Claire Lewis v Philip Clarke & Anor  EWHC 1975 (ChD)
A recent case of interest to commercial and family practitioners discussing the broad discretion the court has when approaching the valuation of shares in the context of an order for the purchase of shares following a S.994 Companies Act 2006 unfair prejudice petition; in particular the extent to which the court can disregard expert evidence. As the judge made clear, the court retains a wide freedom to disregard the views of experts and apply the court’s view of what is fair and sensible in all the circumstances (Re Planet Organic Ltd  B.C.C 610 followed) and should ask itself whether the expert’s valuation makes commercial or business sense viewed in the round (Chilkuri v RP Explorer Master Fund  EWCA Civ 1307 followed).
The S.994 Petition was presented in the context of divorce financial remedy proceedings. The judgment makes clear that a shareholder has rights as a shareholder independent of their rights as a spouse but that the Petition was part of the process of splitting the matrimonial assets to establish a future for the parties and that therefore the parties should communicate to resolve how the valuation could best be paid. To that end, although an initial on account of the valuation was ordered, enforcement of the remainder and the costs order was stayed for a period.
Although not part of the published judgment it is worth noting that the Respondent’s conduct in the context of the valuation and his refusal to provide up to date information was a significant factor in the award of all costs to the Petitioner.
To view the judgment in full please click here.