Agricultural holdings — Appointment of arbitrator — Whether appointment made when form of appointment received and accepted by arbitrator or when arbitrator communicated acceptance to parties
In February
1992 the respondent landlord gave the appellant notice to quit White Farm,
South Leverton & Cottam, Nottinghamshire. The notice contained a statement
for the purposes of Case E of Schedule 3 to the Agricultural Holdings Act 1986,
which asserted that the tenant had parted with possession of all or part of the
holding without the landlord’s consent. On March 12 1992 the tenant served a
counternotice challenging the reasons relied on in the notice to quit and
requiring the questions under section 26(2) of the Act to be arbitrated. On
June 10 1992 the parties, through their solicitors, signed a document appointing
C as sole arbitrator; C accepted his appointment by letter dated June 11,
copies of which reached the tenant on June 12 and the landlord on June 15. The
tenant appealed against the decision of the assistant recorder, who held that
the arbitrator was purportedly appointed on June 15 and that the appointment
was invalid because the three-month time-limit from the date of the tenant’s
counternotice prescribed by article 10A of the Agricultural Holdings
(Arbitration on Notices) Order 1987 had expired.
10A must depend primarily on the facts in each case. In the present case the
parties agreed irrevocably to appoint C; as soon as he was approached he
accepted the appointment and, when he accepted, his appointment was complete.
Accordingly, his appointment was complete on June 11 1992 and with the
three-month time-limit.
present case without his communication of that acceptance to the parties was a
valid appointment for the purposes of article 10A of Agricultural Holdings
(Arbitration on Notices) Order 1987.
The following
cases are referred to in this report.
Hannaford
v Smallacombe [1994] 1 EGLR 9; [1994] 15 EG
155, CA
Sclater v Horton [1954] 2 QB 1; [1954] 2 WLR 566; [1954] 1 All ER
712, CA
Tanham v Nicholson (1872) LR 5 HL 561
Tew v Harris (1847) 11 QB 7
Tradax
Export SA v Volkswagenwerk AG [1970] 1 QB
537; [1970] 2 WLR 339
University
College, Oxford (Master & Fellows) v Durdy [1982]
Ch 413; [1982] 3 WLR 94; [1982] 1 All ER 1108, CA
This was an
appeal by the tenant, Charles David Robinson, from a decision of Mr Assistant
Recorder Matthews on November 2 1992 on a case stated to Gainsborough County
Court by the arbitrator, Roger H Chatterton, arising out of a notice to quit
served by the respondent landlord, John Moody.
Joanne Moss
(instructed by Tallents Godfrey & Co, of Newark) appeared for the
appellant; Keith Rowley (instructed by Roythorne & Co, of Spalding)
represented the respondent.
Giving the
first judgment, KENNEDY LJ said: This is an appeal from a decision of Mr
Assistant Recorder Matthews, sitting in Gainsborough County Court, who on
November 2 1992 gave his response to a special case which had been stated for
the opinion of the court under the Agricultural Holdings Act 1986. The
important question which had to be decided by the assistant recorder was
whether after a dispute had arisen between a landlord and a tenant, and after
they had both agreed that a Mr Roger Chatterton [FRICS FAAV], a land agent and
surveyor, should act as sole arbitrator, he was in fact validly appointed to
act, having regard to the fact that the landlord’s solicitors did not receive
written notification that he had agreed to act within the period prescribed by
article 10A of the Agricultural Holdings (Arbitration on Notices) Order 1987 SI
1987 No 710.
The assistant
recorder found that the arbitrator’s appointment was invalid and the tenant has
thus appealed to this court.
For present
purposes relatively little need be said about the relationship between the
landlord, John Moody, and the tenant, Charles David Robinson. Suffice to say
that White Farm, South Leverton & Cottam, Nottinghamshire, was let to the
tenant on a yearly tenancy which commenced on April 6 1967 at a rent of £1,507
pa. In February 1992 the landlord gave the tenant notice to quit. The notice
contained a statement for the purposes of Case E of Schedule 3 to the
Agricultural Holdings Act 1986, which asserted that notice to quit was given
because the tenant had parted with possession of all or part of the holding
without the landlord’s consent. The tenant responded with a counternotice dated
March 11 1992 which was served on March 12 1992. It showed that he challenged
the reason given in the notice to quit and required the questions arising under
section 26(2) of and Schedule 3 to the 1986 Act to be determined by arbitration
under the Act.
By virtue of
article 10 of the Agricultural Holdings (Arbitration on Notices) Order 1987 the
counternotice ceased to be effective three months after the date of service:
Unless before
the expiry of those three months —
(a) an arbitrator has been appointed by agreement
between the parties,
On June 10
1992 the landlord and the tenant through their solicitors signed a document. It
reads in part as follows:
We, ROYTHORNE
& CO of 10 Pinchbeck Road, Spalding, Lincolnshire, Solicitors for JOHN
MOODY the Landlord of the above holding and TALLENTS GODFREY & CO of 3
Middlegate Newark Nottinghamshire Solicitors for CHARLES DAVID ROBINSON the
Tenant of the above holding appoint ROGER H CHATTERTON of TURNER FLETCHER &
ESSEX of The Cattle Market Meadow Lane Nottingham as sole arbitrator under the
Agricultural Holdings Act 1986 for the purpose and the settling and determining
in accordance with the
Landlord and Tenant of the above holding as set out in the Schedule below AS
WITNESS our hands the tenth day of June one thousand nine hundred and
ninety-two
That document
was forwarded to Mr Chatterton on June 10 1992 under the cover of a letter from
the tenant’s solicitors, which read as follows:
I enclose a
consent to you being appointed as arbitrator which I hope you will accept.
Roythorne’s
reference is AJP (Mr Plummer)/CAW (MOO 86-1)
On June 11 Mr
Chatterton replied to the solicitors for the landlord and to the solicitors for
the tenant in writing in identical terms indicating his acceptance. Part of his
letter reads:
I acknowledge
receipt and accept the appointment as Arbitrator in the above case, and my
appointment is dated 10 June 1992.
A little later
in the letter:
My costs will
be based on an hourly charge of £70 per hour including time travelling, plus
the costs of travelling and disbursements for the hire of rooms etc. I would
point out that as I have been appointed charges have already been incurred, and
if the matter is settled by agreement before the Hearing, as part of that
settlement responsibility for my charges to that date should be covered.
Clearly, as it
seems to me, there was no doubt in Mr Chatterton’s mind as to the date of
appointment. He viewed himself as being appointed, as the deed of appointment
showed, on June 10 1992, obviously, on the basis that the appointment would be
effective if and when he was aware of it and acted in pursuance of it, and
ineffective if he chose to refuse it. The tenant’s solicitors received their
letter from Mr Chatterton on June 12 1992, but the letter to the landlord’s
solicitors did not arrive until June 15. The landlord then contended in his
statement of case that the arbitrator had not been validly appointed within the
three-month period prescribed by article 10A. So Mr Chatterton submitted three
questions of law for the opinion of the court, namely one:
For the
purposes of Article 10A of the order what was the latest date by which the
landlord and the tenant could validly appoint an arbitrator by agreement?
The answer
which the learned assistant recorder gave to that question, namely midnight on
June 12 1992, is not an issue in this appeal.
Question 2:
Was the date
of appointment of the arbitrator for the purposes of Article 10 of the order
either (1) the date on which the arbitrator received and accepted the joint
appointment dated 10th June 1992, that is to say 11 June 1992, or (2) the date
on which the notice of arbitrator’s acceptance was received by the solicitors
for both the landlord and the tenant, that is to say 15th June 1992, or (3)
some other date?
The learned
assistant recorder held that the date of the appointment of the arbitrator for
the purposes of Article 10 of the order was June 15 1992. The third question
posed by Mr Chatterton was:
Whether,
having regard to answers to questions 1 and 2 above, the arbitrator was validly
appointed under Article 10A of the order.
To that
question the assistant recorder held, having regard to questions 1 and 2, that
the arbitrator was invalidly appointed under article 10 of the order.
Miss Joanne
Moss, on behalf of the tenant, submits that Mr Chatterton’s perception of the
position, that is to say that he was appointed on June 10 subject to his
willingness to act, was factually correct and also legally correct; and that he
expressed his willingness by writing on June 11 and posting letters in the way
that I have described.
If the matter
has to be viewed in a contractual setting she submits that the deed of
appointment was an invitation which he accepted when he posted those replies
and in accordance with normal principles which apply in the law of contract he
was then validly appointed. He was a person appointed by agreement between the
parties for the purpose of para 1(1) of Schedule 11 to the 1986 Act, there being
in that paragraph no statutory requirement that notice of his acceptance should
be received by either party let alone by both.
Miss Moss
recognizes that passages in well-known textbooks that deal with this type of
activity suggest otherwise. Both she and Mr Rowley have drawn our attention to
passages from Muir Watt on Agricultural Holdings, Scammell and Densham’s Law
of Agricultural Holdings and Halsbury’s Laws of England (4th ed) vol
1(2). Dealing with this topic by way of example, because they seem on the whole
to reproduce each other, I need cite only the passage which comes from Scammell.
It reads at p367 of 7th ed:
The
appointment if made by agreement is not effective from the date the appointment
itself bears. To perfect the appointment by agreement all the following steps
must have been taken:
(i) the appointment must have been made in
writing,
(ii) the arbitrator must have accepted the
appointment (but this may be done before the formal act of appointment);
(iii) the arbitrator must have received notice of
the appointment; and
(iv) the parties themselves must have received
notice also.
It is, of
course, Mr Keith Rowley’s submission that that accurately sets out the law. The
general principle which applies in contract, the postal rule, is not seriously
in dispute, though Mr Rowley submits to us that we should have regard to the
fact that it was formulated in the 19th century and should not be liberally
applied at the end of the 20th. It is said by Mr Rowley that, as the learned
assistant recorder held, that rule does not operate in relation to the
appointment of arbitrators and in particular in relation to the appointment of
an agreed arbitrator under the 1986 Act.
We have been
invited to look at a number of authorities, the first of which was Tew v
Harris (1847) 11 QB 7. We have not had to consider that case directly,
but it was referred to in later cases and to some extent relied upon by Mr
Rowley. That was a case of a somewhat different kind because each side in that
case was appointing its own arbitrator and the argument arose because the
appointment by one side of its arbitrator was not made known to the other.
Understandably in that situation the court held that in order to give
commercial sense to the arrangement it was necessary that that information be
passed by one side to the other. More significantly from Mr Rowley’s point of
view, there is the decision of the Court of Appeal in Tradax Export SA v
Volkswagenwerk AG [1970] 1 QB 537. Again, however, that was a case where
each side appointed its own arbitrator, so the issue was not the issue with
which we are concerned. The issue in that particular case was whether the
appointment of an arbitrator took effect at a time when the arbitrator himself
was unaware of the appointment. The court again understandably, in our view,
took the view that it did not.
However, Mr
Rowley invites our attention to passages from both Lord Denning MR and Salmon
LJ, which dealt with the wider issue. Both of those members of the court said
that the appointment of an arbitrator did require notification to the parties
to the arbitration. By way of support for that proposition they referred to the
authority to which I have already made reference, namely Tew v Harris.
Lord Edmund Davies in that case was the third member of the court. At p574 he
referred particularly to a passage from Francis Russell on the Law of
Arbitration, 17th ed (1963) at p160 which he cited and approved. That
passage reads:
Acceptance of
the office by the arbitrator appears to be necessary to perfect his
appointment. It has been so decided in the case of an umpire, and it would seem
to be only reasonable that an appointment should not be considered effective
until the person appointed has agreed either expressly or tacitly to exercise
the functions of the office.
It is
noticeable that that particular citation does not suggest that the acceptance
by the arbitrator has to be communicated to both sides and will take effect
only when it is known to the last to learn of it.
The next
authority to which our attention was invited was University College, Oxford
(Master & Fellows) v Durdy [1982] Ch
considerable assistance to us, because it is a decision made under the relevant
legislation. But the decision was of a somewhat different kind because it was
concerned with the alternative procedure which arises when the appointment of arbitrator
is not made by consent. In that case, the appointment fell to be made by the
minister and his appointment was held to be complete when he executed the
relevant document, not when he notified the parties.
The learned
assistant recorder in the present case distinguished that case because, as he
pointed out, the minister was the appointing body. But in the course of his
judgment Griffiths LJ referred to the authorities to which I have just referred
and in particular to Tradax Export SA v Volkswagenwerk AG [1970]
1 QB 537 and pointed out, as I have already indicated, that two members of the
Court of Appeal in that case were relying on the earlier case of Tew v Harris.
He then said at p423A:
. . . for
myself, I should have had considerable hesitation in using that decision [that
is to say the Tradax decision] as authority for the general proposition
that in all commercial arbitrations the appointment of an arbitrator was not
complete until the parties to the arbitration had been told of his appointment.
Whereas I can readily see the arbitrator cannot be said to be appointed until
he has been asked to act and agreed to do so, which is the point that had to be
decided in Tradax Export SA v Volkswagenwerk AG [1970] 1 QB 537,
it is not clear to me why in all cases it necessarily follows that his
appointment is not complete until both parties to the arbitration have been
notified of the appointment. Much would depend, I should have thought, upon the
particular wording of the arbitration agreement.
Since the
learned assistant recorder gave his decision in the present case, the case of Hannaford
v Smallacombe* has been before the Court of Appeal and judgment in
that case was given December 14 1993 by Henry LJ. There the court was
considering the legislation with which we are concerned, and the date of the
appointment of an agreed arbitrator was in issue because the time for
submission of the statements of case runs from appointment. The formal document
signed by both parties offering appointment as arbitrator reached the
arbitrator in that case on September 14 1990, but he did not acknowledge until
September 18 when, like Mr Chatterton, he wrote to both sides. But a month
earlier he had indicated by telephone that he was willing to act and both
solicitors knew that. He had also written on August 31 in these terms:
I confirm that
I would be willing to act as arbitrator in this case, subject to receiving a
properly completed form signed by both parties within the appropriate time
limit.
My charges
will be based upon a rate of £65 per hour exclusive of VAT, travelling costs
and disbursements, and I reserve the right to appoint a legal assessor if this
is necessary . . .
Upon receipt
of a properly completed form of appointment, I will write to the parties
further specifying arrangements for the conduct of the case.
*Editor’s
note: Reported at [1994] 1 EGLR 9.
The issue
which therefore had to be considered was when in fact he was appointed, and in
particular, was he appointed on September 14 when the notice for which he had
asked reached him, or on September 18 when he acknowledged it? Henry LJ in giving judgment cited a passage
from Muir Watt which is in these terms [[1994] 1 EGLR 9 at p11]:
It would
seem, therefore, that the date of appointment must be the date when the
following requirements have been fulfilled: (a) the agreed appointment has been
made in writing; (b) the proposed arbitrator has been notified of the
appointment and has consented to act (he might have signified consent before
the appointment); and (c) the arbitrator’s acceptance has been notified to the
parties (unless they had advance notice of acceptance before the formal
appointment). It is desirable that the arbitrator should accept his appointment
in writing, although this is not prescribed by the Act, and the appointment
will be effective if he does in fact proceed under it without the formality of
writing.
Henry LJ then
continued:
In my
judgment, that passage rightly identifies the necessity for the parties
knowledge that the arbitrator has consented to act, unless they had advance
notice of his acceptance before the formal appointment.
Of course, Mr
Rowley relies particularly on that aspect. Henry LJ continued a little later on
[at p12A]:
. . . the
parties had notice from the arbitrator’s letter of August 31 at the time at
which he would consider himself bound. They had bound themselves by signing the
notice of appointment and sending it to him — his receipt of that document
completed the tripartite agreement.
It is true
that that conclusion produced the untidy result that the parties to the
arbitration will (unless the document is delivered by fax) be unaware of the
precise time when their 35 days begin to run against them. However, they could
avoid this untidiness by making the appointment only complete on the
arbitrator’s faxed acceptance.
In my
judgment, the important point which has to be noted for present purposes is
that the issue in Hannaford v Smallacombe was whether on the
facts the appointment was complete on September 14. The court held that it was
because the arbitrator had already agreed to act. The court did not therefore
have to consider whether the parties might put the proposition that he should
act as an arbitrator in such a way that his appointment would become effective
when he decided to act and responded to the proposition by sending letters to
that effect which, as I see it, is the case with which we are concerned.
Miss Moss’
submission is that in the circumstances with which we are concerned there is no
reason to stretch the wording of article 10A in order to introduce a
qualification which is not there upon the wording of the article itself, and
that what this court should find is that the appointment of the arbitrator was
complete at the time when, having regard to the decision of the Court of Appeal
in Tradax, the arbitrator not only was appointed by the parties but also
received notice of his appointment and in fact accepted it.
As an
alternative submission she submits that in the particular circumstances of this
case it is possible to approach the matter by way of agency. In fact what
happened was that the tenant’s solicitors sent the formal deed of appointment
to the arbitrator on behalf of both parties. Mr Chatterton could therefore have
replied only to the tenant’s solicitors; in fact, he chose to send the reply in
identical terms also to the landlord’s solicitors. That, she submits, did not
detract from the fact that the reply to the tenant’s solicitors was itself a
sufficient acceptance of the proposition that had been put to him and it
completed the appointment for the purposes of this case. She invited our
attention to the very old decision of the House of Lords in Tanham v Nicholson
(1872) LR 5 HL 561. In that case an agent was held to have received notice
to quit. In my view, it is unnecessary to have regard to the older authorities
for the purpose of supporting that general proposition. The learned assistant
recorder held that in the circumstances of this case there was no need to view
the matter in terms of agency. He adopted that approach, at any rate to a large
extent as I see it, because he came to the further conclusion that the 1986 Act
envisaged each party receiving from the arbitrator actual knowledge of his appointment.
Miss Moss put
her case in a further way, which seems to me to be only a reformulation of her
two earlier arguments. She submits that the interests of the litigating parties
were identical for the purpose of appointing the arbitrator; their interests
were put to the arbitrator, as it turned out by one of them; as their interests
were identical, it was possible for the arbitrator to indicate his acceptance
to either of them. In fact he chose to indicate it to the solicitors who had
approached him within the relevant time-scale. Accordingly, if the matter is
put in that way it can again be said that appointment was complete within the
statutory time-scale.
In my
judgment, what amounts to an appointment for the purposes of article 10A must
depend primarily on the facts of each case. The parties to a dispute such as
this could agree, for example, that the appointment would take effect from the
moment that both sides knew of the arbitrator’s willingness to act. But there
was no such agreement in the present case. What there was was an agreement on
the identity
subject only to his willingness to act. It was also agreed, it seems to me as a
matter of obvious inference, that the tenant’s solicitors should act on behalf
of both in approaching the arbitrator and they did so.
Mr Rowley
invites us to find that there was no basis on which we should proceed to the
conclusion that it was further agreed that they should act as a vehicle for
acceptance. That may be. But as soon as the arbitrator was approached he
accepted that appointment and when he accepted it, in my judgment, the
appointment in this case and on the facts of each case was complete. There is
clear evidence of his acceptance to be found in the letters which he wrote and
posted on June 11 1992. As the arbitrator rightly perceived he became entitled
then to charge and at the latest his appointment was complete when he notified
the solicitors, who on behalf of both sides had in fact contacted him. Plainly,
therefore, as I see the situation, his appointment for the purposes of article
10A was complete before midnight on June 12 1992. I see no reason to impose any
gloss on the perfectly straightforward wording of article 10A. What amounts to
an effective appointment depends, as I say, on the facts of this case and on
the facts of this case it seems to me that the second question which was posed
by the arbitrator should be answered that the appointment was on June 11. The
letter having been written and the deed of appointment having been forwarded to
him on the 10th, but it being a necessary ingredient to complete his
appointment that he should in fact accept it, which he did on that date, namely
June 11.
Accordingly I
would answer the third question posed by the arbitrator, that he was validly
appointed within the period of article 10A.
For those
reasons, in my judgment, this appeal should be allowed.
Agreeing, EVANS
LJ said: The issue which arises is whether Mr Chatterton was appointed as
sole arbitrator for the purposes of the Agricultural Holdings Act 1986 on or
before June 12 1992. If the appointment was not made on or before that date
then it was ineffective, having regard to the terms of article 10A of the
Agricultural Holdings (Arbitration on Notices) Order 1987. This is not a case
where a question has arisen as to when the 35-day period for submitting
statements of case which follows the arbitrator’s appointment expires. In that
context certain authorities have drawn a distinction between the date of the
appointment and the commencement of the 35-day period. In that context also the
question of notice of the appointment becomes relevant because it is, on the
face of it, unfair to hold that the period has begun to run against a party before
he is aware of it. Nor is this a case where the appointment was to be made by a
third party, specifically the President of the Royal Institution of Chartered
Surveyors, as provided for in Schedule 11 to the 1986 Act. In such a case the
decision of this court in University College, Oxford v Durdy [1982]
Ch 413 shows that the appointment is effective when it is made on the
assumption that it is not made until the appointee has assented to it.
The earlier
decision in Tradax Export SA v Volkswagenwerk AG [1970] 1 QB 537
was involved with the question whether it was necessary for the appointee to
have known of and assented to the appointment within the period provided in the
relevant contractual arbitration clause. It was a case where the arbitration
clause required each party to appoint its own arbitrator, and in that context
two of their lordships, Denning MR and Salmon LJ, indicated that the essential
requirement of such an appointment was notice given to the other party as well
as obtaining the consent of the arbitrator himself. Edmund Davies LJ spoke
merely, as it was sufficient to do in that particular case, of the knowledge
and assent of the appointee being obtained.
In the present
case the only statutory reference is in article 10A and Schedule 11, para 1(1),
to which I have referred, the relevant words being ‘appointed by agreement
between the parties’. The statute also provides that the appointment, though
not the acceptance, must be in writing. Mr Rowley’s submission is that the
appointment is not complete until it has not merely been accepted by the
arbitrator but also that that acceptance has been communicated to each of the
two appointing parties. He acknowledges that there is no express statutory
requirement to that effect. The request to the arbitrator is necessarily a
joint one. It could only be a joint one because it must be made ‘by agreement
between the parties’. In the present case, it was made by the tenant’s
solicitors in the form of a covering letter which enclosed a formal written
agreement signed by both parties which purported to ‘appoint’ Mr Chatterton as
the arbitrator and which was dated June 10 1992. Mr Chatterton in fact, so far
as the material before us shows, had not been approached or assented to the
appointment by that time. He received the joint request on June 11. He in fact
accepted it on June 11 and on that date wrote letters to both of the parties.
The letter to the tenant’s solicitors was received by them on June 12, but that
to the landlord’s solicitors was not received until June 15. That fortuitous
circumstance led to the landlord taking the point which he has done in these
proceedings. I shall assume without deciding that something more than the
‘arbitrator’s knowledge and assent’ is necessary. I shall also assume without deciding
that the relationship between the parties on the one hand and the arbitrator on
the other hand is governed by what one might call general contractual
principles.
On that basis
the correct analysis, in my judgment, is that this was a joint offer made to
the arbitrator to enter into a tripartite arrangement which would in fact, if
accepted, result in separate contractual relations between the arbitrator and
each of the appointing parties. The phrase ‘joint offer’ reflects what is said
in Mustill & Boyd Commercial Arbitration 2nd ed at p175, where it is
described as a joint written invitation, that is to say by the parties to the
proposed appointee. The phrase ‘tripartite arrangement’ comes from the judgment
of Henry LJ in Hannaford v Smallacombe (December 14 1993). That
joint offer, it seems to me, was accepted in fact by the arbitrator on June 11.
If communication of that acceptance was necessary as a matter of law, which for
the moment I assume to be the case, then, in my judgment, a reply received by
the tenant’s solicitors was sufficient. It was a single offer and a single
acceptance in those circumstances of such an offer, in my judgment, was enough.
But I would go
further and hold that in the present case acceptance even without communication
was enough. The case is a sufficient analogy with Hannaford v Smallacombe.
It was a case where the parties had reached a formal agreement to appoint Mr
Chatterton. That agreement was dated June 10 and impliedly contained the
necessary proviso that it was subject to Mr Chatterton being willing to accept
the appointment. Once that proviso was satisfied I can see no reason why that
should not stand as an agreement between the parties, made effective as to his
appointment by his acceptance of it on June 11, and one can leave open in the
present case whether the appointment might not, in fact, in those circumstances
have been effective as from the previous day June 10.
So far as Miss
Moss’ further submissions regarding agency and joint contractual rights are
concerned, it seems to me sufficient to say compendiously that on the facts of
this case the landlord’s solicitors impliedly authorised the joint offer to be
made, and I would add to be accepted also, in the manner in which it was, that
is to say effective as of June 12. The decision in Tradax concerned with
the nomination by each party of its own arbitrator clearly involves different
considerations altogether and, in my judgment, adds support to the landlord’s
arguments in the present case.
I conclude by
saying that we have had the benefit of the most excellent arguments. I would
pay particular tribute to Mr Rowley’s learned and eloquent submissions in
support of the judgment, but they are submissions which unfortunately, as I
have indicated, I cannot accept.
Also agreeing,
ROCH LJ said: If the respondent’s case is correct then the appellant
will be deprived of the opportunity of having the merits of the dispute which
has arisen between him and his landlord in respect of Whites Farm, South
Leverton & Cottam, of which the
arbitrator’s letter to the landlord’s solicitors, instead of arriving on Friday
June 12 1992 when it should have done, inexplicably failed to arrive until
Monday June 15.
The only
requirements for the appointment of an arbitrator expressly contained in
Schedule 11 to the Agricultural Holdings Act 1986, which are applicable in the
present case are that the appointment must be agreed between the parties and
the appointment must be in writing; those are in para 1(1) and (5) of Schedule
11. The Schedule does not require the arbitrator to accept appointment, still
less does it require any acceptance by the arbitrator that he will act to be in
writing or that such acceptance should be notified to the parties.
Nevertheless, decided authority has added to the procedure of the appointment
of an arbitrator the additional requirement to them in Schedule 11 that the
arbitrator must agree or consent to act. That seems to have been first stated in
Sclater v Horton [1954] 2 QB 1. The Master of the Rolls at p10
proceeded on the basis that an arbitrator appointed by the minister in default
of agreement between the parties under the Agricultural Holdings Act 1948 was
effectively appointed at the moment the arbitrator accepted appointment. No
doubt when the arbitrator is appointed by the President of the Royal
Institution of Chartered Surveyors the parties must receive notice of
appointment, for until that moment they will have no idea who the President has
appointed or when the appointment was made.
This case is
quite different. The parties had agreed that the arbitrator should be Mr
Chatterton as early as the landlord’s solicitor’s letter of May 19 1992. The
formal notice of appointment was prepared by the tenant’s solicitors at the
invitation of the landlord’s solicitors and signed by the solicitors for both
parties. That contained the date of Mr Chatterton’s appointment of June 10. Mr
Chatterton clearly understood his appointment as being June 10 as is shown in
two passages in his letters dated June 11.
In my
judgment, what are required to complete an appointment of an arbitrator by
agreement of the parties are two matters: first, that the person appointed has
accepted to act as arbitrator; and, second, that there is clear evidence of
this acceptance and of the date on which it occurred. Here the letters of June
11 provide clear evidence that Mr Chatterton had accepted his appointment to
act as arbitrator and, indeed, had started to act as arbitrator on June 10.
What is important is that the parties should note the date from which the
appointment will be effective; here the parties were agreed that that should be
June 10. If it is wrong to approach the issue which arises in this appeal as a
question of status and to focus on the effective date of appointment, and if Mr
Chatterton’s appointment is to be determined as a matter of contract, then I
would find that his appointment is effective from June 12. I would have as an
alternative June 12, the date on which the letters would arrive in the normal
course of post, so that both parties are protected from the vagaries of the
post which in fact occurred. This avoids the inelegance of two different dates
from which the 35-day period would start to run.
For those
reasons I would allow this appeal.
Appeal
allowed.
