Smalley v Williamson

Smalley v Williamson was a case before the court, where the dispute centred around the valuation of shares conducted by EY, a professional firm. The court was tasked with determining whether EY had acted within the terms of the contract and whether the valuation met the standards set out in the AES-2 standard. The primary legal issues revolved around whether EY exercised its professional judgment in accordance with the mandate and whether the valuation adhered to the specified standards and procedures outlined in the AES-2 Standard.

The court examined the interplay between clauses 33 and 34 of the AES-2 Standard, which outline the requirements for gathering evidence and the application of professional judgment in business valuations. Clause 33 mandates that sufficient evidence must be gathered to support the business valuation conclusion, while Clause 34 allows the valuer to exercise professional judgment in determining the extent of necessary evidence. The court concluded that EY was within its rights to use professional judgment, given its role as the sole arbiter of the relevance of any information provided. The case of Peregrine Estate Ltd v Hay was referenced to support the notion that the valuation is valid if carried out in accordance with the terms of the contract, regardless of any errors made by the expert, unless those errors were outside the scope of the expert's mandate.

In summary, the court found that EY had exercised its professional judgment appropriately and had acted within the bounds of the mandate and the AES-2 Standard. The valuation was deemed valid, and the court upheld the decision made by EY. The final orders reflected the court's findings, affirming the valuation conducted by EY as compliant with the contractual and professional standards.