Divorce case of the former Dragons & Den Star highlights problems with "expert testimony" in family law


The more complex our world becomes, the more likely the litigation to involve expert evidence. Many cases of family law require the testimony of specialists from psychologists or social workers who make recommendations on what is in the best interests of the child.

Other experts who frequently appear in family courts include real estate appraisers and chartered business appraisers who testify about the value of stocks in private companies and income for support purposes.

A few years ago, judges began to express concern about the independence of the experts who appeared before them: some experts were seen as simply another lawyer in court rather than providing a balanced opinion for the court's consideration.

As a result, the rules governing the experts have changed. Specialists who provide testimony in an Ontario court are now required to sign an acknowledgment that they are aware of their obligation to be independent, with their obligation being to the court, not to the party that held them.

Despite this change, Judge Ruth Mesbur of the Superior Court of Ontario in Plese v. Herjavec, a ruling released last month, seems to suggest that problems with expert testimony continue to plague the courts.

The case was a long-running dispute involving millions of dollars involving Robert Herjavec, a businessman and Canadian television personality best known for his appearances on Dragon's Den and Shark Tank. Herjavec had separated from his twenty-four-year-old wife, Diane Plese, leaving her for her dance partner in Dancing with the Stars.

Despite the details of the collapse of marriage, Judge Mesbur succinctly described the lengthy trial that preceded it: "Ultimately, the real conflict between the parties lies not in the historical facts of their case or who did what, but in the considerable difference . in the expert opinions each of them gave as much to determine the value of these assets as to determine the revenue of Mr. Herjavec. "

The family law trial finally took place four years after the parties split. It involved a forensic accountant who was obliged to reconstruct the records that Mr. Herjavec had failed to maintain for his trust in the family; two real estate experts, who valued the properties of the parties, including a 22,000-square-foot house in Toronto; investment specialists; two chartered business appraisers, who evaluated the actions of the Herjavec company; and a chartered business appraiser who provided evidence of Mr. Herjavec's revenue for support payment purposes.

The experts differed by $ 3.6 million worth of the parties' home in Toronto, and by more than $ 30 million worth of Mr. Herjavec's shares in his privately held company.

Judge Mesbur's frustration with several of the experts who appeared before her was evident at the beginning of her trial.

"In each case, each evaluator, supposedly acting independently, suggested values ‚Äč‚Äčthat benefited the position of the party that hired him," she wrote. "Likewise, with regard to the opinion of experts on Mr Herjavec's income, Mr Herjavec's expert in particular seemed particularly aligned with Mr Herjavec's position. Unfortunately, this is often the case. "

After thoroughly analyzing the evidence of each real estate expert, Judge Mesbur determined that she could not accept the opinion of any of the experts, adding with some frustration: "Although I acknowledge that valuation is an art, not a science, I would have expected the final opinions. be much closer to each other. "

She then analyzed in detail the differences between each specialist, increasing the $ 14,000,000 value for the Toronto home offered by a specialist and discounting the value of other specialists of $ 17,600,000. She determined that the home was valued at $ 15,500,000 on the date of separation.

The frustration of her Honor seemed to increase as she turned to the value of Mr. Herjavec's shares in her privately held company. "As was the case with real estate appraisers, their views directly align with the interest of the Party that retained them," wrote Judge Mesbur. "I'm surprised there should be this kind of disparity between them. I wonder if their results would have been the same if they had been retained by the other party. This case highlights very sharply the problem continued with evidence from experts. Despite the clear duties of the experts, they end up supporting the position of the party that hired them. Changes in the rules of experts and the requirement that specialists recognize their duties of independence and impartiality should solve the problem of specialists simply being "hired gunmen." Unfortunately, the problem remains. I must therefore approach each expert's opinion with a degree of caution and skepticism. "

Mr. Herjavec's appraiser estimated that the shares of his private company were worth $ 24,000,000; His wife's appraiser estimated the same actions at about $ 52,500,000. After a careful analysis of the nearly $ 30 million difference between them, Judge Mesbur determined that the value of the shares was $ 32 million.

Two accounting experts, however, not only escaped Judge Mesbur's sharp criticism, but received his approval: the specialist who drew up the $ 21 million disbursement, and the wife specialist who provided evidence of Mr. Herjavec's income for purposes.

His Honor comments left no doubt as to what is expected of the court by experts, saying the wife's income specialist was "fair and balanced."

"I did not find her unduly aligned with Mrs. Plese's position. His evidence was useful and measured. She clearly took her duties to court seriously.

His Honor went further and suggested a way of resolving the difficulties with the experts, saying "it seems to me that in order to provide the court with truly independent, impartial and trustworthy opinions, it would be preferable to require the parties to retain only one specialist, or perhaps , to require the parties to finance a specialist who would be retained by the court at the expense of the parties. "

Despite the millions of dollars in question, Herjavec is unlikely to be remembered for its legal principles.

Instead, it could mean the beginning of the end of the "contracted weapon."

Laurie H. Pawlitza is a senior partner in the Torkin Manes LLP family law group in Toronto.
[email protected]


Source link