Valuations in Family Law

Valuations in Family Law Services at SM Family Law

In the realm of family law, disputes often arise over the valuation of assets, be it the family home, an investment property, or a business. Our “Valuations in Family Law” service at SM Family Law addresses this common challenge by providing expert witness reports to assist in resolving disputes and ensuring a fair and accurate assessment of assets.

Property Valuations in Family Law

Expert Witness Reports

It is common that parties in a family law property dispute do not agree on the valuation of an asset. This regularly occurs regarding the family home or an investment property. In family law proceedings the Family Court Rules provide that if the parties to a proceeding agree that expert evidence may assist to resolve the dispute, they may agree to jointly appoint a single expert witness to prepare a report to assist the Court. This witness may also be appointed by the Court.

When a valuation is required for a real property, such as a residential house, unit, or commercial premises, a suitably qualified, experienced valuer should be engaged. While the parties are free to agree on the expert who is to provide the report, it is common practice for one party to select a panel of three experts that the other party can choose from. The expert witness should be an independent expert who will prepare a single expert report providing the valuation.

This valuation will be relied upon by the parties and the Court unless one of the parties further disputes the valuation. It is only in limited circumstances that a new report can be relied upon in the proceedings, and this will require the permission of the Court

Business Valuations in Family Law

When business valuations are required, an independent accountant with suitable skills and experience in preparing business valuations should be selected. The accountant who is engaged by the business can provide a valuation that may be accepted by the parties.

However, if there is a dispute in relation to the valuation, that accountant would not be considered a single expert witness for the purposes of court proceedings. If the valuation is disputed, then the involvement of the incumbent accountant should be limited to assisting the material for valuation and not providing the
report directly.

Disputing an Expert Witness Valuation

If a party disputes the valuation provided by a single expert witness, then they have three options:

1. Agree with the other party to confer with the single expert witness.

The parties can confer with the expert at a conference to clarify the report. This must be done within 21 days of receiving the expert’s report.

2. Questions can be put to the single expert witness.

A party can write to the expert and ask questions to clarify the report. The questions must be put to the expert within 7 days of a conference, or if no conference is held then within 21 days after receiving the report.

3. Obtain another report known as a shadow expert report.

A party is free to obtain a shadow expert report at any time which may assist them to determine the value of property or to support a dispute as to the value provided by a single expert witness. However, if a party seeks to rely on a shadow expert report, where a single expert witness has been appointed, they will require the permission of the court.

For the court to grant permission for the report to be tendered it must be satisfied that:

a. there is a substantial body of opinion contrary to any opinion given by the single expert witness and the contrary opinion is or may be necessary for determining the issue; or

b. another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue; or

c. here is another special reason for adducing evidence from another expert witness.

When considering if a special reason exists the courts will consider factors such as:

a. the methodology used to calculate the value of the property;

b. any matters that were known to the shadow expert that were not known to the expert witness;

c. the information relied upon if a different methodology was relied upon; or

d. the impact the different valuation may have on the parties.

The courts have determined that conferring with the original expert witness, and putting questions to them, should be utilized prior to making an application to obtain permission for another report to be relied upon.

It is important that all parties understand the role of an expert witness providing property valuations and the circumstances in which the valuation that they provide can be challenged.

When it comes to Valuations in Family Law, trust the experienced team at SM Family Law to advocate for your best solutions. Let's start initiating the process of securing a fair and equitable division of assets and liabilities.