What Is the Property Worth? Why Guesswork Can Derail a Family Law Property Case

By Sofia Saad

“My former partner says the property is worth $1 million.”

That may be their opinion, but an allegation, estimate or figure written in court documents does not automatically prove the value of an asset.

The Federal Circuit and Family Court’s decision in Statham & Statham (No 2) [2026] FedCFamC1A 176 demonstrates why reliable valuation evidence, accurate contribution calculations and proper treatment of debts are essential in family-law property proceedings.

What happened?

The parties had been together for approximately 22 years and had two adult children.

The principal residential asset involved shares in a company that carried the right to occupy a property. The husband had acquired the interest in 2015 for $625,000, using approximately $125,000 of purchase funds and a $500,000 mortgage.

The wife and children later lived in the property. The wife made mortgage payments from 2021 and was primarily responsible for the children’s expenses after separation.

The husband was declared bankrupt in 2023. His interest in the asset vested in his trustee in bankruptcy.

The bankruptcy estate also had substantial administration liabilities.

What did the original orders provide?

The original property orders effectively transferred the principal residential asset to the wife, subject to the mortgage and other responsibilities.

The Court adopted a value of $1 million for the property interest.

However, there was:

• no expert valuation establishing that figure;
• no admission by the husband that the property was worth $1 million; and
• no other evidence capable of proving that value.

 
The original decision also assessed the wife as having made 100% of the contributions to the asset, despite the undisputed evidence that the husband had contributed at least $125,000 towards its acquisition.

The orders further failed to give proper consideration to the outstanding liabilities of the bankruptcy estate and their effect on creditors.

What did the appeal Court decide?

The husband’s appeal was allowed.

The Court identified three material errors:

1. A disputed property value of $1 million had been adopted without evidence or an admission.
2. The husband’s undisputed contribution towards the purchase had not been properly taken into account.
3. The effect of the proposed orders on the recovery of debts owed to creditors had not been properly considered.

 
The original property orders were set aside and the proceedings were sent back for rehearing before a different judge.

The appeal Court did not decide the final value of the property or what percentage each party should ultimately receive. Those questions must be reconsidered at the rehearing on proper evidence.

Does every property need a formal valuation?

Not necessarily.

A value may be established through:

• an agreed expert valuation;
• a single expert appointed for the proceedings;
• admissible market evidence;
• an agreed value between the parties; or
• another proper evidentiary basis.

 
The problem in Statham was not simply the absence of a formal expert report. The problem was that the $1 million value was disputed and had no evidentiary foundation.

The Court also explained that one party’s refusal to cooperate with a joint valuation does not automatically transform the other party’s estimate into evidence.

Non-cooperation may have procedural or costs consequences, and the Court may sometimes draw appropriate inferences from the available evidence. But there must still be some evidence upon which a finding of value can properly be based.

Why does the value matter so much?

The value assigned to a property affects almost every part of a financial settlement, including:

• the size of the net property pool;
• the percentage outcome for each person;
• whether one person can afford to retain the property;
• the amount required for a refinance or payment to the other person;
• settlement negotiations; and
• whether the proposed orders are practically achievable.

 
Even a modest valuation error can significantly change the final dollar outcome.

Contributions cannot simply be overlooked

Property proceedings require consideration of the parties’ financial and non-financial contributions.

This may include:

• money used to purchase property;
• mortgage payments;
• renovations and improvements;
• income applied for the family’s benefit;
• homemaking and parenting contributions; and
• contributions made after separation.

 
In Statham, the appeal Court did not decide the parties’ final contribution entitlements. It held that an assessment attributing 100% of the contributions to the wife could not stand when the husband’s acquisition contribution was undisputed.

This does not mean that the person who paid the deposit will necessarily receive an equivalent dollar amount or percentage at the end of the case. It means the contribution must be identified and genuinely considered as part of the overall assessment.

Bankruptcy does not make creditors disappear

The case also involved an important complication: the husband’s bankruptcy.

Where a party is bankrupt, the trustee in bankruptcy may control property that would otherwise have been available to that party. The Court must also consider how proposed family law orders may affect creditors’ ability to recover legitimate debts.

In Statham, the bankruptcy estate’s administration liability was identified but was not properly accounted for when the final orders were made.

Bankruptcy can affect:

• who legally controls an asset;
• whether a trustee in bankruptcy must be joined;
• the debts that must be paid;
• the property available for division; and
• the orders the Court can practically make.

 
Early specialist advice is important where bankruptcy, insolvency or substantial third-party debts overlap with a separation.

What should separating couples do?

Before negotiating or seeking final property orders:

1. Identify every asset, liability and financial resource.
2. Decide whether the value of each significant asset is agreed or disputed.
3. Obtain reliable valuation evidence where necessary.
4. Record the source of purchase funds and other financial contributions.
5. Disclose bankruptcy, taxation and creditor issues promptly.
6. Check that proposed orders can actually be implemented.
7. Avoid treating figures in a financial statement or affidavit as proven merely because they have been asserted.

 

The practical lesson

A property settlement cannot safely be built on a guessed value, an incomplete contribution history or debts that have been placed on a balance sheet and then forgotten.

Statham & Statham (No 2) is a reminder that the Court’s decision must be based upon evidence, and that every proposed outcome must account for the people and liabilities legally affected by it.

The Madison Marcus Family Law team can assist with property settlements involving disputed valuations, businesses, company-title interests, bankruptcy and complex liabilities.

This article provides general information only and is not legal advice. The appropriate evidence and outcome will depend upon the assets, liabilities and circumstances of each matter.