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In Family Law property cases when the Family Court or Federal Circuit Court comes to look at how property should be divided, the Court will need to know the value of all property. Questions arise as to what date should the property be valued – the value at separation or a later date. What is the Court’s approach in valuing assets (and liabilities) and determining the date at which the valuation may be complex?
There can often be a considerable passage of time between the date when the parties separated and the date when the Family Court or Federal Circuit Court looks at how property should be divided. Many things could have happened during this period. The value of the property may have gone up or the value of the property may have gone down. The relationship of the parties in terms of their potentially different contributions to the value or decrease in value of the property between separation and hearing by the Court will be very different.
It is generally the case that it is necessary for the Court to ascertain the value of the property as at the date of the hearing before the Court. That is the general rule but it may be necessary to ascertain the value of the property at other and different dates such as, the date at which the property was acquired and whether the contributions of the parties are equal or different from the date of acquisition of the property up to the date of hearing. The Court has discretion in relation to the date at which it will determine or accept evidence in relation to the valuation of the property. The Court needs to take into account the contributions of each of the parties to the acquisition, maintenance and improvement of family properties but has to balance this with the need for an adjustment in favour of one of the parties if some of the facts that are set out in Section 75(2) of the Family Law Act are to apply. The task is variable and complex. The value of property at dates other than the date of hearing may be relevant.
A property could be acquired jointly and both parties may make equal contributions up to the point of separation. One party remains in the home and continues to pay the mortgage, maintain the property and potentially make improvements to the property. The party no longer living in the home makes no contribution to that property. These post separation contributions will be important in assisting the Court to make an order for division of property.
In the marriage of Cozantis the parties had acquired a business shortly before separation. The wife left and the husband took control of the business. Between the date of separation and the date of the hearing the husband had worked to increase the value of the business. The approach taken by the Court was to find that post separation, the husband made the sole contributions to the property and that this should be recognised in the exercise of the Court’s jurisdiction. The Court found that because of the difference in the parties’ contributions since separation that it was appropriate to have regard to the value of the property at the time of separation as well as the value of the property at the time of hearing.
Acknowledgment of Contributions
Section 79 of the Family Law Act requires the Family Court to take into account contributions. It may be the case that one party brought about an increase in value by effecting a major alteration, improvement or addition to the property since separation then he or she should be entitled on the basis of the contributions made to a higher proportion of the added value.
The value of property at the date of separation may be important if the parties acted on such valuation and one of the parties received his or her entitlement on the basis of that valuation.
At Watson & Watson our experienced Family Law Solicitors are skilled in all aspects of family law matters and if you need advice on your financial/property settlement, please contact Richard Watson Senior Family Law Solicitor or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate advice.
This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.
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