8th January 2015
Forensic accountants are often asked what sector expertise they have that qualifies them to give their valuation opinions.
However, in a recent case involving a company that published internet subscription videos with a female domination theme, both the forensic accountant for the claimant – Roger Isaacs of Milsted Langdon – and the forensic accountant for the defendant were keen to emphasise that their expertise was based purely on desktop research.
In a case that concerned the unravelling of business interests following the breakdown of a personal relationship and the termination of a relationship in business together, the claimant sought an order to set aside a transfer of shares on the grounds that he had been subject to duress.
Judge Havelock-Allan QC pertinently observed that “assessing the credibility of a claimant who has a fetish for female domination and claims to have been the victim of duress and intimidation by his female partner is not easy. Assessing the credibility of a defendant who denies threatening behaviour, but who has made a career as a dominatrix and appearances in female domination videos is not easy, either.”
Prior to the incorporation of the company, the claimant had been a client of the defendant’s domination services but, over time, their relationship turned from that of ‘supplier and customer’ to a more personal one and eventually into a business partnership. After some years, their personal and business relationship broke down and the claimant relinquished his interest in the company by transferring his shares to the defendant. However, the claimant subsequently alleged that the contract by which he had given up his shares in the company should be set aside by the court on the grounds that he had been forced to enter into it under duress.
The judge made his observation and it was concluded that there had not been any duress, but went on to consider the value of the company which was the issue that had led to the instruction of forensic accountants. Ultimately, Roger’s evidence was sufficient to persuade the judge to value the company at the centre of the dispute at an amount close to the figures he had put forward and more than sixteen times the mid-range valuation of his forensic accounting opponent.