BL Goodman (General Partner) Limited v Morris Homes (Midlands) Limited

A contractual expert-dispute mechanism must be construed as a whole. Where a schedule creates a self-contained process for expert determination of valuation or calculation disputes, a provision excluding matters of law from that process ordinarily includes questions of contractual construction and interpretation unless clear wording provides otherwise. A flexible Part 8 procedure remains appropriate for agreed or largely factual disputes concerning contractual interpretation. The court should transfer a claim to Part 7 only where it is clear that Part 8 is unsuitable; the possible need for limited further evidence does not itself require transfer.

The claimant sought declarations concerning the interpretation of sales-overage provisions in a 2013 development contract. The defendant challenged the court’s jurisdiction, contending that the disputes fell within contractual expert-determination provisions. It also sought transfer of the claim from Part 8 to Part 7 on the basis that factual and expert evidence might be required.

The central issues were whether Schedule 4 required disputes about the legal interpretation of the overage provisions to be determined by an independent surveyor, or instead reserved them to the courts, and whether the declarations were unsuitable for Part 8.

1. Jurisdiction. The defendant’s jurisdiction challenge was dismissed. The court construed the contract and Schedule 4 as a whole. Schedule 4 contained a comprehensive and self-contained process for an independent surveyor to determine disputes relating to the calculation of the sales-overage payment.

2. Paragraph 4.6 of Schedule 4 excluded disputes in relation to matters of law from that process. Matters of law included questions of contractual construction and interpretation. The definition of Expert elsewhere in the contract, and paragraph 3.7, did not import a parallel lawyer-expert process into Schedule 4. That construction would be strained and unnatural.

3. The surveyor could obtain legal or other expert assistance under paragraph 4.4(c) when undertaking the calculation. That did not give the assistance, or the surveyor’s underlying legal analysis, the status of a final and binding determination of questions of law. Such questions remained for the court under paragraph 4.6.

4. Procedure. The application to transfer the claim to Part 7 was also dismissed. Part 8 is flexible and should be transferred only where it is clear that the claim is unsuitable for that procedure. There was no present substantive dispute of fact, no rectification claim, and no demonstrated need for oral, expert or extensive factual evidence.

5. Any genuinely necessary limited evidence, agreed statements of fact or law, or points of claim and defence could be accommodated within Part 8. Transfer would add unnecessary cost and delay and would not accord with the overriding objective. The claim was to continue as a Part 8 claim.

First-instance determination of the defendant’s application challenging jurisdiction and seeking transfer from Part 8 to Part 7. Both limbs of the application were dismissed.