Re Global Mortgage Equity Corporation Pty Ltd

In the case of Re Global Mortgage Equity Corporation Pty Ltd, the parties involved were creditors of the company, which had been placed into liquidation. The nature of the dispute was the valuation of the company's share capital for the purpose of determining the distribution of assets to creditors. This case was heard by the New South Wales Court of Appeal.

The primary legal issue the Court of Appeal had to resolve was whether the valuation of the company's share capital should be determined by an earnings-based method or by an unadjusted balance sheet method, given that the Court of Appeal's earlier orders mandated a valuation based on the market value of the whole share capital. The Court was required to consider the conflicting expert valuation evidence and the appropriateness of the methodologies applied by the experts in light of the Court of Appeal's prior directions.

The Court of Appeal examined the evidence and the application of the differing methodologies by the experts. It was noted that the Court of Appeal's previous orders specified a valuation based on the market value of the whole share capital. However, the experts presented conflicting evidence, with one advocating for an earnings-based valuation and the other for a valuation based on the unadjusted balance sheet. The Court held that the appropriate valuation method was one that aligned with the Court's prior orders, which required a valuation based on the market value of the whole share capital. The Court concluded that the unadjusted balance sheet method was more consistent with the Court's directions and was, therefore, the preferred method for determining the value of the company's share capital.

The Court of Appeal determined that the unadjusted balance sheet method should be applied for the valuation of the company's share capital. The Court made orders accordingly, directing that the valuation be conducted using this method and providing further directions for the distribution of the company's assets to creditors.