Sir David Alliance v Regent Holdings Incorporated

An expert valuation stated to be final and binding will not be reopened merely because an alternative method of calculation produces a different result. The court must be satisfied that a manifest error appears on the face of the valuation. Where the expert’s methodology is incompletely stated and permits more than one reasonable calculation, manifest error is not established. The exercise of judgment by an appointed valuer is not ordinarily open to correction by the court. A consent order substituting an expert may preserve the contractual provision that the valuation is final and binding. The court left open the proper juridical basis for intervention where a genuinely manifest error appears in a final and binding valuation.

Regent Holdings Incorporated appealed from the decision of Park J, who dismissed its motion concerning an expert valuation of Mermaid House. Under the parties’ agreements and a consent order made during earlier litigation, Anthony Margo was appointed to value the property, and the price was to be calculated by averaging his valuation with an earlier valuation by Allsop & Co.

Regent alleged that Mr Margo had made a manifest mathematical error when adjusting the price of a comparable property. It also argued that the valuation was not final and binding, or that the court could direct reconsideration or correct an injustice. The central issues were whether manifest error had been shown and whether the valuation was contractually final and binding.

1. Appeal dismissed with costs. The valuation was not shown to contain a manifest error on its face.
2. The relevant paragraph of the valuation described percentage adjustments but did not fully specify the method by which the additions and deductions were calculated. More than one method was therefore possible, including a method producing the stated valuation. The court could not conclude that the expert had made an obvious error.
3. The exercise of judgment by an appointed valuer could not, in the circumstances, be interfered with. The distinction between a mathematical error and an error of description was immaterial to the result.
4. The adjusted value of Ionic Villa was material to the valuation because the expert had considered it as one of only two comparables, although he regarded the other comparable as more important.
5. The valuation was final and binding. Properly construed, paragraph 8 of the consent order preserved the relevant terms of the variation agreement, substituting Mr Margo for Jackson-Stops & Staff. The order’s liberty-to-apply provision did not alter that conclusion.
6. The court expressed no concluded view on the possible legal routes for intervention where a final and binding valuation contains a genuine manifest error. These might include an implied contractual term, non-compliance with the expert’s instructions, or exceeding the limits of the expert’s decision-making authority. The issue was left for a case in which it required determination.

• Court of Appeal (Civil Division): Appeal from the decision of Park J dismissing Regent’s motion concerning the expert valuation; appeal dismissed with costs.
• High Court of Justice: Park J dismissed the appellant’s motion on 9 September 1998.