The Court of Appeal has backed the right to apply to the High Court to decide issues of law over the heads of independent rent assessment experts.
In the course of a £10m property dispute, National Grid successfully challenged a decision by Pumfrey J that, once an independent expert has been appointed, the High Court has no jurisdiction to decide questions of law involved in the rent assessment procedure.
It was, said Mummery LJ, a “dry legal dispute”. But, allowing National Grids appeal, he added: “The dispute becomes a little more comprehensible once it is appreciated that as much as £10 million might be at stake on the ultimate result”.
The row centres on the rental value of a narrow strip of land next to the Grand Union Canal at Acton Lane, North London. The land forms part of the site of an electricity substation.
The land was leased to National Grid by predecessors of M25 Group in 1968 for a period of 60 years, subject to rent review every 15 years. The lease contained provisions for the appointment of a valuer if the parties were unable to come to an agreement.
A valuer was appointed in December 1995. National Grid claimed that the value of the land for rental purposes should be calculated on the basis of ground rent at £25,000 pa while M25 Group said that the calculations should be based on a market rent of £914,925.
However, when National Grid sought to refer a number of legal questions over the terms of the lease to the High Court, Pumfrey J ruled that this was a matter for the valuer to decide and not the court.
Now the Appeal Court has backed arguments by Jonathan Brock QC, for National Grid, that points of law relating to the meaning of certain clauses in the lease were complex and that the valuer did not have any expertise in resolving issues of this type.
Mummery LJ said that the terms of the lease did not confer on the valuer, either expressly or by implication, the sole and exclusive power to construe the lease.
In National Grid’s originating summons, which can now proceed, the company raises eight issues on the construction of the lease.
National Grid Company plc v M25 Group Ltd, Court of Appeal (Stuart-Smith, Thorpe and Mummery LJJ) November 30 1998
Jonathan Brock QC and Alexander Hill-Smith (instructed by Brookstreet des Roches, of Witney) appeared for the appellant; Guy Fetherstonhaugh (instructed by Wallace & Partners) appeared for the respondent.
PLS News 7/1/99
