Yan v Yangdo Pty Ltd (No 2)

Yan and Yangdo Pty Ltd appeared before the court in a dispute concerning the valuation of shares for a buy-out. The case revolved around the determination of the buy-out price, which was to be assessed by an expert. The expert initially issued a valuation, later identified an error, and provided a second valuation. This second valuation resulted in a $10 million difference in the buy-out price. Both parties supported the valuation that was more favourable to them during the trial, but the court found neither valuation to be binding.

The legal issues the court needed to resolve included whether the valuations provided by the expert were binding on the parties, and if so, which valuation should be adopted. The court examined the circumstances under which the expert's valuations were issued, the nature of the error identified, and the parties' conduct in relation to the valuations at trial. The court had to determine whether the error was significant enough to render the initial valuation invalid and whether the parties' conduct in supporting the valuations at trial impacted the binding nature of the expert's determination.

The court concluded that neither valuation was binding on the parties due to the significant error in the initial valuation and the parties' conduct in supporting the valuation that favoured them at trial. The court emphasised that the parties had an opportunity to challenge the expert's determination and failed to do so effectively. Consequently, both parties were ordered to bear their own costs, reflecting the court's view that neither party was entitled to rely on the expert's valuations.