The Valuator Both Sides Were Supposed to Trust

The situation

The letter arrived from opposing counsel about two months into the file, and on its surface it looked like ordinary business: a proposal to jointly retain a named valuator, Kenji, to determine the value of the clinic chain Halima had built over the previous decade, for the purpose of dividing property between her and Hodan as their separation moved forward. The letter itself was short, almost administrative in tone, the kind of correspondence that could easily be read once, agreed to, and forgotten, which was precisely what made it worth a closer look rather than less.

Hodan, a surgeon, and Halima, the owner of a chain of medical aesthetics clinics across the region, had accumulated substantial joint and separate property during their marriage, and the clinic chain was by far the largest asset either of them held. Under Ontario's approach to dividing property on separation, each spouse's net worth at the date of marriage and the date of separation is compared, and the value of a business like Halima's clinics sits at the centre of that calculation. Get the value wrong, and the equalization payment that follows is wrong too. Neither Hodan nor Halima wanted a prolonged fight over the number; both had said early in the file that they preferred a fair result reached efficiently over a drawn-out contest that would cost more in fees than either side could gain by winning it.

Jointly retaining a single expert, rather than each side hiring its own and fighting over which number to believe, is a common and often sensible approach. It saves money, and in theory it produces one number both sides can trust because neither side controls the expert alone. The proposal to use Kenji, whose valuation firm had a solid regional reputation, seemed at first like a reasonable and cost-effective way to move the file forward.

Hodan, who had never been closely involved in the financial side of the clinics, had no particular reason to question the proposal. It was only because our office routinely checks a proposed joint expert's history before agreeing to one that anything came up at all. Left to move at the pace opposing counsel proposed, the engagement letter would likely have been signed within the week, and by the time anyone thought to look closely at Kenji's history, his firm would already have been well into the valuation work.

What was actually at stake

What was actually at stake was not just which valuator got hired. It was whether the number that valuator produced would hold up, because a joint expert's report tends to be treated by both sides, and often by a court if the matter does not settle, as close to determinative. Once a joint valuation is accepted, unwinding it later is difficult and expensive, and by then the equalization payment negotiations have usually already moved forward on the assumption the number is right.

Our review of Kenji's firm's public engagement history turned up a prior relationship: several years earlier, his firm had provided advisory work to the clinic chain's primary landlord during a lease renegotiation, work that had involved reviewing the clinics' own financial performance as part of assessing what rent the business could sustain. It was not a disqualifying scandal, and Kenji had not worked for Halima directly. But it meant he had, at one point, formed views about the clinics' financial health from a landlord's perspective, where the landlord's interest in a strong-looking tenant ran in a particular direction, and that history was not something either side would have known to ask about without checking.

Separately, and just as important, our own preliminary review of the clinic chain's books raised a different concern entirely. The financial statements Halima's bookkeeper had prepared over the years used inconsistent categories from one year to the next, several inter-clinic transfers were recorded in ways that did not reconcile against bank records, and at least one clinic's revenue appeared to be understated relative to its patient volume. None of this pointed to anything necessarily improper. It pointed to books that had never been built with a valuation in mind, and that meant whoever valued the business would be working from a foundation that needed real reconstruction, not light adjustment, before any number coming out of it could be trusted.

Put together, the two issues compounded each other. A valuator with an undisclosed prior relationship to the landlord, working from books that had not been properly reconciled, created a real risk of a number that looked authoritative because it was jointly commissioned, while actually resting on a shaky foundation neither side had tested. Had that number been accepted early and used as the basis for negotiating the equalization payment, unwinding it later, after money had changed hands or been relied upon in other decisions, would have been far harder than addressing both issues before the engagement even began.

What we did

1. Ran a conflict check on the proposed joint expert before agreeing to the retainer. This is a routine step we take whenever an expert is proposed jointly rather than by our own side alone, precisely because a joint expert's independence is the entire basis for trusting their eventual number, and confirming that independence up front takes far less time than unwinding a completed report later.
2. Raised the landlord relationship with opposing counsel directly and in writing. Rather than object informally, we documented the specific prior engagement and asked Kenji's firm to confirm or clarify it, because an undisclosed relationship discovered only after a report has been delivered can taint the whole valuation and force the parties to start over at far greater cost. Putting it on the record early meant the issue was resolved as a matter of process, not litigated later as a credibility attack.
3. Proposed an alternative shortlist of valuators with no prior connection to either party or the clinics. We put forward three names with relevant experience in medical and aesthetics practice valuations, giving opposing counsel a genuine choice rather than simply vetoing their first proposal, since an outright objection with no alternative tends to read as obstruction and can invite a motion. The shortlist kept the process cooperative and moved the file toward a replacement expert within days rather than weeks.
4. Commissioned a preliminary internal review of the clinic chain's accounting. Before agreeing to any valuation date or methodology, we had a forensic accountant review the underlying books to understand what state they were actually in, so we would know in advance what a valuator would actually be working with rather than discovering problems mid-engagement when they are far more expensive to fix. The review produced a concrete list of the specific gaps that needed attention before any number could be trusted.
5. Identified and flagged the specific reconciliation gaps to both sides. Rather than let the eventual joint expert discover the inconsistencies mid-engagement, which risked delay and added cost for both parties, we surfaced the categorization and transfer issues early, in writing, so they could be addressed before the formal valuation work began instead of derailing it partway through. This turned a potential mid-engagement dispute into a manageable pre-engagement task.
6. Coordinated a limited accounting cleanup before the joint expert's engagement started. Halima's bookkeeper, working with our forensic accountant's guidance, reconciled the inter-clinic transfers and corrected the revenue categorization for the years that mattered most to the valuation date, because a valuator working from unreconciled books produces a number neither side can safely rely on. The cleanup produced a record a valuator could actually use without needing to first act as a forensic accountant themselves.
7. Confirmed the replacement expert's engagement terms in writing before any work began. Once a mutually acceptable valuator was agreed, we set out the scope, the valuation date, and the underlying financial records both sides had agreed were now reconciled, closing off the possibility of a later dispute over what the expert had actually been asked to assess or which version of the books they had relied on. That written scope became the yardstick both counsel used to confirm the final report matched what had been agreed.
8. Kept Hodan informed at each step without involving him in the accounting detail. Because Hodan had no background in the clinic chain's finances, we summarized what mattered for his decisions, the choice of expert and the settlement range, rather than burying him in reconciliation detail that would not change what he needed to decide, which let him approve each step quickly instead of stalling on questions he had no way to evaluate. That kept the file moving at the pace the accounting work allowed.
9. Documented the reasoning for the expert switch in the file record. We kept a clear written trail explaining why Kenji was replaced and why the accounting was corrected before valuation, so that if the file did not settle and a court later reviewed the process, the steps taken would stand up to scrutiny on their own rather than looking like an unexplained change of expert. That record became the reference point both counsel relied on when the file was later summarized for settlement discussions.

The outcome

The joint valuation proceeded with a different expert, working from books that had already been reconciled rather than ones a valuator would have had to untangle mid-engagement. Because the problem was caught before any report was produced, there was no flawed number to unwind, no argument later in the file about whether the valuation should be redone, and no added cost from having to relitigate a figure both sides had already relied on. Opposing counsel, once shown the reconciliation gaps directly rather than left to discover them independently, agreed relatively quickly to both the replacement expert and the accounting cleanup, which kept the file moving instead of stalling into a dispute about the dispute. The alternative, a drawn-out fight over whether Kenji should be disqualified, would have cost both sides more in legal fees than the accounting cleanup itself did.

That is the nature of a prevention outcome: nothing dramatic happened, because the dramatic version of this story, a contested valuation fight breaking out months later once one side discovered the landlord relationship or the accounting gaps on their own, never occurred. The eventual valuation, once the books were sound and the expert's independence was not in question, came in at roughly $1.15 million for the clinic chain, a number both Hodan's and Halima's counsel accepted without further dispute.

Hodan later said he had not understood, when the joint expert letter first arrived, why our office wanted time to check into Kenji's history rather than simply agreeing to a name that seemed reasonable on its face. The value of that step only became clear once he saw what the accounting review turned up. Catching a problem before it becomes a dispute rarely feels dramatic while it is happening. It is usually only visible afterward, in the fight that did not happen.

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