Ac Yule & Son Ltd v Speedwell Roofing & Cladding Ltd

JurisdictionEngland & Wales
JudgeHIS HONOUR JUDGE PETER COULSON QC
Judgment Date31 May 2007
Neutral Citation[2007] EWHC 1360 (TCC)
Docket NumberCase No: HT-07–137
Date2007
CourtQueen's Bench Division (Technology and Construction Court)

[2007] EWHC 1360 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN's BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

St. Dunstan's House

Fetter Lane

London, EC4

Before

His Honour Judge Peter Coulson QC

Case No: HT-07–137

Between
AC Yule & Son Limited
Claimant
and
Speedwell Roofing & Cladding Limited
Defendant

Mr. James Leabeater (instructed by Dickinson Dees) for the Claimant

Mr. Simon Henderson (instructed by Weightmans) for the Defendant

HIS HONOUR JUDGE PETER COULSON QC
1

The process of compulsory adjudication was introduced into the UK Construction Industry by the Housing Grants, Construction and Regeneration Act 1996 ('the 1996 Act') which came into force on 1st May 1998. The early reported cases, such as Macob Civil Engineering Limited v. Morrison Construction Limited [1999] BLR 93 and Bouygues UK Ltd v Dahl Jensen UK Ltd. [2000] BLR 522 made plain that, provided the adjudicator had the necessary jurisdiction, the courts would enforce his decision by way of summary judgment. Initially, therefore, a party seeking to challenge the validity of an adjudicated decision often sought to do so on jurisdictional grounds. However, the Court of Appeal decision in C&B Scene (Concept Design) Ltd. v Isobars Ltd [2002] BLR 93 underlined the limited scope for such jurisdictional challenges, reiterating that, provided the adjudicator had answered the dispute referred to him, no matter how erroneous his subsequent decision might be, a jurisdictional challenge would almost certainly fail.

2

Following the decisions of the TCC in Discain Project Services Limited v Opecprime Limited (No 2) [2001] BLR 287 and Balfour Beatty Construction Limited v. The London Borough of Lambeth [2002] EWHC 597 (TCC), which confirmed that, within the particular constraints of adjudication, the adjudicator was obliged to follow the rules of natural justice, those seeking to avoid the consequences of an adjudicator's decision began to regard an alleged breach of those rules as a more productive method of challenge. However, following the decision of the Court of Appeal in AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA (Civ) 1418, it became apparent that this line of attack too was of limited practical scope. As Chadwick LJ put it in Carillion Construction v Devonport Royal Dockyard [2006] BLR 15, summarizing these two common types of challenge to an adjudicator's decision:

“It is only too easy in a complex case for a party who is dissatisfied with the decision of an adjudicator to comb through the adjudicator's reasons and identify points upon which to present a challenge under the labels 'excess of jurisdiction' or 'breach of natural justice' … In short, in the overwhelming majority of cases, the proper course for the party who is unsuccessful in an adjudication under the scheme must be to pay the amount that he has been ordered to pay by the adjudicator. If he does not accept the adjudicator's decision is correct, whether on the facts or in law, he can take legal or arbitration proceedings in order to establish the true position to seek to challenge the adjudicator's decision on the ground that he has exceeded his jurisdiction or breached the rules of natural justice (save in the plainest cases) is likely to lead to a substantial waste of time and expense …”

3

There is no doubt that, following AMEC and Carillion, the overall number of disputed applications to enforce the decisions of adjudicators has fallen. With challenges based on jurisdiction and natural justice difficult (although not of course impossible) to establish in practice, the resourceful losing party in adjudication has had to look elsewhere for a reason to argue that the adjudicator's decision should not be enforced. In recent times, as was discussed in argument this morning, it has become common for the losing party to allege that the adjudicator has failed to comply with the strict timetable required by the 1996 Act, and that, in consequence, his decision is a nullity. The present dispute is another example of this new type of challenge.

4

Here, Yule commenced adjudication proceedings against Speedwell on 20th February 2007 in accordance with the Scheme for Construction Contracts provided by the 1996 Act. The decision was therefore due by 20th March 2007. The adjudicator sought more time at an early stage and Yule, as the claiming party, granted him a 14-day extension of time, as they were entitled to do under paragraph 19(1)(b) of the scheme. This extended the adjudicator's time for completion of his decision to 3rd April 2007. The adjudicator's decision was in fact provided on 4th April 2007. In it, he decided that Yule were entitled to £191,661.42 plus interest together with his fees. Speedwell have not paid any part of these sums and contend that, because the decision was provided after the agreed extended period, it was a nullity.

5

There have been a number of decided cases on this topic, and it is unnecessary to set them all out again here. They were identified in the skeleton arguments, and I was also provided with a lengthy index covering them all. By way of summary, therefore, the authorities to which I have had particular regard are as follows.

(a) In Barnes and Elliot Ltd. v Taylor Woodrow Holdings Ltd. [2004] BLR 117, His Honour Judge Humphrey Lloyd QC differentiated between the completion of the decision itself, which he said had to be completed within the 28 days or the agreed extended period, and its subsequent communication to the parties which could, he said, occur a day or two days thereafter.

(b) In Ritchie Brothers (PWC) Ltd v David Philp (Commercials) [2005] BLR 384, the Court of Session in Scotland, the only appellate court to consider this point thus far, concluded by a majority that the adjudicator's jurisdiction expired at the end of the 28 days (or any agreed extended period) and that an adjudicator's failure to reach his decision within that time limit rendered any subsequent decision a nullity. Lord Nimmo Smith said, in an admirably succinct judgment:

“If a speedy outcome is an objective it is best achieved by adherence to strict time limits. Likewise, if certainty is an objective, it is not achieved by leaving the parties in doubt as to where they stand after the expiry of the 28-day period. These considerations reinforce the view that paragraph 19 [of the Scheme] means exactly what it says, so that it is not open to an adjudicator to purport to reach his decision after the expiry of the time limit.”

(c) In reaching their decision in Ritchie, the court expressed the view that Simons Construction Ltd v Aardvark Developments Ltd [2004] BLR 117, in which His Honour Judge Richard Seymour QC concluded that a decision was valid whenever it was completed, provided that no further adjudication had been commenced in the meantime, was wrongly decided.

(d) In Hart Investments Ltd v Fidler and another [2006] EWHC 2857 (TCC) and Cubitt Building & Interiors Limited v Fleetglade Limited [2006] EWHC 3413 (TCC), I concluded that the word “shall” in the 1996 Act and the Scheme was mandatory. In the latter case I held that the obligation at paragraph 19 of the Scheme, that the adjudicator “shall” reach his decision not later than 28 days, or any extended time, meant what it said, such that the adjudicator was obliged to complete his decision within the 28 days or any extended period, no more and no less. For what it is worth, I expressed the view that Ritchie was correctly decided.

(e) In Epping Electrical Company Ltd. v. Briggs and Forrester (Plumbing Services) Limited [2007] BLR 1126, and Aveat Heating Ltd. v Jerram Falkus Construction Ltd [2007] EWHC 121 (TCC), His Honour Judge Havery QC also concluded that Ritchie was right, and that in any event, given that it was a decision of an appellate court, it was appropriate for him to follow it. He therefore concluded that the decision had to be completed within the 28 days or any agreed extended period.

6

I therefore conclude that the relevant obligation in paragraph 19 of the Scheme, that the adjudicator shall reach his decision within 28 days and/or any agreed extended period, means what it says and that, in order to be valid, an adjudicator's decision must be completed within this period. It seems to me that that is the only proper conclusion permitted by the mandatory requirements of the Scheme. It is also in line with the authorities noted above, particularly the decision of the Court of Session in Ritchie. Perhaps most importantly of all, I consider that it is a conclusion which is entirely consistent with the purpose of the 1996 Act. As Lord Nimmo Smith put it in Ritchie, the only way to ensure both speed and certainty is for the adjudicator and the parties to comply with the statutory time limits.

7

Returning to the facts of the present case, therefore, it would appear that, prima facie, the adjudicator's decision was completed out of time, and was therefore a nullity. However, as is so often the case with disputed enforcements, a closer scrutiny of the facts reveals a rather more complex picture.

8

On 27th March 2007, at a time when the decision was due on 3rd April, Yule, through their solicitors Dickinson Dees, provided a number of responses to queries raised by the adjudicator. Later that day, by an e-mail timed at 15.42 p.m., Speedwell requested the responses to be provided in electronic form. They also sought time to respond to the material provided, pointing out that some of the documents referred to in Yule's responses would not be provided by way of hard copy until the following day, 28th March 2007. They put their request in these terms:

“In addition, hard copy of correspondence (and other documents) is only due...

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  • Extended Adjudication Timetables
    • United Kingdom
    • Mondaq United Kingdom
    • 27 Junio 2007
    ...timetable, he must speak up, or forever hold his peace. Reference: AC Yule & Son Ltd v Speedwell Roofing & Cladding Ltd [2007] EWHC 1360 (TCC) This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to Law-Now i......

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