There was to be a compulsory transfer of shares. Shareholders objected that the accountant was not independent as was required by the articles. The company appealed an order that the accountants had not been properly appointed. Though the accountant was one of the ones named by the shareholder, he had not been given chance to approve the terms of the appointment nor to make representations.
Held: The company’s appeal failed. The drafting of the clause providing for such an appointment was open to criticism. However: ‘The TPA’s role is to produce an expert valuation of shares held in the Company by the person who is liable to be compelled to offer his shares for sale at that valuation to those who remain. The TPA also has power to decide who should bear the costs of the exercise. The firm of accountants appointed would also lay down the terms, such as limitation of liability, on which it would be prepared to act.
In those circumstances it would be very surprising if a firm of accountants could become the TPA solely as a result of nomination by the parties and without any agreement by both parties and the firm on the terms of engagement as the TPA.’ Nor was the shareholder estopped from accepting the accountant.
Mummery LJ, Sedley LJ, Wilson LJ
[2008] EWCA Civ 1363, [2009] BCC 183
Bailii
England and Wales
Company
Updated: 09 November 2021; Ref: scu.278600
