Value to Owner vs Market Value: What Family Law Solicitors Should Take From Two Recent Decisions

Where some have suggested that contrasting outcomes represent contradictions, I would disagree. They are better understood as a reminder that valuation opinions succeed or fail based on the facts a valuer is able to place before the Court.

Additionally, adherence to the principles contained within the International Valuation Standards (IVS) is both a sword and a shield: it protects the solicitor and client, and it gives the Court confidence that the valuation conclusion is grounded in recognised professional standards.
In practical terms, this means being clear about the nature of the interest, the basis of value, the premise of value, and any key assumptions underpinning the conclusion.

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Gare & Farlow: A business can be difficult to sell and still have value

In Gare & Farlow, the Court was faced with a common valuation dispute: what is the correct basis to value a party’s business?

The key factual detail (as summarised) was that the business operated from premises owned by the party’s father, and there was no written lease.

That issue alone can produce two competing valuation narratives.

From the perspective of a hypothetical purchaser, tenure risk can reduce market value sharply.
From the perspective of the existing operator, the business may still have significant practical value if the commercial reality is that the premises remain available and the business can continue trading from that location.

This is the territory in which “value to the owner” becomes a relevant consideration.

In reading the published summary, Gare & Farlow is presented as a decision that emphasises the importance of assessing the business as it is actually used and enjoyed, rather than treating it solely as a saleable asset.

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The competing valuation approaches

The dispute in Gare & Farlow was framed between two approaches:

• a “fair market value / net tangible assets” approach (Party One’s expert).
• a “value to owner / capitalisation of earnings” approach (Party Two’s expert).

This is not an uncommon divide in family law matters.

One approach tends to focus on what a third party would pay.
The other focuses on what the business is worth to the party who operates it and benefits from it.

The published summary describes the Court’s approach as being consistent with established authority: valuation must reflect commercial reality and the worth of the interest in the hands of the party.

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Lund & Whittall (No 2): A business can trade, yet the party’s interest may be of little or no value

Lund & Whittall (No 2) is being cited now because the valuation outcome was reported as effectively nil, or close to it.

The key reasoning (as reported in the published summary) was not that the business did not trade.

It was that the party’s interest lacked the practical features that ordinarily create value:

• control
• access
• the ability to derive benefit

In valuation terms, without those features, an interest may have no meaningful worth to the party in the property pool, even if the underlying business appears active.

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Are the cases inconsistent?

At a principle level, Gare & Farlow and Lund & Whittall (No 2) point in the same direction. They both require the valuation conclusion to reflect reality.

The difference is that:

• Gare & Farlow illustrates circumstances where “value to owner” may be supported by ongoing practical benefit, even where marketability is impaired.
• Lund & Whittall (No 2) illustrates circumstances where “value to owner” fails because the evidence does not establish real, accessible benefit to the party.

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What solicitors should take from these decisions

These cases reinforce points that experienced practitioners already know, but which are often lost under litigation pressure.

1. Forming a valuation conclusion is not a template exercise

Courts do not decide valuation disputes by adopting a generic rule. They decide them by examining evidence of commercial reality.

2. “Value to owner” is not a hybrid approach — it is a question of fact

If a party wishes to assert “value to owner”, the valuation evidence should identify, with specificity:

• what quantifiable benefits exist
• how the party controls or accesses that benefit
• why those benefits are enduring
• whether they are dependent on relationships, premises, licences, or personal goodwill

3. If the valuer cannot clearly identify and explain the facts relied upon, the valuation becomes vulnerable

The quality of valuation evidence depends heavily on the valuer’s ability to obtain and analyse the underlying commercial facts — not merely the financial statements.

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Conclusion

Gare & Farlow and Lund & Whittall (No 2) do not sit on opposite sides of the law. But they do sit on opposite sides of the facts.

The common thread is this: a business interest is only valuable in a family law property pool to the extent that it produces real, defensible benefit to the party — whether through marketability, ongoing earnings, control, or special advantages.

At Negotia Group, our valuation work is not template-driven. It is fact-driven.

Where a matter turns on “value to the owner”, the difference between a persuasive valuation and an unhelpful one is often the same: whether the valuer has uncovered the true commercial position and can demonstrate it clearly to the Court.