Is Hearsay Evidence Admissible in an Expert Valuation?

by Greg Carter, Fixed-Fee Litigation Lawyer

When property (such as land) is valued by an expert, the expert will generally rely on:

  • matters drawn from his or her own knowledge and experience, which are not required to be proved by direct evidence (‘non-specific hearsay’);
  • specific comparable transactions, of which he or she has personal knowledge, which must be proved by direct evidence (‘specific hearsay’).

Both types of hearsay are admissible as evidence in support of the expert’s opinion.

Non-specific hearsay

Information obtained by a valuer from others, relating to particular transactions, forms part of his general experience, knowledge and expertise upon which he can draw 'to formulate his opinion and to express working truths'.

In addition a valuer will often have learned information from other sources such as text books, journals, and other relevant sources.

Hearsay information of this kind may be used by a valuer, without giving direct evidence of it, for example, to give a general exposition of the subject, to assess market trends, or to determine whether a particular transaction is aberrant or consistent with overall market conditions.

Specific hearsay

On the other hand, hearsay evidence of particular comparable transactions that are used to infer the value of the property that is directly in issue cannot be used by the valuer, unless proved by direct evidence of those comparable transactions.

Example

A valuer can give evidence, based on general experience, that particular transactions are ‘outliers’ and should be excluded from the valuation.

However a valuer (or the party who retains the valuer) must give direct evidence of any comparable transactions that are relied on for the valuation.

Please contact me if you require assistance.

Greg Carter is a freelance litigation lawyer based in Perth, specialising in fixed-fee commercial dispute resolution.

Greg offers a free consultation and a ‘no obligation’ quotation.

For more information please call Greg on 0422 406 929 or email gc@gregcarter.com.au.

Or see his website www.gregcarter.com.au.



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