Cobden Investments Ltd v RWM Langport Ltd & Ors

After judgment but before the final order, the court may admit further evidence where it is needed to achieve a fair and proportionate remedy, particularly in determining the value of shares. The strict Ladd v Marshall criteria apply where evidence is tendered to reverse findings already made, but do not govern evidence directed to filling identified gaps in the valuation exercise. The discretion must be exercised cautiously, having regard to the overriding objective, proportionality, cost, fairness and the parties’ opportunity to adduce evidence at trial. In an unfair-prejudice petition, relief under section 996 may include financial adjustments which do not themselves constitute unfair prejudice, and the court need not compensate every instance of unfair prejudice for the entire period in which it occurred.

The judgment concerned further orders following an earlier judgment in an unfair-prejudice petition brought by Cobden Investments Ltd concerning Southern Counties Fresh Foods Ltd. The parties had agreed that RWM Langport Ltd would purchase Cobden’s shares, with the valuation date fixed at 31 December 2008.

The court was required to determine how the valuation should reflect findings made in the earlier judgment, including compensation, licence fees, shared costs, procurement fees, compliance with a supply agreement, late payment, rent reviews and surplus assets. It also had to decide whether further factual or expert evidence should be admitted after the substantive hearing.

1. The court confirmed that it had jurisdiction to admit further evidence after judgment had been handed down but before the final order. The discretion had to be exercised sparingly and cautiously, with particular regard to the overriding objective, proportionality, fairness, additional cost and whether the evidence could and should have been adduced at trial.

2. The criteria in [1954] 1 WLR 1489, as discussed in [2005] EWHC 2424, were not controlling where the evidence was sought to fill gaps relevant to the fair valuation of shares rather than to persuade the judge to reverse findings already made. The court explained that the approach in [2005] EWHC 0282 (Ch) was helpful by analogy, but the admission of evidence remained a matter of case-specific discretion.

3. The court allowed further evidence selectively. Evidence was admitted on electricity usage, effluent-plant costs, procurement fees, financing charges under the Supply Agreement, rent reviews and the value of Pound Farm. Evidence intended to establish a higher cow-trading opportunity or to revisit the rejected kill-fee case was refused.

4. In exercising its jurisdiction under section 996, the court could make financial adjustments which did not correspond precisely to an established instance of unfair prejudice. It could also decline to compensate every instance of unfair prejudice for the whole historical period. Relief had to produce a fair and proportionate result, taking account of the parties’ conduct, delay and the practical basis of the share valuation.

5. The valuers were directed to reflect specified historical and prospective adjustments, including compensation for qualifying cow sales, apportioned electricity and effluent costs, employment-cost set-offs, the Supply Agreement’s financing consequences, late payment under the MoU, the 2003 and 2008 rent reviews, and the fair value of Pound Farm.