of the joint line of credit; and
(c) if Ms. Hilborn does not make the required payment to Mr. Wright within the 45-day period or such other period as may be allowed, either party may apply to the Supreme Court to have the property sold and to have the net sale proceeds divided equally after making adjustments for the amount paid to Mr. Wright at the time of the transfer of his one-half interest to Ms. Hilborn, the amount paid or credited by Mr. Wright in respect of the two lines of credit in the name of Ms. Hilborn, and the amount Ms. Hilborn paid Mr. Wright in respect of the joint line of credit.
[52] In accordance with s. 23 of the Court of Appeal Act, R.S.B.C. 1996, c. 77, Mr. Wright is entitled to the costs of this appeal.
