Valuation of Property


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Valuation of Property

In a recent case heard in the Family Court of Australia, the trial judge granted the wife’s application to adjourn the final hearing for the property proceedings for 3 years due to valuation issues concerning a grazing property.

The wife produced evidence that the grazing property, which had declined significantly in value, was likely to increase by approximately $10 million or other such similar substantial amount over the next 3 year period.

This is a common issue in the current property market. The Gold Coast in particular has experienced a significant drop in property values. It is not uncommon for a property to be valued by an expert valuer for the purposes of a family law matter at an amount less than the purchase price, particularly if purchased post 2005.

In the current case, the husband appealed to the Full Court of the Family Court against the order of the trial judge for an adjournment of 3 years. The husband wanted the matter dealt with on a final basis.

The husband’s position was that liabilities exceeded assets and he was unable to meet interest repayments over the 3 year adjournment period.

The Full Court of the Family Court examined Section 79(5) of the Family Law Act which allows for a matter to be adjourned where a significant change in financial circumstance is likely and where an adjournment is more likely to do justice between the parties rather than an immediate order.

The husband argued that the trial judge had not taken into account the cost of maintaining the debt attached to the property and that this was something to be considered in assessing whether any increase in value of the property would amount to a significant change.

The Full Court of the Family Court accepted the husband’s argument and found that even if the value of the property did increase, it would not exceed the level of debt secured by the property, particularly if the husband was correct in saying that the income from the property was insufficient to meet the interest accruing on the debts secured by the property.

The husband was granted leave to appeal. The trial judge was obliged to take into account the husband’s financial circumstances and had not done so when making the order for the adjournment.