Joseph v Deloitte NSE LLP (Rev 1)

A contractual right to require a special partners’ meeting was subject to a strict seven-day deadline running from the date of the Board meeting, not from communication of the Board’s decision. The possibility that the partner might not yet know the outcome, or that the deadline might operate harshly, did not alter the express bargain. A term extending time until communication could not be implied because it would rewrite and contradict the express provision. Fairness and commercial inconvenience were insufficient. Promissory estoppel also failed where an email promised only that the decision would be communicated by a specified date and said nothing about when the contractual period ran.

David Joseph, an equity partner of Deloitte NSE LLP, received a notice of retirement under clause 16.2 of the LLP Agreement. After the Board meeting at which his request for reconsideration was considered, he sought a special meeting of all partners, but did so one day outside the seven-day period calculated from the meeting date.

Whipple J dismissed his claim for specific performance in the High Court: [2019] EWHC 3354 (QB). On appeal, Mr Joseph sought damages, arguing that the agreement contained an implied term postponing time until communication of the Board’s decision, or that Deloitte was estopped by an email promising communication by 9 October 2019. The central issues concerned construction, implication of terms and promissory estoppel.

Appeal dismissed. Arnold LJ delivered the leading judgment, with Nugee LJ and Lewison LJ agreeing. Mr Joseph’s stage 3 request was one day late.

1. Construction. Clause 16.2 established a three-stage procedure: the Board’s retirement decision, reconsideration by the Board, and a right to require a special partners’ meeting. Under clause 16.2(b), the seven-day period ran from the date of the Board meeting. It was a strict deadline and did not run from communication of the Board’s decision. The expression still aggrieved included a continuing grievance where withdrawal had not been communicated. A withdrawal became effective when communicated. The potentially odd or harsh consequences did not justify a different construction.
2. Implied term. The applicable principles were those stated in Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 742: an implied term must be reasonable and equitable, necessary for business efficacy or obvious, capable of clear expression and consistent with the express contract. Fairness alone was insufficient. The proposed term conflicted with clause 16.2(b) and would replace its express deadline with a different rule. It therefore could not be implied.
3. Estoppel. Promissory estoppel required a legal relationship, a sufficiently clear representation that strict rights would not be enforced, an intention of reliance and detrimental alteration of position making it inequitable to resile. The court assumed the required clarity threshold identified by Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. The email promised only that the Board’s decision would be communicated by 9 October. It contained no representation about the contractual deadline. Estoppel therefore failed.
4. Nugee LJ and Lewison LJ emphasised that the court’s role was to ascertain, not improve, the parties’ contract. Despite sympathy for Mr Joseph, Deloitte had acted within its strict legal rights.

• Court of Appeal (Civil Division): Appeal dismissed on the issues of implied terms and estoppel.
• High Court, Queen’s Bench Division: Whipple J dismissed Mr Joseph’s claim for specific performance after an expedited trial: [2019] EWHC 3354 (QB).