Lewis v Clarke & Anor

Lewis v Clarke & Anor

The fair value of Ms Lewis's 50% shareholding is determined by crediting her with two years of dividends at £26,000 per year (for the period 1 September 2017 to 1 September 2019), plus a further sum for anticipated future profits using a 1.5 multiplier (£19,500), resulting in a total valuation of £45,500. This approach balances the lack of financial disclosure, the uncertainty over the lease, and the need for fairness, rather than strictly following the expert's net asset valuation or a four-year dividend approach.

Parties
Petitioner: Claire Lewis; First Respondent: Philip Clarke; Second Respondent: Solent Garage Services Limited
Jurisdiction
England and Wales
Judgment Date
28 July 2020
Procedural Posture
Petition Under Companies Act 2006, Section 994 (unfair Prejudice) / Judgment After Contested Valuation Hearing
Outcome
Petition allowed; valuation of petitioner's shares determined by the court.
Legal Topics
Unfair Prejudice, Shareholder Disputes, Share Valuation, Remedies Under Companies Act 2006
Company Law Insolvency Unfair Prejudice Shareholder Disputes Share Valuation Remedies Under Companies Act 2006

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Parties

Claire Lewis

Petitioner

Philip Clarke

First Respondent

Solent Garage Services Limited

Second Respondent

Procedural Posture

Petition Under Companies Act 2006, Section 994 (unfair Prejudice) / Judgment After Contested Valuation Hearing

Legal Issues

  1. 1 What is the fair value of the petitioner's 50% shareholding in Solent Garage Services Limited following a finding of unfair prejudice?
  2. 2 What is the appropriate methodology and date for valuing the shares given the transfer of business, lack of financial disclosure, and lease uncertainty?

Ratio Decidendi

The fair value of Ms Lewis's 50% shareholding is determined by crediting her with two years of dividends at £26,000 per year (for the period 1 September 2017 to 1 September 2019), plus a further sum for anticipated future profits using a 1.5 multiplier (£19,500), resulting in a total valuation of £45,500. This approach balances the lack of financial disclosure, the uncertainty over the lease, and the need for fairness, rather than strictly following the expert's net asset valuation or a four-year dividend approach.

Court Disposition

Petition allowed; valuation of petitioner's shares determined by the court.

Orders

  • Mr Clarke to purchase Ms Lewis's 50% shareholding in Solent Garage Services Limited for £45,500.