Sudbrook Trading Estate v Eggleston: HL 1983

An option was granted to purchase the reversion conferred on the lessees under certain leases. The price was be not less than andpound;12,000, and it was to be fixed by valuers appointed by each party and default of agreement it was to be fixed by an umpire. The lessors refused to appoint a valuer.
Held: The price was on the true construction of the lease a fair and reasonable price, as judged by objective criteria. The provisions for the appointment of valuers by either party were mere machinery. The court could substitute its own machinery and direct specific performance of the option. That the price should be fair and reasonable followed by necessary implication from the fact that the price was to be fixed by valuers. In this particular case the House ordered an inquiry as to the what was a fair and reasonable price because there was a risk that if the court merely ordered a party to appoint a valuer the order might be disobeyed, leaving only a remedy in contempt.
Lord Diplock said: ‘when honest parties to a contract for the sale of land or an option to enter into such a contract have in the past inserted provisions for the ascertainment of the purchase price . . they must have intended to create legal rights to have those provisions acted on by both parties and not flouted by either party at his own sweet will, otherwise there is no point in inserting them at all.’

Judges:

Lord Diplock

Citations:

[1983] 1 AC 444, [1982] ANZ Conv R 541, [1982] 3 WLR 315, [1982] 3 All ER 1

Jurisdiction:

England and Wales

Cited by:

CitedDutton and Dutton v Dutton and Brown ChD 3-Feb-2000
An option was granted by the will. Its validity was challenged because of difficulties in the method of reaching a valuation. It was occupied and it could not be agreed whether an assumption was to be made that the occupier would consent to the . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 30 April 2022; Ref: scu.198160