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Court finds for contractor

27 Aug 12 Rebecca Evans, solicitor with Thomas Eggar LLP, reports on a case that offers good news for contractors in England.

Rebecca Evans
Rebecca Evans

A recent case, heard by Akenhead J in the Technology & Construction Court in London, has practical consequences for contractors: the effect of concurrent delay on an extension of time claim.

Walter Lily Company (WLC) was employed by DMW Developments Ltd (DMW) to construct a substantial house in the Boltons in London. DMW was the corporate vehicle for Mr and Mrs Mackay. The architects were Barrett Lloyd Davis Associates (BLDA). The work started in 2004 with the initial projected timeframe of 18-20 months.

From the outset it would appear that the design was not in a state of readiness to enable WLC to proceed with the works. However, due to a planning requirement, the Mackays needed to press ahead. Somewhat unusually the Contractor’s Designed Portion in the JCT was set out as a list of things that ‘may’ be instructed, should the Mackays so decide. 

Perhaps with the benefit of hindsight delay was inevitable. WLC contested that delays were attributable to incomplete design information and that was a matter for which they were not responsible. Indeed, BLDA rarely challenged WLC’s extension of time notices, their opinion being that the primary cause of the delay was poor design information provision and poor coordination by the design team. The project became substantially delayed by approximately a year.

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The Mackays became increasingly frustrated by the delays and became uncooperative with WLC. Mr Mackay made explicit a strategy of omitting works from the contract which were not causing delay so as to leave matters in the contract which were already delayed with the intention to hit WLC with substantial liquidated damages. The extension of time claim became paramount. 

The court found entirely for WLC and awarded the whole extension applied for. The case is of interest not only for its facts but because the extension of time claim concerned some delays which were allegedly concurrent – i.e. there were matters which were the responsibility of WLC and Mackay causing the same delay. Readers may be familiar with a recent Scottish decision that stated, in Scotland at least, that the effect of concurrent delays should be apportioned between the parties. Akenhead J stated that this is not the law in England.  

Under the JCT, or a similarly drafted clause, if there are two concurrent causes of delay, one a relevant event (employer risk) and the other not (contractor risk), then the contractor is entitled to an extension for the period of the delay caused by the relevant event notwithstanding that there was a concurrent delay.

This will be welcome news for contractors.  Contractors should get an extension of time for the full impact of an employer risk event that delays the project. If there is a concurrent delay caused by the contractor, this is ignored.  However, if you are working on a Scottish project – beware, the law is quite different there!

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