Gebhardt v Gebhardt

The High Court of Australia considered a dispute between a husband and wife, Mr. and Mrs. Gebhardt, concerning the division of their matrimonial property. The primary issue before the Court was the appropriate valuation of certain assets, particularly shares in a family company, for the purposes of a property settlement.

The Court was required to determine the correct methodology for valuing the shares in the family company, which formed a significant component of the matrimonial assets. This involved considering whether the shares should be valued on a "going concern" basis or a "liquidation" basis, and how to account for potential tax liabilities that would arise upon a sale or transfer of those shares.

The High Court ultimately held that the shares should be valued on a "going concern" basis, reflecting their value as part of an active business. Crucially, the Court determined that it was appropriate to discount the value of the shares to account for the capital gains tax that would be payable if the shares were sold. This approach aimed to ensure a fair and equitable distribution of the actual wealth available to the parties, rather than a theoretical value that could not be realised without incurring significant tax liabilities. The Court emphasised that the valuation of assets in family law proceedings must be practical and reflect the reality of their disposal.