When parties separate and enter into negotiations or commence
proceedings in Family Court for a property settlement, one of the
first steps that is required to work out how their property is to
be divided, is the identification and valuation of the parties'
Do I need a valuation of my properties?
This depends on whether you are able to agree with your former
partner or spouse on the value of each of your assets. In many
cases, parties are able to agree on the values of their assets with
the result that a formal valuation is not required. This often
happens with the value of real estate, particularly where parties
In more complex financial structures involving businesses or
trusts, a valuation is often necessary.
What is the difference between an appraisal and a valuation
An appraisal is typically given by a real
estate agent as a guide to the value of properties. It is an
estimate based on their sales knowledge. They are typically given
for free and may not be relied upon legally as an accurate value of
the property in question.
In contrast, a valuation is prepared by a
qualified valuer who has specialised knowledge based on their
training, study or relevant experience, to provide a valuation. A
valuation is typically more reliable as to the value of a
particular asset. A valuation will also usually be charged for by
the qualified valuer.
How does the valuer value the asset?
Unless they have received instructions to the contrary, the
majority of valuers will value assets based on what is known as the
"fair market value". This is the price that a willing but
not anxious buyer, acting at arm's length, with adequate
information, would be prepared to pay to a willing but not anxious
seller of the shares or assets (as defined in Spencer v The
Commonwealth of Australia (1907) 5 CLR 418).
The Family Court has held however, that there is no fixed rule
as to what is the proper method of valuation. The Court must
approach a question of valuation on a realistic basis. The method
of valuation depends not only on the type of property or commodity
concerned but also on the purpose for which the goods (assets) were
originally acquired and the need to realise on them in the shorter
or longer term: see Hull and Hull (1983) FLC 91-360.
We need a valuation, what do I do now?
Typically, if you are represented, your lawyers will make
enquiries and assist you to identify a number of expert valuers who
may be able to prepare a valuation of the assets in dispute for
you. Where possible, parties are encouraged under the Family
Law Rules to agree on a Single Expert valuer. The benefit of
having a Single Expert valuer is that the cost of their report or
opinion is typically shared between you and your former partner or
spouse. In addition, the values provided by the Single Expert
valuer are accepted by the Court as evidence without either you or
your former partner or spouse having to apply separately to the
Court to accept the evidence.
Once the identity of the Single Expert valuer is agreed upon,
and both parties have resolved the issue of who pays what amount
for the Single Expert valuer's costs, the next step is the
agreement between the parties on the "terms of reference"
and "instructions" to the Single Expert valuer. Where the
asset that is to be valued is a business or a trust, your lawyers
will often work with your accountant to ensure that appropriate and
relevant information is brought to the valuer's attention.
There are also a number of relevant Family Law Rules which
are required to be complied with when a valuation report is ordered
for Family Court purposes. Your lawyers will need to ensure that
these rules are complied with in their written instructions to the
If you and your former spouse cannot agree on the appointment of
a Single Expert, it may be necessary for you or your former spouse
to make an application to the Court to appoint the Single Expert
you have chosen as the Single Expert valuer.
Alternatively, if both you and your former spouse or partner
have appointed separate Experts, not only will you need to apply to
the Court to accept the evidence given by your valuer, there is
likely to be a need for a conference of those two experts to be
organised. At the conference, the valuers discuss their respective
opinions, and see if they can come to an agreement on some or all
of the issues forming their report.
Ultimately, where there is no agreement as to the value of an
asset, the Family Court will decide what value the Court will
accept for the asset, based on the information provided by the
Expert or Experts, the evidence given by the Expert at Trial, and
any other relevant evidence.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The person named as an executor in the deceased's will has the right to arrange for the burial of the deceased's body.
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