Letchworth Roofing Company v Sterling Building Company

MR. JUSTICE COULSON:

This is an application for summary judgment to enforce the decision of an adjudicator dated 19 ^th January 2009. The total sum sought is £55,893.07 inclusive of VAT and interest. Although the defendant is not represented today, I have had the benefit of a detailed skeleton argument prepared on its behalf by Mr. Andrew Singer of Counsel. It is therefore appropriate that I deal in detail with the two points which he raises in that skeleton.

The application for summary judgment is resisted on two separate grounds. First, it is said that the decision was issued by the adjudicator out of time, with the result that his decision is a nullity. Secondly, it is said that the adjudicator failed to deal properly or at all with a particular dispute that was referred to him.

The defendant engaged the claimant to carry out roofing work at South Hill Church, Cemetery Hill in Hemel Hempstead. There is no dispute that the subcontract order incorporated the JCT Standard Form of Subcontract DOM/1. Clause 38A of that subcontract form contains a comprehensive set of adjudication provisions including, at clause 38A5.3, a requirement that the adjudicator reaches his decision within 28 days of his receipt of the referral. The clause provides that the 28 day period can always be extended by 14 days by the referring party.

A dispute arose between the parties by reference to the claimant's interim application number 5. The claimant, as the referring party, issued a notice of intention to refer (commonly called the notice of adjudication) on 9 ^th December 2008. The referral notice, that is to say the more detailed claim document, was dated 12 ^th December and reached the adjudicator on 13 ^th December. Accordingly, allowing for the three intervening bank holidays (which are not to be taken into account in calculating the 28 days: see section 116(3) of the Housing Grants (Construction and Regeneration) Act 1996), this meant that the 28 days expired on 12 ^th January 2009. If the claimant was prepared to grant the 14 day extension, then time expired on 26 ^th January 2009.

The claimant had anticipated that an extension was likely to be necessary. At paragraph 79 of the referral notice, the claimant said:

“Letchworth, however, do not wish for any party to be disadvantaged by the Christmas holiday and will thus grant an extension to the date when the adjudicator must make his decision.”

The adjudicator noted this concession in his letter of 15 ^th December 2008, written to both parties, in which he set out a proposed timetable. He said that he would “take this into account if it proves necessary”.

Also on 15 ^th December, the defendant sought an extension of time for the service of its response until 9 ^th January 2009. This application was put on the basis of the imminent holiday period. It is worth noting that such an extension, if granted, would have allowed the adjudicator just three days to consider the response before the expiry of the 28 day period on 12 ^th January.

The following day, 16 ^th December, the adjudicator agreed to extend time for the defendant's response until 7 ^th January 2009. In so doing he said this:

“In order to allow sufficient time for SBD to respond I will allow their response time to be extended until close of business on Wednesday, 7 ^th January 2009 thus allowing them this week and a further three days into week commencing 5 ^th January 2009.

In order to accommodate this I will reset the date for the decision to 19 ^th January 2009, i.e. plus one week (although I would reserve my position on the further week allowable between referring party and adjudicator)”.

On 5 ^th January 2009 the adjudicator wrote again to the parties to confirm the timetable to which he was working. He said:

“Following the Christmas/New Year break I would like to confirm the present position as to timetable as my previous directions 1 and 2.

1. SBD to respond by close of business Wednesday, 7 ^th January 2009.

2. Decision issued on Monday, 19 ^th January 2009.”

In responding to the adjudicator's letters of 16 ^th December 2008 and 5 ^th January 2009, neither party ever suggested that the adjudicator's understanding of the timetable was in any way incorrect. Neither did they raise any point about the proposed date of 19 ^th January. Accordingly, it is plain that the adjudicator was working on the basis that both parties were happy for him to take the further seven days that he had indicated, to 19 ^th January 2009, if that is what he required.

In my judgment this was confirmed when, on 13 ^th January 2009, the adjudicator wrote to the parties to say that he had nearly concluded his review of the referral and response and assumed that no further submissions were to be made by either side. He also said that he would shortly commence the preparation of his decision, and he referred expressly to that decision being issued on 19 ^th January. Again, neither party said that they disagreed with that timetable. Instead, both parties wrote to the adjudicator to say that they had no further submissions to make.

Thereafter, in accordance with his timetable, the adjudicator provided his decision on 19 ^th January 2009. Further to that decision he found that the sum of £46,807.14 was due and owing to the claimant from the defendant. That sum has not been paid and forms the basis of the claimant's claim now for summary judgment.

It is trite law that, unless there is a want of jurisdiction or there has been a breach of natural justice, the court will enforce the decison of the adjudicator: see, for example, Carillion Construction v. Devonport Royal Dockyard Limited [2005] EWCA (Civ) 1358; [2005] BLR 310. With that principle in mind, I turn to the two matters raised by the defendant in response to this enforcement application.

a) The 28/42 Days

In the absence of an agreed extension of time, the adjudicator is obliged to complete his decision within 28 days or, if extended by the referring party, within 42 days. If the adjudicator fails to do so he has no remaining jurisdiction and any subsequent decision that he might purport to provide is a nullity: see for example Ritchie Brothers (PWC) Limited v. David Philip (Commercial) Limited [2005] SLT 341 and Hart Investments Limited v. Fidler [2006] EWHC 2857 (TCC).

Here the decision was provided within the 42 day period. Accordingly, the only point available to the defendant is the submission that the claimant did not extend the adjudicator's time from 28 days to 42 days. On the facts as I have set them out, it seems to me that such a submission is unarguable. In particular:

(a) The claimant's referral notice made plain that it would agree to an extension because of the intervening holiday period.

(b) On three separate occasions the adjudicator indicated that he would avail himself of a one week extension to the 28 days (see above), so as to produce a decision on 19 ^th January. The claimant did not dispute or object to that course. Indeed, the claimant would not have been in a position to do so, having earlier indicated that it would not object to an extension.

(c) As I put to Mr. Hussain during the course of argument this afternoon, if the boot had been on the other foot, and the claimant had not liked the adjudicator's decision and so claimed that it was a nullity because it had been produced out of time, I would have had no hesitation, on these facts, in concluding that the claimant was estopped from taking such a point. The claimant had acquiesced in the timetable set out by the adjudicator. To that extent this case would then have been indistinguishable from AC Yule & Son v. Speedwell Roofing & Cladding Limited [2007] EWHC 1360 (TCC), where the claimant was estopped from denying that the adjudicator had been granted the necessary extension.

The defendant takes the point that the claimant's position as to extensions was ambivalent, because paragraph 81 of the referral notice objected to the defendant having additional time for its response. Mr. Watkins correctly notes in his witness statement that, in truth, there was no ambiguity at all. That part of the referral notice was dealing with the time that the defendant should be given to respond to the claim. That is an entirely separate matter, and unconnected to the time that the adjudicator was to be given to decide the totality of the dispute.

For these reasons, therefore, it seems to me that the defendant's submissions in relation to time are hopeless and cannot succeed. The claimant always accepted the need for an extension. It did not challenge the extension indicated by the adjudicator and supports that extension now. The decision was not a nullity and there is therefore no jurisdiction point.

b) The Dispute And The Alleged Breach Of Natural Justice

Every dispute referred to an adjudicator is defined by reference to the notice of adjudication: see Mecright v. TA Morris Developments Limited 26th June 2001 (unreported)and Griffin v. Midas Homes Limited [2000] 78 Con LR 152. The dispute cannot be...