Premier Telecom Communications Group Ltd & Anor v Webb
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE MOORE-BICK
- LORD JUSTICE FLOYD
Areas of Law
- Contract Law
- Civil Procedure
- Corporate Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
The appeal by Premier Telecom Communications Group Ltd (PTCG) and Mr. Ridge against the summary judgment favoring Mr. Webb was dismissed. The case centered around the expert valuation of Mr. Webb's shares by Grant Thornton. The appellants contended that Grant Thornton did not follow their mandate, but the court found no material departure from the instructions. Key legal principles reaffirmed include the finality of expert determination, the necessity of adhering to the expert's mandate, and the treatment of hypothetical situations in valuations. The court upheld the original decision, validating Grant Thornton's valuation of Mr. Webb's shares.
Judgment
Lord Justice Moore-Bick :
Background
This is an appeal from the order of His Honour Judge Havelock-Allan Q.C., the Mercantile Judge at Bristol, giving judgment for the defendant, Mr. Webb, under Part 24 of the Civil Procedure Rules against the claimants, Premier Telecom Communications Group Ltd (“PTCG” or “the company”) and Mr. Ridge.
PTCG is a successful private company, 60% of whose shares are owned by Mr. Ridge and 40% by Mr. Webb. The success of its operations depends heavily on personal relationships built up between Mr. Ridge and senior representatives of various companies with which it does business. It is an unusual feature of the business that Mr. Ridge himself has no contract with PTCG or its subsidiary and the group has no contractual relationships with most of its principal business partners. Everything depends on trust and good working relationships.
Mr. Webb was a director of PTGC and was employed by it until October 2011, when there was a parting of the ways. He was accused of misconduct and his employment was terminated. He asserted that he had been unfairly dismissed, but that was denied and a dispute thus arose between him on the one hand and the company and Mr. Ridge on the other. Mr. Webb began proceedings before the Employment Tribunal and made it clear that he was also thinking of issuing proceedings under section 994 of the Companies Act 2006 on the grounds of unfair prejudice. However, in December 2012 the parties were able to reach agreement and the dispute was compromised on terms, among others, that the company and Mr. Ridge would buy out Mr. Webb’s shareholding.
Given the nature of PTCG’s business, valuing the shares was not a straightforward task. The parties therefore agreed to delegate it to Grant Thornton acting as expert valuers. On 4 th October Burges Salmon wrote to Grant Thornton on behalf of the appellants to enquire whether they would undertake the task. The solicitors made it clear in the letter that they were seeking to identify a valuer to produce a valuation:
“ . . . to reflect the remedy that might be applied by the courts in an unfair prejudice action of a minority shareholder.”
The valuation would therefore:
“ . . . seek to reflect the position which would exist if [Mr. Webb] had successfully brought a claim for unfair prejudice in the High Court.”
Grant Thornton accepted the appointment on the terms set out in a letter of engagement dated 4 th December 2012. It included the following provis