Fantuz v Totem Road Pty Ltd

The parties to the case were Fantuz, a shareholder in Totem Road Pty Ltd, and the company itself. Fantuz applied for an inspection of the company's books for the purpose of valuing the shares he held. The dispute arose when the company refused to provide the necessary documents. The case was heard in the Supreme Court of New South Wales.

The primary legal issues the court had to address were whether the orders for inspection should be granted, and if an agreement on the market value of the shares was necessary before enforcing the sale under the option agreement. The court needed to determine whether the shareholder's right to inspect the company's books outweighed the company's right to protect its commercial interests.

The court held that the shareholder's right to inspect the company's books for the purpose of valuation was justified, and orders for inspection should be made. Regarding the option agreement, the court found that an agreement on the market value of the shares was not a prerequisite for enforcing the sale. The court concluded that the term "agreed market value" in the option agreement was not a condition precedent to the obligation to sell the shares. The court was satisfied that the shareholder had a legitimate interest in obtaining the necessary information for the valuation of his shares.

The final orders of the court were that the company was required to provide Fantuz with access to its books and records for the purpose of valuation. The court did not find it necessary to determine the exact market value of the shares at that time. The decision emphasised the importance of the shareholder's right to inspect the company's books and the flexibility in interpreting option agreements.