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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Aziz v Khan [2001] EWCA Civ 792 (18 May 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/792.html Cite as: [2001] EWCA Civ 792

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
CARDIFF DISTRICT REGISTRY
(HIS HONOUR JUDGE MOSELEY QC)

		Royal Courts of Justice Strand London WC2 Friday, 18th May, 2001

Friday, 18th May 2001

1. LORD JUSTICE CHADWICK: This is an appeal against an order made on 19th December 2000 by His Honour Judge Moseley QC sitting as a judge of the High Court in the Cardiff District Registry in proceedings brought by Mr Javed Akhtar Aziz against Mr Nawaz Khan for specific performance of an agreement to purchase property known as 5/7 High Street, Llanbradach, near Caerphilly. The agreement arises out of the exercise of an option contained in a lease, dated 14th December 1994, of shop premises on the ground floor of that property.
2. The lease was granted by Mr Khan, as landlord, to there described as Javaid Akhtar and Khalid Mahmoud, as tenants for a term of 21 years from the 25th February 1994. Mr Mahmoud's interest in the lease was assigned to Mr Aziz in July 1998. The option, which is contained in clause 5(11) of the lease, is in these terms:

"The Tenant is hereby granted the right to purchase the freehold interest of the Landlord in the Building after the fourth anniversary of the date hereof on the following terms and conditions:-

(a) At a price to be agreed between the parties hereto or failing such agreement as decided by the independent valuer mutually appointed by the parties hereto. In the event of the parties hereto failing to agree such appointment then a joint application must be made to the President of the Royal Institute of Chartered Surveyors to appoint a valuer and the decision of such appointed valuer shall be final.

(b) The price to be decided upon in (a) supra shall be the open market value of the property on the basis of vacant possession and disregarding those matters referred to in the Sub-Clauses 5(7)A(i)(b)(i) and (iii).

(c) The tenant must give notice of intention to exercise this right within a period of six months either before or after the said fourth anniversary date and the sale must be completed by the fifth anniversary of the date hereof or within six weeks after determination of the price by the valuer appointed by the President of the Royal Institution of Chartered Surveyors which ever is the sooner PROVIDED THAT if the purchase is not completed within six months of the said fifth anniversary date the right herby granted shall forthwith terminate."

3. In that context "the Building" means the property at 5/7 High Street of which the ground floor shop premises demised by the lease formed part. The remainder of the property – being the first floor – had been converted into two self-contained flats. At the date of the lease one of those flats was let on a long tenancy at a low rent; the other was either empty or occupied under an assured shorthold tenancy. Mr Khan was the freehold owner of the property.
4. On the basis that the date on which the lease was granted is the date which it bears, 14th December 1994, the period for the exercise of the option commenced on 14th June 1998 and continued until 14th June 1999. On the same basis the period at the expiry of which the proviso to clause 5(11)(c) would take effect ended on 14th June 2000. I put the point in that way because Mr Khan, in the course of his submissions to us today, suggested – it seems, for the first time in litigation – that the date which the lease bears, 14th December 1994, was a false date. He says that the true date of the lease was the date upon which it was actually executed - that is to say, 25th February 1994 – the date of the commencement of the term. If that were right, then the lease would be misdated and that misdate would have led to a fraud on the Stamp Office; in that the lease was not stamped until 17th January 1995, a date which would be within the permitted period on the basis that the lease was made on 14th December 1994 but would be well outside it if the lease had in fact been made in February 1994.
5. We were not prepared to entertain a submission on that basis for three reasons. First, in his defence document put in on 23rd February 2000 in these proceedings, Mr Khan makes no mention of the point at all. Secondly, if the point was to be taken, it should have been taken at the first hearing of these proceedings on 2nd March 2000, because if the allegation as to misdating is correct, the time limited under the proviso to clause 5(11)(c) would already have expired by that date. It was not taken then, nor was it taken at any subsequent hearing before the judge.
6. Thirdly, it is a point which involves making a serious allegation of fraud against the solicitors who submitted this lease for stamping, and if such an allegation is made, needs to be made with proper particularity and raised in front of the trial judge. Had the matter been raised before the trial judge, it is difficult to see how he could have dealt with this litigation on the basis that it was suitable for disposal under CPR 24. He did not have the opportunity to consider the point; and because he was denied that opportunity, there is no basis of fact upon which we can entertain it. I might add that that point finds no place in the grounds of appeal in the appellant's notice which was settled with professional help.
7. Following service of the option notice, the parties attempted, but failed, to reach agreement as to the purchase price of the freehold interest in the property. They failed also to agree on the appointment of an independent valuer to determine that price under clause 5(11) of the lease. No application for the appointment of a valuer was made to the President of the Royal Institution of Chartered Surveyors. It was in those circumstances that on 12th January 2000 Mr Aziz commenced these proceedings for a declaration that he was entitled to purchase the freehold and for an order for specific performance.
8. It is necessary to refer in some detail to the course of this litigation. By an application notice issued with the claim form on 12th January 2000, Mr Aziz sought summary judgment under CPR part 24. That application came before Judge Moseley on 2nd March 2000. Mr Khan appeared in person. We have seen a transcript of the proceedings at that hearing. It is clear that the only issue then between the parties was whether the proceedings were premature. Mr Khan indicated to the judge that he had no objection to an order for specific performance, but that he took the view that the proceedings had been unnecessary. He resisted the order for costs that was sought against him in the application notice. The order which the judge made on 2nd March contained the following paragraphs, to which (in effect) Mr Khan had raised no objection at all:

"(1) That the agreement for the sale to the claimant of the freehold estate in 5/7 High Street, Llanbradach contained contained in option clause 5(11) of the lease of the ground floor of the said premises made on the 14 December 1994 between (i) the Defendant and (ii) the Claimant and Khalid Mahmoud, and (for) the exercise of that option by notice dated 18 August 1998 be specifically performed and carried into execution.

(2) That unless the parties shall have either agreed a price for the sale of the premises or jointly appointed a valuer to determine the price, the Defendant shall no later than 4 pm on 8 March 2000 join with the Claimant in making application to the President of the Royal Institution of Chartered Surveyors to appoint a valuer."

9. The judge stood over the question of costs to enable the parties to exchange evidence about the circumstances which had led to the issue of the proceedings. In the event, it seems that Mr Aziz did not pursue a claim for costs at that stage and (so far as I am aware) that issue was never decided.
10. Following the order of 2nd March 2000, the parties agreed the appointment of Mr Michael Graham Young, a Fellow of the Royal Institution of Chartered Surveyors, as the independent valuer to determine the purchase price for the freehold interest. On 10th May 2000, Mr Khan and Mr Michael Lawson, the solicitor instructed by Mr Aziz, signed a joint letter of instructions to Mr Young. They attached to that letter a copy of the lease dated 14th December 1994. The letter contained the following paragraphs:

"You are referred to clause 5(11) of the Lease by which the option was granted to the tenant to purchase the freehold reversion at the open market value.

In coming to your opinion as to the value you must have regard to all the circumstances of the case and in particular you should bear the following points in mind:-

1. The rent currently passing under the lease is £10,660.00 per annum. Perhaps you could indicate if you consider this to be the current 'market value'.

2. There is a First Floor Flat let on a long lease in respect of which only ground rent is payable. (We presume there is an obligation to insure through the agency of the landlord but this is not known for certain at the moment).

3. The other First Floor Flat is let on a weekly tenancy under which there is an income of £55.00 per week (£2,860.00 per annum).

4. The lease requires the tenant to keep the premises in a state of repair to a standard equivalent to that evidenced by the schedule of condition annexed to the lease.

5. The lease requires the landlord to keep in good and substantial repair order and condition the 'common parts' of the building and to contribute one half of the cost of insuring the property.

6. Clearly the landlord is not entitled to any benefit of the goodwill built up by Mr Aziz."

11. Mr Young set out his valuation in a letter dated 9th June 2000, a copy of which was sent to Mr Khan. The valuer's understanding of his instructions appears in the first paragraph of that letter:

"Under the terms of the [1994] Lease I have been appointed by agreement between the Landlord, Mr Nwaz Khan, and the Tenant, Mr and Mrs Aziz, to act as a Valuer to determine the value of the freehold interest in the above property as at today's date subject to vacant possession of the ground floor and the tenancies on the upper floor."

12. He referred to the tenancies of the first floor in these terms:

"We understand that the first floor self-contained flat known as No. 5A has been sold by way of lease for a term of 99 years from 1980 approx. subject to an annual ground rent of £25.00 to an Andrew Hanson who, we understand, has sub-let to his brother. This information has been provided to us by the Landlord, Mr Khan.

No. 7A is currently let on a 6 month Assured Shorthold Tenancy to Edward Evans who, we understand, has been in occupation for approximately 18 months, and is paying £55 a week, and is supported by the DHS."

13. On the basis of his understanding of what he had been instructed to do, Mr Young valued the premises at £55,000. He subsequently confirmed the basis of his valuation in a letter dated 20th July 2000 where he wrote:

"As stated in my valuation report, the valuation was on the basis that the ground floor supermarket, trading as Super Save, was vacant. The first floor self-contained flat, No. 5A had been sold separately on a 99 year lease and was therefore producing an income of £25. Per annum by way of ground rent and No. 7A was occupied on an assured shorthold tenancy, producing £55. Per week, with the assumption that vacant possession could be achieved if so desired by the Freeholder."

14. Clause 5(11)(c) of the lease, which I have already set out, contains the proviso:

"... provided that if the purchase is not completed within six months of the said fifth anniversary date the right hereby granted shall forthwith terminate."

15. The period of six months from the fifth anniversary of the grant of the lease would expire on 14th June 2000. On 12th June 2000, Mr Khan informed Mr Aziz, through his solicitor, that he was not satisfied with the valuation made by Mr Young, which he had received a few days earlier. In those circumstances and with the proviso to clause 5(11)(c) in mind, Mr Aziz made an application to the court on 13th June 2000. He sought further directions, including a direction that a transfer of the property be executed forthwith. That application was supported by a witness statement signed by Mr Lawson, in which he set out the position.
16. His Honour Judge Moseley QC heard the application on very short notice. Nevertheless both parties were represented by counsel. It is clear from the transcript of the proceedings on 13th June 2000 that Mr Khan was seeking to avoid completing the contract on the basis that he had not understood, when he signed the joint letter of instructions to Mr Young of 10th May 2000, that he would be bound by Mr Young's valuation for the purposes of clause 5(11) of the lease. The point is encapsulated in a short exchange between the judge and counsel then appearing for Mr Khan, recorded at page 4F-G in the transcript:

"THE JUDGE: So far as the valuation is concerned he surely does not have a leg to stand on does he?

[COUNSEL]: I would that submit he does, the reason being is that until this morning he represented himself and when he signed the instructions to the surveyor to value the property what he thought he was signing was simply a document that the valuer would value the property that would not entail him having to sell the property at that figure. It was a misunderstanding on his part.

THE JUDGE: Well that really does not alter the situation does it? There is a contract between him and the claimants constituted by the provisions of the lease and that makes it quite clear that the decision is to be final."

17. It is clear from the transcript of the proceedings on that day taken as a whole that Mr Khan through his counsel was taking the point that he had been under pressure to sign the letter of joint instructions and that he had not appreciated the effect of that letter. Counsel referred on his behalf to allegations of undue influence that might be made, but, as the judge pointed out, there was no evidential basis whatever for those allegations. It is plain that the judge was satisfied that no basis had been shown upon which Mr Khan could go behind the price fixed by the appointed valuer. But he was concerned that the conveyancing aspects of the transfer had not been fully considered and that, if possible, those should be resolved between solicitors. For that reason he thought it undesirable (unless necessary) to make an order then and there, for the execution of a transfer. It is in those circumstances that the order which he did make on 13th June 2000 contains the following recitals:

"AND THE DEFENDANT by his Counsel having given to the Court and to the Claimant an assurance that he will not hereafter seek to rely upon any argument to the effect that the Claimant's right to performance of the agreement for sale referred to in paragraph (1) of the Order made herein on 2nd March 2000 shall have terminated in the event that the sale shall not have been completed by the time specified in the Proviso to clause 5(11)(c) of the Lease referred to in paragraph (1) of the said Order

AND THE PRICE for the sale of the premises having been determined pursuant to paragraph (2) of the said Order of 2nd March 2000."

18. Following those recitals, the order went on to provide that the contract for the purchase of the freehold interest be performed (failing agreement) at such time and in such manner as the Court should determine. The judge delivered a short judgment explaining why he was making the order he did which contained this passage:

"Fortunately Mr Khan has, after some argument, reached the conclusion that what he is prepared to do is to consent not to rely on the proviso to clause 5(11) of the lease, which is the clause which causes time to run out tonight. He has said that he can agree to extend time but that may not be the most appropriate form to make an order of the court. In effect the consent is that Mr Khan will not rely in future on an argument to the effect that the contract ceases to have effect at midnight tonight. That agreement by Mr Khan enables the problem to be considered at more leisure."

19. Mr Khan was not satisfied with the position. He made a further application to the Court, by notice dated 26th June, for a variation of the order of 13th June 2000. The variation sought was to exclude the second recital in that order - that is to say, to exclude the recital that the price for the sale of the premises had been determined pursuant to paragraph 2 of the order of 2nd March 2000. That application was supported by a witness statement signed by Mr Iwan Doull, a solicitor then acting for Mr Khan. The issue which he invited the Court to determine was whether the valuation in the letter of 9th June 2000 had been made on the basis of the instructions contained in the joint letter of 10th May 2000.
20. That application came before Judge Moseley on 21st July 2000. By that time Mr Doull should have received the letter of 20th July 2000 from Mr Young (to which I have already referred) which confirms the basis upon which the valuation had been made. The judge dismissed the application to vary his order on 13th June 2000. We have not been provided with a transcript of the proceedings of 21st July 2000, but we do have a transcript of the judgment of that day. The judge identified the point which he thought before him:

"Now I have to bear in mind that this is not an application for me to decide whether or not Mr Young's valuation is or is not correct. As the argument has been advanced on Mr Khan's behalf the application is for a correction of the order of 13th June."

21. It was on that basis that he rejected the application. It is plain that the judge was satisfied that the order made on 13th June 2000 (including the recitals) correctly reflected his intentions on that date. But he went on to say this:

"As I see it the recital does not preclude Mr Khan from saying that though the price had been determined it had been determined incorrectly. If Mr Khan wants to put forward that argument, he should put it forward in a proper application bringing to the attention of the court precisely in what respects the price has not been properly determined and backing it up with evidence to that effect. Since the only application before me today is to correct the order, and since the order seems to me correctly to reflect what the court determined, there is no occasion for correcting it under the slip rule (because there was no accidental slip or omission) nor under the inherent jurisdiction of the Court.

So, despite the slightly differing applications of both counsel that I should determine the point which appears to be between them, it seems to me that that point should be determined when there is an application before the court to determine it. I am quite prepared to give directions relating to that though, since the application has not yet been made, it seems to me that it might be better not to give those directions today and wait to see what happens. If Mr Khan puts in an application I can deal with it then."

22. For my part, I think I might have taken the view that if Mr Khan had wished to raise the issue that the valuation was not binding upon him because the valuer had proceeded on a wrong basis, he should have done so on 13th June 2000 in conjunction with his contention that the valuation was not binding because he had not understood the effect of the letter of joint instructions. The second recital in the order of 13th June 2000 was, as it seems to me, included for the very purpose of laying to rest any question whether or not the purchase price had been determined in accordance with the earlier order of 2nd March 2000. Nevertheless, on 21st July 2000, the judge - perhaps mindful of the circumstances in which the matter had come before him on 13th June 2000 - plainly did indicate to Mr Khan and his advisors that he did not regard the question whether the price had been determined upon a correct basis as closed.
23. Mr Khan applied to this Court for permission to appeal the orders of 3rd March, 13th June and 21st July 2000. His application for permission to appeal was coupled with an application for an extension of time. Those applications came before me, as a single Lord Justice, for consideration on paper. I refused those applications for the reasons set out in the order which I made on 16th October 2000. Mr Aziz, through his skeleton argument provided by his counsel for this hearing has placed some reliance on that order; and so it is appropriate that I should set out the reasons that I gave.

"1. I am satisfied that there is no real prospect of success of an appeal against the order of 3 March 2000 on either of the grounds set out under paragraph 1 of the appellant's notice.

2. In any event, an appeal against the order of 3 March 2000 is well out of time, the parties have acted in the meantime on the basis that the order was not under challenge, and it would be wrong, now, to extend time.

3. I am satisfied that there is no real prospect of success on an appeal against the order of 13 June. It is clear the Judge did address the question whether or not the valuation was binding.

4. There is no basis for a contention that the Judge was wrong, on 21 July 2000, to hold that the order of 13 June 2000, as drawn, reflected his intentions."

24. It is, indeed, clear that, on 13th June 2000 the judge addressed the question whether or not Mr Young's valuation was binding. He did so upon the basis of the contention then being advanced on behalf of Mr Khan, namely that he had not understood the effect of the letter of 10th May containing the joint instructions. The judge did not address the question whether or not the determination made by the valuer had been made upon the correct basis. He did not do so on 13th June 2000, because no contention that the determination had not been made on the correct basis had been advanced before him. He did not do so on 21st July 2000, because, as appears from the passage in his judgment which I set out, he did not regard that question as one which he was required to decide on the application that he was hearing on that day.
25. No further progress towards completion of the sale of the freehold was made following the hearing on 21st July 2000. By application dated 29th November 2000, Mr Aziz applied for further directions for the purpose of giving effect to the orders made on 2nd March and 13th June 2000. That application was fixed for hearing on 19th December 2000. On 15th December, Mr Khan made a cross-application for an order "that the order for specific performance dated 2.3.00 be dissolved". The basis for that application, as appears from the notice dated 15th December 2000, was:

"...because (i) the price for the purchase of the property has never been determined in accordance with the terms of the contract (ii) the parties were unable to complete the purchase by 14.6.00 alternatively within 28 days of that date alternatively within 28 days of 21.7.00 alternatively within a reasonable time."

26. The application was supported by a witness statement signed by Mr Khan which contained the following paragraph:

"It follows that, as the property has not been valued, the sale could not be completed before the cut-off date in clause 5(11)(c) of the lease of 14 June 2000 or within 28 days of that date which was the extension agreed to by [counsel] on my behalf at the hearing of 13 June 2000 or within 28 days of 21 July 2000, being the date after which [counsel] gave notice at the hearing on that date that I would rely on that clause or in any event within a reasonable time".

27. In the light of the history which I have set out, that application may, I think, fairly be described as bold.
28. The two applications came before Judge Moseley on 19th December 2000. Both parties were represented by counsel. The judge dismissed Mr Khan's application, but gave him permission to appeal that part of his order. The judge went on to give directions on Mr Aziz's application which were intended to lead to completion of the purchase, but he stayed those directions for so long as Mr Khan was pursuing an appeal with proper expedition.
29. Mr Khan's appeal against the order of 19th December 2000, dismissing his application of 15th December, is now before us. Mr Khan is not represented at this hearing. Nevertheless, the grounds of his appeal appear to have been settled by counsel and in fairness to Mr Khan I should set them out in full:

"1. The learned judge was wrong to construe clauses 5(11)(b) and 5(7)A(i)(b)(iii) of the lease dated 14th December 1994 as requiring all goodwill attaching to the premises to be disregarded in valuing the freehold interest of the Defendant in the property known as 5/7 High Street, Llandrabach, Mid Glamorgan under clause 5(11)(a). On their true construction the clauses 5(11)(b) and 5(7)A(i)(b)(iii) only required the increase in the goodwill attached to the premises by reason of the carrying on of the business of the Claimant and the assignors of the lease namely himself and Mr Khaled Mahmood at the property be disregarded in valuing the freehold interest of the Defendant in the property. The Learned Judge ought therefore to have concluded that a valuer valuing the freehold interest of the Defendant in the property under clause 5(11)(a) ought to have taking into account the goodwill which already attached to the premises at the date of the lease by reason of the carrying on there previously of the business of the Defendant.

2. The Learned Judge was wrong to construe clauses 5(11)(b) and 5(7)A(i) as requiring the valuation of the freehold interest of the Defendant in the property under clause 5(11)(a) to be on the basis of vacant possession of the shop premises only but subject to the existing leases of the two flats. On their true construction clauses 5(11)(b) and 5(7)A(i) require the valuation of the freehold interest of the Defendant in the property to be on the basis of vacant possession of the entire premises.

3. The Learned Judge was wrong to conclude that the price for the purpose of the property had been determined in accordance with the terms of the lease by the valuation of Mr Young. He ought to have concluded that Mr Young had not valued the property in accordance with the terms of clause 5(11) of the lease and therefore it was not binding upon the parties.

4. The Learned Judge was wrong to conclude that the question of whether or not the price for the purchase of the property had been determined in accordance with the terms of the lease had been finally decided in the proceedings on a previous occasion. He ought to have found that the question had not been finally decided previously.

5. The Learned Judge was wrong to conclude that the Defendant had by his Counsel on 13th June 2000 waived for all time reliance upon the proviso in clause 5(11)(c) that if the purchase was not completed within 6 months of 14th December 1999 the right to purchase the property should forthwith terminate. He ought to have concluded that the Defendant was entitled to rely on the provision after 28 days had elapsed after 13th June 2000 alternatively after 28 days had elapsed after 21st July 2000, being the date that the Defendant had given notice by his Counsel that he intended to rely on the provision, alternatively that in any event the Claimant had not been able to complete the purchase within a reasonable time and therefore the order for specific performance should be dissolved and the contract for the purchase of the freehold interest of the Defendant in the property rescinded."

30. Mr Khan has given us such help as he can in presenting his appeal in person. He put his submissions in writing in a document which appears to have been prepared with professional assistance. Those submissions follow closely the grounds set out in the appellant's notice. It is, in those circumstances, convenient to address the appeal by reference to those five grounds.
31. Ground 4 can be addressed shortly. If, on 19th December 2000, the judge had determined the application which was then before him on the basis that the question whether or not the purchase price of the property had been determined in accordance with the terms of the lease had been finally decided in the proceedings on a previous occasion, there would be force in that ground. The relevant passage in the judgment of 19th December 2000 appears at page 10B-D of the transcript:

"There are other reasons also for upholding the valuation. The first reason is that the point had already been dealt with: it was dealt with at the hearing in July at which the same point was raised on Mr Khan's behalf by Mr Adams [counsel for Mr Khan]. Mr Keyser [counsel for Mr Aziz] pointed out that at the July hearing Mr Khan had produced evidence to the effect that he was going to obtain another valuation and that he had questioned Mr Young concerning his valuation. The point was then explored and in my view was dealt with at that hearing. Mr Keyser referred me to various passages in the transcript showing that it was decided. In my view Mr Khan is not entitled to renew the argument once again at this fourth hearing, it having been raised and determined at the third hearing."

32. As I have said, we have not had the advantage of seeing the transcripts of the hearing on 21st July 2000, but it is clear from the passages in the judgment of 21st July 2000, to which I have already referred, that the judge did not then take the view that he had already decided at a previous hearing the question whether or not the purchase price had been determined in accordance with the terms of the lease. Nor did he decide the question at that hearing. But the reason why the point in ground 4 of the appellant's notice is of no force on this appeal is that, as the passage to which I have just referred makes clear, the judge did not decide the matter on 19th December 2000 on the basis that the point had already been determined. He addressed the question whether or not the valuer's determination could be challenged as a matter of substance.
33. If the valuer's determination is not open to challenge on substantive grounds, then, as it seems to me, there can be nothing in ground 5 of the grounds for appeal. The reason is that so far as appears from the evidence, Mr Aziz has throughout, from 13th June 2000, been ready and willing to complete upon the terms of the orders of 2nd March and 13th June 2000. Completion has not taken place because Mr Khan has been unwilling to give effect to those orders. He cannot invoke the proviso to clause 5(11)(c) of the lease in circumstances in which it is his own conduct that has prevented completion within the time limited by that proviso. He cannot take advantage of his own wrong.
34. But there is, as it seems to me, a further reason why Mr Khan can no longer take advantage of the proviso to clause 5(11)(c) of the lease. It is plain from the transcript of proceedings on 13th June 2000 that, if the assurance recorded in the first recital to the order of 13th June 2000 had not been given, the judge would have made an order on that day for execution of the transfer. The assurance was given so as to avoid such an order being made. In the light of that assurance the judge made an order that the contract could be performed at such time and such manner as the court should determine. The effect of that order was that the timetable for the performance of this contract came under the control of the court pursuant to the orders that it had made, Mr Khan having waived his right to rely on the contractual provisions.
35. The order of the 13th June 2000 has not been the subject to any appeal to this Court. Indeed, it is significant that the permission to appeal that was sought was restricted to the second recital to that order. It has never previously been suggested that the first recital to that order did not accurately reflect the assurance that had been given to the court on that day. The judge dealt with the point in a passage with which I entirely agree:

"Here there was a waiver of the benefit of a contractual provision, which benefited Mr Khan alone and which he was entitled therefore to waive, which he did waive in return for the agreement of Mr Keyser, who appeared on the other side, and for myself as Judge, that he should be granted an adjournment of one month to consider the title which he had been ordered to transfer under the specific performance order."

36. The waiver of reliance on the proviso to clause 5(11)(c) of the lease was the price which Mr Khan (with the benefit of legal representation) was prepared to pay on 13th June 2000 in order to avoid completion of the transaction by the execution of a transfer on that day. Thereafter the timetable for the performance of the contract which had come into existence upon the exercise of the option was in the discretion of the Court (see paragraph 1 in the substantive part of the order of 13th June 2000.)
37. I turn therefore to grounds 1, 2 and 3 in the appellant's notice. The law is not, I think, in doubt. It is conveniently summarised in the well-known passage in the judgment of Lord Justice Dillon in Jones v Sherwood Computer Services Ltd [1992] 1 WLR 277, 287 A-B:

"On principle, the first step must be to see what the parties have agreed to remit to the expert, this being, as Lord Denning MR said in Campbell v Edwards [1976] 1 WLR 403, 407G, a matter of contract. The next step must be to see what the nature of the mistake was, if there is evidence to show that. If the mistake made was that the expert departed from his instructions in a material respect— e.g. if he valued the wrong number of shares, or valued shares in the wrong company, or if, as in Jones (M) v Jones (RR) [1971] 1 WLR 840, the expert had valued machinery himself whereas his instructions were to employ an expert valuer of his choice to do that—either party would be able to say that the certificate was not binding because the expert had not done what he was appointed to do."

38. In a case where the parties give joint instructions to the expert, the relevant question is whether the expert has made a valuation in accordance with those instructions. It may well be that the instructions are to value in accordance with the terms of the underlying agreement by which the parties have agreed to accept and to be bound by the valuation of the expert. But where the joint instructions go beyond a direction to value solely by reference to the underlying agreement, the task which the expert has been set by the parties is to value in accordance with the underlying agreement read in conjunction with the joint instructions. If the expert performs that task, the parties are bound by the answer that he gives. That is because that is the answer by which they have agreed to be bound. It is not open to a party who has agreed joint instructions (whether those instructions are contained wholly within the underlying agreement or are to be found in that agreement when read in conjunction with a subsequent joint letter) to assert that he is not bound by the answer given by the expert to the question put to him by the agreed joint instructions.
39. The starting point in the present case, therefore, is to ascertain the basis upon which the parties agreed that Mr Young should be asked to make his valuation by reading the relevant provisions in the lease in conjunction with the joint letter of 10th May 2000. On that basis I find it impossible to reach the conclusion that the valuer was required to disregard the goodwill which attached to the ground floor shop premises only to the extent that there had been an increase in the goodwill attached to those premises by reason of the carrying on of the business subsequent to the date of the lease; or, to put the point another way, that the valuer ought to have taken into account the goodwill which had already attached to the shop premises by reason of the business previously carried on there by Mr Khan. Clause 5(7)A(i)(b)(iii), to which reference is made in clause 5 (11)(b) of the lease, is in these terms:

"Disregarding... any goodwill attached to the Demised Premises by reason of the carrying on thereat of the business of the Tenant its sub-Tenants or their predecessors in title in their respective businesses...."

40. The context in which clause 5(7)A(i)(b)(iii) appears is as part of in the reason of the rent review provisions in the lease; but it is imported into the valuation on a sale of the freehold interest of the whole Building by the reference in clause 5(11)(b).
41. It is necessary to keep in mind the difference between the goodwill of a business and the goodwill (in that sense of enhanced value) attached to premises or a building because a business has been carried on there. On a natural reading of clause 5(7)A(i)(b)(iii), the goodwill referred to includes goodwill attached to the demised premises by reason of the carrying on there of the business carried on by the tenant or by any predecessor in title of the tenant. If, as appears to have been the position in the present case, Mr Aziz carried on the business of mini-supermarket, which had previously been carried on by Mr Khan, it was the goodwill attached to the premises because that business had been carried on there which was to be disregarded. There could be no distinct goodwill which attached to the building, or the premises, because of what Mr Khan had been doing there six years earlier.
42. Even if that not were the true effect of the instruction in clause 5(11)(b) of the lease that the price should be the open market value of the property on the basis of vacant possession and disregarding the matters referred to in sub-clause 5(7)A(i)(b)(iii), the matter is put beyond doubt by the letter of 10th May 2000. Paragraph 6 is in these terms:

"Clearly the landlord is not entitled to any benefit of the goodwill built up by Mr Aziz."

43. If it had been intended that the valuer should take into account some residual value attaching to the building as a result of a business which had been carried on six years earlier by Mr Khan, it was necessary for the parties to say so. It is, to my mind, plain that what the valuer was instructed to do was to value a building of which the shop premises on the ground floor had been used (and, no doubt, would continue to be used) as a supermarket, but without including in the value of the building any additional element to reflect the value of goodwill attached to the building because the business carried on by Mr Aziz, and formerly carried on by Mr Khan had been carried on there. It is clear also from Mr Young's letter of 20th July 2000 that he reflected the value which use of the ground floor shop premises as a supermarket added to the value of the building by the process of capitalising "the current rental value of the ground floor supermarket", which he did not equate with the current rent passing (see paragraphs 4 and 5 of that letter). It follows that I am not persuaded that there is anything in ground 1 of the notice of appeal.
44. Nor, as it seems to me, is there anything in ground 2 of the appellant's notice. Clause 5(7)A(i) is in these terms:

"The 'open market' rent shall mean the rent at which the Demised Premises might reasonably be expected to be let as a whole at the relevant rent Review Date in the open market by a willing Landlord to a willing Tenant without a premium with vacant possession of the whole...."

45. Clause 5(11)(b) provides that the price to be determined is "the open market value of the property on the basis of vacant possession". The use of the word "property" is imprecise, because, in the context of this lease, what was to be valued was either the Building or the Demised Premises, those each being defined terms.
46. In determining whether for the purposes of clause 5(11)(b) of the lease the valuer is to proceed on the basis that there will be vacant possession of the whole of the Building and not merely vacant possession of the shop premises, clause 5(7)A(i) provides no comfort or support to Mr Khan. "The Demised Premises", to which reference is made in clause 5(7)A(i), plainly means only the ground floor premises (see the first schedule to the lease).
47. In those circumstances it seems to me that there is a degree of ambiguity in clause 5(11)(b). But the point is put beyond doubt by two factors. First, at the date when the lease was granted it was known to both parties that other parts of the Building, not comprised in the lease, were occupied under existing tenancies; of which one was a long tenancy at a low rent. Second, that the attention of the valuer was expressly drawn to those tenancies by the letter dated 10th May 2000. It is plain from the letter that the intention of the parties was that the Building should be valued on the basis that vacant possession of the premises, which were the subject of the 1994 lease, should be assumed but that otherwise the Building was to be valued subject to the long tenancy which was in existence at the time that the lease was granted and whatever other tenancies created by the landlord were in existence at the date of the valuation. There could be no other reason for providing the information as to those tenancies which that letter of 10th May 2000 did provide.
48. In my view it is plain also that that it was the parties' intention when they executed the lease that the Building was to be valued subject to the existing long tenancy and to whether further tenancies might be created by the landlord after the grant of the lease. If that were not the intention, then (i) the tenant would be paying for something that he was never likely to get – namely, vacant possession of the flat subject to the long tenancy and (ii) it would have been open to the landlord between the grant of the lease in 1994 and the exercise of the option some four or five years later to devalue the Building by the grant at a premium of a long tenancy of the other flat on the first floor and then to seek to extract from the purchaser, upon exercise of the option, a price based on the assumption that that newly granted long tenancy did not exist. That would have been such an extraordinary bargain to make that it needed to be spelt out in clear terms. The terms are not clear, and reading the lease in conjunction with the letter of 10th May, it seems to me impossible to say that the valuer proceeded upon a wrong basis.
49. For those reasons I would dismiss this appeal. It is time that the contract which came into existence by the exercise of the option by notice given in August 1998 was completed.
50. LORD JUSTICE LONGMORE: I agree. There is nothing that I can usefully add.
(Appeal dismissed with costs)