DOES YOUR DIVORCE LAWYER NEED TO KNOW WHAT EPS AND/OR EBITDA IS TO EFFECTIVELY ASSIST YOU IN RESOLVING YOUR PROPERTY DISPUTE?
In a recent decision in Pavlic & Pavlic  FedCFamC1A 54, handed down on 4 May 2023, the Appeals Division of the Federal Circuit and Family Court of Australia set aside a set of family law property settlement orders made by a judge in Division 2 of the Court because of an error of law in which the trial judge failed to draw clear distinctions between the corporation, the parties and their respective assets and liabilities, and despite the particular error not forming part of the appeal, the entire decision was set aside by the appeal court due to the fundamental error.
In their decision at paragraph 17 to 21, Justices Austin and Williams criticised the manner in which the parties conducted their case (through their lawyers) in that a tax debt owed by a company belonging to the parties of $185,255, that the parties were not liable for, were classified as their personal joint liability, reducing their asset pool (including superannuation) to $3,361,303. They also criticised the trial judge for leaving a $268,000 in shareholder debit loans were left out of their personal liabilities and not providing reasons for the decision.
When dividing up the assets belonging to the parties of a marriage, the law has established that the Court must first make a finding on the assets, liabilities, and financial resources belonging to the parties and the value to attach to each of these items.
It is therefore, of paramount importance that a lawyer assisting parties in resolving a family law property dispute be able to distinguish between what belongs to them and what do not. The same would apply to liabilities. To perform this job properly, whilst it may not be necessary for a family law practitioner to be able to understand EPS and EBITDA, they need to have a basic understanding of Corporations Law and be able to effectively assist in the resolution of property disputes concerning companies and businesses.
At Longton Legal, we are blessed to have experts and experienced practitioners from different fields of law that will be able to assist the various aspects of law that falls outside the usual expertise of family law practitioners and able to work collaboratively with your family lawyers to help resolve your case in a manner that is efficient, just, and equitable for you.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
Special Counsel | Accredited Family Law Specialist NSW
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