| Date | 17 July 2002 |
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| Judgment | Motherwell Bridge Construction Ltd -v- Micafil Vakuumtechnik, TCC 31 January 2002 |
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| The Issue | Dealing with concurrent delays arising after the date for completion of the works. |
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| Implication |
A contractor may be entitled to an extension of time for a relevant delay event, notwithstanding other delays caused by the contractor. In determining the effect of such delays after the date for completion, it may be correct to take into account the incidence of the delaying event and thus award a full extension of time, if that is considered fair and reasonable. |
printIt is commonplace to find delays to construction projects and for arguments to ensue concerning the manner in which extensions of time should be granted. Two cases will usually find their way into the argument, Balfour Beatty Building -v- Chestermount Properties from 1993 and Henry Boot Construction -v- Malmaison Hotel from 1999. A particular reason why these two cases will often find their way into the arguments of the parties is that these cases will often give positive points for both parties to the dispute. In Balfour Beatty, the court said that the purpose of the power to grant an extension of time was to fix the period of time by which the period available for completion ought to be extended having regard to the incidence of relevant events. The completion date, as adjusted, was not the date by which the contractor ought to have achieved practical completion, but the end of the total number of working days starting from the date of possession, within which the contractor ought fairly and reasonably to have completed the works. On this footing, where a relevant event arose after the date for completion and during a period in which the contractor was in culpable delay, the contractor would only become entitled to a "net" extension of time corresponding to the specific number of days of delay occasioned by the relevant event. In other words, the occurrence of the new delaying event would not let the contractor off the hook for its own culpable delays. In Henry Boot, the court had to deal with the matter of concurrent delays. The judge said "it is agreed that if there are two concurrent causes of delay, one of which is a relevant event and the other is not, then the contractor is entitled to an extension of time for the period of delay caused by the relevant event, notwithstanding the concurrent effect of the other event. Thus to take a simple example, if no work is possible on a site for a week, not only because of exceptionally inclement weather (a relevant event), but also because the contractor has a shortage of labour (not a relevant event), and if the failure to work during that week is likely to delay the works beyond the completion date by one week, then if he considers it fair and reasonable to do so, the architect is required to grant an extension of time of one week". The judge went on to say that an architect is not precluded from considering the effect of other events when determining whether a relevant event is likely to cause delay to the works beyond completion. These two cases were reconsidered in the case of Motherwell Bridge Construction -v- Micafil earlier this year. Micafil was engaged by BICC as main contractor for the construction of an autoclave, a large steel vessel with an internal volume of 650m3 . The vessel was to be used in the manufacture of high quality power cables. Micafil undertook responsibility for the design of the vessel and sub-contracted its construction to Motherwell Bridge. The project did not run smoothly. During construction Motherwell Bridge raised many technical queries and there were a number of significant design changes issued by Micafil. There were two major formal amendments to the contract. Delays occurred and Micafil deducted liquidated damages. Motherwell Bridge in turn claimed extensions of time to extinguish the claim for liquidated damages. His Honour Judge Toulmin QC first dealt with the matter of concurrent causes of delay. He was satisfied that his approach must be that outlined from the judgment in the Henry Boot case. He commented, "Crucial questions are (a) is the delay in the critical path? and if so, (b) is it caused by Motherwell Bridge? If the answer to the first question is yes and the second question is no, then I must assess how many additional working days should be included". At this point Judge Toulmin departed slightly from the guidance in Henry Boot. He went on to say "other delays caused by Motherwell Bridge (if proved) are not relevant, since the overall time allowed for under the contract may well include the need to carry out remedial works or other contingencies. These are not relevant events, since the court is concerned with considering extensions of time within which the contract must be completed". Judge Toulmin went on to add that the approach must always be tested against an overall requirement that the result accords with commonsense and fairness. With regard to the questions raised in the Balfour Beatty case, Judge Toulmin concluded that an extension of time for completion of the works may be granted in respect of a relevant event occurring during the period of culpable delay. However, he refused to follow precisely the guidance in Balfour Beatty to determine the 'net' effect of delays occurring after the date for completion. By fixing the extended period of time available for completion of the work having regard to the incidences of the causes of delay and measured by the standard of what is fair and reasonable, Motherwell Bridge became entitled to an extension of time for the full period of delay.
CJ-0227
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