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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Single expert and shadow expert valuations of businesses, practices and company interests for property settlements, written to the Federal Circuit and Family Court's expert evidence standard and built to be tested.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A family law business valuation in Sydney establishes what a spouse's business, practice or company interest is worth to that spouse at the hearing date, after owner remuneration, private expenses and related-party costs are normalised and personal goodwill is separated from goodwill that would transfer to a buyer. In most matters it is prepared by one valuer on joint instructions from both sides.
When a marriage or de facto relationship ends and one party owns a business, that business is usually the largest item in the property pool and the one least likely to be agreed. The family home has comparable sales down the street. A dental practice in Chatswood, a plumbing business in Blacktown or a consulting firm in the CBD has none, and each spouse arrives with a different belief about what it is worth.
The Court cannot divide what it has not valued. Under section 79 of the Family Law Act 1975, and section 90SM for de facto couples, the first task is to work out what each party owns, owes and can draw on, and what all of it is worth. Contributions and future needs are then assessed against that pool, and the final orders must be just and equitable. An unreliable business figure distorts every step that follows.
The business owner carries an added exposure. Each party owes a duty of full and frank disclosure, and a business whose accounts do not reflect commercial reality, or whose owner has been slow to produce records, invites the inference that value is being hidden. A valuation prepared early, by someone independent of both spouses, is often what allows the parties to negotiate instead of litigate.
We act as single expert on joint instruction, as shadow expert advising one party's solicitors, and as reviewer of a report prepared by someone else, for matters in the Sydney and Parramatta registries of the Federal Circuit and Family Court of Australia and in negotiated settlements that never reach a hearing.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Family law does not prescribe one valuation standard, and the basis of value is a matter for your lawyer to instruct. The valuer's job is to apply the instructed basis rigorously and to show the difference where an alternative basis would produce a materially different figure.
Where the business is not going to be sold, the Court is generally concerned with what the interest is worth to the spouse who keeps it. That can retain value a hypothetical buyer would not pay for, and it can set aside discounts a buyer would demand. The report states the basis applied and shows the market value alternative where the gap is material.
The pool is ordinarily valued at the time of the hearing or settlement, not at separation. A business that has grown or shrunk since the parties separated is valued as it stands, and the argument about who caused the change is run by the lawyers, on quantified figures, as a contribution question.
The Court strongly prefers one valuer, jointly instructed by both parties, whose first duty is to the Court and not to either spouse. Each side may still engage a shadow expert to review the report, frame questions and advise on settlement, and that work usually attracts legal professional privilege.
Where records are incomplete or withheld, the valuer does not fill the gap with assumptions in the owner's favour. The report lists what was requested, what was produced and what effect the gap has on the conclusion, so the Court can draw its own inference.
A recurring error is to capitalise a professional's income as business goodwill and then treat that same income a second time as earning capacity under the future needs factors. Where the income is personal to the practitioner, it is not a saleable asset of the pool, and counting it twice inflates the settlement. The report keeps the two apart so the lawyers and the Court can deal with each in its proper place.
Capitalisation of future maintainable earnings usually leads. For an established practice or trading business, three to five years of normalised results are used to establish what the business can sustainably earn, and a capitalisation rate or multiple that reflects the risk of those earnings is applied. The income approach mirrors how an informed buyer would look at the business and gives the Court a framework it is used to testing.
A discounted cash flow is used where the earnings profile is changing and a reliable forecast exists, for example where a second surgery has just been fitted out or a major contract has been won or lost. The asset approach gives the floor and leads where the entity mainly holds property or investments. The market approach cross-checks the result against practice sales and industry benchmarks. Rules of thumb, such as a percentage of fees for an accounting practice or a per-chair figure for a dental practice, are a cross-check only and never the method.
Two questions decide most family law valuations. The first is goodwill: how much of the earnings would follow the business to a new owner, and how much belongs to the spouse personally through reputation, skill and relationships. A sole practitioner earning a large income may own very little transferable goodwill. The second is control: where a spouse holds a minority parcel on paper but in practice runs the company and sets the dividends, a mechanical minority discount is unlikely to survive challenge, and the report reasons the position from the facts.
These are the weaknesses a shadow expert looks for first, and the ones most often exposed in cross-examination.
In family law the report will almost always be read by the other party's lawyers, a shadow expert and potentially a judge, so the depth has to match that scrutiny. The exception is the early stage, when one party wants a private view of the number before deciding how hard to negotiate.
The report sets out the instructions received, the basis of value applied, the valuation date, the documents examined and the facts and assumptions relied on. It itemises every normalisation adjustment with the reason and the evidence, explains why the leading method was chosen and how the cross-checks were used, deals with goodwill and control expressly, and states any limitation caused by incomplete disclosure where the reader will see it. It is written to comply with the Court's expert evidence rules, including the overriding duty to the Court.
The certified valuer who signs the report attends conferences of experts, contributes to joint reports, answers questions from either party through the proper channels and gives evidence, including concurrently with the other expert, when required. That willingness is the point. A figure its author will not defend in the witness box has little value to either spouse.
If the other side's expert reviewed this report, which assumption would they attack first, and what is the answer? If your valuer cannot tell you before the report is filed, you will find out in cross-examination.
Talk your situation through with a certified valuer before you commit to anything, at no cost.