Fair Market Value Evaluation

From Riverview Legal Group

Aquam Corporation v. Coffey, 2019 ONSC 7218 (CanLII)

[11] In Smeenk v. Dexleigh Corp., 1990 CanLII 6935 (ON SC), at para. 36, Henry J. adopted the following apt description of valuation proceedings:

Further in Cyprus Anvil Mining Corp. v. Dickson (1986), 1986 CanLII 811 (BC CA), 8 B.C.L.R. (2d) 145, 33 D.L.R. (4th) 641 (C.A.), Lambert J.A. referred to a number of U.S. authorities and observed at p. 158 B.C.L.R.:

It is not necessary for me to analyze those cases or to quote from them. The point that they emphasize is that the problem of finding fair value of stock is a special problem in every particular instance. It defies being reduced to a set of rules for selecting a method of valuation, or to a formula or equation which will produce an answer with the illusion of mathematical certainty. Each case must be examined on its own facts, and each presents its own difficulties. Factors which may be critically important in one case may be meaningless in another. Calculations which may be accurate guides for one stock may be entirely flawed when applied to another stock.

The one true rule is to consider all the evidence that might be helpful, and to consider the particular factors in the particular case, and to exercise the best judgment that can be brought to bear on all the evidence and all the factors. I emphasize: it is a question of judgment. No apology need be offered for that. Parliament has decreed that fair value be determined by the courts and not by a formula that can be stated in the legislation. [Emphasis added.]

[12] In upholding Henry J. the Court of Appeal added at 1993 CanLII 8594 (ON CA):

The issue of who has the onus of proof in cases such as this was raised by the appellants. It is merely another aspect of the issues of availability of information and appointment of an appraiser. There is no doubt that the statute places the onus on the court to place a "fair value" on the shares. It has been held, and in our view correctly, that there is no ultimate onus on either party to prove or disprove that any particular value is the "fair value" for the shares. Rather, each party bears the onus of adducing evidence to substantiate its position. The court may, as in other types of cases, accept all or part of the evidence -- expert or otherwise -- tendered by any party, but must finally decide, on an assessment of all the evidence, what it considers to be a "fair value". The ultimate onus is on the court, rather than on either of the parties: see Cyprus Anvil Mining Corp. v. Dickson (1982), 1982 CanLII 741 (BC SC), 40 B.C.L.R. 180, 20 B.L.R. 21 (S.C.); Robertson v. Canadian Canners Ltd. (1978), 4 B.L.R. 290 (Ont. H.C.J.); Manning v. Harris Steel Group Inc. (1986), 1986 CanLII 754 (BC SC), 7 B.C.L.R. (2d) 69, [1987] 1 W.W.R. 86 (S.C.). [Emphasis added.]