Case law analysis: Late adjudicators' decisions

Further to my article earlier this year concerning the cases of Hart -v- Fidler and Cubitt -v- Fleetglade, which considered the enforcement of decisions that were issued late, HHJ Peter Coulson QC has now considered further, in the recent case of AC Yule & Son Ltd -v- Speedwell Roofing and Cladding Ltd, circumstances in which an adjudicator's decision that is apparently issued late may, nevertheless, be enforced.

In this case, HHJ Coulson reviewed the earlier cases on this point and, consistent with the Inner House Court of Session decision in Ritchie Brothers -v- David Philip [2005] and the more recent decisions of the Technology and Construction Court, he confirmed that an adjudicator's decision must be reached within 28 days or any agreed extension to that timescale, and that it is not open for an adjudicator to purport to reach a decision after the expiry of the time limit.

The facts of this case were that Yule commenced the adjudication in accordance with the scheme and, following service of its referral, the adjudicator's decision was to be reached by 20 March 2007. Early on, the adjudicator sought an extension of time and Yule agreed to a 14-day extension, as it is entitled to, without reference to the responding party. Accordingly, the decision was to be reached by Tuesday 3 April 2007. The adjudicator did not provide his decision until 4 April 2007 and in it he awarded Yule £191,661.42 plus interest. Speedwell refused to pay and argued that the decision was out of time and a nullity.

Enforced decision

For three reasons HHJ Coulson rejected Speedwell's argument and enforced the adjudicator's decision.

First, on Tuesday 27 March 2007, a week before the decision was due, Yule served some responses to queries from the adjudicator. Speedwell asked for time to respond. The adjudicator agreed that they should have until Friday 30 March 2007 to do so, but asked the parties to agree to an extension of two days for him to reach his decision. Yule agreed to extend the time for the completion of the decision to 5 April 2007, but Speedwell said nothing.

The judge observed that if one party does not respond to a request from the adjudicator for more time, then it runs the real risk that its silence will be taken to amount to acquiescence to the requested extension. He concluded that, from the information available in this case, by its silence, Speedwell had indeed accepted that the adjudicator could reach his decision by 5 April 2007.

Second, on 29 March 2007, the adjudicator asked Speedwell to verify certain matters. On 30 March 2007 the adjudicator confirmed that he had completed his review of response number 10 and confirmed that he expected to receive Speedwell's comments that day. Speedwell did not provide further material until Tuesday 3 April 2007. In so doing, Speedwell did not indicate that it considered this to be the last day for the adjudicator to reach his decision and neither did it raise any objection on 4 April 2007.

Judge's conclusion

The judge concluded that Speedwell's conduct was only consistent with it having agreed to an extension to 5 April 2007 and was wholly inconsistent with the suggestion that it had not agreed to an extension beyond 3 April 2007.

Third, Yule argued that there had been an estoppel by silence. There are various forms of estoppel but, in essence, it is an equitable remedy that may be used as a defence to prevent the other party from enforcing its legal rights.

In certain circumstances, estoppel prevents a party from later taking a different position to one that it took earlier if the other party acted in reliance on the earlier position and if the change in position would operate to the detriment of that other party. Because it is an equitable remedy, there generally has to be an element of unconscionability for a party to be able to rely on the doctrine.

The judge agreed that Speedwell's silence and its continued conduct meant that it was estopped from denying that the adjudicator's decision was valid and/or was reached in time and observed that, if Speedwell had made its position clear at the time, Yule and the adjudicator would clearly have acted differently so as to avoid the suggestion that the decision was out of time. In support of this conclusion, he considered the case of Stolt Loyalty [1993], in which Clark J approved of the following clear statement:

"Nonetheless, the dictum that I have cited seems to me to be most persuasive authority for the proposition that the duty necessary to found an estoppel by silence or acquiescence arises where 'a reasonable man would expect' the person against whom the estoppel is raised 'acting honestly and responsibly' to bring the true facts to the attention of the other party known by him to be under a mistake as to its respective rights and obligations."

HHJ Coulson confirmed that there was no question that a reasonable man would have expected Speedwell, acting honestly and reasonably, to be under a duty to make clear that it objected to the extension requested by the adjudicator, if that was its position.

Acquiescence and conduct

He also found that there was the required unconscionability in Speedwell's acquiescence and conduct, in order to found an estoppel. Speedwell must have known that both Yule and the adjudicator mistakenly believed that the time for completion had been extended to 5 April 2007. On that basis, Speedwell was taking advantage of the mistaken belief that both the other party and the adjudicator plainly held. He therefore concluded that the necessary ingredients of an equitable estoppel were in place.

The message is clear - if a party to an adjudication wishes to rely on a fact or issue arising during the course of an adjudication, then it should say so and make its position clear at the time it arises and not wait until enforcement proceedings.