Mace Construct Limited v Baltic Investment Holdings Limited

Contractual interpretation is a unitary exercise directed to the agreement as a whole. The court should, where possible, give effect to every contractual provision, including bespoke provisions which qualify or explain standard-form terms. A derogations schedule may limit a contractor’s design responsibility notwithstanding broad standard-form wording, particularly where the contract establishes a process ending in formal instruction.

Declarations should not paraphrase detailed contractual provisions governing fact-sensitive planning delay issues. Under paragraph 20 of the Scheme for Construction Contracts (England and Wales) Regulations 1998, an adjudicator may open up, revise and review an extension-of-time decision unless it is contractually final. The review remains the prospective assessment required by the contract.

These Part 8 proceedings concerned the construction of an amended JCT Design and Build Contract 2016 for refurbishment works at the Baltic Exchange Building. Mace sought declarations concerning incorporation of tender documents, the extent of its design responsibility for derogation items, responsibility for planning-related delay, and the power of an adjudicator or court to revise an earlier extension-of-time decision.

The Employer’s Agent had granted Mace seven weeks and five days’ extensions of time. An adjudicator subsequently treated that decision as non-binding and reduced the extension to zero. The court was asked to determine the contractual and adjudication issues without resolving the parties’ wider factual disputes.

1. Declarations 1 and 2. The Tender Clarifications and Schedule of Derogations were incorporated into the Contract. Declarations to that effect were granted.
2. Contractual interpretation and design responsibility. The court adopted the agreed principles of interpretation, including the whole-contract approach and the presumption that operative provisions have an effect: Wood v Capita Insurance Services Ltd [2017] UKSC 24, Dwr Cymru Cyfyngedig v Corus UK Ltd [2007] EWCA Civ 285 and PBS Energo AS v Bester Generacion UK Ltd [2020] EWHC 223 (TCC). Bespoke provisions were to be given effect alongside the amended JCT terms.
3. The Schedule of Derogations was intended to limit Mace’s design obligations for listed items. Read with the Derogations Programme, it established a process of design development, approval and formal instruction. Mace assumed design responsibility for those items only when the necessary process had concluded and the relevant instruction had been received. Declarations 3 to 5 were therefore appropriate in substance, subject to reconsideration of the reference to consents in declaration 3.
4. Planning delay. Declaration 6 was refused. Clauses 2.1.3 and 2.26.13 contained detailed provisions allocating responsibility for planning permissions, approvals and delay. Their application was fact-sensitive, and a declaration paraphrasing them would either merely recite the contract or enter complex factual territory. The Schedule of Derogations’ exclusion of planning approval might assist in particular factual circumstances, but could not be construed in isolation.
5. Extension of time. Declaration 7 was refused. Paragraph 20 of the Scheme for Construction Contracts (England and Wales) Regulations 1998 empowered the adjudicator to open up, revise and review the Employer’s Agent’s extension-of-time decision. In performing that function, the adjudicator had to stand in the shoes of the Employer or Agent and apply the prospective assessment required by clause 2.25.1, considering the position at the time of the notice and particulars under clause 2.24. Later events could not be used to convert the exercise into a purely retrospective assessment. The difficulty of reconstructing the earlier perspective concerned evidence and procedure, not jurisdiction or principle.
6. The court would grant declarations 1, 2, 4 and 5, refuse declarations 6 and 7, and invite counsel to agree the wording of declaration 3 and consequential matters, failing which a short further hearing would be held.

Not stated in the judgment.