EASTERN MOTOR COMPANY LTD AGAINST COLIN DONALD GRASSICK AND OTHERS [2021] ScotCS CSOH_5 (26 January 2021)

EASTERN MOTOR COMPANY LTD AGAINST COLIN DONALD GRASSICK AND OTHERS [2021] ScotCS CSOH_5 (26 January 2021)

The expert addressed and answered the questions referred to him under the SPA. Any alleged error was not a departure from instructions but, at most, a mistake in carrying out those instructions. The SPA made the expert's determination final and binding except in cases of manifest error or fraud. No manifest error was demonstrated in the expert's approach to VAT or the interpretation of 'prevailing' CAP value. The challenge to the expert's determination was competent as a defence, but on the merits, the expert's decision stands.

Citation
[2021] ScotCS CSOH_5
Parties
Pursuer: Eastern Motor Company Limited; Defenders: Colin Donald Grassick and Others
Jurisdiction
Scotland
Judgment Date
26 January 2021
Procedural Posture
Commercial Contract Dispute / Judgment After Proof
Outcome
judgment for pursuer
Legal Topics
Expert Determination, Share Purchase Agreement, Valuation of Assets, Manifest Error, Judicial Review, Enforcement of Expert Decisions
Contract Law Commercial Law Expert Determination Share Purchase Agreement Valuation of Assets Manifest Error Judicial Review Enforcement of Expert Decisions

Case Brief

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Parties

Eastern Motor Company Limited

Pursuer

Colin Donald Grassick and Others

Defenders

Procedural Posture

Commercial Contract Dispute / Judgment After Proof

Legal Issues

  1. 1 Whether the price adjustment expert's determination under the SPA is binding on the parties
  2. 2 Whether the expert departed from instructions or committed manifest error in valuation of used vehicle stock (VAT issue and 'prevailing' CAP value issue)
  3. 3 Whether the challenge to the expert's determination is competent by way of defence (ope exceptionis) or requires judicial review

Ratio Decidendi

The expert addressed and answered the questions referred to him under the SPA. Any alleged error was not a departure from instructions but, at most, a mistake in carrying out those instructions. The SPA made the expert's determination final and binding except in cases of manifest error or fraud. No manifest error was demonstrated in the expert's approach to VAT or the interpretation of 'prevailing' CAP value. The challenge to the expert's determination was competent as a defence, but on the merits, the expert's decision stands.

Court Disposition

judgment for pursuer

Orders

  • Declarator that the expert’s determination is binding on the parties
  • Order requiring the defenders to instruct the Royal Bank of Scotland to release £158,068 plus accrued interest to the pursuer and £91,932 plus accrued interest to the defenders