Owen Pell Ltd v Bindi (London) Ltd

An expert determination is binding if the expert decides the question referred to him, even where the decision contains errors. The court will not generally imply a term allowing review for gross or obvious error, perversity, or breach of natural justice, since that may undermine the agreed commercial purpose of finality. A determination is a nullity only where the expert exceeds his jurisdiction or answers a different question. Actual bias may invalidate the determination, but apparent bias does not do so on the facts considered. The Porter v Magill test applies to alleged apparent bias.

The claimant sought summary judgment to enforce an expert determination concerning the value of construction work, the claimant’s final account, and the defendant’s alleged contra-charges. The parties had agreed that the expert’s decision would be binding and that the dispute could not be referred to a subsequent tribunal.

The defendant alleged procedural unfairness, actual and apparent bias, failure to consider a late submission, jurisdictional error, and gross or obvious errors in the determination. The central questions were whether terms permitting such challenges should be implied and whether the expert had answered the questions referred to him.

1. Summary judgment. The claimant’s application succeeded. The defendant had no real prospect of successfully defending enforcement, and there was no other compelling reason for a trial.
2. Implied terms and finality. The agreement did not contain, expressly or by implication, a term that the determination would be enforceable only if free from gross or obvious error, perversity, or procedural unfairness. The distinction between speaking and non-speaking determinations was arbitrary and unsupported by the agreement. Such a term would frustrate the commercial purpose of obtaining a binding and final decision. The officious bystander and business efficacy tests were not satisfied.
3. Natural justice and bias. There was no requirement that the rules of natural justice or due process be followed for the expert determination to be valid and binding. Actual bias could invalidate the determination, but there was no evidence that the expert had been influenced by partiality or prejudice. Applying the Porter v Magill test, a fair-minded and informed observer would not conclude that there was a real possibility of bias. The expert was entitled to control the procedure and to refuse a late submission.
4. Jurisdiction and error. The court had to determine whether the expert acted within the scope of the reference and answered the questions submitted to him. On construction of the agreement, the expert was entitled to consider the claimant’s entitlement under its final account and the defendant’s contra-charges relating to the claimant’s work. His conclusion that the parties had effectively agreed a walk-away basis was within that scope.
5. The expert had answered the right question. His determination was therefore binding and enforceable even if it was wrong. The court declined to set it aside for alleged errors, whether gross, obvious, or perverse. Alternatively, any review would have been confined to errors on the face of the decision.