Are you part of the problem or part of the solution?

Apr 14, 2015

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A number of years ago, I was engaged to assist in a rather complex file which involved a common-law couple.  At issue were the existence and valuation of some 34 brokerage accounts, 9 RRSP accounts, 13 private corporations (as well as an additional 8 private businesses, purportedly held “in trust”), 9 pieces of real property and 3 family trusts.  A further issue was the quality of the underlying evidence or documentation.

It is not uncommon in such situations for the two parties to become extremely entrenched in their positions, however they were determined to resolve their differences through private arbitration, rather than through the courts.  They had engaged a very senior lawyer with extensive experience in family law to be the Arbitrator.

In preparation for the arbitration, the parties and their lawyers had each engaged experienced valuation experts.  Over a period of several months, the 2 opposing valuation experts prepared independent reports using a common format.  Included in each of these reports, were schedules detailing the values of the numerous assets and liabilities at various dates – date of co-habitation, date of separation as well as an interim date that both parties more or less supported.

As you might imagine, the arbitration hearing quickly bogged down into an ongoing dispute between the 2 valuation experts (led by counsel) over numerous differences in values, supported by mountains of documents, or in some cases not supported at all.  The differences in some cases were significant, however, in many cases, they were not.

After several days of hearing testimony and expert opinion, the Arbitrator adjourned the hearing and directed the 2 valuation experts (and only the 2 of us) to spend the next day or so working together to identify and quantify all unresolved differences in excess of a certain threshold dollar amount.  The Arbitrator instructed us to do all we could to resolve all differences below the threshold amount. 

It was amazing!  Because we were not invested emotionally, the other valuation expert & I were able to dispense with most of the hundred dollar items that seemed to be so difficult to resolve during the arbitration hearing.  We were able to come back the following day with a list of “big ticket” items, together with our pooled documentation for the Arbitrator to decide.

How I accidentally became qualified as an Expert Witness

Early in my career as a Business Valuator, I was engaged by a law firm to provide a report on the estimated value of a privately held general insurance agency. The purpose of the report was to assist the parties in a divorce action to value and then divide their matrimonial assets. Both the husband and the wife worked in the business, however the wife was the Agent of record and one of the issues at trial was the value of a transition commission which would be paid to the Agent upon completion of a specified term of service and upon “qualified termination” of the contract.

At the time of preparing the report, I had not yet written my final exam (called the Membership Entrance Examination) to qualify as a Chartered Business Valuator.

The lawyer who had engaged me sent a copy of my report to the opposing counsel. After a few weeks, I was informed that I would be needed at trial. (The only other time I had ever been in court was as a character witness for a friend, so understandably, I was a bit nervous.) I was asked to provide my CV, which at the time was not that impressive.

The day that I was to appear in court arrived and I was sworn in. The lawyer who engaged me walked me through my rather limited CV and, as I recall, the judge asked me a couple of questions about my experience. There being no objection from opposing counsel, the judge then stated that I was qualified as an Expert Witness in valuation matters before the court. I reviewed my valuation report and my conclusions therein for the court.

I answered the questions put to me on direct as well as on cross examination. I was then excused and as I was walking past counsel’s table, he said to me: “You were just qualified as an Expert Witness. You should put that on your resume.” I’m not sure that I fully comprehended at the time what that meant, but I’ve worked hard ever since to justify that judge’s (and several other judges since) determination that I am qualified as an Expert Witness in valuation matters.