“The evident advantage of an expert determination of a contractual dispute is that it is expeditious and economical. The second attribute is a consequence of the first: expert determinations are, at least in theory, expeditious because they are informal and because the expert applies his own store of knowledge, his expertise, to his observations of facts, which are of a kind with which he is familiar”4 In practical terms (and perhaps less understood in commercial practice), a valuer’s mandate (as reflected in both a contractual expert determination clause and engagement letter) should expressly state whether the engagement is either speaking (with reasons) or non-speaking. Both modes of delivery have their pros and cons. Non-speaking engagements tend to ‘end the dispute’ and, with more abbreviated reporting requirements, be more cost effective. A decision with reasons enables the parties to understand the experts reasoning, but leaves the door slightly ajar to challenge. In NZ, speaking engagements tend to be the norm, possibly due to a lack of awareness about the alternative option. • Minority shareholding discount: PEL’s “most trenchant” criticism of the Valuation Report was that the Valuer did not apply a minority shareholding discount to the value of the Trust’s (minority) shareholding. This criticism, however, amounted to no more than a challenge to the merits of the expert’s conclusion, which was not a reviewable error. As Mathews J concluded: “[45] In my view these aspects of Mr Shiels’ argument only raise the prospect that Ms Millar was mistaken in her view, or possibly that she made an error in not enquiring further on this point. This does not amount, however, to departing from her mandate to assess fair value.” 5 • Delegation of authority: PEL also complained that the Valuer had delegated her authority impermissibly, because she had sought the advice of a law firm in relation to the application of a minority discount. This complaint was rejected on the facts. On the evidence before the High Court the Valuer had, albeit with the benefit of having received advice, arrived independently at the conclusion that a minority discount should not be applied. In practice, a valuer is therefore able to seek advice from a third party for an issue that falls within their mandate but would be unwise to rely on that advice without undertaking their own evaluations. The Valuer had properly discharged her mandate in Peregrine, and therefore there was no basis to review her assessment of fair value. Did the expert’s valuation also fix “fair value” for the purposes of s149 of the Companies Act? Yes. In an important finding, Matthews J held that the Valuer’s “fair value” determination also fixed “fair value” for the purposes of s 149 of the Companies Act. Section 149 of the Companies Act provides that, in given circumstances, directors may only acquire shares at or above “fair value”, and dispose of them at or below “fair value”. PEL submitted that setting the “fair value” for the purposes of s 149 of the Companies Act was the sole province of the High Court. It argued that, even if parties agree on a fair value, that may still not bind them if, on an objective assessment, it is found (by a court) that they have agreed on a figure that is not in fact “fair value”. On PEL’s case, because the Valuer’s fair value was substantively wrong on an objective assessment, it could not be binding for the purposes of s 149.