Epping Electrical Company Limited -v- Briggs and Forrester (Plumbing Services) Limited
The sub-sub-contract required adjudication in accordance with the CIC procedure current at the time of appointment of the adjudicator. A dispute arose in relation to variations, whether the contract sum was fixed or fluctuating, the length of the defects liability period, and the agreed daywork rates for labour.
The time for the adjudicator to make his decision was initially extended with Epping’s consent. The adjudicator later requested a further 7 day extension until 21 November 2006 to make his decision. Briggs agreed for the extension “in which to issue your decision” subject to confirmation of Epping. Epping then agreed. The adjudicator completed his decision on 21 November but initially declined to send it to the parties until he had been paid. After correspondence with the parties, the adjudicator relented and sent his decision to the parties on 23 November 2006.
Briggs argued that its consent to the extension of time for the adjudicator to reach his decision was conditional upon his issuing the decision on that day. As he did not, there was no effective consent. Briggs relied on the Scottish decision of Ritchie Brothers v David Philp. Epping argued that Briggs’ consent was not conditional upon the issue of the decision on that day.
His Honour Judge Havery QC held that there is a distinction between reaching a decision and its despatch or delivery to the parties: Barnes & Elliott v Taylor Woodrow; the Act. Therefore there is no dispute that the adjudicator’s decision was reached on 21 November. The next question to be considered was whether the time for reaching that decision had been effectively extended to that date. The Judge considered that the time for the adjudicator to reach his decision had not been validly extended as Briggs had not unconditionally agreed to extend the time by which the adjudicator had to make his decision. The consent was to an extension of time to issue the decision and there was no basis of an estoppel on the ground that Briggs had failed to correct the adjudicator’s misunderstanding of the effect of its consent to an extension.
Judge Havery considered that he ought to follow Ritchie’s case as it would be undesirable to have the Act interpreted in different ways in the two jurisdictions. Therefore he considered that the time limit was mandatory.
"Mr Leabeater submitted that Ritchie's case was wrongly decided and that I ought not to follow it. Mr Thomas told me that Ritchie's case is the only decision on the point by an Appellant court. Since the Act applies not only in this jurisdiction but also in Scotland, it would be anomalous and, in my judgment, undesirable that it should be interpreted in different ways in the two jurisdictions. For this reason, whilst strictly I am not bound by the decision, I consider that I ought to follow it. Thus I would reject Mr Leabeater's submission that on the true construction of the Act the time limit is not mandatory."
Judge Havery then considered the effect of paragraph 25 of the CIC procedure that stated that an adjudicator’s decision, although reached outside the time permitted, would remain effective if reached before the referral of the dispute to any replacement adjudicator. Judge Havery stated that it could not affect the construction of section 108(2) of the Act, which provides the mandatory time limit. Section 108(5) provides that if a contract does not comply with Section 108(2) the adjudication provisions of the Scheme shall apply. The effect of paragraph 25 is inconsistent with the mandatory nature of section 108(2) and the apparently mandatory nature of paragraph 16 and 24 of the CIC procedure. If paragraph 25 is valid, the paragraphs 16 and 24 are effectively not mandatory, and the contract does not comply with section 108(2) of the Act, so the Scheme applies. Therefore paragraph 25 cannot then survive and the Scheme applies. Therefore, the Judge refused to enforce the adjudicator’s decision.