Plaintiff exercising option to acquire roadway adjacent to development site – Price to be determined by valuer in default of agreement – Valuer determining price at £130,000 – Plaintiff about to complete – Plaintiff discovering 1975 deed giving then site owner full rights of way over roadway – Plaintiff claiming determination not binding because of valuer’s mistake – Judge holding that determination conclusive – Plaintiff’s appeal dismissed
Some 14ha of undeveloped and uncultivated land in Sawston, Cambridgeshire, belonging to the defendant (D), included a roadway capable of affording highway access to a neighbouring area of wasteland, Deal Grove. In May 1975 D granted to the then owner of Deal Grove a right of way over the roadway for all purposes connected with Deal Grove. In February 1991 the plaintiff (P), having in mind a possible purchase of Deal Grove, although unaware of the 1975 grant, entered into an agreement with D whereby, for a nominal consideration, P acquired a five-year option to buy the roadway at an “option price” defined as “such sum as represents a fair and reasonable price for the Property (as at date of exercise of the option) assuming that the property were offered on the open market for sale by a willing seller to a willing purchaser”. It was further provided that if the parties failed to reach agreement, then “the determination of the Option Price” would be referred to an independent valuer, who would act as an expert and not as an arbitrator.
In July 1992 P bought Deal Grove, and in January 1996, still unaware of the 1975 grant, exercised the option. In July 1996 the parties appointed a valuer who received representations from surveyors for both sides. No mention was made of the 1975 grant. In October 1996 the valuer, making a non-speaking valuation, determined the option price to be £130,000. In November 1996 P’s solicitors became aware of the 1975 grant in the course of investigating title to the roadway. By originating summons issued in March 1997, P sought a declaration that the determination was a nullity.
The trial judge, applying the law as summarised in Jones v Sherwood Computer Services plc [1992] 1 WLR 277, refused the declaration on the ground that an award of a contractually appointed valuer, acting as an expert, was binding on the parties notwithstanding an error on his part, unless the error was such that he had failed to carry out the task prescribed by the agreement. P appealed contending: first, that it could be deduced from the representations made to the valuer and his final figure that he had erroneously proceeded upon a ransom-strip basis rather than an open-market basis; and, second, that the judge was wrong to reject P’s contention that the wrong subject-matter had been valued – a roadway subject to a limited right of way being something different from one subject to an unlimited right.
Held The appeal was dismissed.
1. The fundamental objection to P’s first contention (not advanced in the court below) was that it was seeking, by a process of inference, to turn a non-speaking valuation into a reasoned one and then to attack the reasons. Designed to achieve certainty by a quick and reasonably inexpensive process, valuations by an expert, rather than an arbitrator, were almost invariably non-speaking, leaving the expert’s reasoning and calculations behind the curtain. The court should not encourage attempts to infer, from ambiguous shadows and murmurs, what was happening behind the curtain.
2. The judge was right to reject the wrong subject-matter argument, having correctly accepted the submission of counsel for D that any mistake that had been made was in the attributes of the land and not its identity, such mistake lying not in the valuation but in the formulation by the option agreement of the task to be undertaken by the valuer.
Michael Burton QC (instructed by Titmus Sainer Dechert) appeared for the appellant plaintiff; Kim Lewison QC and Anthony Tanney (instructed by Beachcroft Stanleys) appeared for the respondent defendant.
Alan Cooklin, barrister