Great Dunmow Estates Ltd v Crest Nicholson Operations Ltd & Anor

An expert’s jurisdiction is determined by the parties’ contract. A provision requiring an expert to value property by applying specified contractual criteria does not, without clear language, confer exclusive jurisdiction to construe those criteria or decide a pure question of law defining the expert’s mandate. The court may determine that question. The expert must apply the contract’s correct meaning; a valuation made by reference to the wrong contractual date is outside the mandate and non-binding.

A contractual clause prescribing how variations may be made is effective. A purported variation that does not comply cannot ordinarily alter the contract, although estoppel may provide a separate basis if properly pleaded.

Great Dunmow Estates Ltd sold land under a conditional contract with Crest Nicholson. The contract provided for an expert valuer to determine the assumed value and specified a valuation date. The parties’ valuers recorded a different date in a Statement of Agreed Facts marked without prejudice.

The High Court held that the statement was contractual and binding, while also declaring that the contract itself prescribed the Challenge Expiry Date: [2018] EWHC 2133 (Ch). Crest Nicholson appealed, challenging the court’s jurisdiction and the contractual effect of the statement. The central issues were whether the valuer had exclusive jurisdiction to determine the contractual valuation date and whether the statement could vary the contract despite its formal variation clause.

Disposition

The appeal was allowed in part. The first declaration, that the contractual valuation date was the Challenge Expiry Date, was not challenged. The second declaration, that the valuation date was the date of Mr Downham’s determination, was set aside. The matter was remitted for further directions, including any application by GDEL to amend its case to plead estoppel.

1. Contractual variation. The decision in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24 established that parties may bind themselves to a specified method of contractual variation. A purported variation which does not comply with that method is invalid. Clause 30 required a written variation signed by the parties or their solicitors and specifically referring to the clause. Those requirements were not met, so the Statement of Agreed Facts could not operate contractually to vary the valuation date. The possibility of relying on estoppel remained open, but that case would need to be pleaded.
2. Expert jurisdiction. The scope and finality of an expert’s authority depend on the contract. Clause 6.2 appointed a Valuer to ascertain the Assumed Value by applying the contractual valuation criteria. The appointment did not confer authority to determine the meaning of clause 6.2.2 or to decide conclusively which valuation date the contract prescribed.
3. Pure question of law. The valuation date was a question of construction and therefore law. It was not a mixed question of fact and law of the kind considered in Norwich Union Life Insurance Society v P&O Property Holdings Ltd [1993] 1 EGLR 164. The approach of Hoffmann LJ in Mercury Communications Ltd v Director General of Telecommunications [1994] CLC 1125, later prevailing in the House of Lords decision reported at [1996] 1 WLR 48, and approved in later authorities, supported access to the courts on questions going to the expert’s mandate.
4. Contractual effect. A valuation made using a date other than the correct date prescribed by clause 6.2.2 would be outside the Valuer’s authority and would not bind the parties.

Lord Justice Moylan and Lord Justice Singh agreed with Lord Justice Patten.

• Court of Appeal (Civil Division) allowed the appeal in part, set aside the second declaration and remitted the matter for further directions: [2019] EWCA Civ 1683.
• High Court of Justice, Chancery Division held that the contractual valuation date was the Challenge Expiry Date but that the parties’ Statement of Agreed Facts was contractually binding for the expert determination: [2018] EWHC 2133 (Ch).