Federal Court of Australia

Leviston v PQ Management Pty Ltd (No 2) [2023] FCA 295

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 23.03(2)(a) of the Federal Court Rules 2011 (Cth), the parties be granted leave to cross-examine Mr Matthew Ashby in his capacity as Court expert.

2.    The matter be listed for a further hearing at 9:30 am AEST on 5 April 2023.

3.    Costs reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

1    This application is made pursuant to r 23.03(2)(a) of the Federal Court Rules 2011 (Cth) for leave by a party to cross-examine a Court expert.

2    The expert was appointed in connection with a judgment previously handed down in these proceedings: Leviston v PQ Management Pty Ltd [2022] FCA 787. The proceedings concerned the claims by Mr Andrew Leviston of oppression in the conduct of the affairs of Treated Waste Agencies Pty Ltd (the Company). The substance of the proceedings was heard and determined and an order was made on 8 July 2022 that the first defendant, PQ Management Pty Ltd, purchase Mr Leviston’s shares in the Company.

3    The methodology for the valuation of the shares was provided in the judgment previously delivered, and was, in part, derived from an agreement between the parties as to the manner in which the shares in the Company ought be valued. On 22 August 2022, it was ordered that the value of the shares be ascertained by a Court expert in accordance with that agreed methodology. The parties were involved in that process with the assistance of a Registrar of this Court. The expert, Mr Matthew Ashby, has now prepared his report.

4    The defendants wish to cross-examine Mr Ashby on the report, no doubt on the basis that they perceive that the value of the shares on which he arrived was too high. The application for leave to cross-examine is opposed by the plaintiff.

5    The issues in respect of which cross-examination is sought go essentially to the methodology adopted by Mr Ashby, including the matters that he took into account in drawing his conclusion as to the Company’s future maintainable EBITDA.

6    Mr White for the plaintiff submitted that the Court would be able to ascertain from submissions the existence of any defects in the report and deal with those concerns simply as a matter of arithmetic. There is force in that submission and it is certainly true that, to some extent, the Court might conceivably be able to do that.

7    Ultimately, however, I am not persuaded that I would be in a position to adjust with sufficient confidence the workings of Mr Ashby in order to reach a final value. It is important that Mr Ashby be given the opportunity to respond to any criticism of his methodology or the matters that he took into account. Afforded such an opportunity, he may provide, utilising his expertise, the rationale for the steps that he took and the matters that he considered.

8    Although the process of appointing a Court expert is intended to reduce the expense of a prolonged hearing, in this case I apprehend that, as any cross-examination will not be lengthy, and perhaps might help in clarifying what has been written, the interests of justice, including the ability of the defendants to put their propositions to Mr Ashby and his entitlement to respond to them, weigh in favour of granting leave to cross-examine him on his report.

9    In those circumstances, I propose to make an order granting leave to the defendants to cross-examine Mr Ashby.

Associate:

Dated:    24 March 2023

SCHEDULE OF PARTIES