Mw High Tech Projects UK Ltd v Haase Environmental Consulting GmbH

Declaratory relief may be granted where there is a live dispute arising from specific existing facts and the declaration will have practical utility, including in the context of construction adjudication. The court should, however, grant relief sparingly and avoid declarations that are hypothetical or more detailed than the facts permit.

Under a design consultancy appointment, an overriding obligation to exercise reasonable skill and care may qualify specific obligations, but does not extinguish them. If a consultant can comply with specified contractual documents through a non-negligent design, it must do so. A design change departing from those documents may therefore constitute a prima facie breach, subject to issues such as consent, approval, waiver or acquiescence.

MW appointed HEC to provide process engineering design services for a waste treatment plant. The appointment required HEC both to exercise reasonable skill and care and to design in accordance with the EPC Output Specification and EPC Delivery Plan.

Following an adjudication concerning upgraded agitator motors, MW sought declarations as to the proper construction of the appointment. The adjudicator had concluded that a non-negligent developed design could not breach the appointment merely because it exceeded the basic design or increased MW’s costs. HEC disputed the utility of declaratory relief and maintained that the declarations were hypothetical.

The central issues were whether the court should grant declarations and how the reasonable skill and care obligation interacted with the specific design obligations and the contractual procedures for design development and changes.

1. Declaratory relief. The court granted relief in principle. A declaration should be granted sparingly and not where it would be merely hypothetical. The relevant considerations were whether there was a dispute, whether it arose from specific existing facts, whether it remained live, and whether determination would have practical consequences. Those conditions were satisfied because the dispute arose from an adjudication and identified present and future claims. The declarations would assist the parties in resolving subsequent disputes.
2. Reasonable skill and care. HEC’s overriding obligation was to design with reasonable skill and care under clause 5.9.1. That obligation qualified the other contractual requirements. If compliance with a part of the EPC Output Specification or EPC Delivery Plan would make the design negligent, HEC would not be required to comply with that part.
3. Specific contractual requirements. The qualification did not make the specific obligations irrelevant. Where HEC could produce a non-negligent design complying with the EPC Output Specification and EPC Delivery Plan, it was contractually obliged to take reasonable skill and care to do so. The adjudicator had therefore erred in treating a non-negligent design as incapable of breaching the specific requirements.
4. Design development and changes. A developed or changed design still had to comply with the specified documents. A departure that caused the design to cease complying with them would prima facie be a breach. Clause 13.7 referred to the Basic Design Proposal existing when the appointment was made and prohibited knowingly increasing procurement, installation and commissioning costs by changing that design without the contractor’s prior consent.
5. Factual qualifications and scope. Consent or approval, waiver, estoppel and acquiescence could affect liability, but would depend on the facts of each item. The court therefore declined to formulate detailed declarations without specific allegations of breach and invited the parties to agree their precise form.