Cotton & Cotton

In *Cotton & Cotton*, the parties were a husband and wife, and the dispute concerned the division of matrimonial property. The matter came before Nygh J in the Family Court of Australia.

The primary legal issue before the court was the appropriate valuation of certain assets, specifically shares in a family company, for the purposes of a just and equitable division of the matrimonial property. The court was required to determine whether the shares should be valued on a "going concern" basis or a "liquidation" basis, and how to account for potential tax liabilities associated with any sale or distribution of those shares.

Nygh J reasoned that the valuation of the shares should reflect their realisable value to the parties, considering the likely circumstances of their disposal. His Honour applied principles of property division under the *Family Law Act 1975* (Cth), emphasising the need for a practical and realistic assessment of asset values. The court considered expert evidence regarding the company's financial position and the tax implications of various disposal scenarios.

The court ordered that the shares be valued on a "going concern" basis, with an allowance for estimated tax liabilities that would arise upon their sale or distribution. This approach aimed to ensure a just and equitable outcome by reflecting the net value of the asset available for division.