Home Information Cases Macro & Ors v Thompson & Ors (1996)

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Macro & Ors v Thompson & Ors (1996)


The court was entitled to intervene where a valuer of shares had made a mistake in calculating share values. The issue was essentially a matter of contract, and turned on what the parties had agreed to remit to the valuer.


This appeal concerned shares in two family companies involved in the property business. The appellants ('A'), who were shareholders, sought to reverse a decision of Sir John Vinelott on 7 February 1996 striking out two paragraphs of their Statement of Claim. The appeal took place against a background in which findings under s.459 Companies Act 1985 had already been made against the first respondent, who was the senior and controlling figure in the companies, and directions had also been given as to sale of certain shares, allowing pre-emptions to be exercised. Part of the sale process involved valuation of the shares in the two separate companies, but an error had occurred where the valuer (who was a respondent) had calculated the figures wrongly in each case. Where the difference in value was possibly about #1,000,000, a further dispute arose as to whether sale should be completed. The court then restrained registration of transfer of the shares, but the respondents had also succeeded in having struck out two paragraphs in the Statement of Claim, which related to the errors in calculation and A's right to avoid sale or claim sale as void. It was that decision to strike out parts of the pleading which A appealed. The issue at the root of the striking out application and the appeal was whether the court could intervene where a valuer had arrived at his valuation upon the basis of the wrong company's assets.


(1) Although Baber v Kenwood (1978) 1 Lloyd's Rep 174 had application, and it was important that a company should know who its shareholders were, and that there should be certainty and speed, that did not mean that in every case the decision of a valuer was not open to consideration by the court. That had been clarified in Jones v Sherwood Services plc (1992) 1 WLR 277. (2) Several steps were to be followed: (i) it should be determined what the parties had agreed to remit to the expert, which was a matter of contract; (ii) the nature of the mistake must be decided, if there was relevant evidence; (iii) if the expert had departed from instructions, it could be concluded by either party that the valuation certificate was not binding because the expert had not done what he was appointed to do. (3) It was not in this case difficult to determine step (i) above: the Articles stated what was to be remitted to a valuer. As to step (ii): the nature of the mistake was also agreed. The shares had been valued by reference to the wrong company. Under step (iii): there had clearly been a departure from instructions, even where the expert proceeded in reliance upon a judgment of the court which itself replicated the error. (4)(i) A valuation of the kind which occurred was open to challenge, and paragraph 2 of the pleading, which concerned that issue, should not have been struck out. (ii) The error in the case of Jones (supra) related to what was to be valued, which was not the case in the present case, where the error came from the instructions. (5) As to the other paragraph struck out (para.3): (i) this raised an alternative ground for avoiding the contract of sale or claiming it as void, and relied on an assumption by the parties to the contract as to correct valuation, which had proved false. (ii) It was not right to come to any conclusion other than that the allegation was arguable, and para.3 should also be restored (Staughton LJ dissenting here). (6) The judge had erred in describing as an abuse of process persistence in the face of an offer to settle made in open correspondence, and he had erred in considering that as a factor affecting the right of A to rescind the agreement as to sale. The matter should have been left for trial. (7) Nor did acceptance by A of money paid to them for shares prevent A from proceeding: it was clear from the correspondence that A had reserved their position as to appeal on the striking out, and the payment had proceeded upon that basis. The acceptance of the money was not intended as acceptance of a fair price and A had not compromised their rights by affirmation of the agreement.
Appeal allowed. Paras.2 and 3 of Statement of Claim to be restored. Plaintiff's costs in CA and below, to include costs of the application for leave to appeal and costs of the application for leave to adduce further evidence. Leave to appeal to the HL refused.

Court of Appeal
Staughton LJ, Aldous LJ, Douglas Brown J
Judgment date
29 April 1996

LTL 8/12/98 : [1996] BCC 707 : [1997] 1 BCLC 626