Aziz v Khan

Where parties jointly instruct an expert valuer, the binding question is whether the expert has valued the subject matter in accordance with the agreed instructions. Those instructions comprise the underlying contract and any later joint directions. If the expert performs that task, the parties are bound by the valuation, even if one party later considers the valuation incorrect. A party cannot rely on a contractual time limit where that party’s own conduct prevented completion. A party may also waive reliance on such a provision in return for the court postponing completion.

The claimant exercised an option in a lease to purchase the freehold of a building from the defendant. The parties jointly instructed a valuer after failing to agree the price. The valuer assessed the property at £55,000, taking account of the existing upper-floor tenancies and disregarding goodwill attributable to the supermarket business.

The defendant challenged the valuation and sought dissolution of the order for specific performance, relying on alleged errors in the valuation and expiry of the contractual completion period. His Honour Judge Moseley QC dismissed that application on 19 December 2000. The defendant appealed, contending that the valuer had misunderstood the contractual basis of valuation and that the option had terminated.

1. Appeal dismissed. The order dismissing the defendant’s application to dissolve the specific-performance order was upheld, with costs.
2. The governing principle was stated by reference to Jones v Sherwood Computer Services Ltd [1992] 1 WLR 277. The court must first identify what the parties agreed to remit to the expert. If the expert materially departs from those instructions, the determination may not bind the parties. If the expert answers the question put by the agreed instructions, the parties are bound by the answer.
3. In this case the relevant instructions were found by reading the lease together with the parties’ joint letter of 10 May 2000. The valuer was required to disregard goodwill attached to the shop premises because the tenant’s business, and the business of predecessors in title, had been carried on there. The valuation was not confined to goodwill generated by the present tenant.
4. The valuation was properly made on the basis of vacant possession of the premises demised by the lease, while taking account of the existing upper-floor tenancies. The lease was ambiguous as to the extent of vacant possession, but the parties’ knowledge of the tenancies and their express disclosure to the valuer resolved the ambiguity.
5. The defendant had waived reliance on the contractual proviso terminating the option if completion did not occur within the specified period. The waiver was given through counsel on 13 June 2000 in return for postponement of completion. Further, the defendant could not rely on the proviso where his own unwillingness to complete had prevented completion.
6. The court concluded that the contract created by exercise of the option should now be completed.

• High Court, Cardiff District Registry: His Honour Judge Moseley QC made orders for specific performance and dismissed the defendant’s later application to dissolve that order on 19 December 2000.
• Court of Appeal (Civil Division): The appeal was dismissed with costs.