Experts bend the knee as Court of Appeal clarifies jurisdiction for question of law

Great Dunmow Estates Ltd v Crest Nicholson Operations Ltd and another [2019] EWCA Civ 1683

Summary

The Court of Appeal has confirmed that an expert cannot determine the scope of their own authority in circumstances where this conflicts with the correct interpretation of the contract giving rise to their instruction. In this case, a contract confirmed how a valuation date should be determined by the parties' expert valuer. While it was open to the valuer and ultimately to the Court to consider the correct construction of relevant clause, the valuer was not entitled to adopt a valuation date outside of the terms of the calculation mechanism in the contract.

Facts of the Case

The parties entered into a contract for sale of a parcel of land and the contract contained a provision to appoint an expert valuer to determine the value of the property. The parties disputed the date upon which the property should be valued. Owing to the nature of the market, this was expected to be a highly material factor for the purposes of the valuation exercise.

The claimant disagreed with the expert's chosen date of valuation and, amongst other things, sought a declaration that the expert did not have jurisdiction to decide the valuation date, as this was a question of law and therefore a matter for the Court to decide.

In the first instance, the Court agreed with the claimant that the expert did not have jurisdiction to issue a binding decision on the construction of the contract ie the correct valuation date. Had the Court granted the expert jurisdiction to decide this point, it could have prevented the parties from using the Courts to determine the correct construction of the provision. The Defendant appealed the first instance decision but the Court of Appeal upheld the judgment. Had clear words been used to confirm that the expert should have the unfettered ability to determine the valuation date in his/her full discretion, the position would have been different.

Impact of the Case

The decision confirms that an expert's jurisdiction may be bound by the contract to which their instruction relates. Construing the terms of a contract is a matter usually left to the Courts to determine. Parties will therefore have some security in knowing that an expert determination clause within a contract will not create an absolute restriction on referring matters of law to the Courts.