The two parties (Great Dunmow Estates & Crest Nicholson) were in dispute over a specific term in a sales contract relating to the correct way to determine the value of a property. Being unable to resolve this matter (between themselves or in the lower Courts), this matter recently appeared before the Court of Appeal (2019 – EWCA Civ 1683).
An expert had been appointed in order to provide a valuation to the disputed land. Pursuant to Clause 6.2 of the Contract, the “Valuation Date” had been defined as the “Challenge Expiry Date or if later, the date of the Valuation”. The former (Challenge Expiry Date) had expired and so, the Expert considered the Valuation Date to the the correct date for the valuation. The Parties Surveyors then produced a Statement of Agreed Facts which note the Valuation date was the date of the Valuation. At the point of instruction, Counsel was asked to consider a peripheral point when he determined that the expert’s literal interpretation of the clause was in fact incorrect.
On learning of this, the Claimant applied to set aside the valuation on the basis that the Expert (the Valuer) did not have the jurisdiction to determine the contractual valuation as this was a point of law and so, should only be determined by the Court, not by an expert.
The lower Courts agreed with the Claimant that the Expert had no jurisdiction to make a binding decision on the construction of the clause in the contract and determined that the Valuation Date should in fact be the Challenge Expiry Date, however, given that the Parties had agreed to be bound by the Statement of Agreed Facts, the lower Courts considered that it had to be correct tha the Valuation Date was the date of the valuation.
This decision was appealed.
On appeal, the Court of Appeal held that the Judge was correct in determining that the Expert did not have the exclusive jurisdiction to decide the valuation date issue. Patten LJ confirmed in his judgment that “[t]he balance of authority is… now firmly in favour of preserving access to the courts to determine this legal issue going to jurisdiction”.
This case is a reminder of the extent of the expert’s jurisdiction and that ultimately the courts will have the final say when determining the construction of a contract (and rightly so). However, if the parties wish or intend for the expert to be the sole arbiter, then any contractual agreement must be clear in defining the extent of the expert’s role.