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Nettler & Nettler

Dispute in relation to the value of a mortgage broking business and treatment of a loan book

The wife was the sole director in the company.  The wife’s expert valued the company at $322,981.  The husband’s expert valued the company at $965,382.

After the experts conferred, the husband’s expert subsequently reduced his valuation by approximately $300,000.  The reduction was due to errors in the experts report, as pointed out by the wife’s expert.

Key areas of disagreement

The key difference between the experts was the treatment of the loan book.

The husband’s expert valuation approach was to value the net tangible assets of the company and then add the value of the loan book.

The wife’s expert contended that the loan book had no additional value and was integral to the conduct of the business and was included in his value of the company. The expert adopted an income based approach and used after tax maintainable earnings. The expert incorporated a level of remuneration to reflect the time, skills and effort of the wife in the business. This adjustment was substantial.

Both experts agreed that the net tangible asset of the business were worth $313,000.


Give the significance of the identified errors, the Judge apportioned less weight to the husband’s expert.  However, the Judge summarised that both experts recognised that the loan book could in theory be sold.  Further, both experts agreed on a a very similar value for the loan book, of approximately $340,000.

As such the Judge adopted the husband’s expert report and took the net tangible asset value and added the value of the loan book.

Nettler & Nettler (2007) FamCA 1374 

Further reading

About the Author

Simon Cook, Valuations, Forensic Accounting, Virtual CFO. CA Accredited Business Valuation expert, Chartered Accountant and Certified Fraud Examiner

Simon specialises in providing forensic accounting and valuation services. Prior to founding Lotus Amity, he was a Forensic Accounting partner with BDO Australia and led their National Forensics practice.  He has worked as a forensic director for a major offshore forensic accounting practice which included assisting in multi-billion-dollar litigation in relation to the largest Bernie Madoff feeder fund.  He has also held senior management positions with Deloitte and Crowe Horwath.  Simon is a Chartered Accountant, CA Accredited Business Valuer and a Certified Fraud Examiner.

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