John Seneschall v Trisant Foods Limited & Ors

The appeal concerns the correct case management approach to be taken where a single joint expert has produced a report and a party seeks to rely on an independent expert. The court applied the guidance in Daniels v Walker (Practice Note) [2000] WLR 1382 endorsing a staggered approach: initial questions to the joint expert, then a meeting between experts before deciding whether oral expert evidence or an adjournment is necessary. The judge below was held to have acted prematurely by focusing on whether the trial would require adjournment rather than directing the experts to meet and see whether issues could be narrowed or resolved.

The appellant sought to admit a summary report from a second expert on valuation methodology for a start‑up business; the joint expert had produced a nil valuation. The Court of Appeal (appeal judge) concluded that the valuation methodology difference was central and potentially decisive to the remedies trial under section 994 Companies Act 2006 and that refusing to permit the second expert without an experts' meeting risked injustice. The appeal against the October 2023 order dismissing the application to admit the second expert was therefore allowed.

Background and parties:

• The appellant, Mr John Seneschall, is a minority shareholder in Trisant Foods Limited and brought a petition under section 994 of the Companies Act 2006 alleging unfair prejudice. Liability was determined in his favour in May 2023.
• Remedies were to be decided at a separate five‑day hearing scheduled for mid‑November 2023 before ICCJ Greenwood. One remedy sought was an order requiring the majority shareholder, Market Fresh Limited, to purchase the appellant's shares, requiring a valuation.

Procedural history and facts:

• ICCJ Greenwood directed appointment of a single joint expert, Mr Haddow, who produced a report (6 September 2023) valuing the appellant's minority interest at nil under multiple methodologies.
• The appellant raised questions about methodology and, after receiving unsatisfactory answers and with trial imminent, instructed a second expert, Mr Nissan, who produced a summary report advocating alternative valuation approaches (Market Approach and Venture Capital Method) and substantial positive values.
• The appellant applied for permission to rely on Mr Nissan's summary report, to allow further instruction if required, for the experts to meet to narrow issues, and for permission to call both experts for oral examination if no agreement was reached.
• ICCJ Greenwood dismissed that application by order dated 30 October 2023. Leech J subsequently granted permission to appeal against that October Order ([2024] EWHC 1049 (Ch)), conditional on permission to appeal the Remedies Judgment; the judge below later granted permission to appeal the Remedies Judgment as well.

Issues framed by the court:

• Whether the lower court erred in refusing to permit reliance on the second expert's report and in failing to direct an experts' meeting in accordance with the Daniels v Walker approach.
• Whether the lower court acted prematurely and misdirected itself by focusing on potential adjournment rather than first allowing experts to meet and explore agreement or narrowing of issues.

Court's reasoning and decision:

• The appellate judge emphasised Lord Woolf's guidance in Daniels v Walker favouring a staggered approach: ask questions of the joint expert, then require a meeting of experts before deciding whether additional expert evidence and any oral attendance at trial are necessary.
• The judge below had concentrated on whether admitting the second expert would require adjournment and thereby decided prematurely without directing an experts' meeting; this excluded potentially critical contrary expert opinion on valuation methodology for a start‑up company.
• The difference in methodology was central to the remedies issue (the price to be paid for the shares). Given the importance of the valuation evidence and the appellant's prompt steps to obtain it, refusing the second expert without the experts meeting risked injustice.
• Accordingly the appeal against the October 2023 order was allowed. The appeal against the Remedies Judgment will be dealt with separately; directions for that appeal were to be proposed.

Other procedural notes:

• The respondents did not attend the appeal hearing. The appellant was represented pro bono by counsel.

This appellate court allowed the appeal against the October 30, 2023 order which had dismissed the appellant's application to rely on a second expert. The judge below was held to have acted prematurely and to have misdirected himself by deciding the matter without directing the experts to meet in accordance with the Daniels v Walker (Practice Note) approach and by focusing prematurely on the prospect of adjournment rather than first seeking to narrow or resolve expert disagreement; given the centrality of valuation methodology to the remedies, excluding the second expert without that step risked injustice.

First instance liability trial found for the petitioner in May 2023 (liability judgment by ICCJ Greenwood). Remedies trial listed for November 2023 before ICCJ Greenwood. The judge below (ICCJ Greenwood) dismissed the appellant's application to rely on a second expert by order dated 30 October 2023 (the "October Order"). Leech J granted permission to appeal against the October Order ([2024] EWHC 1049 (Ch)), conditionally linked to permission to appeal the Remedies Judgment (Remedies Judgment handed down 11 March 2024; permission to appeal that Remedies Judgment was later granted by ICCJ Greenwood on 26 April 2024). The present appeal was heard before Mr Justice Adam Johnson, resulting in allowance of the appeal and reversal of the October Order ([2024] EWHC 1380 (Ch)).