In an earlier blog I wrote about the decision in Elanor Funds Management Ltd v Alceon Group Pty Ltd [2023] FCA 1291, a matter in which a claim by the purchaser of a shopping centre  – who said that it has suffered loss and damage due to its reliance on information provided by the vendor – was unsuccessful.

The Court found that the purchaser’s valuation expert was not truly independent, although notably it specifically declined to criticise him for accepting the engagement.  However, the Court was critical of “unnecessary negative comments” which he made about his counterpart in a response affidavit, and a question he asked of his counterpart in the concurrent evidence session, which was said to demonstrate that he was acting “as an advocate.”

In Elanor Funds Management Ltd v Alceon Group Pty Ltd [2024] FCAFC 121 the Full Court reversed the original decision, finding for damages in favour of the purchaser.

The Full Court described the conclusion of the defendant’s valuer – that the market value of the centre significantly exceeded the transacted price agreed by two well-advised, sophisticated parties – as “surprising,” and preferred the evidence of the purchaser’s valuer.

The Full Court found that there was no sound basis to conclude that the “negative comments” were unnecessary.  In relation to the question asked of the other expert in the “hot-tub” the Court held:

The question [the purchaser’s valuer] asked was relevant. It was open to conclude that the raising of the question tended towards advocating rather than giving impartial evidence. However, it should be recognised that the evidence was given in the cut and thrust of litigation, more specifically in giving concurrent evidence where one expert might seek to convey why he considers his opinion to be preferable to the opinion of the other. This was the first time [the purchaser’s valuer] had given evidence in Court. Ultimately, it is a careful examination of the facts, the reasoning underlying the opinions, and the rationality of the views expressed, which is the surer guide to the correct outcome than the manner in which one particular piece of evidence is given or the fact that a witness temporarily lost his cool or slipped into a transient moment of what could be seen as advocacy.

Happily for the valuer, the Full Court held that the adverse credibility finding implicitly made against him “ought not have been made.”