WW Gear Construction Ltd v McGee Group Ltd [01.06.12]
After an employer and contractor entered into a building contract under JCT Trade Contract (TC/C) 2002 (with Amendment No 1:2003), a dispute arose as to whether the contractor was entitled to additional monies for variations under clause 4.6 of the contract.
The contractor commenced an adjudication to recover his money. Simultaneously, the employer sought a declaration from the Technology and Construction Court that the contractor could not make a claim under the contract. The contractor opposed the declaration, submitting that:
- The court did not have jurisdiction to entertain the application.
- Court intervention would be an unwarranted interference with the adjudication process.
- The distinction between issues of legal interpretation and questions of fact would be blurred by the declaration sought, which would be of limited utility.
Judge found against the employer, holding that the court has an unfettered jurisdiction to grant a declaration, as per Part 40.20 of the Civil Procedure Rules.
However, he went on to hold that, in light of the timing of the adjudicator’s deadline to make his decision, a court declaration in this case might place unacceptable pressure on him, which could lead to unfairness, misunderstandings or mistakes. It was not, therefore, appropriate to make a declaration in this case where the adjudication was ongoing.
This judgment provides useful guidance as to when the Technology and Construction Court will intervene in an ongoing adjudication.
It was acknowledged that, whilst the court has an unfettered discretion under the Civil Procedure Rules, there may be circumstances in which it is not appropriate to exercise that discretion. Reference was made to the cases of Dorchester Hotel  and Financial Services Authority v Rourke , in addition to paragraph 9.4.1 of the Technology and Construction Court Guide, which offers guidance on appropriate circumstances for a court declaration during adjudication.
The judgment also acknowledges the practical implications in terms of the timings of adjudication proceedings and court judgments. In this case, the adjudicator would have had just one working day to consider any declaration before the adjudication deadline. Although in this instance it was held that a court declaration might place unfair pressure on the adjudicator, it was noted that this decision was not intended to be of general application.
Finally, it was acknowledged that there are rare circumstances in which a court may make a declaration during ongoing adjudications. For example, where both parties agree to extend the time for the adjudicator to make a decision or where both parties agree to a declaration.