The articles of association of a private company provided for shares to be valued by the auditor. The plaintiff transferred shares at a price fixed by the auditor, and subsequently alleged that the valuation was negligently made. One of the issues between the parties was whether the requisite standard of skill and care was that of a reasonably competent chartered accountant who professed specialist skills in valuing unquoted shares (‘the specialist standard’) or that of a reasonably competent chartered accountant in general practice acting as an auditor who has agreed to a request to undertake the valuation task (‘the auditor standard’).
Held: In favour of the latter, the choice facing the members of the company, when agreeing to the terms of the articles of association, was between opting for the specialist skills of a share valuer and the special knowledge of the company’s affairs that the auditor would have. As they were seeking a fair result, as to which a specialist share valuer would not have a special advantage over their own auditor, they intended the auditor to apply his skills and not the skills of a specialist share valuer.
Judges:
Terence Cullen QC
Citations:
(1988) 4 BCC 122
Jurisdiction:
England and Wales
Cited by:
Cited – Goldstein v Levy Gee ( A Firm) ChD 1-Jul-2003
There had been a dispute between shareholders, and the defendant was called upon to value the company. He issued a tender for valuers to value the properties. Complaint was made that the tender was negligent in its description of the basis for . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence
Updated: 21 June 2022; Ref: scu.184177