Rossco Civil Engineering Limited v Dwr Cymru Cyfyngedic
Case reference:
[2004] All ER (D) 339 (Jul)
Thursday, 15 July 2004
Key terms: Summary Judgment - Partnership - Limited Company - NEC Option C - Partnering - Incorporation - Transfer -Duty to Speak - Estoppel by Convention
Francis Butler and Peter Wall carried on business in Partnership. One part of the business was a part hire enterprise and the other a civil engineering contractor. They were invited to tender for Welsh Water Limited’s (the trading name of Dwr Cymru Cyfyngedic) Mains Refurbishment Programme. The proposed form of contract was the NEC Option C, which was to be let on a partnering arrangement.
The Partnership was successful. No formal contract was ever signed but the parties agreed that the partnership started work in January 1999, the NEC Option C terms were applicable and that the Act applied. In 1999 the plant hire part of the business was incorporated. The date of transfer of the business was in dispute. In some instances documents included the additional term “Limited” whilst others referred only to the partnership.
The claimant was informed that their services were no longer required on the basis that under the partnering arrangement Welsh Water was not obliged to allocate any work to the claimant. Disputes then arose and many issues were compromised. One matter was referred to adjudication. The adjudicator asked the parties if Rossco was incorporated. Rossco confirmed that they were. No response was received from the other side. The issue was first raised by Welsh Water in the enforcement proceedings.
Recorder Dermott O’Brien QC held that there was a duty on the defendant, Welsh Water, to say whether the claimant was or was not incorporated. The claimant asserted that they were incorporated but the defendant failed to take issue with it. An estoppel by convention prevented the defendant from now resisting the claim. An estoppel cannot normally arise based upon silence, but in this instance there was a duty on the defendant in the adjudication to “speak up” in its defence. Further, he also held that there was a common understanding between the parties by the time of the adjudication at the latest that the defendant was dealing with a limited company.
The Partnership was successful. No formal contract was ever signed but the parties agreed that the partnership started work in January 1999, the NEC Option C terms were applicable and that the Act applied. In 1999 the plant hire part of the business was incorporated. The date of transfer of the business was in dispute. In some instances documents included the additional term “Limited” whilst others referred only to the partnership.
The claimant was informed that their services were no longer required on the basis that under the partnering arrangement Welsh Water was not obliged to allocate any work to the claimant. Disputes then arose and many issues were compromised. One matter was referred to adjudication. The adjudicator asked the parties if Rossco was incorporated. Rossco confirmed that they were. No response was received from the other side. The issue was first raised by Welsh Water in the enforcement proceedings.
Recorder Dermott O’Brien QC held that there was a duty on the defendant, Welsh Water, to say whether the claimant was or was not incorporated. The claimant asserted that they were incorporated but the defendant failed to take issue with it. An estoppel by convention prevented the defendant from now resisting the claim. An estoppel cannot normally arise based upon silence, but in this instance there was a duty on the defendant in the adjudication to “speak up” in its defence. Further, he also held that there was a common understanding between the parties by the time of the adjudication at the latest that the defendant was dealing with a limited company.