Great Dunmow Estates Ltd v Crest Nicholson Operations Ltd (2018)
The parties to a conditional contract for the sale of land which provided for the fixing of a valuation date had reached an agreement as to that date and the valuer appointed under the contract had been wrong to depart from that agreement.
The claimant sought an order setting aside what it claimed was a determination of the third defendant valuer as to the correct valuation date in relation to the sale of certain land.
The claimant, which owned the land in question, had contracted with the first defendant for its sale. The contract was conditional on the fulfilment of four conditions precedent. One was the occurrence of the "Challenge Expiry Date", being three months and five days after the grant of an envisaged planning permission. Another was the "agreement or determination of the price, as calculated in accordance with clause 6 of the agreement". Clause 6 dealt with the ascertainment of property phases and the price. Clause 6.1 required the parties to attempt to agree a number of matters. By cl.6.2, following the agreement or determination of the items referred to in cl.6.1, and after the Challenge Expiry Date, the parties were to appoint a valuer to ascertain the "Assumed Value" of the property; that was defined as the market value of the property ascertained in accordance with cl.6.2. Clause 6.2.2 provided that the valuation date would be "the Challenge Expiry Date or (if later) the date of valuation". The third defendant was appointed as the valuer. The claimant and the first defendant also instructed their own experts in relation to value. The valuer directed those experts to produce a statement of agreed facts. In their statement, the experts agreed, among other things, that the valuation date would be the date when the valuer issued his determination. Subsequently, counsel was instructed to advise as to whether the valuer should assume that there was an implementable planning permission when making his valuation (the existing permission was due to expire shortly). In giving his advice, counsel thought it necessary to identify the correct valuation date by construing cl.6.2 of the contract. He concluded that the valuation date was the Challenge Expiry Date. Having received that advice, the valuer stated that he disagreed with the valuation date as set out in the statement of agreed facts and indicated that he agreed with counsel's view in that regard. The claimant challenged that determination.
The main issues were whether the valuer or the court had jurisdiction to determine the dispute as to the correct valuation date and whether the parties were bound by the agreement as to the valuation date in the statement of agreed facts.
Jurisdiction - Clause 6 of the contract set out a number of principles which the valuer was required to apply in making his valuation. Clause 6.2.2 specified the valuation date he was to adopt. His remit was to provide the valuation as at that date and no other. If he construed the contract in such a way that he selected the wrong date, he would not have performed the task assigned to him and would have gone outside his decision-making authority. Thus, not only was the jurisdiction of the court not excluded on the issue of the construction of cl.6.2.2 but the valuer had no power to issue a binding decision in that regard. It was true that in order to perform his task he would have to ascertain the valuation date, and thus would need to construe cl.6.2.2, but that did not of itself amount to an implicit instruction to construe the clause in a way which was intended to bind the parties (see paras 37-38 of judgment).
Effect of statement of agreed facts - The parties were effectively directed to narrow the issues by identifying what was and was not agreed. The agreed statement covered a number of issues relevant to valuation upon which either side could have taken a stand. The agreement of such issues inevitably involved compromise. As to those facts which were agreed, they were a package deal, negotiated and agreed in an endeavour to secure a more expeditious and economic determination. Looked at objectively, it was unlikely that either side would have concluded other than that the other party was bound by the matters agreed and could not start to unpick the agreed matters as the valuation process progressed; that would be a recipe for chaos. It could be assumed that commercial parties who had contracted for the transfer of land were looking for certainty and orderliness. Still less could they have intended that, having gone to the trouble of agreeing issues, the valuer would be entitled to ignore their agreement and decide such issues for himself; his job, broadly stated, was to resolve the dispute between the parties, not generate new disputes. The statement of agreed facts was therefore intended to have binding legal force, Techno v Allied Dunbar  22 E.G. 109 considered. In the circumstances, the claimant was entitled to a declaration that the parties' agreement as to the valuation date should stand (paras 44, 66).
Declaration granted in favour of claimant
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