Jordan v Jordan

In *Jordan v Jordan*, the High Court of Australia considered a dispute between a husband and wife concerning the division of their matrimonial assets. The primary issue before the Court was the appropriate valuation of certain shares held by the husband, which formed a significant component of the matrimonial property pool. The wife sought a greater share of the assets, arguing that the husband's valuation of the shares was unduly conservative and did not reflect their true worth.

The central legal question before Gaudron and Kirby JJ was how to determine the value of the husband's shares in a private company for the purposes of property settlement under the *Family Law Act 1975* (Cth). Specifically, the Court had to consider whether the valuation should be based on a hypothetical sale of the shares on the open market, or whether other factors, such as the company's profitability and future prospects, should be taken into account. The Court also had to consider the impact of any potential capital gains tax liability on the shares.

Gaudron and Kirby JJ reasoned that the valuation of shares in a private company for family law purposes requires a pragmatic approach that reflects the reality of the asset's value to the parties. They held that while a hypothetical sale value is a relevant consideration, it should not be the sole determinant. The Court emphasised that the valuation must take into account all relevant factors, including the company's financial performance, its potential for future growth, and any encumbrances or liabilities associated with the shares. The judges also confirmed that potential tax liabilities should be factored into the valuation to arrive at a realistic net value. The Court ultimately ordered that the shares be valued on a basis that reflected their true worth to the husband, taking into account the company's circumstances and potential tax implications.