WW Gear Construction Ltd v McGee Group Ltd

The court has jurisdiction to grant a declaration concerning an ongoing adjudication, but should exercise that jurisdiction only rarely. The court must consider whether intervention is appropriate, including the effect on the adjudication timetable and the risk of unfairness or misunderstanding.

Where contractual provisions for valuing variations and recovering loss and expense overlap, a contractor prevented from recovering under the loss-and-expense provision may recover under the valuation provision if the loss falls within it. The contractual provisions prevent double recovery, but a failure to satisfy a condition precedent under one provision does not automatically bar recovery under the other.

The claimant employer sought declarations concerning the proper construction of clauses 4.6 and 4.21 of an amended JCT Trade Contract. The contractor had commenced a fourth adjudication, including substantial claims for variations and associated loss and expense. The adjudication was due to conclude shortly after the hearing.

The central issues were whether the court should intervene during the adjudication and whether the proviso to clause 4.6 prevented claims for loss and expense relating to variations from being pursued under clause 4.6 where the contractor had not complied with clause 4.21.1.

1. Jurisdiction and discretion. The court had jurisdiction under CPR 40.20 to grant a binding declaration. The TCC Guide indicated circumstances in which intervention might commonly be considered, but was not a rule of court and its examples were not exhaustive. The jurisdiction was wide, although intervention in an ongoing adjudication should be rare.
2. Appropriateness of intervention. The court declined to grant a declaration. The adjudication was well advanced and the adjudicator had only a very short period in which to consider the judgment. Requiring the adjudicator to take it into account risked unfairness, misunderstanding or mistake, particularly because the parties might have no opportunity to make further submissions. A declaration would therefore not serve a sufficiently useful purpose in the circumstances.
3. Interaction between clauses 4.6 and 4.21. The two provisions could overlap. Loss and expense caused by a variation materially affecting the regular progress of the works might be recoverable under clause 4.21, while time-related charges of the type referred to in the SMM might also fall within clause 4.6. Both provisions prevented double recovery.
4. The proviso to clause 4.6 barred recovery only where the contractor would be reimbursed under another contractual provision. If the contractor could not make a claim under clause 4.21, for whatever reason, that did not by itself prevent recovery under clause 4.6, provided the loss fell within clause 4.6. Claims under clause 4.21 remained subject to the notice requirements previously held to be a condition precedent in the earlier proceedings, [2010] EWHC 1460 (TCC).
5. The declaration sought did not reflect the proper construction of clause 4.6. The claim was dismissed. Costs and any consequential relief were left for further argument.

The judgment records earlier adjudication proceedings and an earlier declaration by Akenhead J in [2010] EWHC 1460 (TCC), but states no appellate history.