3.4.5.2 Valuation date

As a company's value can be affected by intemal and extemal factors and may change dramatically over a short period of time, the question when the fair value is to be assessed in an oppression case is of relevance.1 There are several options for this: the date the oppressive conduct occurred, the date the conduct became known, date on which the lawsuit was filed, date of trial, date of judgment and date of the actual valuation time.

The current situation is: there is no consensus on the valuation date. Nevertheless, subject to the discretion of the court, the presumptive valuation date is the date of filing. 2 The advantage of choosing the date of filing is obvious. It is easy to identify and closer to the date on which the harm due to the oppression occurred, but the corporation has not yet suffered any Toss of resources owing to the litigation. The disadvantage of this choice is that the financial situation of the corporation may have changed substantially between the misconduct date and the date of filing.

Another commonly considered valuation date is the date of oppression. Misconduct of which the shareholder complains takes place at this point, so it is quite natural for people to think relief should be granted at this point. With a later date, the misconduct might cause the value to decrease, and it is not fair to ask the minority to share the majority's fault.3 But things are not always that simple and clear. If the misconduct has decreased the value of the corporation, but overall the corporation is still making considerable profits, a later valuation date, such as the filling date, or actual valuation date would be fair to the minority. Deciding on the valuation date is therefore not an easy job. And if the alleged conduct lasts for some time or consists of several actions, it is even more difficult and costly to decide when the valuation date should be.4

In my opinion, the valuation date cannot and should not be fixed. The valuation date, just as the valuation method, can be appropriate in one case, but it may not be appropriate in another. It is up to court to use its discretionary power to decide in each case, subject to the tent of the date which is fair for the exiting shareholders. In Chapter 4, we will reopen this topic and examine the approach to this issue adopted by the UK.