Kranidiotes v Paschali & Anor

An appellate court should not interfere with a case-management or discretionary decision merely because it would have chosen a different solution. Intervention is justified only where the judge exceeded the generous ambit within which reasonable disagreement is possible, or where a serious procedural irregularity caused an unjust decision. Case management must remain fair and proportionate, having regard to the amount at stake, the issues, their complexity and the parties’ circumstances. A court-appointed expert assists the court but does not assume the court’s responsibility to determine the issue, and the trial judge remains entitled to assess the expert evidence together with the evidence as a whole.

A minority shareholder presented a petition under section 459 of the Companies Act 1985. By consent, the majority shareholder was to purchase the minority shareholding at its appropriate market value. The judge directed a joint expert to value the shares, subject to a proportionate investigation and an initial fee limit.

After receiving extensive allegations concerning the company’s accounts and related-party transactions, the appointed expert proposed an artificial valuation exercise which would take the allegations into account without investigating them fully. The judge terminated that expert’s appointment and directed that a cheaper expert should undertake a more proportionate inquiry. The majority shareholder appealed. The central issue was whether the judge had exercised his case-management discretion on wrong principles or outside the permissible range.

1. Appeal dismissed. The order terminating the appointment of Deloitte & Touche and directing the instruction of a cheaper expert was upheld. The appellant was ordered to pay the specified costs.
2. The valuation order was made to assist the judge in determining the appropriate market value as cheaply as possible. It did not transfer that decision-making responsibility to the expert. At trial, the judge remained required to consider the evidence as a whole, including the joint expert’s report, the parties’ criticisms and relevant factual evidence.
3. The appointed expert was entitled to seek directions when the parties’ allegations could not reasonably be investigated within the agreed budget. The judge was entitled to reject an approach which selectively avoided investigation of allegations while allowing their adverse implications to affect the valuation. Choosing a cheaper expert who might conduct a reasonable inquiry was a permissible case-management solution, even though it was imperfect.
4. Per Lord Justice Aldous, the appellate approach was governed by Tanfern Ltd v Cameron-MacDonald [2000] 1 WLR 1311. The Court of Appeal could not interfere merely because it preferred another imperfect solution. It could intervene only if the judge exceeded the generous ambit within which reasonable disagreement was possible, or if a serious procedural irregularity had caused an unjust decision. No such error or irregularity was established.
5. Lord Justice Laws agreed entirely.

• Court of Appeal (Civil Division): Appeal from the order of His Honour Judge Weeks QC, sitting as a deputy High Court judge in the Chancery Division, dismissed.
• High Court of Justice, Chancery Division: Directed that the appointed expert cease acting and that a cheaper expert be instructed to assist with the share valuation.