Court Addresses Valuation, Reasonable Endeavours, and Costs in Shareholder Dispute

Citation: [2023] EWHC 2933 (Ch)
Judgment on


In “Paul Richard Knell & Ors v Eric Van Loo: 2023 EWHC 2933 (Ch)”, Deputy Judge Tom Smith KC presided over consequential issues related to quantum and costs after previously addressing liability in an August Judgment. This article analyzes the key legal principles applied in the resolution of this dispute surrounding a shareholders’ petition and a Part 7 Claim.

Key Facts

The case concerns a dispute ensuing between shareholders (the Claimants and Petitioners, Paul and Peter Knell) and Eric Van Loo (the Defendant and First to Fourth, Seventh Respondent) regarding the management and affairs of the company MTIM. The petition sought a buy-out order for the shares held by the Knells, which was granted according to the August Judgment. Additionally, liability and quantum were examined, as this was not a split trial.

The judgment addressed valuation methodology, the application of reasonable endeavours clauses, interest rates on damages, and the costs arising from both the petition and the Part 7 Claim. Importantly, matters pertaining to the costs included the consideration of who should bear them, taking into account the success and failure of various claims within the proceedings.

Valuation of Shares

A significant part of the judgment addresses the valuation of shares for the buy-out order. The court determined the market value of the shares as of 12 June 2023. The judge rejected the approach that suggested a retrospective valuation based on an earlier balance sheet, instead of the correct date for valuation purposes.

The net assets valuation approach was deemed appropriate, where MTIM’s assets were primarily rights under Clause 16.1 of the AMAs and that MTIM had a valid claim against BGL under Clause 16.1 of the AMA for the Bridgwater project was established.

Reasonable Endeavours and Loss of Chance

The loss of chance doctrine was applied to quantify damages. The claimants had a substantial chance of obtaining a disposal fee from BGL, warranting no discount, contrasting typical applications where uncertainty might lead to discounts in the estimated valuation of the lost opportunity.

Costs of Proceedings

On costs, the judge applied the usual rule that costs follow the event. The parties largely unsuccessful in their claims (the Part 7 Claim against Mr. van Loo and the claim for relief against the First to Fifth Respondents in the Petition) were ordered to pay corresponding costs. Conversely, BDI was ordered to pay 70% of the Petitioners’ costs for the petition proportionate to the measure of their success in obtaining a buy-out order.

Non-party Costs Orders

The judgment further considered whether to make non-party costs orders, under principles such as those established in “Paper Mache Tiger v Lee Mathew Workroom Pty Ltd”. However, it determined that the shareholder BDI was the real party to the petition, and there was no exceptional factor to hold Mr. van Loo personally liable alongside BDI.


The court computed a buy-out price for the Knells’ 30% shareholding in MTIM at £722,085.60, without accrual of further interest from 12 June 2023. Costs were apportioned based on the success and failure of the claims, with indemnity costs not considered warranted. Furthermore, there was a stay on enforcement of the costs orders in favor of Mr. van Loo until the buy-out order sum was satisfied by BDI, addressing concerns of equity in enforcement.


In “Paul Richard Knell & Ors v Eric Van Loo”, the court meticulously applied established legal principles concerning valuation methodology, reasonable endeavours, loss of chance, and the allocation of costs in a shareholder dispute. By focusing on the substantive financial aspects tied to the shares’ valuation and the proper allocation of the costs based on the parties’ relative success, this judgment reflects a balanced approach aiming for equitable resolution of complex corporate disputes.

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