Property – determination of valuation methodology…

family law casenotes

…‘value to owner’ preferred to ‘fair market value’

In Gare & Farlow [2023] FedCFamC2F 109 (17 February 2023), Judge Forbes heard competing property and parenting applications following a marriage of almost 10 years that produced two children, born in 2010 and 2012.

The asset pool included the wife’s business. In November 2019 the wife’s business was valued by her forensic accountant at $57,120. The husband’s expert valued the business at $400,000 on a ‘value to owner’ basis. 

After summarising the evidence of the competing experts, Judge Forbes said (from [177]):

“It is well accepted that traditional valuation methods which have been developed for commercial purposes may be inappropriate for the purposes of a Family Law valuation.


[180] The ‘value to owner’ approach to valuation is intended to capture the reality of the situation by bringing to account any special or additional economic benefit which is conferred upon the business owner by his or her control of the shareholding. It is intended to include within the value any commercial, financial or other advantage which accrues to the owner which might not necessarily be available to any hypothetical third party purchaser [Scott & Scott (2006) FamCA 1379] … A valuation which assumes a negligible or only net asset value because the business is ‘unsaleable’ is artificial because it ignores the reality of benefits which accrue to the owner.


[181] In a fair market value valuation, risk is considered from the hypothetical willing but not anxious buyer. It reflects the value of each asset and liability on a going concern basis and the profitability, market position and attractiveness of the business …


[185] The criterion which engages the value to owner approach is not whether a party is a minority shareholder. Rather the critical criteria are the absence of a market for the party’s interest in a business … and evidence of circumstances which satisfy the Court that … the party is likely to retain the interest because he or she derives real value and benefits from it …


[188] … I am satisfied that in the circumstances of this case the ‘value to owner’ approach to valuation is appropriate …”

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 (

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