AC Yule & Son Ltd v Speedwell Roofing & Cladding Ltd [2007] EWHC 1360

This summary was provided by CMS Cameron McKenna LLP.

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If an adjudicator receives new information shortly before his deadline for reaching a decision, which makes it necessary for him to seek a short extension of time from the parties, the parties are under an obligation to reply plainly and promptly to that request.  Failure to reply may be taken to mean consent to the request.  This is particularly so where the party in question continues to participate in the adjudication.

HH Judge Coulson QC – Queen’s Bench Division, Technology and Construction Court

Background

Yule commenced adjudication proceedings against Speedwell.  At an early stage, the adjudicator requested and Yule granted a 14-day extension expiring on 3 April 2007.  Shortly before expiry of the extended period, Yule provided a number of responses to queries of the adjudicator, which Speedwell requested some time to respond to.  The adjudicator gave Speedwell 2 days to respond and required both parties agree that the adjudicator’s deadline for reaching a decision was also extended by 2 days, until 5 April 2007.

Yule agreed, but Speedwell did not expressly respond to the adjudicator’s request.  Documentation running to 65 pages was provided by Speedwell to the adjudicator late on 3 April.  On the morning of 4 April, the adjudicator indicated that he would provide his decision later that day.  Speedwell did not object. The adjudicator decided that Speedwell should pay Yule £192k plus interest.  Following Speedwell’s failure to pay, Yule brought proceedings for enforcement of the adjudicator’s decision.  Speedwell contended that the decision was a nullity because it was out of time.

Decision

HHJ Coulson QC found that the decision was not out of time on the following grounds:

1. Where, late in the 28-day or extended period, new information makes it necessary for an adjudicator to ask for a little more time so that he can do the job properly, there is a clear obligation on both parties to respond plainly and promptly to his request.  If in breach of that obligation, one party (e.g. Speedwell) does not respond, his silence can be taken as acquiescence to the request. 

2. This is particularly true where that party continues to participate in the adjudication, because he can be taken to have agreed to the adjudicator’s request by conduct.  Speedwell had done more than that – it had participated in a process that made it impossible for the adjudicator to have reached his decision in time.

3. Even if his conclusion that Speedwell had consented to the extension of time was wrong, Speedwell were estopped from denying that the adjudicator’s decision of 4 April was a valid decision and/or reached in time.  Speedwell had represented to the adjudicator that he had until 5 April to reach his decision both by their failure to inform the adjudicator that they did not consent to the extension sought and by their participation in the exchange of information all the way through to late afternoon on 3 April.  To the extent necessary to found an estoppel, the required unconscionability in Speedwell’s acquiescence and conduct were present.

The judge also commented that, contrary to the alternative proposition put forward by Yule, it was not appropriate to take a “flexible approach” to statutory interpretation in the context of the provisions of the HGCRA.  Adjudication is a field that requires certainty and the deadlines imposed by the HGCRA are mandatory, not directory.    In any event, Yule had succeeded in its principal argument, therefore the adjudicator’s decision was valid.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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