What is the style of your home and how are you constructing the wainscot? In a space with 10'-6" high walls I would install the wainscot at no less than 42" H. You could also go up halfway or even make it look more substantial at 6' or 7' H. If the chair rail is truly being used as a chair rail, then you need to measure the height of the back of your chairs. If the chair rail is only aesthetic then let us determine the wainscot height first and then go from there.