AMS v AIF

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Garnet & Garnet has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. By an Amended Notice of Appeal filed 19 January 2026, the appellant appeals orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 26 September 2025. The appeal concerns only the primary judge's findings in relation to the value of a company. The respondent, by way of Amended Notice of Contention filed 16 February 2026, contended that the primary judge's reasons should be affirmed on grounds other than those relied upon by the Court.
2. At the conclusion of the appeal, judgement was reserved. The parties later advised the Full Court that they had reached agreement and sought the Full Court make orders by consent allowing the appeal and a further order that the respondent pay the appellant $150,000.
3. While parties may elect to compromise an appeal by consent, the Court is still required to be satisfied that the judgement is infected by appealable error (Traverso & Traverso (No 2) [2024] FedCFamC2F 960).
4. These reasons explain why that is so and why the appeal will be allowed.

1. The parties were engaged in proceedings pursuant to Pt VIII of the Family Law Act 1975 (Cth) ("the Act") arising from the breakdown of their marriage.
2. Central to the determination of the pool of assets for division by the primary judge was the value of a company ostensibly controlled by the appellant. The company had been valued by a jointly appointed single expert on 14 February 2025 as at 30 June 2024 (referred to by the primary judge as the "first report"). The expert then valued the company again as at 4 July 2025 (referred to by the primary judge as the "second report").
3. The primary judge determined the pool of assets for division at [147] to be as follows:

ANZ Bank account [X...86] (from sale of family home)

ANZ Bank account [X...67] (from sale of family home)

Wife's ANZ Bank account (balance remaining from interim distribution)

Husbands's ANZ Bank account (balance remaining from interim distribution)

1. The primary judge's findings as to value of the company commenced at [148]. The primary judge found that the single expert's opinion should not be accepted, as the single expert had not valued the company in accordance with the court's orders at [103] and [151], and because the underlying assumptions upon which the opinion of value was expressed had not been proved (at [102], [103], [152] and [154]).
2. Having rejected the single expert's opinion, the primary judge proceeded to address the evidence of the appellant as follows:
   1. The [appellant's] financial statement, Exhibit F sworn 7 July 2025, gave a value for [D Ltd] as $725,000. The Court finds that valuation by the [appellant] as an admission that is appropriate in all the circumstances to adopt and as a matter of common sense the recency of the value placed by the [appellant] as the corporate mind of [D Ltd] can and should be given genuine weight. The Court prefers this valuation by the [appellant] to that of the expert Ms [N] given the unsatisfactory nature of her evidence in relation to the second report and the want of proof of the underlying assumptions in both reports.
   2. As touched upon above, the payment of dividends for the year ended 31 July 2024 in Ex R undermines the financial records and assumption of [D Ltd] making a loss in FY24 upon which both reports of Ms [N] opined. This is also supported by Ex P in the [Q Bank] commencing as a carry forward on 8 September 2023 and shows the [appellant] received from [D Ltd] £10,000 on 19 February 2024, 10,000 on 1 March 2024, 10,000 on 28 March 2024, 10,000 on 26 April 2024, 10,000 on 31 May 2024, 10,000 on 26 June 2024, 10,000 on 26 July 2024 and 27,400 on 31 July 2024. This is a total of £97,400 paid by [D Ltd] to the [appellant]. The payment on 31 July 2024 of 27,400 appears in Ex R as alleged dividends. The payments of the amount of £10,000 totalling £70,000 were said by the [appellant] to be a wage paid to him by [D Ltd] to the [Q Bank]. There was no disclosure of this wage in the [appellant's] financial statement Ex F being a further breach of the [appellant's] duty of disclosure.
   3. The Court finds that the loan accounts of [D Ltd] in Ex T are not reliable being inconsistent with Ex R and do not adequately explain away the dividends in Ex R which the Court finds were made in FY24 contrary to the Profit and Loss records of [D Ltd] for FY24 in the two expert reports of Ms [N]. The Court finds that the [appellant's] admission as to the value of [D Ltd] sworn on 7 July 2025 is an admission on which the Court should rely and should be adopted as the true value of [D Ltd].
   4. Further, in relation to the true value of [D Ltd] as at the date of hearing given the payment of those dividends in the FY24 of £120,000, according to Ex R, the Court prefers a capitalisation of earnings approach to the value of the company using a commonsense approach that EBITDA for FY24 must have been at least of the quantum of those dividends that were paid. Applying this a commonsense approach and adopting the multiplier of 3 identified by Ms [N] as 3 or 4, which expert evidence as to multiplier the Court accepts, to the £60,000 dividends paid within one year ended 31 July 2024 to the [appellant] and £60,000 paid to the [respondent], totalling £120,000 dividends that were able to be paid in the financial year ended 31 July 2024, this would reflect in Aus $240,000 x 3 a valuation $720,000, which is very close to the admitted value by the [appellant]. The Court accepts a downturn in the economy for [D Ltd] in 2025 but given the breaches of the duty of disclosure by the [appellant] the Court need not be unduly cautious in making a valuation finding of [D Ltd] in favour of the [respondent]. The Court finds that the value of [D Ltd], as at the date of hearing is A$725,000.
3. The primary judge, having accepted the appellant's admission against interest in his Financial Statement that the company had a value of $725,000, then sought to include that value in the pool of assets in addition to the value of the real estate recorded in the company's balance sheet. The company and the two pieces of real estate are the first three items in the pool of assets identified at [147].

1. The Amended Notice of Appeal recorded the grounds as follows:
   1. That the learned trial Judge erred in finding that the value of [D Ltd] ("the Company") was $725,000 by reason of:

1.1 Refusing to accept the evidence of the single expert, Ms. [N], as to value of the Company;

1.2 Refusing to accept the evidence of Mr. [HH], the Company Accountant;

1.3 Finding that the Appellant asserted a value of $725,000 for the Company exclusive of the value of the real property asserted to have held by the Company;

1.4 Adopting his own formula to determine the value of the Company; and

1.5 There being no evidence of such value for the Company.

1. Where error is established by Ground 1.3 (which disposes of the appeal), in the interests of judicial economy, the remaining sub-grounds will not be addressed (Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593).

1. At [163] the primary judge found "the [appellant's] admission as to the value of [D Ltd] sworn on 7 July 2025 is an admission on which the Court should rely and should be adopted as the true value of [D Ltd]".
2. This finding by the primary judge, that the appellant's admission as to the value of the company in his Financial Statement was $725,000 exclusive of the value for the real estate, was erroneous. The appellant's Financial Statement filed 30 July 2025 included the real estate in the figure of $725,000. By making this factual error, the primary judge, in compiling the assets for division at [147], double-counted the value of the real estate, thereby increasing erroneously the value of the pool of assets.
3. In AMS v AIF (1999) 199 CLR 160 Kirby J observed:
   1. ...Only if a material error of the kind warranting disturbance of a discretionary decision is established is the appellate court authorised to set aside the primary decision, to substitute its own exercise of discretion or to require that it be re-exercised on a retrial.

1. The approach to be adopted in a financial adjustment case under s 79 of the Act is to follow the well-recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) [2003] FamCA 395; (2003) FLC 93-143). Following such an approach, the Court identifies and values the existing assets and liabilities at the date of hearing for the purposes of division. Secondly, the Court assesses the contributions of the parties within the meaning of s 79(4) of the Act and determines a contribution-based entitlement. Thirdly, the Court identifies the relevant matters under s 79(5) and determines such adjustment as is necessary to the contribution-based entitlement. Finally, the Court considers the effect of the findings and determines whether the order as proposed is, in all the circumstances, just and equitable.
2. Here, the findings made by the primary judge perpetuated error at the first stage of the process by increasing the pool of assets by $575,000, and at the final stage such that the result could not be just and equitable. The errors meet the requirement of materiality such that the appeal must be allowed.

1. In circumstances where the appeal is allowed on an error of law, it is appropriate to grant a costs certificate to the parties.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell.