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When the two families behind a Cambridge joinery company stop speaking, or one partner wants out of a Hobart CBD accounting firm, the real argument is about the exit price. We set that price in a way the other side's expert has to answer on the merits.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
In Hobart, a falling-out between shareholders or partners rarely ends in a winding up; one side buys the other out, and the fight moves to price. A defensible figure states its basis and date, shows the result with and without a minority discount, restores value taken by oppressive conduct, and can be tested in the Supreme Court of Tasmania.
Picture two directors of a Moonah engineering workshop who now talk only through solicitors, three physiotherapists in partnership where one wants to leave, or a Derwent Valley family company running a vineyard and cellar door, where the siblings who work in the business have stopped paying dividends to the one who does not. Few of these end in a winding up. The Corporations Act 2001 gives the Court wide remedies for oppressive or unfairly prejudicial conduct in sections 232 and 233, but in a trading company the usual one is an order that the majority, or the company itself, buy the minority's shares.
Ordering a buy-out is the easy part; fixing the price is not. Three choices drive the number, the basis of value, the date and whether a minority discount applies, and the Court makes each of them in light of the conduct it finds. A valuation written for a lender that quietly assumes those answers is exposed the moment counsel asks why.
Most of these disputes never reach a courtroom. Owners negotiate under a buy-sell clause, appoint an expert to determine the price or sit down with a mediator, and Tasmania has no small business commissioner, so that mediator is usually privately engaged. A figure from a valuer neither side controls is often what turns those talks into signed terms, and if it does not, the same report becomes the core of the evidence in the Supreme Court of Tasmania or the Federal Court's Tasmania registry.
Family ownership runs deep in Tasmanian business, so many of these disputes are also succession disputes, tangled up with a parent's shares, a related-party lease or a loan account nobody documented. We act for shareholders, partners and their lawyers across Greater Hobart and the rest of the state: for one party, as an expert both sides appoint jointly, or as the determining expert whose decision the owners have agreed to accept.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Liability is not the valuer's call. What we can do is price each version of the facts the Court might accept, so the lawyers know what every finding is worth before they decide what to concede.
The test in section 232 is commercial unfairness judged objectively, not bad faith: conduct, a resolution or an omission that is oppressive, unfairly prejudicial or unfairly discriminatory to a member, or against the interests of members generally. In closely held Tasmanian companies the complaints are familiar: a director voted off the board, contracts steered to a related entity, generous pay for the majority, no dividends, accounts withheld, a share issue that dilutes the minority.
A buyer of a minority parcel in a private company pays less per share than a pro rata slice of the whole, because the parcel brings no control and few exit routes. Courts in oppression cases have often refused to apply that discount against a member who was pushed out, since doing so would reward the majority twice. The answer turns on how the shares were acquired, whether the company was run like a partnership and whether the conduct forced the exit, so we calculate both figures.
Hearing date is the default, but it can reward a majority that has run the company down since the dispute began. The minority may press for the date of exclusion or the date proceedings were filed, or for a current value with the lost value restored. Because the choice is the Court's, instructions usually ask for values at more than one date, with the movement explained.
Value that has leaked out of the company may need to be put back before the shares are priced. Typical items are excess director pay, measured against salary data; contracts and margin shifted to a related business; rent, fees and loans with related parties on non-commercial terms; and private costs charged to the company. Together these often outweigh the choice of method, and each one is contested on its own evidence.
Many family company constitutions and shareholders agreements set a price formula, pre-emptive rights or a forced transfer on certain events. Outside court, that clause governs, so we read it closely: which standard of value, at what date, fixed by whom and how. Inside an oppression case, section 233 lets the Court look past it, and the formula becomes one piece of evidence, weighed less heavily if the minority shows it was part of the unfairness.
Nothing about the valuation method is special to disputes; what changes is the scrutiny. For a trading company the income approach usually leads: normalised earnings the business can sustain, capitalised at a rate or multiple drawn from comparable evidence. Expect the majority to push both inputs down and the minority to push them up, which is why every input in our reports is tied to a source a reader can check.
A budget the controlling side prepared after the falling-out is tested line by line, and the report gives our own view of it. Tasmanian family companies often own the land they trade from, so the asset approach often comes forward, as it does when trading is in decline or the Court is comparing a winding up with a buy-out. Earlier share sales, offers and buy-ins are market evidence too, though a related-party transfer or a price set under an untested formula counts for less, and the minority may say a low past price was itself part of the oppression.
Partnerships follow the same logic under different law. The Partnership Act 1891 (Tas) values each partner's share on dissolution by reference to the partnership assets unless the deed provides otherwise, and in a professional firm goodwill is usually the largest of them. Whether that goodwill belongs to the firm or walks out with a departing partner settles most splits, whether the firm is an accounting or legal practice in the Hobart CBD or a specialist group near the Royal Hobart Hospital.
Most of these failures are set in the first week, in the instructions and the choice of valuer, long before any number is run.
Match the report to the fight you are in. Two partners settling a buy-out amicably need a sound, certified figure; owners heading for a contested hearing need every input exposed, because the opposing expert and then a judge of the Supreme Court of Tasmania will go through it line by line.
Assume the other side's expert will read the report hunting for the one weak link; ours are written on that footing. Each sets out who instructed us, the questions asked, the assumed facts and the documents seen, then reasons to each figure in steps a stranger to the case can follow. Alternative bases and dates appear side by side with the gaps between them explained, and records a party did not produce are named in the body of the report.
In the Supreme Court of Tasmania, where corporations matters run under the Supreme Court (Corporations) Rules 2008, the report is prepared to meet Part 19 of the Supreme Court Rules 2000 and the Expert Witness Code of Conduct attached to the Court's Practice Direction No 1 of 2016, which put the expert's duty to the Court ahead of any duty to the client; in the Federal Court's Tasmania registry it follows that Court's expert evidence practice note. The certified valuer who signs it attends experts' conferences, helps prepare joint reports on what is agreed and what is not, and gives evidence, concurrently with the other expert if the Court directs. We also review the other side's report as consultants, and act as determining expert where both owners have agreed to accept the result.
If this goes to a hearing in the Supreme Court of Tasmania, will you meet the other expert, sign a joint report and then be cross-examined on your figure? A valuer who hesitates is giving you an opinion that will not survive the case.
Talk your situation through with a certified valuer before you commit to anything, at no cost.