MW Insights – July 2025
As we enter the new financial year (during one of the coldest and wettest months of the year), it’s timely for us to revisit the basics of valuation as it relates to Family Law matters. Please feel free to share this newsletter with colleagues who may find this useful.
We also regularly present to law firms on business valuations for Family Law matters. If this is of interest, reach out and we’ll be more than happy to arrange.
When might Valuations be required in relation to Family Law Matters?
In marriages or de facto relationships where the pool of assets consists of real estate and personal items only, determining value is relatively straightforward. However, when one or both parties to a Family Law matter have ownership in a business or an entitlement to an income stream, a valuation may be required.
Our team is often called upon to assist with Family Law matters where a business or complex corporate structure is involved. Our services include preparing business, share and other equity valuations, critically appraising business valuations prepared by another expert witness as a shadow expert, preparing an independent report as a single expert witness, or attending as an expert witness in Court proceedings with respect to a report prepared by us.
What is Valuation?
APES 225 (the professional standard issued by the Accounting Professional and Ethical Standards Board for members providing valuation services) defines valuation in the following way: Valuation means the act or process of determining an estimate of value of a business, business ownership interest, security, intangible asset, or other asset or liability by applying Valuation Approaches, Valuation Methods and Valuation Procedures. A Valuation does not involve the verification of information in respect of the business, business ownership interest, security, intangible asset, or other asset or liability being valued.
Neither the Family Law Act 1975 (“Family Law Act”) or Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“Family Law Rules”) define ‘value’. In the absence of legislative guidance, Courts have looked to case law and a widely accepted definition of value has centred around the concept of ‘(fair) market value’ (see eg. Spencer v Commonwealth [1907] 5 CLR 418). There are however particular assets and circumstances where ‘fair market value’ may not be an appropriate definition to adopt. This is particularly so in circumstances where there is not a ready and available market, however contrary to the removal of this by the International Valuation Standards Council (“IVSC”), we are of the opinion that fair market value will remain relevant from a litigation perspective. We will explore valuation approaches, methods and procedures in more detail in future newsletters.
In general, Courts have indicated that Valuation is an art, not a Science (Gold Coast Selection Trust v Humphrey [1948] AC 459) and that it involves an element of guesswork (Myer v Commission of Taxes [1937] VLR 106). Although the Court may take expert evidence as to the valuation of assets, it is ultimately the Court who makes a determination with regards to value.
Who is the instructing party for the expert witness?
To avoid unnecessary costs arising from the appointment of more than one expert witness, Rule 7.03 of the Family Law Rules provides that if the parties agree that expert evidence may help to resolve a substantial issue to a proceeding, they may agree to jointly appoint a single expert witness to prepare a report in relation to the issue. The Court may also, on application or on its own initiative, order that expert evidence be given by a single expert witness (Rule 7.04 of the Family Law Rules).
The single expert witness is independent and their duty to the Court prevails over the obligation of the expert witness to the person instructing, or paying the fees and expenses of, the expert witness (see Rule 7.18 of the Family Law Rules). The single expert witness is also abound by other duties as outlined in APES 215, including the duty not to advocate for a party.
How to achieve the best results from a single expert witness
A properly prepared joint letter of appointment is the key to getting the best results from a single expert witness. It is worth the efforts of both parties spending some time from the outset to clarify the scope of the expert witness’ involvement and to identify the issues of significance.
What can be done when you or your client disagrees with the conclusions of a single expert witness?
Either party may appoint a ‘shadow’ expert to review the report of a single expert witness and prepare questions. In more complex matters, a shadow expert may be appointed even earlier on in the process to assist with the selection of the jointly appointed single expert witness. Questions may be presented to the single expert witness within the relevant timeframes, but only for the purpose of clarifying the report (see Rule 7.26 of the Family Law Rules). The expert witness may also be cross-examined in Court (See Rule 7.32 of the Family Law Rules).
Our directors are regularly consulted as shadow experts, noting a shadow expert’s critique can be a valuable negotiation tool during mediations.
What does an expert report include?
The Family Law Rules and APES 215 govern the requirements of an expert report.
For Family Law purposes, it is important to note that the expert report (and instructions to the expert) should include an assessment of both business and equity. The assessment of business value only is not appropriate for Family Law purposes because it does not consider any debt, surplus assets or loans with the parties.
The service/ outcome that the parties receive from an expert witness is a carefully considered professional opinion regarding how much a business, share or other equity is worth. If a member of our team is appointed as an expert witness, you can also expect clear communication, a prompt turnaround, and a well rationalised, high quality report. We look beyond the numbers to gauge the reality of a business’ position, paired with a healthy dose of skepticism and common sense.
Our New Office Location – Visit Us in Ringwood
We’ve happily settled into our new office in Ringwood. You can find us at Suite 2, 12 Maroondah Highway, Ringwood 3134, Victoria. We’re the green/blue glass building next to the Eastlink turnoff. We love our new office, but it can be easy to miss the driveway (Don’t worry there are plenty of spots to turn around if you do!)
Our Accredited Specialists
🎉 🎂🎂 Fun Fact: Russell and Victoria both share birthdays in the month of July! So it’s birthday month celebrations here at Munday Wilkinson. 🎂🎂 🎉
Victoria Wheeler – Director with over 20 years’ experience in accounting, business services and taxation. She is recognised as a Business Valuation Specialist by CA ANZ and has appeared as an Expert Witness in the Federal Circuit Court of Australia and County Court of Victoria.
Joshua Wheeler – Director with over 17 years’ experience in commercial and professional accounting services. He is recognised as a Business Valuation Specialist by CA ANZ, has appeared as an Expert Witness in the County Court of Victoria, and has participated in conferences / mediations with legal representatives and other experts.
He was a presenter at the inaugural SV Partners Accounting Forum, has presented with Legalwise Australia, and regularly presents to law firms on Business Valuations for Family Law matters
As always you can reach out at any time on (03) 9816 9122 or email us at advice@mwforensic.com.au.
Regards,
The MW Forensic Team
(Like the A-Team for litigation support)
Disclaimer: Although every care has been taken in preparing “MW Insights”, no responsibility is accepted by Munday Wilkinson Pty Ltd for errors or omissions. Professional advice should be sought before applying the information to particular circumstances.
Liability limited by a scheme approved under Professional Standards Legislation
Munday Wilkinson, trading as MW Forensic, is a boutique business valuation and forensic accounting firm established in June 2000. We offer the legal profession, and others, a quality, personalised, time efficient and cost-effective service