Short v Crawley (No. 38)

Short v Crawley (No. 38) involved the appellant, Mr Short, seeking a compulsory buy-out of shares held by the respondents, Mr and Mrs Crawley. The crux of the dispute was the valuation of the shares in question for the purpose of determining the amount owed by the appellant to the respondents. The case was heard in the Federal Court of Australia, which had jurisdiction to determine the matter under the Corporations Act 2001 (Cth).

The primary legal issue the Court had to address was whether the valuation of the shares should be based on the offer made by Mr Short, which exceeded the market value, despite the offer being rendered incapable of acceptance due to the respondents' conduct. The Court also needed to determine the appropriate method of valuation when the full circumstances of the offer were obscured by the respondents' actions. The Court's decision hinged on the relevance of the offer in determining the value of the shares, despite it not being a binding contract.

The Court held that the offer, though not binding, was relevant in determining the value of the shares. The offer, which exceeded the market value, provided a basis for valuation as it reflected the value placed on the shares by the offeror. The Court determined that the valuation should be based on the value contained within the offer, taking into account the full circumstances that led to the making of the offer. The Court found that the respondents' conduct, which prevented the offer from being accepted, did not negate the relevance of the offer in determining the value of the shares. The Court concluded that the valuation should reflect the value proposed in the offer, despite the offer not being capable of acceptance.

The Court ordered that the valuation of the shares be based on the value proposed in the offer made by Mr Short. The exact amount owed by Mr Short to the respondents was to be determined using this valuation, and further proceedings were to be held to ascertain the precise figure. This ruling provided clarity on the valuation of shares in the context of a compulsory buy-out, emphasizing the relevance of offers that exceed market value even when not capable of acceptance.