Declaration held to be inappropriate in ongoing adjudication

In WW Gear Construction Ltd v McGee Group Ltd [2012] EWHC 1509 (TCC), [2012] All ER (D) 16 (Jun) Mr Justice Edwards-Stuart held that, although the court did have jurisdiction to grant a declaration in the context of an ongoing adjudication, it should exercise that jurisdiction very sparingly and only intervene in a rare case. The present case was held not to be such a rare case. The factor which weighed most heavily with Edwards-Stuart J was that intervention by the court risked causing injustice in the context of the adjudication, both because it might distract the respondent from giving full attention to the adjudication and it could seriously interfere with the adjudicator’s ability to conduct the referral properly. In the latter context, an important factor was that the adjudicator would have had just over one working day in which to consider the judgment of Edwards-Stuart J. This was held to be an unacceptable imposition on the adjudicator and one that could result in unfairness, misunderstandings or mistakes and so it was held not to be appropriate to grant the declaration sought.

The facts

The parties entered into a contract (referred to as ‘the Trade Contract’) under which the defendant agreed to carry out the excavation and associated groundworks for a development in London. The contract was on an amended form of the JCT Trade Contract. Unfortunately, the works did not proceed according to plan and one consequence of this was a number of adjudications between the parties. The adjudication which featured in the present litigation was the fourth one between the parties and the decision of the adjudicator was due two days after the issue by Edwards-Stuart J of his draft judgment in the present proceedings. In that adjudication the defendant claimed some £2.5m, much of which was based on variations to the works. The Trade Contract made rather elaborate provision for the valuation of variations in clauses 4.4 to 4.6 and it was these provisions which were the subject of the adjudication, and of the declaration in the present litigation. However, we shall not concern ourselves with the detail of the interpretation of these clauses. Rather, our focus will be upon the relationship between the adjudication proceedings and the present litigation.