Home Information Cases (1) Frederick Dennis Baldwin (2) Soma Contract Services Ltd v Jr Pickstock Ltd (2017)

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(1) Frederick Dennis Baldwin (2) Soma Contract Services Ltd v Jr Pickstock Ltd (2017)

Summary

When an adjudicator failed to provide a decision in accordance with the time agreed by the parties, his appointment lapsed or expired by effluxion of time. The provision in the Scheme for Construction Contracts (England and Wales) Regulations 1998 Sch.1 Pt I para.9 allowing an adjudicator to resign "at any time" was constrained by the terms of para.19(1) and ceased on the agreed time limit. An adjudicator who had resigned after the expiry of the time limit could therefore not recover his fees, as his appointment had already lapsed.


Facts

An adjudicator, and his service company, claimed for breach of contract for non-payment of fees.

The defendant had referred a dispute to adjudication, and the first claimant was appointed adjudicator. The adjudication was subject to the Scheme for Construction Contracts (England and Wales) Regulations 1998 and the adjudicator's standard terms and conditions. Clause 3.2 of his conditions stated that if he resigned prior to reaching a decision due to a valid challenge to his jurisdiction, the referring party was liable for payment of his fees. Schedule 1 Pt 1 para 9(1) of the scheme stated "an adjudicator may resign at any time on giving notice to the parties". The adjudicator suggested an extension of time to 20 May 2016 to conclude the adjudication, with a long stop date of 27 May. The defendant agreed to an extension to 20 May and made further submissions. The adjudicator then suggested a further extension to 7 June. The defendant did not respond, but the other party agreed. On 31 May the defendant indicated that it had expected a decision by 27 May. When the defendant refused to agree an extension on 7 June, the adjudicator resigned two days later, invoking cl.3.2. The second claimant then sent an invoice to the defendant for the adjudicator's fees.

The defendant submitted that the power in para.9(1) of the scheme to resign "at any time" could not exist after the expiry date for the adjudicator to reach a decision, as para.19 operated to determine the adjudicator's appointment in those circumstances. The adjudicator argued that the defendant had acquiesced to extending time by its silence, and he therefore retained the right to resign, and to receive payment.

Held

Meaning of "at any time" - The fundamental objective of adjudication was the speedy determination of a construction dispute by a person agreed upon by the parties. An adjudicator could be removed by agreement between the parties or could resign; otherwise, the duration of an adjudication was defined by the deadline provisions of para.19, supplemented by the slip provisions of para. 22A and the very short period recognised by the courts as a window for delivery of a decision, once reached. The delivery and slip periods only applied if a decision had been reached within the time calculated in accordance with para.19. There were sound commercial reasons why the courts expected strict adherence to para.19, Cubitt Building & Interiors Ltd v Fleetglade Ltd [2006] EWHC 3413 (TCC) applied. The overarching reason for the scheme was the need to cure the injustice caused by delays in resolving construction disputes. For an appointment to be open-ended until an adjudicator chose to resign, or the appointment was revoked by agreement, would be at odds with the rationale and the provisions of the scheme. The only sensible reason why para.19(2) did not provide for replacement of the adjudicator, but for the appointment of a new adjudicator, was because the original adjudicator had ceased to be such on failing to deliver a decision in accordance with an agreement which incorporated the scheme: the appointment lapsed or expired by effluxion of time, Arnold v Britton [2015] UKSC 36 followed. The phrase "at any time" was constrained by para.19(1), and ceased on the agreed time limit. Subject to an express agreement between the parties to the contrary, paras 19 and 22A of the scheme operated to set longtime time limits for an adjudicator to resign from an appointment subject to the scheme (paras 24-31 of judgment).

Acquiescence - It was clear that, at least in the TCC, when considering the particular circumstances of an adjudication, the doctrine of acquiescence was applied robustly as an aid to validating an adjudicator's continued appointment, KNN Colburn LLP v GD City Holdings Ltd [2013] EWHC 2879 (TCC), AC Yule & Son Ltd v Speedwell Roofing & Cladding Ltd [2007] EWHC 1360 (TCC) and Letchworth Roofing Co v Sterling Building Co [2009] EWHC 1119 (TCC)considered. However, the facts of and the policy underlying those authorities fell well short of empowering an adjudicator to extend time without at least tacit, if not express, agreement of the parties in dispute (paras 38-39).

Adjudicator's reliance on cl.3.2 - The defendant had agreed an extension of time to 20 May. Bearing in mind that the defendant's letter enclosed substantial further submissions and made unqualified reference to directions which implied agreement to the deadline of 27 May, it was fair to read that letter as consenting to the 27 May deadline. When the adjudicator informed the parties that he needed until 7 June to reach his decision, it was incumbent on the defendant to make its position clear, particularly as it had causally contributed to the need for more time by its substantial further submission. The adjudicator was entitled to treat the defendant's silence as agreement to an extension to 7 June. However, the adjudicator had no basis for thinking that the deadline for reaching a decision would extend beyond 7 June, and it was for him to decide whether to invoke cl.3.2 to provide some protection for recovery of his fees that day. His appointment had lapsed on 7 June. Accordingly, his notice of resignation sent two days later was invalid, and he was not entitled to recover the sum claimed (paras 64-65, 69-71).

Judgment for defendant

Queen's Bench Division (TCC)
Judge Simon Barker QC
Judgment date
5 October 2017
References
LTL 13/3/2018