Thomas v UTS Rail Pty Ltd [2016] NSWSC 991

Thomas v UTS Rail Pty Ltd [2016] NSWSC 991

The option deed created successive and conceptually different processes: first, an adversarial process to seek agreement on fair value under clause 2(a), and then, if no agreement was reached, an expert determination process under clause 2(b). In that context and having regard to the commercial object and purpose of Schedule A, the parties' objective intention was that the expert appointed under clause 2(b), whether by the board or by the President of the Institute of Chartered Accountants, could not be the same person engaged and paid by UTS Rail to advance its position in the clause 2(a) process. Mr Shields also misconceived his function by treating the April 2015 report as an update or...

Jurisdiction
Australia
Judgment Date
14 July 2016
Procedural Posture
Challenge to an Expert Determination in Equity / Principal Judgment
Outcome
Plaintiffs succeeded; appointment of Mr Shields as expert was invalid, his valuation dated 8 April 2015 was void, and defendants were ordered to pay the plaintiffs' costs.
Legal Topics
['expert Determination Clause' 'construction of Contract' 'fair Value of Shareholding' 'appointment of Expert']
['contract' 'equity'] ['expert Determination Clause' 'construction of Contract' 'fair Value of Shareholding' 'appointment of Expert']

Case Brief

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Procedural Posture

Challenge to an Expert Determination in Equity / Principal Judgment

Legal Issues

  1. 1 ['Whether, on the construction of the put and call option deed, the person engaged and paid by UTS Rail to assist it in seeking agreement on fair value under clause 2(a) could also be appointed by the board as the expert to determine fair value under clause 2(b).' 'Whether Mr Shields misconceived his function in conducting the expert determination under clause 2(b).']

Ratio Decidendi

The option deed created successive and conceptually different processes: first, an adversarial process to seek agreement on fair value under clause 2(a), and then, if no agreement was reached, an expert determination process under clause 2(b). In that context and having regard to the commercial object and purpose of Schedule A, the parties' objective intention was that the expert appointed under clause 2(b), whether by the board or by the President of the Institute of Chartered Accountants, could not be the same person engaged and paid by UTS Rail to advance its position in the clause 2(a) process. Mr Shields also misconceived his function by treating the April 2015 report as an update or...

Court Disposition

Plaintiffs succeeded; appointment of Mr Shields as expert was invalid, his valuation dated 8 April 2015 was void, and defendants were ordered to pay the plaintiffs' costs.

Orders

  • ['Declarations and orders reflecting that the appointment of Mr Shields as the expert pursuant to paragraph 2(b) of Schedule A to the option deed was invalid.' "Declaration or order that Mr Shields' valuation dated 8 April 2015 was void and not in accordance with the requirements of the contract." "The defendants...