ISG Construction Ltd v English Architectural Glazing Ltd

Part 8 declaratory relief is discretionary. In adjudication-related proceedings, the court should grant declarations only where the issue can fairly be determined and the declaration will serve a useful practical purpose. This is especially important where a proposed declaration concerns a possible future adjudication.

A contractual estimate stated to be binding and conclusive pending final determination may be conclusive as to the estimated amount, but not necessarily as to entitlement to an extension of time, the claimant’s good faith, or relevant causation and reasonableness questions. The scope of an adjudicator’s decision depends primarily on what was referred and decided. The court should avoid an excessively fine dissection of the adjudicator’s reasons.

The claimant, a main contractor, commenced Part 8 proceedings against its cladding subcontractor after an adjudicator determined that a fair and reasonable completion date was 22 October 2018, that the claimant had not proved responsibility for 20 weeks of main-contract delay, and that its bona fide estimate of loss could not justify a deduction from an interim payment.

The claimant sought declarations concerning the subcontractor’s notices and extension of time, the conclusive effect of the estimate under clause 9(8), and the scope and future effect of the adjudicator’s decision. The central questions were whether the issues were suitable for Part 8 determination and whether declarations would provide useful and fair guidance.

1. Part 8 discretion. The power to grant declarations under Senior Courts Act, section 19 and CPR 40.20 is discretionary. Relevant considerations include justice to each party, whether the declaration would serve a useful purpose, and any special reason for or against relief. In adjudication cases, the court must consider whether the issue can be determined without resolving disputed facts and whether the proposed declaration concerns an actual dispute rather than a possible future dispute.
2. Notice and extension of time. The claimant could not establish that it was unarguable that no effective notices had been given, or that the subcontractor had received its full entitlement to an extension of time. Issues concerning the delayed start, winter working, the April notice, prevention, and any agreement to review entitlement involved factual or mixed questions unsuitable for isolated Part 8 determination.
3. Bona fide estimate. Clause 9(8) made the estimate binding and conclusive pending final determination as to the amount of loss or damage. Read with paragraph 20(a) of the Scheme for Construction Contracts, the estimate could not be opened up or reviewed on its amount before final determination. It was not conclusive as to entitlement to an extension of time, whether the estimate was made in good faith, or whether the claimant had acted reasonably in determining responsibility for relevant delay.
4. Scope of the adjudicator’s decision. The adjudicator had jurisdiction to determine the extension-of-time issue and the estimate issue in their own right, not merely in relation to interim valuation 35. The decision that 22 October 2018 was a fair and reasonable completion date was to be treated as a decision on the extension-of-time issue. The court should focus on what was referred and what was decided, without undertaking an excessively fine analysis of the adjudicator’s reasons.
5. Declarations refused. The adjudicator’s decision did not finally determine the claimant’s ultimate entitlement to delay-related damages, but its effect on any future estimate or adjudication was not sufficiently clear to justify the wide declarations sought. No declaration was made for either party.

First instance Part 8 proceedings in the High Court (Technology and Construction Court). The court declined to grant any declaration sought by either party.