Douglas Homes Housing Incorporated v Alan Martin Dykes & Ors

An expert determination clause confined to contractual interpretation does not necessarily make every decision labelled “final and binding” immune from court review. A party may have a real prospect of showing that an expert exceeded the mandate by misinterpreting the contract. Whether a party has waived or is estopped from challenging jurisdiction is fact-sensitive and may depend on reliance, detriment and unconscionability. Summary judgment should be refused where those issues require a trial rather than a mini-trial. Claims for an account based on alleged agency or fiduciary duties, limitation and laches may likewise require factual investigation. Preliminary issues should not be ordered where there is a substantial risk of inefficient or duplicated litigation.

The claimant sought summary judgment against the defendant on a substantial damages claim founded on alleged repudiatory breach of a development agreement. The claim relied on an expert determination that the defendant was not entitled to terminate the agreement, although the expert had declined jurisdiction to decide whether the defendant’s conduct amounted to repudiatory breach.

The defendant challenged the determination as outside the expert’s jurisdiction and legally erroneous. Separately, the defendant and related companies sought an account from the third party based on alleged agency and fiduciary relationships. The defendant also sought a preliminary trial of a trust issue concerning beneficial ownership of the claimant. The court considered whether any of those issues could safely be determined summarily.

1. Summary judgment on repudiatory breach. The claimant’s application was refused. The expert’s contractual jurisdiction was narrowly framed by clause 7.1 as disputes concerning interpretation of the development agreement or specified documents. Clause 11 reserved wider disputes to the court.
2. The defendant had clearly represented during the expert process that the expert had jurisdiction to determine matters corresponding to findings B, C and D. That representation was capable of amounting to waiver or submission to jurisdiction. However, whether the defendant could resile from it depended on the effect of the entire-agreement clause, reliance, detriment and unconscionability. Those matters could not safely be resolved summarily.
3. The “final and binding” wording in clause 7.3 did not preclude a challenge based on an error of law. Applying the reasoning in Barclays Bank Plc v Nylon Capital LLP, the defendant had a real prospect of showing that the expert misinterpreted clause 18 and thereby exceeded her decision-making mandate. The court did not decide that the determination should ultimately be set aside.
4. The question whether the defendant’s conduct amounted to repudiatory breach remained for trial. The court would need to assess his conduct before and after the determination and after the claimant’s purported acceptance.
5. Account claim. The application to strike out or summarily dismiss the account claim was refused. The alleged agency, fiduciary relationship, scope of authority, payments, limitation, concealment, trusteeship and laches involved fact-sensitive issues requiring cross-examination and a trial.
6. Trust issue. The application to try beneficial ownership as a preliminary issue was refused. Although success might bring the damages claim to an end, the account issue would substantially remain and a preliminary trial risked inefficient duplication.
7. Both applications were refused. The court directed further case management towards an early trial of liability, leaving damages and any equitable accounting for a later stage. Costs were left for agreement or further determination.

First-instance decision. No prior appellate decision was stated in the judgment.