Arbitration–Special case stated–Paragraph 6 of Schedule 6 to Agricultural Holdings Act 1948–‘Within 28 days from the appointment of the arbitrator’–What is effective date of appointment of arbitrator?–Date when all necessary requirements have been fulfilled, sealing by minister (if appropriate), acceptance by arbitrator, receipt by him of notice of appointment and receipt by parties of notice–28 days begins to run on next day–No power for arbitrator to extend time for delivery of statement of case
This was a
special case stated by David Thomas Hefin Davies FRICS, the arbitrator
appointed by the Minister of Agriculture to determine claims arising on the
termination of a tenancy between Lieut-Commander R M Richards, the landlord,
and Martin Vernon Allinson, the tenant, of a holding at Gwynedd. The material
facts are set out in full in the judgment. The questions of law which were
submitted by the arbitrator for the opinion of the court were as follows:
(1) Was the date of appointment of the arbitrator
as referred to in paragraph 6 of Schedule 6 to the Agricultural Holdings Act
1948 the date on which the minister sealed the appointment, the date on which
the deed of appointment was received by the arbitrator, or the date on which
the arbitrator formally accepted the appointment and notice of the appointment
was given to the parties?
(2) Was the statement of case and particulars,
posted by first-class recorded delivery post by the landlord’s agents in
accordance with the agreed statement of facts, delivered to the arbitrator
within the time limited by Schedule 6, paragraph 6, to the 1948 Act?
(3) Was the landlord entitled to rely on matters
alleged in the statement of case and particulars delivered to the arbitrator in
accordance with the agreed statement of facts?
(4) If a party to an arbitration is not entitled
to rely on matters alleged in a statement of case and particulars delivered to
the arbitrator because it has not been delivered within the said period of 28
days as set out in paragraph 6 of Schedule 6, has the arbitrator power to
permit him to rely on such matters?
H A C Densham,
solicitor, of Burges, Salmon & Co, of Bristol, appeared on behalf of the
landlord; Pryce Michael Farmer (instructed by Edward Jones & Son, of
Blaenau Ffestiniog) represented the tenant.
Giving
judgment, His Honour JUDGE MEURIG EVANS said: The dispute in the present case
arises out of a landlord’s claim against a tenant for damages for
dilapidations. Such claims have to be determined by arbitration by an
arbitrator appointed (in default of agreement between the parties) by the
Minister of Agriculture, Fisheries and Food, to whom particulars of the claim
and of the defence have to be submitted.
The
Agricultural Holdings Act 1948 governs the procedure to be complied with in
such arbitration, and provides, inter alia, a time-limit, from the
appointment of the arbitrator, within which the claim has to be submitted. The
relevant statutory directions are to be found in Schedule 6, paragraph 6, to
the Act (as amended) as follows:
6. The parties
to the arbitration shall, within twenty-eight days from the appointment of the
arbitrator, deliver to him a statement of their respective cases with all
necessary particulars and–
(a) no amendment or addition to the statement or
particulars delivered shall be allowed after the expiration of the said
twenty-eight days except with the consent of the arbitrator;
(b) a party to the arbitration shall be confined
at the hearing to the matters alleged in the statement and particulars
delivered by him and any amendment thereof or addition thereto duly made.
The main
question raised for determination in this present case is: What is the proper
date to be taken as the date of ‘the appointment of the arbitrator’? The deed of appointment under the seal of the
Ministry of Agriculture, Fisheries and Food is dated August 23 1976. Prima
facie, that would be the date of appointment of the arbitrator, and time
would begin to run from that date. That at any rate was the view of the
arbitrator in the present case. On September 29 1976 he accordingly wrote to
the parties the letter of that date pointing out that the landlord’s statement
of case had not reached him until September 22, whereas it should have been
delivered within 28 days from August 23–ie not later than September 21. It was
suggested that it was therefore out of time. Correspondence followed between
the arbitrator and legal adviser. The arbitration was deferred and the matter
was eventually referred for the opinion of this court.
The hearing
took place at Portmadoc on June 6 1978, nearly two years after the issue had
first been raised by the arbitrator.
It may be
convenient to recall the relevant dates, which are as follows:
August 12
1976–Minister informs arbitrator that he proposes to appoint him.
August 18
1976–Arbitrator replies he is prepared to accept.
August 23
1976–Minister posts letter and deed of appointment of that date to the
arbitrator.
August 24
1976–Deed of appointment received by arbitrator.
August 24
1976–Minister posts notice of arbitrator’s appointment to landlord’s agent.
August 26
1976–This notice of appointment of arbitrator received by landlord’s agent from
the minister (though dated August 23, not posted from Ministry until August 24
and not received until August 26).
August 30
1976–Notice of arbitrator’s appointment received by landlord from arbitrator
(though dated August 25, not posted until August 27 and not received until
August 30).
No point was
taken by either party that this letter dated August 25 warns the landlord that
the statement of case must reach the arbitrator by September 21.
The
submissions by Mr Densham for the landlord were as follows:
(1) That the effective date of
‘appointment of the arbitrator’ was not August 23 (the date on his deed
of appointment) but the date by which each of four requirements had been
satisfied, namely:
(1) The minister had signed and sealed the deed
of appointment (August 23).
(2) The deed had been delivered to the arbitrator
(August 24).
(3) The arbitrator had accepted the appointment
(prior to August 23).
(4) notice of the appointment had been received
by the landlord and tenant (August 26);
(2) that the 28 days from whatever is the proper
date of the appointment must be construed as 28 clear days, and that time for
delivery of the pleading would therefore run, not from the day of appointment
itself but from the day following the day of appointment;
(3) that the statement of case required by
paragraph 6 of Schedule 6, having been posted by recorded delivery on September
20, would normally have been delivered on September 21 and was therefore
delivered within the 28 days although in fact it had not been delivered until
September 22;
(4) that in so far as the landlord’s statement of
case had been delivered outside the 28 days time-limit, the arbitrator
nevertheless would have been entitled to grant and should have granted an
extension of time and/or allowed the landlord to rely on its contents as the
basis of his claim.
For the
tenant, Mr Farmer’s submissions may be summarised as follows:
(1) that the date of appointment of the arbitrator
was, and was stated to be in the deed, the date of its execution, viz August
23;
(2) that neither delivery to the arbitrator nor
notice to the landlord affected the matter;
(3) that neither was a prerequisite to the
validity of the appointment of August 23;
(4) that the court ought not to attempt an
artificial construction of the words of the statute, thus causing delay to the
arbitration, one of the objects of the arbitration processes and of Schedule 6
in particular being to bring about an expeditious settlement of differences
between landlord and tenant;
(5) that the 28-days limit expired, as the
arbitrator had stated, on September 21;
(6) that the landlord could not therefore rely on
the contents of the statement of case, having regard to the specific term of
paragraph 6(8);
(7) and that the arbitrator had no jurisdiction
to extend the time or to allow the landlord to rely on the contents of the late
delivery of statement of case.
In my view the
question of the effective date of the appointment has to be determined by
reference to the principles laid down by the Court of Appeal in Tradax
Export SA v Volkswagenwerk AG [1970] 1 QB 537. The question there in
issue was whether there could be an effective appointment of an arbitrator in a
commercial arbitration when the arbitrator designated by the one party had (a)
not been asked whether he was willing to act in the particular matter and (b)
had not consented so to act. It was held that there could be no effective
appointment of an arbitrator until both these conditions, and also a third
condition, viz that his name and appointment had been communicated to the other
side, had been fulfilled. At p 544 Lord Denning MR states the position in
unambiguous terms:
So we have to
decide [he states] what is necessary to constitute the appointment of an
arbitrator? I think the answer is this:
First, it is necessary to tell the other side. That is plain from Tew v Harris
(1847) 11 QB 7. Second, it is necessary to tell the appointee himself. That is
obvious because he often has to start acting at once. Third, it is necessary
that he should be willing to act and have intimated his willingness to accept
the appointment. In Russell on Arbitration, 17th ed (1963), at p 160, it
is said: ‘Acceptance of the office by the arbitrator appears to be necessary to
perfect his appointment.’ There is a
passage in Ringland v Lowndes (1863) 15 CBNS 173, 196, which
gives some support to that statement.
Mr Densham by
great diligence has discovered the case of Cox v Johnson (1914)
14 SR (NSW) 240, where it is said at p 250: ‘In my view all that is required by
the section’–a similar section–‘is nomination by each party to the other of the
person whom he has selected to act on his behalf.’
I think that
statement may have been right in relation to the facts and evidence in that
case. But I do not think it is of general application. I think in general it is
essential not only that the other side should be told, but also that the
arbitrator himself should be told.’
And again
Salmon LJ (as he then was) said in the Tradax case at p 545:
In my
judgment, three things are necessary in order to make an effective appointment
under this clause: first of all, the arbitrator must be communicated with and
asked if he is willing to act. Secondly, he must express his willingness and be
clothed with authority to act. And thirdly, as is apparent from Tew v Harris
(1847) 11 QB 7, in order to perfect the appointment the other side must be
notified of the name of the arbitrator. Sometimes these steps are taken by
letter or by cable. There is nothing to prevent them being taken over the
telephone or by telex. I am not saying that there may not be a special case in
which an arbitrator has informed a party in advance that he is always prepared
to receive instructions to act as arbitrator in any dispute in which that party
may be concerned. If consent has been given in advance, it is enough to
communicate the appointment to the arbitrator, and then give the other party
the appropriate notice.
By reference
to the time-table which is set out in the earlier portion of my judgment it
will be seen that though the arbitrator’s deed of appointment was dated August
23 he was not informed of it until the following day, August 24. Consequently
the date of appointment could not have been prior to August 24.
There still
remains the third request to be satisfied, namely communication of the name of
the arbitrator to the parties. Although a letter to the landlord’s agent giving
this information was written on August 23, it was not posted until August 24
and not received by the agent until August 26. It follows that the third
condition not having been satisfied until that latter date, the effective
appointment of the arbitrator was not completed until that date, namely August
26.
Reference to
the judgments in Sclater v Horton [1954] 2 QB 1, and in
particular to that of Evershed MR at p 10, shows clearly that there may well be
a valid distinction between what might be termed a ‘bare’ appointment of an
arbitrator, even when appointed by a minister, and an effective appointment, so
far as the parties to the arbitration are concerned.
As regards Mr
Densham’s third submission, this was not, of course, necessary to the
determination of the present case, having regard to my decision on his first
point and was not accordingly pressed. In my view, nevertheless it is not well
founded in law. The presumption of delivery of a letter by recorded post
delivery applies only ‘unless the contrary is proved.’ In this case the contrary was proved. The
letter is agreed to have been delivered on September 22 although actually
posted on September 20.
Mr Farmer for
the tenant submitted that different principles applied in the case of an
arbitrator appointed by a minister under the Agricultural Holdings Act 1948
from those applicable to a commercial arbitration under a ‘Centrocon’ clause as
in the Tradax case. I cannot accept that. If it were so, absurd results
might follow. For example, if as he contended, it were unnecessary for notice
of the appointment to be communicated to both parties before the appointment
could become effective, the 28-days’ limitation for pleadings could expire or
at least a significant portion of that period could have expired before one or
both parties knew anything about the appointment, and grave injustice could
result. I find that proposition equally inconsistent with authority as with
commonsense. In my opinion the principles of the Tradax case are as
applicable to the appointment of an arbitrator under and by virtue of the
provision of the Agricultural Holdings Act 1948 as they are to the appointment
of an arbitrator under the Centrocon clause in a private charter party.
Moreover there is direct authority on this point: see Russell on Arbitration,
18th ed p 96 and the cases there cited, in particular the judgment of Lord
Denman, ‘Neither party can be said to have chosen an arbitrator until he lets
the other party know the object of his choice. Nomination implies notice’: See
also Russell p 213, footnote 5.
Accordingly I
consider that the effective date of the appointment of the arbitrator was
August 26 1976–ie the date on which the landlord in fact received notice of the
appointment as stated in the special case. In any event the date could not be
earlier than August 24, the date on which the appointment was
the effective date of the appointment it is common ground that the delivery of
the landlord’s statement of case to the arbitrator was within the 28-days’
time-limit. The same result follows if the correct date was August 24.
I have been
asked however to deal with the other points raised and argued at the hearing
and in particular with the date for which the time of 28 days for delivery of
the statement of case began to run. In my view and on the authority of Stewart
v Chapman [1951] 2 KB 792 and the authorities there cited, the day of
the appointment of the arbitrator, whether August 26 or August 24, has to be
excluded and the 28 days computed as from the following days, August 27 in the
one case, or alternatively August 25 in the other case. In either event the
statement of case was delivered within the 28 days.
Finally, as
regards the power of the arbitrator to extend the time for delivery of the
pleadings. This point has been the subject of decision in various county
courts, and with one exception the consensus of judicial opinion seems to have
been in favour of a strict interpretation of the statutory time-limit. I take
the same view. Had the legislature intended that the arbitrator should be at liberty
to extend the time-limits laid down by the Act, the legislature would have made
provision to that effect–or a statutory discretion given by some other statute.
That does not appear to have been done, though a discretion is given to the
arbitrator by Schedule 6 to allow amendments to the statement of case.
Moreover the
legislature itself extended the time-limit by another Act of Parliament, from
the original 14 days in the 1948 Act, to 28 days by the amending Act in 1963
(section 20). This would have been unnecessary if the arbitrator himself could
have extended the time-limit. Reference was made by Mr Densham to the judgment
of Denning LJ, as he then was, in Seaford Court Estates Ltd v Asher
[1949] 2 All ER 155 at p 164, but I do not consider that has any relevance to
the present case. The various decisions relating to time clauses in leases
suggest that time-limits in that class of case can be regarded as guide-lines
only. In my view, however, statutory limits depending for their validity not on
agreement between the parties but by legislative decree have to be observed. It
may be arguable whether or not such limits can even be waived by the parties (Kammins
Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] A C 850)
but waiver was not an issue in this case.
I answer the
questions submitted to the court as follows:
(1) The date of appointment is not the date upon
which the minister sealed the appointment;
Nor is it
necessarily the date on which the appointment is received by the arbitrator;
Nor is it
necessarily the date on which the arbitrator formally accepted his appointment;
Nor is it
necessarily the date on which notice has been given to the parties. The date of
appointment is the first date by which each and all of the four requirements
set out in paragraph (1) of Mr Densham’s submissions (supra), have been
fulfilled, ie in this case August 26 1976.
(2) Yes–August 26 1976 was the date on which the
final requirement was fulfilled, which made the appointment effective.
(3) Yes.
(4) No. Unless possibly there had been waiver or
consent.
