Tomanovic v One Australia Pty Limited [2015] NSWCA 11

Tomanovic v One Australia Pty Limited [2015] NSWCA 11

The Court held that the primary judge did not err in preferring Mr McGuiness' valuation methodology, which was consonant with accepted valuation principles for going concern companies, nor in attributing $6-8 million in operating costs to the brokerage business. The valuation adopted was not plainly erroneous even though it was significantly lower than book value, given the evidence regarding earning capacity, expense structure, and the recoverability of certain loans. The application to amend the notice of appeal to introduce a new interest component was refused as it was not raised below and would have required further evidence.

Parties
First Appellant: Zoltan Tomanovic; Second Appellant: Australia Financial Services Pty Limited (ACN 003 647 925); First Respondent: One Australia Pty Limited (ACN 003 179 199); Second Respondent: Kenneth Sayer
Jurisdiction
Australia
Judgment Date
16 February 2015
Procedural Posture
Civil / Appeal From Valuation Determination in Remitted Oppression Proceedings
Outcome
Appeal dismissed; leave to amend notice of appeal refused
Legal Topics
Oppression Remedy, Share Valuation, Expert Evidence, Corporate Accounting, Appeals
Corporations Law Oppression Remedy Share Valuation Expert Evidence Corporate Accounting Appeals

Case Brief

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Parties

Zoltan Tomanovic

First Appellant

Australia Financial Services Pty Limited (ACN 003 647 925)

Second Appellant

One Australia Pty Limited (ACN 003 179 199)

First Respondent

Kenneth Sayer

Second Respondent

Procedural Posture

Civil / Appeal From Valuation Determination in Remitted Oppression Proceedings

Legal Issues

  1. 1 Whether the primary judge erred in accepting the valuation methodology of Mr McGuiness over Mr Meredith for GMEC shares
  2. 2 Whether the operating costs of $6 million to $8 million should have been taken into account in valuing GMEC's brokerage business
  3. 3 Whether the valuation of GMEC between $2.7 million and $3.1 million was plainly erroneous given the book equity

Ratio Decidendi

The Court held that the primary judge did not err in preferring Mr McGuiness' valuation methodology, which was consonant with accepted valuation principles for going concern companies, nor in attributing $6-8 million in operating costs to the brokerage business. The valuation adopted was not plainly erroneous even though it was significantly lower than book value, given the evidence regarding earning capacity, expense structure, and the recoverability of certain loans. The application to amend the notice of appeal to introduce a new interest component was refused as it was not raised below and would have required further evidence.

Court Disposition

Appeal dismissed; leave to amend notice of appeal refused

Orders

  • Leave to amend the notice of appeal refused
  • Appeal dismissed