| Date | 10 August 2005 |
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| Judgment | Lafarge (Aggregates) Ltd v Newham Borough Council, QBD 24 June 2005 |
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| The Issue | The operation of deeming provisions and reference to working days. |
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| Implication |
The
expression "working day" means an ordinary office working and will
exclude in the United Kingdom Saturdays or Sundays. |
printThe Commercial Court in London was recently asked to examine a contract between Lafarge (Aggregates) and the London Borough of Newham to rule upon the effect of a clause which stated that a notice served by either party "shall be deemed to be served two working days following service in accordance with this clause". The contract between the parties was a framework agreement for minor civil engineering works such as footpath or carriageway repairs based upon the ICE standard conditions. During the course of the works a dispute arose between Lafarge and Newham concerning the valuation of Lafarge's work. This was referred to adjudication and the adjudicator issued his decision on 13 August 2004 by email. The contract between the parties provided that any notice to arbitrate had to be served within three months of an adjudicator's decision, otherwise that decision would be final and binding. Newham was unhappy with the adjudicator's decision and, recognising the deadline, on 11 November 2004 sent to Lafarge a notice of arbitration and a request to concur in the appointment of an arbitrator. A dispute immediately arose between the parties as to whether Newham's notice to arbitrate had been served within time. The first issue to decide was whether the adjudicator's decision, which had been emailed on 13 August 2004, could be regarded as given on that day. The court agreed with the arbitrator that although the decision had not been signed when sent by email, the decision had been effectively published on that date. Accordingly, the three month limit under the contract ran from the date of the adjudicator's email, the 13 November, a Saturday. Mr Justice Cook was satisfied that the intention of the deeming provision was to provide a complete code for service of notices under the contract so that the parties knew exactly where they stood. The word "deemed" did not mean presumed until the contrary is proved. Whether service was effected by post or hand delivery, it was to be taken that service was effective two days later. The reason for this provision was reasonably apparent. If a letter was sent by post there would inevitably be some delay before the notice came to the attention of those dealing with the matter, whether as a consequence of delay in the post or circulation of the post at the office concerned. Indeed the notice may not arrive at all because of the vagaries of the postal system. The clause was therefore intended to bring clarity to the time at which the service was to be treated as effective. This benefitted the server because he could calculate when he needed to take the relevant action. There were a number of situations in which this arrangement would be of benefit to the parties. For example, the notice might actually be received outside the time allowed in the contract if the vagaries of the postal service resulted in further delay. The recipient could not say that actual receipt occurred later. The delivery would be deemed to have occurred two working days following sending of the notice. Equally, the notice might not arrive at all when sent by post and a repeated notice might have to be sent. The deeming provision would nonetheless apply so that the sender was not prejudiced by adopting the procedures set out in the contract. Furthermore, the notice might be received earlier than the two working days allowed after sending the post, but this would have no effect. The deeming provision would still apply, such that the document would be treated as having been served two working days after sending. In the context of the provision within the contract, the server of such a notice would know that he must adopt one of the prescribed forms of service at the time which allowed two working days to follow before the expiry of the relevant time limit. In this way, the date of effective service could be known in advance and would be demonstrable by reference to the sending of the notice by post or the deposit of notice at the registered office of the recipient. The final question to be answered was whether the two working days required by the contract would include a Saturday. Newham argued that what mattered was the working hours of the offices of the parties and that neither Saturday nor Sunday counted as working days since neither Lafarge nor Newham's offices were open then. The arbitrator however was swayed by the argument that the site permitted working on weekends and since the contract had no definition of working days he concluded that Saturday was a working day for the purposes of the contract. Mr Justice Cook disagreed. In ordinary parlance in the United Kingdom, working days are Mondays to Fridays, excluding Easter, Christmas and Bank Holidays. The parties' own office hours was quite a separate concept to the days upon which work might be carried out on site. In consequence, the judge ruled that the arbitral notice could not be deemed to have been served until the next working day and accordingly the three month time limit had been missed. The decision of the adjudicator was binding and the arbitrator had no jurisdiction to deal with the dispute.
CJ-0531
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