An auditor had valued the shares in a private company under its articles. The court was asked to look behind the valuation: ‘In my judgment the valuation cannot stand. I propose, therefore, to declare that the valuation is not binding upon the plaintiff, and, if necessary – though I doubt if it can be necessary to restrain the defendant company from acting upon the valuation. The plaintiff asks the court to take upon itself the burden of ascertaining the valuation which should be made and then direct an inquiry on that footing. I decline to do either of those things. I do not see what jurisdiction the court has to put itself in the place of the expert that the parties have chosen. It may be that he would be unwilling to assume the burden of trying to do the same thing again, it may be that some agreement will be reached, and it may be that if and when he does come to a new decision one party or the other will refuse to carry it out. I do not propose to do any more than to relieve the plaintiff of any obligation that may be upon her to submit to the present valuation which could be implemented through the company, by the machinery which the articles provide, by the secretary signing the transfer of the shares.’
Judges:
Harman J
Citations:
[1953] 2 All ER 636, [1953] Ch 590
Cited by:
Appeal from – Dean v Prince CA 1954
The court had criticised an auditors’ valuation of a company’s shares.
Held: The criticism was not correct. However. if the court was satisfied that the valuation was made under a mistake, it would not be binding on the parties.
Denning . .
Cited – Smith v Gale ChD 1974
Three solicitors were in partnership. It was agreed that one would retire. He would take 10,000 pounds on retirement and his share of undrawn profits after an account had been taken. When the accountant certified the profits in line with previous . .
Lists of cited by and citing cases may be incomplete.
Company, Arbitration
Updated: 01 May 2022; Ref: scu.245124