Asia Pacific Institute of Experts (APIEx)’s Post

A case from the Western Australian Supreme Court of Appeal dealing with Judicial assessment of Expert valuation evidence – Kipoi Holdings Mauritius Ltd v Kirman & Anor as Administrators of Tiger Resources Ltd (subject to DoCA). This was an appeal from a decision approving the transfer of shares at nil consideration – which requires the court to be is satisfied that the transfer would not unfairly prejudice the owner's interests – as part of the implementation of a Deed of Company Arrangement. The key question was whether the shares had any residual value.   Two of the parties had an “expert team” approach – an valuer who valued the business, and an insolvency practitioner providing an opinion about the “distressed sale discount” to be applied to that value. One of the parties called a single expert – an insolvency practitioner (the Solo Expert), whose evidence was preferred at first instance. The Appellant argued that the judgement failed to give legally adequate reasons, because it failed to engage with the differences between the experts. It also argued that the Court was wrong to prefer the opinion of the Solo Expert on valuation given that he had “candidly admitted” that valuation was outside his expertise. The Court of Appeal held that: – There was a “marked disparity” in the distressed sale discount, ranging from 5% to 55%. – Evidence on the availability of funding to support the marketing period “entered into the realm of speculation.” – The Solo Expert “frankly recognised that he was not a valuer” (he said that his comments about valuation issues were made 'as a vendor'). – Characterisation of the assessment of the expert evidence as ‘very finely balanced’ was seemingly at odds with the “disparate opinions” and the “material differences” between the experts on a number of critical issues. – There was virtually no reference to significant concessions made in oral evidence, notably including concessions by one expert that he was not formally briefed as an expert witness, and that he had provided distressed sale discount figures without knowledge of the specific assets of the company or the circumstances. – To give weight to the Solo Expert’s valuation evidence, when by his own admission, he lacked relevant specialised knowledge or experience as a valuer “would be to usurp the fact-finding function of the primary court as a trier of fact”. – There was “such a marked absence of consideration and explanation connecting the issues raised at trial” that the Court should conclude that there was a failure to provide legally adequate reasons. The Appeal was successful. #expertevidence #valuationexpert #expertwitness Tom Nevin June Tan Paul Heath Jonathan Ellis Melvin Loh Leslie Chew PBM, SC Shaun Walbridge FCCA FAE QDR Juan Carlos Venegas FAIA FCPA ICFS FIICFIP Mark Tottenham Eavanna FitzGerald Geoffrey Campey Bruce Debenham Campbell Jaski Thomas Caldow Kristy Kerswell Beryl Vaughan Seán McNally FCIArb, MRICS, FACICA, Oliver Watts