Property – application for interim sale of shareholding denied

In Maggio & Turner [2021] FamCA 466 (1 July 2021), Hartnett J dismissed a husband’s application for the winding up of a trust and sale of a shareholding interest, in which he argued that neither party sought to retain the interest such that a sale was inevitable.

A single expert had valued the shareholdings as being worth $280,612 per share, whereas another shareholder in the group had offered the husband $150,000 per share.

The court said (from [19]):

“The value of [the] … offer to the parties is fifty-four percent of the value attributed to the … interest … as determined by the single expert Mr M. (…)

[21] There appears no disagreement between the parties that the sale of the shareholding … will deprive the parties of between $415,000 and $420,000 a year …

[22] The husband’s argument for selling the shareholding interest as proposed by him is to allow him to obtain finance to purchase a home in the sum of approximately $2 million. … The husband does not … set out in his evidence … any urgent need to sell the interest … The sale, as proposed by the husband, will decrease [the] income stream for each of the parties in a significant way, in particular and relevantly, by comparison with any interest the husband may pay in borrowing costs for the purchase of a new home. … The husband has the necessary income stream from the parties’ shareholding interest to purchase a home … and meet repayments (…)

[25] The single expert, Mr M, attributed a value of $5,500,000 to the parties’ entire interest (…)

[30] The husband submitted that in circumstances where neither party seeks to retain the shares … that the shareholding should be sold.

[31] The only present offer to purchase the parties’ shareholding … is the earlier referred to $150,000 per percentage point … The wife claimed in respect of this offer that the husband was seeking to undersell a substantial asset of the parties. …

[32] There is no conclusive evidence before me … to indicate that the husband is attempting to deliberately undersell a[n] … asset of the parties’. (…)

[39] I am of the view that the shareholding need not be sold until the valuation is fully tested at trial (…) [A]llowing the shareholding interest to be sold would … ‘clearly cause irreversible prejudice to the wife’s ongoing financial position’.”

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are Accredited Specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).

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