Rajkumar Tahilram v Trustees of the Lukamber Trust and Another - (09 Dec 2021)

Court has the power to interfere with the valuer’s decision in review proceedings

Civil

The primary issue before the SCA is when parties agree to refer a matter to an expert valuer, whether the valuer is legally permitted to unilaterally withdraw the valuation in order to alter or amend it, once the valuer’s valuation has been communicated to the parties concerned.

Values of finality and certainty are foundational, especially to administrative law and to contract law. In their shareholders agreement the parties have identified a means of agreement on the fair market value of the shares of the company concerned, by reference to the valuer identified by them and that his valuation shall be final and binding on them; they must be held to their bargain.

In the absence of a contractual provision to the contrary or agreement or waiver by the parties, whenever parties agree to refer a matter to a valuer, then so long as the valuer arrives at his or her decision honestly and in good faith, the decision is final and binding on them and they are bound by it once communicated to them. The valuer is then functus officio insofar as the valuation and matters pertaining thereto are concerned. That being so, the valuer is then not permitted to unilaterally withdraw or cancel the valuation in order to alter or amend it. Only a court has the power to interfere with the valuer’s decision in review proceedings. The judicial ambit of the court’s power to interfere is severely circumscribed, and limited to the narrow grounds as enunciated in this court’s jurisprudence

The first Respondent is to pay the amount of R2 878 574.70 to the applicant, being the purchase consideration for the sale of his shares in the second respondent to the first respondent. The first respondent is to pay interest at the rate of 10.25% per annum tempore morae on the aforementioned amount from the date of this order until final payment. The appeal is upheld with costs.

Tags : VALUATION ALTERATION PROCEEDINGS