| Date | 4 April 2007 |
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| Judgment | Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd, TCC 6 March 2007 |
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| The Issue | The concept of ‘Time at large’. |
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| Implication |
Time at large will always be a difficult principle for contractors to establish unless the underlying contract is clearly deficient in failing to provide for an extension of time in the event of an act of prevention by the employer. |
printA deliberate professional foul in the penalty box, missed by the referee. It is difficult to avoid football analogies when writing about the new Wembley stadium. In this case it can’t be avoided. This analogy will be the view of many who read the most recent judgment from the Technology and Construction Court concerning the national stadium. Honeywell, responsible for the security and communication installations at Wembley, contended that the project was so mismanaged by Multiplex, the main contractors, that they were no longer bound by the terms of their subcontract to complete their works by a fixed date. Time was ‘at large’ they shouted from the terraces. Multiplex, realising that this might be heard by all the other subcontractors, commenced a pre-emptive action in the court to secure a decision that the contract mechanisms for fixing the date for completion remained operative. Please ignore everything we have said to Honeywell in the past about their rights to an extension of time, they said. We promise faithfully to be fair and reasonable in the future. Mr Justice Jackson turned away and let play continue. Time at large is an old concept favoured by contractors who have found it difficult, if not impossible, to obtain redress under the contract for an extension of the time for completion of their works. Honeywell had three principal arguments for time at large which they believed would win favour. Firstly, they were confident that the contract was poorly drafted. Honeywell was bound to comply with directions issued by Multiplex under subcontract clause 4.2. On a number of occasions Multiplex had directed Honeywell to comply with revised programmes which it issued under clause 4.2. Honeywell maintained that the extension of time clause did not empower Multiplex to grant extensions of time for directions issued under clause 4.2. Honeywell founded this argument on an old concept in the general law; the ‘prevention principle’. The essence of the prevention principle is that the employer cannot hold the contractor to a specified completion date if the employer has, by an act or omission, prevented the contractor from completing by that date. Instead, time becomes at large and the obligation to complete by the specified date is replaced by an implied obligation to complete within a reasonable time. It is in order to avoid the prevention principle that many construction contracts and subcontracts include provisions for extension of time. The 1970 case of Peak Construction v McKinney Foundations continues to underpin the point. In that case it was held that the extension of time provisions did not embrace causes of delay which were the employer’s own fault. Lord Justice Salmon commented: “I cannot see how, in the ordinary course, the employer can insist upon compliance with a condition if it is partly its own fault that it cannot be fulfilled.” Justice Jackson held that the principle did not apply to the present case. Clause 11 clearly gave Multiplex the right to grant extensions of time for ‘acts of prevention’ and a direction permitted by the contract, namely issuing a revised programme under clause 4.2, was an act of prevention for which an extension could be granted. Secondly, Honeywell argued that Multiplex had made the extension of time machinery inoperable by its failure to provide adequate programming data to the subcontractor. Throughout the works Honeywell had been obliged to work to short term programmes and it argued that it had never been able to plan its works or to identify the impact of delay events upon the critical path for completion. This in turn meant that it could never effectively comply with the subcontract requirement for notices and particulars of delay which the subcontract made a condition of Honeywell’s rights to extensions of time. Never mind, said Justice Jackson. These condition precedent clauses don’t mean too much in this case; as subcontractor you were only expected to give notices when it was practicable and if you had the requisite knowledge. By doing your best in appalling circumstances, you kept alive the extension of time mechanisms. Thirdly, Honeywell cited the Australian case of Gaymark Investments v Walter Construction in which the contractor, Walter, was unable to obtain an extension of time for an employer’s act of prevention, because it had failed to notify the relevant event. The Supreme Court of the Northern Territory of Australia held that even though no extension of time could be given, the employer could not recover liquidated damages for delay which was entirely of its own making. A number of subsequent cases have contradicted this decision on the basis that it is always in the hands of the contractor to protect its interests by giving the relevant notices of delay. The late professor Ian Duncan Wallace, who never had too much time for those in the construction industry who actually built things, also thought the Gaymark decision to be wrong. Justice Jackson agreed. In his view, contractual terms requiring the contractor to give prompt notice of delay serve a valuable purpose and they should be preserved, no matter how effectively the other party has contrived to make it difficult, if not impossible, for the contractor to comply with them. And so to the football pundit’s summing up. An eventful ninety minutes, with plenty of goalmouth incidents including shirt pulling and blatant obstruction in the penalty box, ending in a disappointing no score draw. Still anyone’s game, in extra time.
CJ-0713
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