They relied upon the provisions of clause 13.8 of the contract, one of the parties’ special amendments to the conditions. This provided that if an architect’s instruction were likely to delay the completion date, Shepherd was not to follow that instruction without adhering to certain defined procedures. Failure to do so would deprive it of its entitlement to an extension of time. City Inn’s further contention was that, in any event, the architect’s instruction had not delayed the completion date, but, even if they had, any delays which the instructions had caused had been concurrent with delays caused by Shepherd so that they were not entitled to an extension of time.
Shepherd maintained that it was entitled to an extension of time of 11 weeks because of the architect’s late instructions and the dismissal of the original architects and design team. They also claimed that there were significant variations and additional works. Shepherd argued that clause 38 only applied to instructions which were liable to cause delay because of their content and not to instructions which caused delay simply because they were issued late. Shepherd maintained that only one of the delays had not been due to the late issue of instructions. Shepherd also contended that City Inn had waived its entitlement to rely upon clause 38 Stramit Speedeck because of the actions of the architects. City Inn rejected all Shepherd’s contentions, and maintained that the architect’s instruction to use the Stramit Speedeck roofing system had not been a variation because that was the system which had been specified and not the built-up system Shepherd claimed, the consequence being that there was no entitlement to an extension of time.
The following is a selection of points from the 85 page Opinion.
The court reviewed previous authority, deriving a number of propositions to be applied in the present case:
Before any claim for an extension of time could succeed, it must plainly be shown that a relevant event is a cause of delay and that the completion of the works is likely to be delayed thereby or has in fact been delayed thereby;
The decision as to whether the relevant event possesses such causative effect is an issue of fact which is to be resolved, not by the application of philosophical principles of causation, but rather by the application of principles of common-sense;
The decision-maker is at liberty to decide an issue of causation on the basis of any factual evidence acceptable to him. In that connection, while a critical path analysis, if shown to be soundly based, may be of assistance, the absence of such an analysis does not mean that a claim for extension of time must necessarily fail;
If a dominant cause can be identified as the cause of some particular delay in the completion of the works, effect will be given to that by leaving out of account any cause or causes which are not material. Depending on whether or not the dominant cause is a relevant event, the claim for extension of time will or will not succeed;
Where a situation exists in which two causes are operative, one being a relevant event and the other some event for which the contractor is to be taken to be responsible, and neither of which could be described as the dominant cause, the claim for extension of time will not necessarily fail. In such a situation, which could, as a matter of language, be described as one of concurrent causes, in a broad sense, it will be open to the decision-maker, whether the architect, or other tribunal, approaching the issue in a fair and reasonable way, to apportion the delay in the completion of the works occasioned thereby as between the relevant event and the other event. In that connection, it must be recognised that the background to the decision making, in particular, the possibility of a claim for liquidated damages, as opposed to one for extension of time, must be borne in mind and approached in a fair and reasonable manner.
City Inn Ltd. v Shepherd Construction Ltd.,  CSIH 68
Also in this Week’s Subscription Bulletin:
- Challenging an Adjudicator’s Second Decision
- The Battle of the Forms;
- Payment Claim or Progress Claim?
- PLUS Articles on:
- Loss of Productivity;
- Delay Analysis;
- Risk Management under NEC 3