The Court of Appeal has refused an application by Donegal Investment Group plc to change the valuation date for its 30% shareholding in Elst (No. 3), leaving 30 June 2016 in place.
The company had asked the court to move the date to 31 December 2016. It argued that the earlier date had been chosen on the assumption that the remitted valuation hearing in the High Court would take place soon afterwards. That hearing was delayed after the respondents appealed to the Supreme Court against the Court of Appeal’s valuation decision. The Supreme Court dismissed that appeal in February 2017.
The Court of Appeal said its June 2016 order was a final order, including the directions setting the valuation date. Under principles governing amendments to final orders, a court may intervene in limited circumstances, such as correcting a slip or making the record reflect what it actually decided. The court said finality is important to legal certainty and to commercial parties.
The court rejected the company’s account of why 30 June had been specified. It said the earlier judgment’s choice of the shares’ “current value” was based on the assumption that the Court of Appeal had finally determined the remedy issue. It was not based on an assumption that a High Court rehearing would happen promptly. The court also said the half-year-end date was close enough to the date of its June 2016 judgment to represent the intended current value.
The underlying dispute concerns the purchase by the respondents of Donegal’s shares in Elst, following an earlier determination that a share purchase was the appropriate remedy. The Court of Appeal had remitted the price question to the High Court, directing that the price be based on full current market value without a minority, discounted cash flow or marketability discount, using 2016 normalised EBITDA determined in the same manner as the 2014 figure.
The court concluded that delay to the rehearing caused by the appeal did not amount to special or unusual circumstances justifying amendment. It refused the application. The order therefore continues to require valuation as at 30 June 2016; the court did not determine the share price in this application.