Walton Homes Ltd v Staffordshire County Council

An expert determination expressed to be final and binding may be challenged only within the tightly confined exception for manifest error. An arguable error, or an error which might be wrong after detailed legal analysis, is insufficient. Manifest error requires an objective oversight or blunder that is obvious and readily demonstrable. Where competing constructions are strongly arguable, and the determination is not plainly wrong on its face, the court must respect the parties’ agreement to entrust questions of fact and law to the expert.

Walton Homes Ltd sought to set aside an interim determination made by an independent chartered surveyor concerning the amount payable under an overage clause in a land sale agreement. The surveyor, adopting legal advice, construed the expression concerning planning permission not existing as excluding the planning officer’s recommendation and the planning committee’s resolution, as well as the formal permission itself.

Walton contended that the determination contained a manifest error. The court emphasised that the proceedings were neither a construction of the agreement nor an appeal from the determination. The sole issue was whether the surveyor’s reasoning met the stringent threshold for intervention.

1. The action was dismissed. The determination was final and binding in the absence of manifest error, subject to the surveyor having complied with the contractual procedure and instructions.

2. The court adopted the established distinction between an ordinary error and a manifest error. The latter concerns an objective oversight or blunder so obvious as to admit of no real difference of opinion. The court referred to the authorities describing the concept as confined to obvious mistakes, such as an arithmetical error or an obviously incorrect factual reference. The error must also be capable of affecting the determination.

3. The court had no jurisdiction on this application to construe the agreement for itself. It could not set aside the determination merely because it might have preferred a different construction, or because the surveyor’s conclusion was arguably wrong.

4. The surveyor’s reasoning was not manifestly erroneous. Walton’s literal construction could produce a commercially absurd result by leaving the planning process substantially reflected in the valuation despite the exclusion of the formal permission. The competing arguments were strong. It was therefore not obvious that the surveyor was wrong to consider the agreement as a whole, its commercial purpose, and the planning steps leading to the permission.

5. The court’s observations about the likely construction of the overage clause did not determine its meaning. They demonstrated only that the surveyor’s adopted reasoning was reasonably arguable and fell outside the narrow window for challenging an expert determination.

This was a first-instance action seeking to set aside an expert determination dated 17 December 2012 on the ground of manifest error.