Joseph v Deloitte NSE LLP

A contractual time limit expressed to run from the date of a board meeting runs from that date, rather than from later communication of the board’s decision, where the wording is clear. The court will not imply a term which is unnecessary, conflicts with the express contract, or is insufficiently obvious. A partner may exercise a contractual right to seek a further review before learning whether the earlier decision has been withdrawn, where the contractual conditions remain satisfied. Estoppel by representation or promissory estoppel requires a clear and unequivocal representation. Estoppel by convention requires a shared assumption manifested by conduct. Silence, delay, or a failure to assert a time bar immediately does not establish either form of estoppel.

David Joseph, an equity partner of Deloitte NSE LLP, received a Notice of Retirement under the parties’ LLP agreement. He presented his case to Deloitte’s Board. The Board met on 2 October 2019 but communicated its decision to uphold the notice only on 11 October 2019.

Mr Joseph requested a special partners’ meeting by emails dated 10 and 12 October 2019. Deloitte contended that the request was out of time because the LLP agreement allowed seven days from the date of the Board meeting. Mr Joseph relied on contractual construction, an implied term, estoppel by representation or promissory estoppel, and estoppel by convention. The central issue was whether Deloitte was obliged to convene the meeting.

1. Contractual construction. The claim was dismissed. Clause 16.2(b) of the LLP agreement gave a partner seven days from the date of the relevant Board meeting to notify the chairman that a special partners’ meeting was required. The period did not begin when the Board’s decision was communicated. The purpose of the partners’ meeting was to review the original decision to issue the Notice of Retirement, not the Board’s later review decision. The Notice remained in force unless and until withdrawn, and the partner could remain aggrieved without knowing the outcome of the review.
2. This construction protected the partner from any attempt by the Board to defeat the further review right by delaying its decision or communication. It also accorded with the natural meaning of a carefully drafted agreement entered into by sophisticated parties. The request made on 10 October 2019, following the Board meeting on 2 October 2019, was therefore out of time.
3. Implied term. No term should be implied postponing the commencement of the seven-day period until communication of the Board’s decision. Such a term was unnecessary for business efficacy, conflicted with the express words of clause 16.2(b), and was not obvious. The contrast with clause 16.2(a), which expressly referred to receipt of notice, reinforced that conclusion.
4. Representation and promissory estoppel. Deloitte’s email of 18 September 2019 represented that the Board’s decision would be communicated by 9 October. It did not represent that time for seeking a partners’ meeting would run from communication of that decision. No clear and unequivocal representation was made. Further, any reliance on that understanding would have been unreasonable because the contractual wording did not support it and Mr Joseph was legally represented.
5. Estoppel by convention. This required a common assumption, manifested by words, conduct or silence, with conduct passing across the line to show the joint assumption. Deloitte’s evidence established that it understood time to run from the date of the Board meeting. Its decision initially to explore a quiet resolution, without asserting the time bar, did not create a common assumption or prevent Deloitte from relying on the contractual time limit.

The claim was dismissed.