ALAN REAY CONSULTANTS LIMITED V ALAN MICHAEL REAY HC CHCH CIV-2006-409-000251

ALAN REAY CONSULTANTS LIMITED V ALAN MICHAEL REAY HC CHCH CIV-2006-409-000251

Payment of fair value determined by an expert under a Tomlin Order does not necessarily preclude a subsequent s174 claim for compensation where the valuation was a forward‑looking capitalisation of maintainable earnings and did not purport to include compensation for past oppressive conduct; therefore the strike‑out...

Source-derived case information.

Citation
openlaw-2fd19b49_d71b_493e_9745_687eb416f6eb.pdf
Parties
First Appellant: Alan Reay Consultants Limited; Second Appellant: Alan Michael Reay; Third Appellant: Grant Bruce Coombes; Fourth Appellant: Reginald John Garters; Fifth Appellant: Paul Andrew Smith; Respondents: Gordon Edward Duncan and Andrew Joseph Newman (as Trustees of the G N and B G Family Trust)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
25 October 2006
Procedural Posture
Company Law Shareholder Oppression (s174) / Review of Associate Judge Decision (s26 P Judicature Act 1908)
Outcome
Application to strike out dismissed; Associate Judge's decision upheld
Legal Topics
Shareholder Oppression, Fair Value Valuation, Tomlin Order, Strike Out Application, Section 174 Companies Act 1993
Company Law Equity Civil Procedure Shareholder Oppression Fair Value Valuation Tomlin Order Strike Out Application Section 174 Companies Act 1993

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Summary, issues, holding and outcome

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Parties

Alan Reay Consultants Limited

First Appellant

Alan Michael Reay

Second Appellant

Grant Bruce Coombes

Third Appellant

Reginald John Garters

Fourth Appellant

Paul Andrew Smith

Fifth Appellant

Gordon Edward Duncan and Andrew Joseph Newman (as Trustees of the G N and B G Family Trust)

Respondents

Procedural Posture

Company Law Shareholder Oppression (s174) / Review of Associate Judge Decision (s26 P Judicature Act 1908)

Legal Issues

  1. 1 Whether payment of fair value for shares precludes a subsequent claim for compensation under s174
  2. 2 Whether issues of oppression were determined or subsumed by the prior Tomlin Order/valuation process
  3. 3 Whether the expert valuation included an element of compensation for past conduct or only addressed future maintainable earnings

Ratio Decidendi

Payment of fair value determined by an expert under a Tomlin Order does not necessarily preclude a subsequent s174 claim for compensation where the valuation was a forward‑looking capitalisation of maintainable earnings and did not purport to include compensation for past oppressive conduct; therefore the strike‑out application failed and the Associate Judge's refusal to strike out is upheld.

Court Disposition

Application to strike out dismissed; Associate Judge's decision upheld

Orders

  • Application to strike out dismissed
  • Proceeding permitted to continue