The ‘value to the owner’ objective and its implications in the separate recognition of personal and commercial goodwill in Australian Family Law decisions

Abstract: The Court is often confused when duelling valuation experts present apparently different evidence. Without a recognised theory, valuation evidence can appear disorderly and potentially contradictory. Abstract In the absence of theory The Family Court of Australia has attempted to clarify the valuation objective, articulating the ‘value to the owner’ concept. Born out of minority shareholder issues this paper reflects on the gestation of ‘value to the owner’ through reviewing the Court’s guidance. However it is noted that there is some tension with this objective when applied to professional services businesses. This paper explores a particular application of value to the owner in professional services businesses where the distinction between personal and commercial goodwill can be at issue. The importance of this distinction is in the consideration of capitalisation as property or future income as financial capacity. This has implications in Court decisions applying section 79 and/or section 75(2) such that duplication is avoided.