Leviston v PQ Management Pty Ltd (No 3) [2023] FCA 986

Leviston v PQ Management Pty Ltd (No 3) [2023] FCA 986

For both arms of the court's valuation order, the proper methodology requires use of a normalised EBITDA reflective of true maintainable earnings, not an unadjusted 'accounting EBITDA'; the expert's market value assessment of $479,029 for 30% of the shares prevails, since it exceeds the adjusted baseline; the methodology and capitalisation multiple applied by the expert were sound, and criticisms of data weighting or multiplier selection were unfounded.

Jurisdiction
Australia
Judgment Date
22 August 2023
Procedural Posture
Application for Relief on the Ground of Oppression Under Corporations Act / Judgment Post Valuation Hearing
Outcome
Challenge to aspects of expert's report partially successful; price for shares clarified and set at market valuation.
Legal Topics
['oppression Remedy' 'share Valuation' 'construction of Orders']
['corporations Law' 'commercial Law'] ['oppression Remedy' 'share Valuation' 'construction of Orders']

Case Brief

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Procedural Posture

Application for Relief on the Ground of Oppression Under Corporations Act / Judgment Post Valuation Hearing

Legal Issues

  1. 1 ['Whether the expert erred in applying the capitalisation of future maintainable earnings method' 'Whether the correct methodology was used for share valuation as required by court order' 'Whether reliance on particular data points (EBITDA adjustments) was justified' 'Whether correct capitalisation multiple was applied' 'Whether regard may be had to reasons in absence of ambiguity in order']

Ratio Decidendi

For both arms of the court's valuation order, the proper methodology requires use of a normalised EBITDA reflective of true maintainable earnings, not an unadjusted 'accounting EBITDA'; the expert's market value assessment of $479,029 for 30% of the shares prevails, since it exceeds the adjusted baseline; the methodology and capitalisation multiple applied by the expert were sound, and criticisms of data weighting or multiplier selection were unfounded.

Court Disposition

Challenge to aspects of expert's report partially successful; price for shares clarified and set at market valuation.

Orders

  • ["For order 4 of the 8 July 2022 Orders, PQ Management Pty Ltd to pay $479,029 for Mr Leviston's 30% shareholding in Treated Waste Agencies Pty Ltd." "Parties to confer on mathematical calculations for plaintiff's entitlement under 8 July 2022 Orders 4, 5, and 6." 'If no agreement within 21 days, matter to be set...