Appellant challenging valuer’s adjusted comparable figure – Whether valuer adopting wrong method of calculation in making adjustments – Whether valuation contained manifest error – Appeal dismissed
By an agreement dated 20 February 1998, the appellant (Regent) agreed to sell Mermaid House to the respondent (DA). The agreement provided that the purchase price was to be determined by taking the average of two valuations made by valuer instructed by the parties respectively. However, Regent had difficulties in obtaining a valuer and issued a writ, seeking an inquiry into the open market value of Mermaid House and for specific performance of the contract for sale. On 31 July 1998 the action was compromised on agreed terms and the consent order provided that a valuer be jointly instructed by the parties to provide an independent expert valuation on an open market value basis. In August 1998 the valuer prepared his report, in which he referred to two comparable properties. In para 16.06, he set out the adjustments which he applied, in order to compare Ionic Villa, which had been sold for £7m in 1991, with Mermaid House as: “Adjustments for date of sale add 70%, adjustments for less privacy add 20%, adjustments for smaller size add 40%, adjustments for lower specification add 10%, adjustments for longer lease deduct 15% and adjustments for more prestigious location deduct 20%”. At para 16.09 he noted that, having applied the adjustments, the value of Ionic Villa, in April 1998, would be £10,920,000. In September 1998 Regent brought a motion to direct the valuer to reconsider his valuation. The motion was dismissed. Regent appealed, inter alia, on the ground that, when making adjustments to the price for Ionic Villa, the valuer made an arithmetical error in his calculations of the adjusted price, resulting in a lower valuation than it ought to have been. Accordingly, the error was such that the court should intervene and direct him to reconsider his valuation.
Held: The appeal was dismissed.
The valuer did not fully set out the method by which he calculated the percentage additions and deductions at para 16.06. However, it was conceded by Regent that if the valuer had chosen, as a matter of judgment, to adopt the method of calculating the adjustments in the way that achieved that final figure, then it could not be challenged. It was not demonstrated that there was a manifest error on the face of the document: Healds Foods Ltd v Hyde Dairies Ltd, unreported, considered.
Geoffrey Vos QC and Andrew Twigger (instructed by Herbert Smith) appeared for the appellant; Jules Sher QC (instructed by Slaughter & May) appeared for the respondent.
Sarah Addenbrooke, barrister