Haylett v Cayton & Anor

Haylett v Cayton & Anor

The fair value of Mr Haylett’s 50% interest in the profits of Cayton & Co as at 28 February 2011 is £200,000, based on maintainable earnings of £150,000, a multiplier of 3.5, deduction of net debt (£100,455), and adjustment for risk and firm circumstances. Additional deduction of £4,345 for VAT credit note is allowed; no deduction for computer equipment.

Parties
Claimant: Gary Haylett; First Defendant: John Cayton; Second Defendant: Caytons Law (formerly Cayton & Co)
Jurisdiction
England and Wales
Judgment Date
08 July 2015
Procedural Posture
Commercial / Judgment on Quantum Following Prior Liability Determination
Outcome
Judgment for Claimant on quantum; value of 50% profit interest set at £200,000; VAT credit note deduction allowed; computer equipment deduction denied.
Legal Topics
Valuation of Partnership Interest, Fee Sharing Agreement, Joint Venture Termination, Maintainable Earnings Valuation, Profit Share Calculation
Contract Partnership Commercial Valuation of Partnership Interest Fee Sharing Agreement Joint Venture Termination Maintainable Earnings Valuation Profit Share Calculation

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Parties

Gary Haylett

Claimant

John Cayton

First Defendant

Caytons Law (formerly Cayton & Co)

Second Defendant

Procedural Posture

Commercial / Judgment on Quantum Following Prior Liability Determination

Legal Issues

  1. 1 Valuation of 50% profit interest in Cayton & Co upon termination of joint venture
  2. 2 Appropriate methodology for valuation (earnings vs discounted cash flow)
  3. 3 Deductions for net debt and disputed items from profit share

Ratio Decidendi

The fair value of Mr Haylett’s 50% interest in the profits of Cayton & Co as at 28 February 2011 is £200,000, based on maintainable earnings of £150,000, a multiplier of 3.5, deduction of net debt (£100,455), and adjustment for risk and firm circumstances. Additional deduction of £4,345 for VAT credit note is allowed; no deduction for computer equipment.

Court Disposition

Judgment for Claimant on quantum; value of 50% profit interest set at £200,000; VAT credit note deduction allowed; computer equipment deduction denied.

Orders

  • Value of Mr Haylett’s 50% interest in Cayton & Co profits as at 28 February 2011 is £200,000.
  • Deduction of £4,345 for VAT credit note to be issued by Mr Haylett.