CGU Insurance Ltd v Zurich Australian Insurance Ltd & Ors [2003] NSWCA 366

CGU Insurance Ltd v Zurich Australian Insurance Ltd & Ors [2003] NSWCA 366

The fair value of shares as set out in the company's articles is to be determined solely by reference to the value of the company's net tangible assets at the effective date, to the exclusion of other factors such as intangible assets or goodwill, as mandated by the clear words of article 23(9).

Parties
Appellant: CGU Insurance Ltd; First Respondent: Zurich Australian Insurance Ltd; Second Respondent: Associated Marine Insurers Agents Pty Ltd; Third Respondent: Michael Arthur Hill; Fourth Respondent: Geoffrey Gerald Gauci; Fifth Respondent: Anthony Earnest Day; Sixth Respondent: John Leonard Butler; Seventh Respondent: Ian Forbes Brown; Eighth Respondent: Robert John Wagstaffe
Jurisdiction
Australia
Judgment Date
05 December 2003
Procedural Posture
Appeal / Judgment
Outcome
Appeal dismissed with costs
Legal Topics
Construction of Articles of Association, Pre Emption Mechanism, Fair Value of Shares
Company Law Construction of Articles of Association Pre Emption Mechanism Fair Value of Shares

Case Brief

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Parties

CGU Insurance Ltd

Appellant

Zurich Australian Insurance Ltd

First Respondent

Associated Marine Insurers Agents Pty Ltd

Second Respondent

Michael Arthur Hill

Third Respondent

Geoffrey Gerald Gauci

Fourth Respondent

Anthony Earnest Day

Fifth Respondent

John Leonard Butler

Sixth Respondent

Ian Forbes Brown

Seventh Respondent

Robert John Wagstaffe

Eighth Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether 'fair value' under company articles is to be determined solely by reference to net tangible assets or includes other factors such as intangible assets and goodwill
  2. 2 Admissibility of evidence in construing company articles

Ratio Decidendi

The fair value of shares as set out in the company's articles is to be determined solely by reference to the value of the company's net tangible assets at the effective date, to the exclusion of other factors such as intangible assets or goodwill, as mandated by the clear words of article 23(9).

Court Disposition

Appeal dismissed with costs

Orders

  • The appeal is dismissed with costs.