AC Yule & Son Limited v Speedwell Roofing & Cladding Limited
Case reference:
[2007] EWHC 1360 (TCC)
Thursday, 31 May 2007
Key terms: Enforcement - Timetable - One day late - Nullity - Acceptance by Silence - Acceptance by conduct - Estoppel - Silence - Acquiescence
In this case, the challenge to the enforcement of the adjudicator's decision was that the adjudicator had failed to comply with the strict timetable required under the Act. As a consequence, his decision was a nullity. The judge noted that following Amec Capital Products Limited v Whitefriars City Estate Limited [2004] EWCA Civ 1418 and Carillion Construction v Devonport Royal Dockyard [2006] BLR 15 the challenge is based upon jurisdiction and natural justice had reduced. In this present case, the resourceful losing party was presenting a "new type of challenge".
Yule commenced adjudication against Speedwell. The extended time for completion of the adjudicator's decision was 3 April 2007. The adjudicator's decision was provided on 4 April 2007. Speedwell argued that the decision is a nullity because it is late.
His Honour reviewed the decisions touching this area including Barnes & Elliot Limited v Taylor Woodrow Holdings Limited [2004] BLR 117, Ritchie Brothers (PWC) Limited v David Philp (Commercials) [2005] BLR 384, Simons Construction Limited v Aardvark Development Limited (2004) BLR 117, Hart Investment Limited v Fidler and Anor [2006] EWHC 2857 (TCC), Cubitt Building & Interiors Limited v Fleetglade Limited [2006] EWHC 3413 (TCC), Epping Electrical Company Limited v Briggs and Forester (Plumbing Services) Limited [2007] BLR 1126 and Aveat Heating Limited v Jerram Falkus Construction Limited [2007] EWHC 121 (TCC). The distillation of the law from these cases was that the use of the word "shall" meant that the timetable in the 1996 Act was mandatory. The adjudicator was therefore obliged to provide his decision within the 28 day time period. The court in Ritchie Brothers considered that Simons Construction was wrongly decided, such that a decision provided late was a nullity.
On the bare facts of this case, it therefore appeared that the adjudicator's decision was out of time and a nullity. However, the judge went on to consider the facts in more detail.
The adjudicator had requested two more days meaning that his decision would be no later than 5 April 2007. The parties were providing him with information almost up to the last moment. Speedwell did not respond to the adjudicator's request for two further days. Nonetheless, they continued to provide him with further documentation.
HHJ Coulson QC held that Speedwell was taken to have accepted the extension until 5-áApril, and therefore the decision was enforceable. There were three reasons:
First, adjudicators were under some pressure to provide their decision within a strict timetable. If they were to do their job properly, and at the same time to allow parties to provide them with late information, then it will be reasonable for them to request further days within which to provide their decision. If either party did not accept the request, then silence was not adequate. There was a duty on the parties to speak up.
Second, Speedwell did more than acquiesce to the extension of time by silence. They provided further information making it impossible for the adjudicator to provide his decision by 3 April. By continuing to participate and causing the delay, they could not argue that they had not agreed to the extension of time.
Finally, Speedwell were estopped from denying that the decision of 4 April was a valid one and/or reached out of time. It is rare for a party to be able to rely upon an estoppel based upon silence. However, a party will be estopped from relying upon a strict legal right by silence or acquiescence where a reasonable person would expect a person acting honestly and reasonably to speak up.
Yule commenced adjudication against Speedwell. The extended time for completion of the adjudicator's decision was 3 April 2007. The adjudicator's decision was provided on 4 April 2007. Speedwell argued that the decision is a nullity because it is late.
His Honour reviewed the decisions touching this area including Barnes & Elliot Limited v Taylor Woodrow Holdings Limited [2004] BLR 117, Ritchie Brothers (PWC) Limited v David Philp (Commercials) [2005] BLR 384, Simons Construction Limited v Aardvark Development Limited (2004) BLR 117, Hart Investment Limited v Fidler and Anor [2006] EWHC 2857 (TCC), Cubitt Building & Interiors Limited v Fleetglade Limited [2006] EWHC 3413 (TCC), Epping Electrical Company Limited v Briggs and Forester (Plumbing Services) Limited [2007] BLR 1126 and Aveat Heating Limited v Jerram Falkus Construction Limited [2007] EWHC 121 (TCC). The distillation of the law from these cases was that the use of the word "shall" meant that the timetable in the 1996 Act was mandatory. The adjudicator was therefore obliged to provide his decision within the 28 day time period. The court in Ritchie Brothers considered that Simons Construction was wrongly decided, such that a decision provided late was a nullity.
On the bare facts of this case, it therefore appeared that the adjudicator's decision was out of time and a nullity. However, the judge went on to consider the facts in more detail.
The adjudicator had requested two more days meaning that his decision would be no later than 5 April 2007. The parties were providing him with information almost up to the last moment. Speedwell did not respond to the adjudicator's request for two further days. Nonetheless, they continued to provide him with further documentation.
HHJ Coulson QC held that Speedwell was taken to have accepted the extension until 5-áApril, and therefore the decision was enforceable. There were three reasons:
First, adjudicators were under some pressure to provide their decision within a strict timetable. If they were to do their job properly, and at the same time to allow parties to provide them with late information, then it will be reasonable for them to request further days within which to provide their decision. If either party did not accept the request, then silence was not adequate. There was a duty on the parties to speak up.
Second, Speedwell did more than acquiesce to the extension of time by silence. They provided further information making it impossible for the adjudicator to provide his decision by 3 April. By continuing to participate and causing the delay, they could not argue that they had not agreed to the extension of time.
Finally, Speedwell were estopped from denying that the decision of 4 April was a valid one and/or reached out of time. It is rare for a party to be able to rely upon an estoppel based upon silence. However, a party will be estopped from relying upon a strict legal right by silence or acquiescence where a reasonable person would expect a person acting honestly and reasonably to speak up.