ADG United Pty Ltd v EG Enterprises Pty Ltd & Ors

Uncertainty and incompleteness

It is convenient to deal with these matters together, where they overlap and the Defendants address them together in submissions. The Defendants contend that the reference in the 14 February Letter to "appropriate fair market value" was too uncertain to constitute a binding contract and that letter was an unenforceable agreement to agree (POD [4(a)(iv)]). The Defendants also contend that the 14 February Letter was not sufficiently complete to constitute a binding offer, by reason of the valuation process contemplated by that letter (POD [4(a)(v)]). Mr Giles submits that the terms that the 14 February Letter uses to address the consideration payable for ADG's shares in the Company is uncertain and numerous terms are not agreed. The Defendants also emphasise the absence of any mechanism to appoint a valuer absent the parties' agreement and contend that the letters merely constitute an agreement to agree.
Mr Condon responds that the Court will endeavour to give effect to a contract reached between businesspeople, even if its terms are not fully or well stated, although he also accepts that whether the parties have expressed their agreement carefully is a matter relevant to whether they have entered into an agreement: Sagacious Procurement Pty Ltd above at [73]. Mr Condon also points to authority that a court should be reluctant to decide that a contractual provision is void for uncertainty if a reasonable meaning can be ascribed to it, and the Court should seek to put a fair meaning on it unless it is impossible to do so: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 436; Hammond v Vam Ltd [1972] 2 NSWLR 16 at 18; Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98 at [143]. Determination of "appropriate fair market value"
Mr Giles accepts that it is possible to ascertain what is meant by "market value" against the background of previous authorities, but submits that the phrase "appropriate fair market value" must be read as a whole and to do otherwise would be to render the words "appropriate" and "fair" nugatory: Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401 at [30]. He submits that there is no indication what the phrase "appropriate fair market value" is intended to mean or what qualification the word "appropriate" is intended to give to "market value". He submits that concept is vague, although he recognises that that does not in itself equate to uncertainty.
As Mr Condon points out, the concept of "fair market value" is commonly adopted and not uncertain. In MMAL Rentals Pty Limited v Bruning [2004] NSWCA 451; (2004) 63 NSWLR 167 at [57], in dealing with a provision for the purchase price of shares to be agreed, or determined, by reference to the "fair market value thereof", Spigelman CJ (with whom Mason P and Hodgson JA agreed) observed that: "Where the focus of the valuation process is on a "market value", even in a context, as so often occurs, where there is no or little trading history in the relevant property, the approach will usually be quite different to that which arises where a "fair value" is required to be determined. The range of relevant circumstances to be taken into account is not as wide and regard is not had to the particular history of the commercial or personal relationships between the prospective vendor and purchaser of the property to be valued. Where, as here, the formulation is "fair market value", the valuation test requires a similarly limited focus on the range of circumstances relevant to a process of determining exchange value. A "fair market value" may diverge from a "market value" for numerous reasons, e.g. where property is thinly traded, or the parcel is small, or there exist market distortions. In the present contractual context, the intrusion of the word "market" between "fair" and "value" points away from a process of determining what is just or equitable between the parties, towards an objective standard. That that is so in the present case is strongly suggested by the decision-maker nominated in cl 11.2.3. The decision is to be made jointly by the company's auditor and a chartered accountant nominated by the vendor and, failing agreement, by a nominee of the President of the Institute of Chartered Accountants. Persons with such a background are not generally suited to determining what is just or equitable in all the circumstances. Their expertise is appropriate for determining exchange value. Nevertheless, the word "fair" has, in my opinion, work to do. In a contractual context, this additional word suggests that the valuation should proceed on the assumption, which may be contrary to the facts of a particular contractual relationship, that there is no impediment to the process of bargaining, whether in terms of availability of information or restraints arising from the characteristics of a particular vendor or purchaser or otherwise. Issues will arise, however, when determining what aspects of the particular relationship are of a character which inhere in the item of property itself, as distinct from those which should be treated as excluded by the concept of a "fair market value"."
Mr Condon submits that the word "appropriate" neither adds nor subtracts from this reasoning because the expression "fair market value" is capable of definition. He submits that the Defendants do not suggest, for example, that there is more than one way to ascertain "fair market value"; but even if there was, that would not render the expression uncertain. It does not seem to me that there is any real difficulty in giving meaning to the expression "appropriate fair market value", which simply recognises that the fair market value of the shares must also be appropriate in the circumstances. That addition is not superfluous or uncertain where, for example, there may be questions of expert judgement in a valuation of any business. Issues as to the valuation mechanism
Mr Giles also submits that there is no mechanism to fix the price to be paid for ADG's shares absent agreement. Mr Giles seeks to distinguish between the role of the independent valuer in determining the value "of the business of the Company", being the enterprise value of the business, and the determination of the value of the Company and of ADG's shares in it. He submits that, even if the "independent agreed valuer" is agreed and that valuer determines the value "of the business of the Company", there is no mechanism for agreeing or determining the "appropriate fair market value" of ADG's shares in the Company. He submits that the parties did not agree to some other means to determine the value of the business or any means at all to determine the concept of "appropriate fair market value".
I do not accept that submission, which seems to me to take an unduly technical view of a simple agreement between commercial parties. It also seems to me that the reference to "such value" at the commencement of the parentheses in paragraph 1 of the 14 February Letter links the references to the value of the Company's business and the "appropriate fair market value" of the shares in the Company and indicates that the independent valuer is to determine both. I do recognise that there would be real practical difficulty in that process, where the value of the Company's business was to be determined within a relatively short time (15 days or as soon as reasonably practicable thereafter) of the valuer's appointment; and the value of ADG's shares could not be determined until other matters including the amount of the loan to Mr Goldberg and any damages payable by him to the Company were determined, which might need to be determined by the Court over a longer period if the parties could not agree them. I also recognise that there may be real commercial risk to both parties if the value of the business is determined at a time earlier than the transaction can be implemented, because of the need to determine those other matters, since the value of the business may increase or decrease from that amount (the latter being perhaps more likely in the circumstances) before the transaction is implemented. The parties took that risk upon themselves by the structure of the agreement and their inability to implement it in a cooperative manner. It will, however, be relevant to another issue that I address below.
Mr Giles also submits that the 14 February Letter does not specify how the parties are to reach agreement on an "independent agreed valuer" or the mechanism for appointing a valuer if the parties could not agree on a valuer. He submits that the phrase "independent agreed valuer" is inconsistent with the appointment of a valuer other than by agreement, and there is no objective standard to measure the parties' obligations in appointing a valuer or to provide a mechanism to fix the content of this term. Mr Condon responds that the omission of a term of a contract will not render the contract incomplete and uncertain, and therefore void, unless the term is essential: Australian Goldfields NL (in liq) v North Australian Diamonds NL above at [140].
Mr Condon addresses this difficulty by submitting, first, that the parties should be taken to have contracted on the basis that the conditions of the Shareholders Agreement providing for the appointment of the "Independent Chartered Accountant" (as defined) were incorporated into their bargain. Mr Condon submits, and I accept, that parties can incorporate external standards, such as the terms of earlier contracts, in a contract, or at least contract by reference to a term defined by earlier contracts between them: Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503. Mr Condon submits that, whether or not all of the parties to this litigation were in law bound by the Shareholders Agreement, their correspondence treated that agreement as regulating their affairs. I have referred to that correspondence above. Mr Condon also submits that, having regard to the parties' mutual intention to procure the transfer of Mr Goldberg's (or, I interpolate, ADG's) shares, the Court should infer that they impliedly argued that, in the absence of agreement as to the identity of the valuer, the mechanism stipulated within the definition of "Independent Chartered Accountant" in the Shareholders Agreement should apply.
Mr Giles responds that the definition of "Independent Chartered Accountant" in the Shareholders Agreement specifies that the accountant to be appointed is one appointed by the parties, or in default of agreement, one appointed by the President for the time being of the Royal Australian Institute of Chartered Accountants or his nominee. He submits that is not what was contemplated by the 14 February Letter, which contemplated a valuer (not, or not necessarily, a chartered accountant) who was agreed, not one appointed in default of agreement. Mr Giles also submits that the terms of the 14 February Letter are inconsistent with the application of the mechanism in the Shareholders Agreement by implication. Mr Giles also submits, and I accept, that that implication was not obvious in circumstances in which the parties had stipulated a person from a class of persons with particular skills, the identity of whom was to be agreed.
Mr Giles rightly points out that the offer contained in the 14 February Letter did not expressly incorporate any part of the Shareholders Agreement, including the pre-emptive rights that are created by cl 10 of that agreement. Mr Giles also emphasises the difference in terminology (and, I interpolate, potentially in substance) between the reference in the Shareholders Agreement to an "Independent Chartered Accountant" and to an "independent agreed valuer" in the 14 February Letter, and submits that difference in terminology is inconsistent with an intent on the part of the parties to adopt the mechanism identified in the Shareholders Agreement for appointing an "Independent Chartered Accountant" to determine the identity of an "independent agreed valuer".
In further submissions for the Fourth and Fifth Defendants on 7 June 2019, Mr Giles adopted the submissions of the First and Second Defendants. He also made the further point, in opposition to the application of the Shareholders Agreement to fill any gap in the 14 February Letter, that Mr Gregan was in a different position from other Defendants, because he had never been a shareholder in the Company and had never been bound by the Shareholders Agreement, since EG was both the shareholder and the party to the Shareholders Agreement throughout the relevant period. Mr Giles submits, and I accept, that it would be more difficult to imply a term that Mr Gregan was bound by a mechanism in the Shareholders Agreement to which he was not party, merely because a proprietary company with which he was associated was party to that agreement.
I am not persuaded that, in the absence of agreement as to the identity of the valuer, the mechanism stipulated within the definition of "Independent Chartered Accountant" in the Shareholders Agreement would apply. While I accept that the Shareholders Agreement was plainly known to the individual and corporate Defendants, there is nothing in the terms of the 14 February Letter that indicates that the parties intended to incorporate any of its terms in a somewhat different transaction, and an implication to that effect is by no means obvious in the circumstances.
In the alternative, Mr Condon submits that the appointment of the valuer was a subsidiary and non-essential part of the parties' bargain and, as a result, the Court can itself appoint a valuer. He submits, and I accept, that the parties' primary bargain was the determination of the value of the shares, by reference to the objective considerations referred to in MMAL Rentals Pty Limited v Bruning above. The more ambitious aspect of Mr Condon's submission is the proposition that, on that basis, the Court can appoint a valuer if the parties do not agree to the identity of a valuer.
In Cameron v Cuddy [1914] AC 651, a contractual reference to arbitration had failed and Lord Shaw observed (at 656) that, in that situation: "… [I]t is the duty of a Court of law, in working out a contract of which such an arbitration is part of the practical machinery, to supply the defect which has occurred. It is the privilege of a Court in such circumstances and it is its duty to come to the assistance of parties by the removal of the impasse and the extrication of their rights. This rule is in truth founded upon the soundest principle, it is practical in its character, and it furnishes by an appeal to a Court of justice the means of working out and of preventing the defeat of bargains between the parties."
Mr Condon also refers to the approach taken by the House of Lords in Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 ("Sudbrook"). As he points out, the four lease agreements in issue in that case conferred an option on the lessee to purchase the reversion in fee simple in the leased premises: "at such price … as may be agreed upon by two valuers, one to be nominated by the lessor and the other by the lessee and in default of such agreement by an umpire appointed by the said valuers." The lessors there refused to appoint a valuer and contended that the contracts formed upon exercise of the options were uncertain because no price had been agreed for the sale and purchase of the property. Mr Millett (as Lord Millett then was) there referred in submissions to several earlier authorities, on which Mr Condon also relies, and submitted that it was not an essential part of the parties' bargain that a particular valuer be ascertained by a particular process.
Lord Diplock (at 476-479) set out a detailed analysis of the option clause, and treated the exercise of the option as creating mutual legal rights and obligations on the part of both lessor and lessee. His Lordship found that the parties had a primary obligation to appoint their respective valuers to fix a fair and reasonable price for the reversion, but observed that that would, in his view, "also be a necessary implication to give business efficacy to the option clause". His Lordship characterised the relevant obligations as "a contract for sale at a fair and reasonable price assessed by applying objective standards" and observed that the lessor's breach of one contractual obligation in failing to appoint a valuer should not prevent an order of conveyance to the lessees against payment of a fair and reasonable price assessed by applying the relevant objective standards.
Lord Fraser of Tullybelton observed (at 483) that: "I recognise the logic of the reasoning which has led to the courts' refusing to substitute their own machinery for the machinery which has been agreed upon by the parties. But the result to which it leads is so remote from that which parties normally intend and expect, and is so inconvenient in practice, that there must in my opinion be some defect in the reasoning. I think the defect lies in construing the provisions for the mode of ascertaining the value as an essential part of the agreement. That may have been perfectly true early in the 19th century, when the valuer's profession and the rules of valuation were less well established than they are now. But at the present day these provisions are only subsidiary to the main purpose of the agreement which is for sale and purchase of the property at a fair or reasonable value. In the ordinary case parties do not make any substantial distinction between an agreement to sell at a fair value, without specifying the mode of ascertaining the value, and an agreement to sell at a value to be ascertained by valuers appointed in the way provided in these leases. The true distinction is between those cases where the mode of ascertaining the price is an essential term of the contract, and those cases where the mode of ascertainment, though indicated in the contract, is subsidiary and non-essential: see Fry on Specific Performance, 6th ed. (1921), pp. 167, 169, paragraphs 360, 364. The present case falls, in my opinion, into the latter category. Accordingly when the option was exercised there was constituted a complete contract for sale, and the clause should be construed as meaning that the price was to be a fair price." His Lordship also observed (at 484) that, where machinery consisted of valuers and an umpire, none of whom were named or identified, it was: "unrealistic to regard it as an essential term. If it breaks down there is no reason why the court should not substitute other machinery to carry out the main purpose of ascertaining the price in order that the agreement may be carried out."
In In re Malpass, dec'd; Lloyds Bank plc v Malpass [1985] Ch 42, Sir Robert Megarry VC treated a provision for the appointment of a valuer as a subsidiary and inessential part of the machinery of the agreement. He emphasised (at 48), that the Court would provide its own machinery only if the machinery laid down by an option was merely subsidiary and inessential, and not if that machinery constituted an essential term of the contract. He also observed (at 50): "The basis of valuation, that of agricultural value, has been prescribed, and I cannot see that the insertion of the district valuer into the process is anything more than a safeguard for the widow and those entitled to residue, to ensure that the son paid a proper price under the option. Probate valuations are commonly on the economical side, and they usually have to be revised upwards in discussions with the district valuer: see, for example, In re Hayes' Will Trusts [1971] 1 W.L.R. 758, 768. Provided that there is some proper means of ensuring that the son pays a full and proper price on the basis laid down in the option, and not a mere "probate value," as the popular phrase goes, I can see no grounds for thinking that the testator or anyone else can have been attaching any particular value to the participation of the district valuer in the process. If it was assumed that he would take part in the process in any case (an assumption that has proved unfounded), it was no burden to put him into the option. In my judgment, therefore, the option falls within the doctrine laid down in the Sudbrook case [1983] 1 A.C. 444. The machinery provided by the will is defective in a non-essential respect, and the court can and should make good the deficiency."
In Booker Industries Pty Limited v Wilson Parking (Qld) Pty Limited [1982] HCA 53; (1982) 149 CLR 600 ("Booker"), Gibbs CJ, Murphy and Wilson JJ approved Lord Diplock's reasoning in Sudbrook, holding that a term was to be implied in an option agreement, in order to give business efficacy to the option, that both parties would do all that was reasonably necessary to procure the appointment of an arbitrator, where the agreement provided for the rent to be fixed by arbitration if the parties could not agree. I do not read Booker, as Mr Giles suggested, as indicating any view as to the wider approach adopted by Lord Fraser in Sudbrook Trading, where it was sufficient for the majority to rely on the approach of implying a term identified by Lord Diplock to resolve matters at issue in that case.
Brennan J, who differed from the majority as to the extent of the remedy, took a somewhat wider view. His Honour quoted (at 614) an observation of Templeman LJ in Sudbrook in the Court of Appeal, as follows: "The effect of the settled line of authority going back to Milnes v. Gery [(1807) 14 Ves 400; 33 ER 574] and Agar v Macklew [(1825) 2 Sim & St 418; 57 ER 405] was accurately expressed by Templeman L.J. in Sudbrook Trading Estate v. Eggleton [[1981] 3 WLR 361 at 373] when that case was in the Court of Appeal: "The principles which emerge from the authorities may be summarized thus: first, in ascertaining the essential terms of a contract, the court will not substitute machinery of its own for machinery provided by the parties, however defective that machinery may prove to be. Secondly, where machinery is agreed for the ascertainment of an essential term, then until the agreed machinery has operated successfully, the court will not decree specific performance, since there is not yet any contract to perform. Thirdly, where the operation of the machinery is stultified by the refusal of one of the parties to appoint a valuer or an arbitrator, the court will not, by way of partial specific performance, compel him to make an appointment. All three of these principles stem from one central proposition, that where the agreement on the face of it is incomplete until something else has been done, whether by further agreement between the parties or by the decision of an arbitrator or valuer, the court is powerless, because there is no complete agreement to enforce: see Kay J. in Hart v. Hart [(1881) 18 Ch D 670 at 689].""
However, his Honour also observed that that principle had no application where parties had agreed to sell at a fair and just price, which was ascertainable objectively, even if the contracting parties had appointed a third party to ascertain it. His Honour also referred to several earlier decisions where the Court had ordered specific performance, of agreements directed to a sale at "fair valuation", although one party had not taken the steps necessary for the valuation process to proceed. His Honour also observed (at 617) that: "[N]either the synallagmatic contract which came into existence upon the exercise of the option nor the lease to be granted in performance of that contract is uncertain. If the contractual machinery for fixing the rental were to fail, the rental would be fixed by the court. There is therefore no impediment to granting a decree of specific performance of the contract and requiring Booker to grant to Wilson a lease containing a clause relating to the fixing of the rental drawn in conformity with cl. 4.01. Such a lease would be valid, for if the machinery for fixing the rent should fail, the court's machinery will be available to fix it..." Brennan J there left open (at 617) whether Sudbrook warranted any wider change in Australian law.
The reasoning in Sudbrook is noted, without disapproval, by Mr J D Heydon in Heydon on Contract: (Lawbook Co, 2019) at 104-105 where the learned author notes that the English approach permits the Court to intervene, at least unless valuation machinery is an "integral and essential" part of the bargain, if the machinery has not operated, including because of one party's failure or refusal to operate it, and expresses the view that there is no reason why these principles do not apply in Australia.
In Brooks v Wyatt (1992) 112 FLR 12, Kearney J had to determine whether to grant specific performance of a contract for sale of land, which contained an option for purchase at a purchase price to be agreed between the parties or, failing agreement, to be determined by a real estate valuer to be appointed by agreement between the parties. No agreement as to the appointment of that valuer was reached and the defendant contended (as do the Defendants here) that that provision was an "agreement to agree". Kearney J there relied on the reasoning of Lord Diplock in Sudbrook to find that an implied subsidiary obligation would have attached to the appointment of the valuer, had the defendant refused to join in the appointment of a valuer. That conclusion was not necessary to his Honour's decision where, by the relevant time, the defendant had joined in the appointment of a particular valuer, and the Court also found that he was bound by that agreement. That decision was noted, without any negative comment, by Higgins J in Canberra Drag Racers Club Inc v Australian Capital Territory [2001] FCA 332 at [146]-[147].
However, Mr Giles submitted (T42) that Australian law did not permit the approach adopted by Kearney J in Brooks v Wyatt above which he characterised as changing an "agreed valuer" to something that would not be an agreed valuer in the particular circumstances, and changing the parties' bargain. Contrary to Mr Giles' submission, there does not seem to me to be any error in Kearney J having applied the reasoning of Lord Diplock in Sudbrook in the circumstances of that case, where the parties' agreement, in that case for the purchase of the relevant property for the value determined in the specified manner, could take effect so long as the valuer was appointed.
In Candoora No 19 Pty Ltd v Freixenet Australasia Pty Ltd (No 2) [2008] VSC 478, Hargrave J considered the somewhat different position where there was plainly a binding contract; the contractual machinery agreed by the parties had been invoked, but the expert they had appointed had failed properly to undertake his task. His Honour noted at [14] that: "The jurisdiction of a court to supply machinery to enable a valuation to take place where the contractual machinery has been frustrated is subject to the limit that the prescribed contractual machinery is not an essential and indispensable part of the contractual bargain. In this regard, it has been stated that the nomination of a single expert valuer, such as a company's auditor, affords a possible example of contractual machinery which is essential and indispensable. However, even in such a case, it has been held that alternative contractual machinery may be ordered by the court where the nominated valuer lacks the necessary expertise to perform the task." [citations omitted]
Mr Condon also notes that I referred, with approval, to Sudbrook in Barescape Pty Limited v Bacchus Holdings Pty Limited (No 9) [2012] NSWSC 984. I there observed (at [111]) that: "… the Court's jurisdiction to supply machinery to allow a valuation to take place where the contractual machinery has been frustrated is subject to a limit that the prescribed contractual machinery is not an essential part of the contractual bargain: Sudbrook Trading Estate Ltd v Eggleton above at 483-484; Candoora No 19 Pty Ltd v Freixenet Australasia Pty Ltd (No 2) [above] at [14]. In Candoora, Hargrave J distinguished the position where the contractual machinery agreed by the parties had failed from that where the expert chosen by the parties had failed to properly undertake the task. His Honour noted that, in the latter situation, the Court could not simply impose an alternative machinery upon the parties for the purpose of determining the fair value of shares in the company. In Tawfik v Bill [2010] NSWSC 1034, Barrett J observed that the decision in Cameron v Cuddy [above] "does not stand as authority for the proposition that the court can, as it thinks fit, add to, subtract from or otherwise meddle with the parties' contract" (at [24])."
Mr Condon also refers to Alphater Consulting Engineers Pty Limited v Rozman [2016] VSCA 111, where the parties had agreed to a dispute resolution procedure, which included a valuation to be undertaken by a qualified accountant. The Court held that the applicant's termination of the appointment of the accountant did not constitute a repudiation of that agreement, treating Sudbrook as authority that, where the valuation machinery breaks down, the Court may substitute other machinery so that the valuation agreement is carried out. The Court observed (at [66]) that: "There is nothing in the dispute resolution agreement that made [the nominated accountant's] continued involvement in the dispute resolution process an essential step so far as the performance of that agreement was concerned. One could well envisage circumstances where [the nominated accountant] (or indeed any independent expert retained by the parties) might become unavailable or unable to complete the task in respect of which they had been engaged. In our view, there is no reason to conclude other than that the dispute resolution agreement (while not containing an express term) would have permitted the parties in such circumstances to appoint another independent expert. In these circumstances, while Alphater could also have approached the Court in order to seek to have the issues resolved, there was at least one other way of proceeding consistently with the continued operation of the agreement."
Mr Condon submits that the Court can appoint a suitably qualified accountant if it is necessary to do so. Mr Giles responds that would be to alter the parties' agreement, which (if formed) contemplated they would agree the identity of a valuer between themselves. I will assume, without deciding, that the Court has power to appoint a valuer in an appropriate case, even if the parties' agreement to do so is unenforceable, at least whether the primary and operative parts of that agreement (here, as to valuation on a specified basis) are enforceable. On that assumption, there would still have been formidable obstacles to the exercise of the Court's power to make such an appointment in this case, where that would likely alter the parties' agreement as a matter of substance.
First, this was not a case where the Defendants refused to nominate a valuer, as the first step in performing that agreement, but where the parties were unable to agree the identity of the valuer to be appointed. It is difficult to see how that constitutes a breach of the agreement by the Defendants, any more than by the Plaintiff, unless the clause is read as imposing an obligation to agree, and not only to take the necessary steps that would allow agreement to be reached.
Second, the parties' agreement plainly contemplated a process by which the value of the Company's business would be promptly determined after the appointment of an agreed valuer; the amount of Mr Goldberg's loan and any damages payable by Mr Goldberg to the Company as a result of an assumed breach of duty to it would then, presumably also promptly, be determined; and the value of Mr Goldberg's shares in the Company would be determined in consequence. If the Court were now to nominate an independent valuer, that process could occur but it could no longer occur promptly. While a valuation of the Company's business could be determined by the valuer within the short time provided in the 14 February Letter, the parties have not agreed the amount of Mr Goldberg's loan; not only the amount of damages payable to the Company by Mr Goldberg, but also whether he is in breach of the Shareholders Agreement is now in dispute; and there is no agreed mechanism for the determination of those disputes, which would potentially have to be determined by the Court before the valuer could make a determination of the value of ADG's shares in the Company. I have also referred above to the commercial risk to the parties if the value of the Company's business is determined at an earlier point in time but the transaction cannot be completed until significantly later, after the Court has determined the remaining issues. That does not seem to me to reflect the substance of the parties' bargain, and that may be good reason why the Court should have made an order appointing an independent valuer in that situation. It is not necessary to express a final view as to that question where I find below that a binding agreement was not reached, by reason of the last and simplest of the issues in dispute.

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