Few parts of a property settlement generate as much friction as the number attached to the family home. One party is confident it is worth more, the other is equally confident it is worth less, and both have a real estate agent’s opinion to wave about.
Understanding what a valuation is actually for, and how the court treats it, usually changes the question from how to win the argument to whether the argument is worth having.
An appraisal is not a valuation
This distinction does most of the work, and it is where a great many disputes begin.
A market appraisal is an estimate from a real estate agent, typically free, often prepared in the hope of winning a listing, and not given on oath. A valuation is a written report by a qualified valuer, prepared to professional standards, for which the valuer is accountable and can be cross examined.
Both have a place. Where the parties broadly agree on value, an appraisal may be all that is needed and it saves money. Where value is genuinely in dispute, the court’s disclosure requirements call for a valuation or market appraisal of any real estate or other asset, the value of which is in dispute, and in that situation an agent’s estimate rarely settles anything.
Why two appraisals usually prove nothing
Agents price for a campaign, not for litigation, and the range between two honest appraisals on an ordinary suburban house can easily be a hundred thousand dollars. Producing one at the top of the range when the other party has one at the bottom tends to confirm that a proper valuation is needed rather than resolve the gap.
The single expert is the preferred route
The court’s strong preference is one valuer engaged by both parties rather than one each, and the practice direction says plainly that when appropriate, a single expert or an assessor should be engaged to assist the parties and the courts to resolve disputes.
A single expert is instructed jointly, works from a statement of facts the parties agree, and cannot be communicated with by one party alone. Anything either side sends the expert has to be shared. That structure is what gives the report its weight.
| Asset | Who normally values it |
|---|---|
| Real estate | A qualified property valuer |
| Business or company interest | A forensic accountant or business valuer |
| Superannuation | Fund statements, or an actuary for defined benefit funds |
| Vehicles and machinery | A plant and equipment valuer, or agreed market evidence |
| Jewellery and art | A specialist valuer in that field |
| Digital assets | Exchange records, with accounting input where holdings are complex |
Choosing the right discipline matters more than people expect. A property valuer cannot value goodwill in a business, and an accountant will not give you a defensible figure for the house.
“A valuation is evidence, not an opening position in a negotiation. Engaging an appropriately qualified expert early, and jointly where possible, usually narrows the issues in dispute and reduces the cost of resolving them.”
Superannuation is treated differently
Superannuation is commonly the second largest asset after the house, and it does not behave like the others.
The superannuation splitting law treats superannuation as a different type of property, and splitting does not convert superannuation into a cash asset, since it remains subject to superannuation laws and is usually retained until retirement age. A dollar of superannuation and a dollar of equity in the house are therefore not quite equivalent, even where the balance sheet records them at the same figure.
Most accumulation accounts are valued from a member statement. Defined benefit interests and self managed funds are a different exercise and frequently need actuarial or accounting input. Where a splitting order is sought, the trustee must be given notice before the order can be made, which is a procedural step worth building into your timetable rather than discovering late. Our page on superannuation disclosure in property matters sets out what has to be produced.
Businesses, trusts and private companies
These are the most expensive assets to value and the most frequently disputed, because the number depends heavily on method and assumptions rather than on comparable sales.
A valuer will usually consider future earnings, the net value of the underlying assets, and in some cases what the business would realise if wound up. The answer can differ considerably depending on which approach suits the business, how dependent it is on one person, and how reliable the records are.
Our page on how a family business is valued goes into that in more detail, and where holdings include cryptocurrency our page on digital assets in a property settlement covers the particular problems of volatility and tracing.
What the valuation is actually for
Valuations do not exist in isolation. They feed a document called the balance sheet, which is the agreed schedule of everything the parties own and owe, and it is what the court works from.
The timetable is specific. In financial matters the applicant serves a joint draft balance sheet on the respondent not later than twenty eight days before the trial date, listing all assets, liabilities, superannuation interests, financial resources and property, with the values each party alleges. The respondent then has seven days to add their own contra allegations and any agreed values. Upon completion of any single expert valuation the balance sheet is amended to reflect the determined or agreed values, and a final settled version is filed not later than seven days before trial.
Two things follow. First, a valuation figure is only useful once it is on that schedule, which is why obtaining it early matters. The court expects parties to arrive at dispute resolution already holding the valuations they need, so that negotiation can actually be productive.
Second, because the settled balance sheet is filed shortly before trial, a valuation obtained years earlier at the date of separation is usually not the figure that decides anything. Values generally need to be current. Our page on property settlements explains how that fits the wider process.
Should you fight the valuation
Often the honest answer is no, and it is worth setting out why before you spend money finding out.
There are legitimate ways to test a single expert’s report. You can put written questions to the expert, hold a conference with them, or obtain your own report to see whether there is a genuine basis for challenge. Those steps are available and sometimes well worth taking.
What is considerably harder is persuading the court to allow a second valuer into evidence. A difference of opinion about value, which is the ordinary state of affairs between two competent valuers, is not generally enough on its own. You need a real flaw, such as wrong instructions, a factual error, an unsupportable assumption, or a method inappropriate to the asset.
Run the numbers before you run the argument
The commercial reality tends to decide it. If the disputed amount on a house is sixty thousand dollars, your share of that difference might be thirty thousand, and a shadow report plus the legal costs of a contested valuation argument can consume a large part of it with no guarantee of success. Parties and their lawyers are expected to have the cost of each step in mind and to press only issues of genuine significance, and costs orders are a real possibility where that expectation is ignored.
A genuine error is worth pursuing. A figure you simply dislike usually is not.
Valuation depends on disclosure
No valuer can produce a reliable figure for an asset they have not been told about, which is why disclosure sits underneath this entire exercise.
The duty is a serious one. Parties must comply with their obligation to provide full and frank disclosure in a timely manner, and in financial proceedings an Undertaking as to Disclosure is among the documents filed with the application. The duty is ongoing rather than a single event, so it continues as circumstances change.
Where disclosure has been incomplete, the sequence usually has to be repeated, which is expensive. Our page on financial disclosure obligations covers the consequences of getting it wrong.
It is also worth remembering that value is only one input. There is no formula used to divide your property and finances, and the court works through contributions, the economic effect of any family violence, and each party’s future needs before deciding what is just and equitable. A valuation tells you the size of the pool, not your share of it. Where parties want to settle that in advance, our pages on financial agreements and spousal maintenance explain the options.
Key points
- An agent’s market appraisal is not the same as a sworn valuation.
- Appraisals are useful where value is broadly agreed.
- Two opposing appraisals rarely resolve a genuine dispute.
- The court prefers a single expert engaged jointly by both parties.
- A single expert works from an agreed statement of facts.
- Neither party may communicate with the single expert alone.
- Match the valuer to the asset, since disciplines are not interchangeable.
- Superannuation is a different type of property and is not cash.
- Trustees must be notified before a splitting order is made.
- Business and trust valuations depend heavily on method and records.
- Valuations feed the balance sheet the court works from.
- The settled balance sheet is filed seven days before trial.
- Values generally need to be current rather than dated at separation.
- A difference of opinion alone rarely justifies a second valuer.
- Full and frank disclosure is an ongoing obligation.
The practical takeaway is to invest effort at the start, in choosing the right expert and agreeing the scope, rather than at the end in attacking a report you did not help shape. Matters that get the valuation right early tend to settle, and matters that fight about it tend to cost more than the disagreement was worth.
General information cannot tell you whether the figure in your matter is defensible. If you have received a valuation you have concerns about, or you are deciding how to approach one, advice at that point is usually cheaper than advice after the report is in evidence.