In the matter of Australian Water Holdings Pty Limited

Australian Water Holdings Pty Limited is involved in a legal dispute concerning compulsory acquisition by a 90% shareholder and the valuation of the company. The matter was before the Federal Court of Australia, which had to determine the meaning of "fair value" in this context. The court had to decide whether "fair value" refers to the market value or the true, intrinsic value of the company and the appropriate date for the valuation. Additionally, the court considered whether post-valuation events could be taken into account in the valuation process.

The primary legal issues before the court involved the interpretation of "fair value" as used in the Corporations Act and the circumstances under which post-valuation events could be considered. The court had to address whether "fair value" should be assessed based on market value or the true, intrinsic value of the company, and if the valuation should account for events occurring after the date of the valuation. The court also examined the desirability of transferring the proceedings to the Federal Court, considering related litigation pending in that court and the benefits of a single court managing the entire litigation.

The court held that "fair value" should be interpreted as the true, intrinsic value of the company, rather than the market value. It also found that post-valuation events could be considered in the valuation process. The court reasoned that a single court managing the entire litigation would be preferable to avoid fragmentation of the proceedings and ensure consistency. Given that related litigation was pending in the Federal Court and it was preferable for those proceedings to be determined first, the court decided to transfer the proceedings to the Federal Court.

The final orders of the court included a transfer of the proceedings to the Federal Court and a declaration that "fair value" should be interpreted as the true, intrinsic value of the company. The court also allowed for the consideration of post-valuation events in the valuation process. This decision ensures a unified approach to the litigation and provides clarity on the valuation methodology in compulsory acquisition cases.