2010_07_06 rev 003 - issue to client

8/9/2019 2010_07_06 Rev 003 - Issue to Client

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InterimClaimforanExtensionofTimeandresultantand

overtimecosts

SubmittedbyWesternConstructionCo.

ContractNo:MK108007035-W-C02-001

6th

July2010

A wholly owned subsidiary of


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TiwestExpansionProject

Steelwork,MechanicalandPiping(SMP)Works

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TABLEofCONTENTS

1 Introduction..................................................................................................................... 31.1 Thisdocument .......................................................................................................... 31.2 FormationofContract............................................................................................... 3

2 ExecutiveSummary.......................................................................................................... 82.1 TheContract ............................................................................................................. 82.2 Delays ....................................................................................................................... 82.3 Quantum................................................................................................................... 8

3 StatementofClaim .......................................................................................................... 93.1 Extensionoftime ...................................................................................................... 93.2 Delay,disruptionandresultantincreasedcosts .......................................................113.3 WaiverandEstoppel ................................................................................................123.4 FailuretoprovideaccesstotheWorksinatimescalenecessarytoachievePracticalCompletionofthePortionsortheWorksasawhole ........................................................143.5 FailuretoprovideconstructioninformationinatimescalenecessarytoachievePracticalCompletion.........................................................................................................15

4 Time ...............................................................................................................................164.1 Programme..............................................................................................................16

5 Overarchingcauseofdelay .............................................................................................185.1 MaladministrationbyTiwestRepresentative ...........................................................185.2 TiwestRepresentativeactsofpreventiongenerally .................................................20

6 Eventsgivingrisetoentitlement.....................................................................................23 6.1 Introduction.............................................................................................................236.2 DelayEventandoractsofpreventionIssueofInformationforConstructionandaccesstoSite ....................................................................................................................236.3 Theseparationofevents..........................................................................................39

7 TheQuantumofourClaim..............................................................................................40 8 ScheduleofAnnexureandExhibits .................................................................................41

8.1

Annexure .................................................................................................................41

8.2 Exhibits ....................................................................................................................41


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1 INTRODUCTION1.1 Thisdocument1.1.1 ThepurposeofthisdocumentistodemonstratethattheWesternConstruction

Co.(theContractor)isentitledtoanExtensionofTimeandresultantcosts.

1.2 FormationofContract1.2.1 Tiwest,theownerandoperatoroftheplant,engagedProteusEPCMEngineers

(TiwestsRepresentative)asitsagent.

1.2.2 TiwestissuedtheProjectDocumenton16thMarch2009fortendertotheContractorforpricing.Thisdocumentwasinrespectofthesteelwork,

mechanicalandpipingworksassociatedwiththeTiwestExpansionProject.For

theavoidanceofdoubtthecivilconcrete,electricalandinstrumentationworks

associatedwiththeexpansionprojectwereexcludedfromthescopeandwereto

becarriedoutbyothers.

1.2.3 On24thAugust2009theProjectDocumentwasIssuedforConstruction.1.2.4 ThePlant1.2.5 TheTiwestKPPisaTitaniumDioxide(TiO2)pigmentplantoperatingunderthe

ChlorideRoute.Inthisprocess,theTitaniumbasedore(SyntheticRutile)is

reactedwithChlorine(Cl2)gastomakeTitaniumTetrachloride(TiCl4)gas.Thisgas

isseparatedfromtheothermetalchlorides,condensedandpurifiedbefore

beingreactedwithpureOxygen(O2)toformTiO2.TheTiO2iscleaned,treatedand

processed,beforebeingpackedinto25kgor1tonnebagsforsale.

1.2.6 TheproposedexpansionoftheKPPwillincreaseproductionfrom116,000tonnesperannum(tpa)offinishedpigmentproductto153,000tpa.


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1.2.7 TheTiwestKPPisbroadlysegregatedintosix(6)geographicareascalledproductionunits.TheContractorisresponsibleforallSteelwork,Mechanicaland

PipingWorksinalloftheseareas.Theseareasare:-

a) Unit100-containsthereceivingandstoragefacilitiesfortherawingredients,SyntheticRutileandPETCoke

b) Unit200-containsthechlorinationandTiCl4purificationequipmentc) Unit300-receivespureTiCl4andreactsitwithpureOxygento

producecrudeTiO2pigment.Unit300alsocompressestheresulting

ChlorinegasforrecyclingbacktoUnit200

d) Unit400-receivesthecrudepigmentandmakesitintoapresentablebaggedproductforsale

e) Unit500-encompassesallthechemicalstorageanddistribution,eitherofreactantsorproducts.Unit500alsocontainsalltheservices

forthesite

f) Unit600-processesthesiteprocesseffluentbeforedischargingtheneutralised,clearliquorintoCockburnSound

1.2.8 TheContract1.2.9 Thenoticeofnoticeofaward,whichisdetailedbelow,providesthattheWorks

shallbeinaccordancewiththefollowingdocuments:-

a) Thetenderdocumentsb) TermsandconditionsofTiwestConstructionContractamendedas

agreed

c) TheContractorstendersubmissionreceivedbyTiwest4thMay2009


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d) Posttenderclarificationsandadjustmentsagreedpriortothenoticeofaward

i) Includingrevisedconstructionschedule1.2.10 CommencementandCompletion1.2.11 TheContractorwastomobiliseon15thJuly2009.TheWorkscomprisedof

SeparablePortionseachwithdifferentCompletionDates.Theseportionsareset

outbelow:-

a) Unit100i) Commencesitework17thAugust2009ii) Practicalcompletion30thJanuary2009

b) Unit200i) Commencesitework5thAugust2009ii) Practicalcompletion18thFebruary2010

c) Unit300i) Commencesitework21stAugust2009ii) Practicalcompletion10thFebruary2009

d) Unit400i) Commencesitework27thAugust2009ii) Practicalcompletion30thMarch2010

e) Unit500i) Commencesitework24thAugust2009ii) Practicalcompletion4

th

March2010


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f) Submitasbuilt31stMarch20101.2.12 TheresaclearerrorwithintheCommencementdateandPracticalCompletion

dateofUnit100andUnit300asittheyduetobecompletedpriortoits

commencement.Giventhisambiguitythedateswithintheapproved

programmearetakenasagreed.

1.2.13 NoticeofAwardandContractPrice1.2.14 Tiwestscorrespondencedated29thJune20091awardedtheContracttothe

Contractorforthesumof$15,590,671.00.Thesumwasmadeupof:-

ScheduleReference Description Price(AUD)

A1.1 Contractorindirect $5,317,437.00

A1.2 SteelWorks $2,769,012.00

A1.3 MechanicalWorks $1,601,537.00

A1.4 PipingWorks $5,386,734.00

A1.5 PipingTieinWorks $581,951.00

ContractPrice $15,656,671.00

1TiwestPtyLtdletterdated29

thJune2009


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1.2.15 TheContractoracknowledgedreceiptoftheaboveletterandadvisedthatitwouldworktothetermssetoutthereinon30

thJune2009

2.

2WesternConstructionCo.letterdated30

thJune2009


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2 EXECUTIVESUMMARY2.1 TheContract2.1.1 2.2 Delays2.2.1 2.3 Quantum2.3.1


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3 STATEMENTOFCLAIM3.1 Extensionoftime3.1.1 Clause7.3oftheContractprovides:-

TheContractorisentitledtoanextensionoftimetotheDatefor

PracticalCompletionif,andonlyif:

(a) theContractor:

(i) giveswrittennoticetoTiwest'sRepresentative,ofthe

factoflikelihoodofdelaynotmorethan14daysafter

thecommencementofthecauseofdelay;and

(ii) provideswiththatnoticedetailsofthecauseofthe

delayandhowPracticalCompletionislikelytobe

delayed;

(b) theContractorgivesTiwest'sRepresentative,within14days

afterthecessationofthecauseofthedelay:

(i) awrittenclaimforextensionoftimespecifyingthe

numberofdaysclaimed;

(ii) detailsofwhythecauseofthedelayactuallycausedthe

delay,includingastatementofthefactsandthe

provisionsofthisContractonwhichtheclaimisbased;

(iii) detailedevidenceinsatisfactionoftherequirementsof

clause7.3(c);and

(iv) allotherinformationreasonablyrequiredbyTiwest's


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Representative;and

(c) theContractorreasonablysatisfiesTiwest'sRepresentativein

itsclaimunderclause7.3(b)that:

(i) PracticalCompletionhasactuallybeendelayed:

A. priortotheDateforPracticalCompletion,ina

mannerwhichwillpreventtheContractorfrom

achievingPracticalCompletionbytheDatefor

PracticalCompletion,unlesstheDatefor

PracticalCompletionisextended;or

B. aftertheDateforPracticalCompletion,ina

mannerwhichwilldelaytheContractorin

achievingPracticalCompletion;

3.1.2 MoreoverSpecialCondition3provides:-

SC.3DelayandDisruption

a) FurthertoClause7.2andforthepurposesofclarification,in

theeventtheContractorisunabletoperformhisobligationsundertheContractduetoanydelay,interferenceordisruption

(otherthanthatcausedbytheContractor)theContractoris

entitledtobepaidstandbyratesinaccordancewithSchedule

C1fortheaffectedlabour,plantandequipment.

b) Intheeventthatthedelay,interferenceordisruptionaffects

onlyoneareaoftheplantandlastsforaperiodnotexceeding


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onehour,Tiwestshallnotbechargedstandbyonthebasisthat

theContractorsemployeecanbere-deployedtoanotherwork

area.

c) Ifthedelay,interferenceordisruptionaffectsmorethanone

areaoftheplantorlastsforaperiodofmorethanonehour

thentheContractorisentitledtochargestandbyratesfora

minimumofonehourorthedurationofthedelay,interference

ordisruptionwhicheverisgreater.

3.1.3 TheContractorcontendsthatithasbeendelayedanddisruptedasaresultofTiwestRepresentativesfailuretoprovideConstructionInformationina

timescaleconsistentwiththeapprovedprogramme.Further,theContractor

contendsthatitisentitledtoanextensionoftimeasaresultofTiwest

Representativesfailure.

3.2 Delay,disruptionandresultantincreasedcosts3.2.1 Clause7.2(b)oftheContractDocumentprovides:-

TheContractorisentitledtotheactual,directandunavoidableon-Site

costsitcanestablishtothesatisfactionofTiwest'sRepresentativeit

hasreasonablyincurredasaresultofthedelaycausedby:

(i) abreachbyTiwestofthisContract;

(ii) avariationtotheWorkundertheContractdirectedunder

clause8.1;or

(iii) thesuspensionoftheexecutionoftheWorkundertheContract


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pursuanttoawrittendirectiongivenunderclause7.8(a),unless

thatdirectionwasgivenasaresultofabreachbythe

ContractorofitsobligationsunderthisContract,

forwhichtheContractorhasbeengrantedanextensionoftimetothe

DateforPracticalCompletionunderthisContract.

3.2.2 TheContractorcontendsthatasaresultofitsentitlementtoanextensionoftime,forwhichTiwestanditsRepresentativeareculpable,itisentitledto

recoveractual,directandunavoidableon-Sitecosts.

3.3 WaiverandEstoppel3.3.1 ThewidespreadinterpretationofWaiverandEstoppelreferstoconductwhich

makesitunfairor,inequitableorunconscionableforthepromiseetoinsistona

rightthatithas,bywayofitsconduct,leadtheotherpartytobelievewillno

longerbeutilised.Thispositionhastoalterandbeunconscionableforitto

apply;theutilisationofaconditionprecedent,orasitismorecommonlyknown

atime-bar,whenithaspreviouslybeendisregardedamountstothis.

3.3.2 Estoppel3.3.3

Estoppelisaprinciplewhichprecludesanentityorpersonfromdenyingthetruthofastatementmadebyhimorfromallegingthatafactisotherwisethanit

appearedtobefromthecircumstances.Thereareanumberoftypesof

estoppelalthoughforthepurposeofthisdocumenttheinterestlayswiththatof

estoppelbyrepresentationorconduct.

3.3.4 Tiwesthas,byitsconduct,establishedthattheDateforSubstantialCompletionhas,orwastobe,revisedandthatthecostsassociatedwithsuchextension


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wouldbedealtwithatalaterdate.Ithasdonethisby:-

a) IssuingConstructionInformationaftertheDateforSubstantialCompletion

b) IssuingVariationsaftertheDateforSubstantialCompletionc) Waivingitsrighttoenforcethetimebarassetoutunderthe

Contract

3.3.5 Waiver3.3.6 Waiveristherelinquishmentofarightorremedywhichmaybebyexpress

writtenstatement,impliedand,orbyinactioninenforcingaright.Therefore,in

theeventthattheContractorfailstoenforceatimebarduringtheperiodfor

completionitmaynotseektoestablishadefenceonthatbasisatornearingits

conclusion.

3.3.7 HudsonsBuildingandEngineeringContractsisconsideredanauthorityonsuchmatters.Thereinitstatesthat:-

...thecourtshavenotbeenslowtoapplyprinciplesofwaiveror

estoppels,orimpliedpromiseorunjustenrichment,soastopreventan

ownerinappropriatecircumstancesfromsettingupadefenceofnon-


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compliancewithcontractualrequirementsofformforvariedwork.3

3.3.8 TheconductoftheContractorhasbeenthatishaswaiveditsrightstoenforcethetimebarinrespectof:-

a) Noticeofdelayb) Theextensionoftimeprovisionsc) Noticeofdelayanddisruptioncosts

3.3.9 TheContractorcontendsthatTiwesthasbywayofitsconductandotherwise:-a) WaiveditsrighttoenforceanytimebarwithintheContract

3.3.10 TheContractorfurthercontendsthatanyenforcementofsuchclauseswouldbeanunjustenrichmentonthepartoftheTiwest.

3.4 Failure to provide access to the Works in a timescalenecessary toachieve Practical CompletionofthePortions

ortheWorksasawhole

3.4.1 TiwestanditsRepresentativefailedtoprovideaccesstotheWorksinaccordancewiththeagreedprogrammeorinatimescaleconsistentwiththe

DateforSubstantialCompletion.Moreover,itshouldbenotedthatfailureto

provideaccessconstitutesanactofpreventiononthepartofTiwest.Thecourt

3 Wallace: I.N. Duncan, (1994) Hudsons Building and Engineering Contracts, Eleventh Edition, London ,

Sweet&Maxwell,Section7.042atp.903


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casesbelowprovidethatTiwestoritsRepresentativemaynotenforcethetime

barinrespectofprovidingnoticeintheeventofadelayoranactofprevention:-

a) GaymarkInvestmentsPropertyLtdvWalterConstructionGroup(1999)16BCL449

b) AbigroupContractorsPtyLtdvPeninsulaBalmainPtyLtd[2001]NSWSC752

c) BeckhausvBrewarrinaNo.2[2004]NSWSC11603.4.2 Therefore,theContractorcontendsthatithassuffereddamageasaresultofthe

actsofpreventionandthatthetimebarisnotapplicable.

3.5 Failure toprovideconstruction information ina timescalenecessarytoachievePracticalCompletion

3.5.1

TiwestRepresentativehasissuedConstructionInformationinatimescaleinconsistentwiththeDateforPracticalCompletionfortheSeparablePortions,or

necessarytoachievetheDateforPracticalCompletion.Moreover,ithasissued

ConstructionInformationaftertheDateforSubstantialCompletionpreventing

theContractorfromachievingthisDate.

3.5.2 TheContractorcontendsthatithasincurreddamageasaresultoftheTiwestRepresentativefailingtoissueConstructionInformationinatimescalenecessary

toachieveSubstantialCompletion.AsaresultofthisfailuretheContractorhas

beenpreventedfromcompletingitsWorksonorbeforetheDateforSubstantial

Completion,fortheSeparablePortionsorasawhole,andhasincurreddamage.

TheContractorfurthercontendsthatTiwestRepresentativeisprecludedfrom

utilisingtheconditionprecedent,ortimebar,asadefenceasaresultofthe

abovecaselawandthatanyattempttodosowouldbeunconscionable.


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4 TIME4.1 Programme4.1.1 Clause2.2.1.3oftheScopeofWorksprovides:-

Thebulkoftheworkshalltakeplacewhiletheexistingplantisfully

operational.ThereforetheContractorshallberequiredtocarefullyplan

theworkandliaisewithTiwestonadailybasistoplanworkaheadto

avoidpotentialriskstopersonnel,equipmentandproductionandto

minimisedelaysingainingaccesstoworkareas.

Whenpreparingforplannedshutdowns,theContractorshallliaise

continuouslywithTiwestonsitetoensuretheworkissafelycoordinated

andintegratedwithothershutdownactivities

TheContractorsWorkScheduleshallbeakeycomponentofthe

managementplans[Emphasisadded].TheContractorshallprepareand

maintainaWorkScheduleinGanttChartformusingPrimaveraVersion5

(orabove)software.


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4.1.2 Itisevidentfromthetextabovethattheworkscheduleisoffundamentalimportanceandhadtobestrictlyadheredto.Moreover,on9

thJuly2009,Tiwest

RepresentativeissuedtheContractoralistofkeydatesforthecompilationof

thebaselineprogramme4.

4.1.3 TheContractorsprogrammedated20thAugust2009wassubmittedandapprovedasthebaselineprogrammeon25

thAugust2009

5.

4.1.4 ActivityWCC1020identifiesthedatefortheissueofconstructioninformation.Anextractofthissectionoftheprogrammeisshownbelow:-

4.1.5 ItisthereforeevidenttoTiwestRepresentativethattheinformationwasrequiredtobeissuedonorbythe29

thJune2009andanyfailuretoadhereto

thisdatewouldresultindelaytotheproject.

4ProteusECPMEngineersletterdated9th

July2009


thNovember2009


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5 OVERARCHINGCAUSEOFDELAY5.1 MaladministrationbyTiwestRepresentative5.1.1 ItshouldbenotedthattheContractormustdispatchtheburdenofproofuponit

toestablishanextensionoftime.Further,thislevelofproofisonthebalanceof

probabilityandnotbeyondallreasonabledoubt.Itisacommonmisconception

thatthelatterisapplicablealthoughthisisreservedforcriminalmatters.

5.1.2 TiwestRepresentativehasfailedto:-a) Issueconstructioninformationinatimescaleconsistentwiththe

baselineprogram

b) Providefreeissuematerialinatimescaleconsistentwiththebaselineprogram

c) EvaluatetheContractorsclaimsforanextensionoftimeinafairandreasonablemanner

d) AwardanextensionoftimetoeachSeparablePortionratherthantheDateforPracticalCompletion

5.1.3 Further,TiwestRepresentativehasinstructedtheContractortoprovideadditionallabourtositeasaresultofslowprogressatthesametimeithasfailed

toprovidetheContractorinformationthatwouldallowittoprogressworkfronts.

5.1.4 TheresultofTiwestRepresentativesactionswheretoincreasetheworkforce,andincurassociatedadditionalcost,atatimewhentherewerefewareasthat

theContractorcouldactuallyprogresstheWorksasaresultofthelackof

ConstructionInformation.ThisismaladministrationbyTiwestRepresentative.


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5.1.5 Commencementonsite5.1.6 TheContractorsletterof29thJuly20096recordsthatithadbeenprevented

fromcommencingtheWorksonsitebyTiwestRepresentativesduetothe

programmenotbeingapproved.Asidentifiedabovetheprojectwasclearlyfast

trackandanydelayincommencementwouldhaveasignificanteffectonthe

overallprogramme.Moreover,itshouldbenotedthatthiswasthesamedate

thattheConstructionInformationwastobeissuedeitheronorby.Withinthe

samecorrespondencetheContractorrecordedthat:-

a) Itwasoutstandingmarkingplandrawingsforthemajorityofthestructuralwork

b) Ofthe715linesonthelinelistithadonlyreceived128linesinisometricform

c) Thatitwouldtakeupto4weekstomobilisegiventhatitwasntgivenaccess

5.1.7 NotwithstandingTiwestRepresentativesfailuretoissuetheConstructionInformationinatimescaleconsistentwiththebaselineprogrammeithas

directedtheContractortoincreaseitslabourresources7.MoreoverTiwest

Representativenotesthattheadditionalmanpowerhasnotincreased

productivity.Whilstitisinsomewhyattemptingtoinferthatthereissomekind

6WesternConstructionCo.letterdated29th

July2009

7ProteusECPMEngineersletterdated13

thJanuary2010


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ofmanagementissueitisapparentthattheincreaseinresourcesissimply

addingtotheexistingproblemofthelackofConstructionInformationandlack

ofworkfrontsasaresultofthisinformationnotbeingissued.

5.2 TiwestRepresentativeactsofpreventiongenerally5.2.1 PursuanttothetermsoftheContractTiwsestanditsRepresentativeare

responsibleforissuingthenecessaryConstructionInformationinatimescale

consistentwiththeDate/sforPracticalCompletion.Moreover,theapprovalof

thebaselineprogramme,whichsetoutthedateforreleaseofallConstruction

Informationas29th

June2009,providesthattheTiwestRepresentativehas

agreedthedatesthatitwouldissuethisinformation.

5.2.2 OnreviewofthedocumentregisterissuedbyTiwestRepresentativeitisapparentthatthemajorityoftheConstructionInformationwasissuedafterthe

abovedate.AcopyoftheregisterissuedcrossreferencedagainsttheSeparable

PortionDateforPracticalCompletionandthedateforissueofallConstruction

IssueinformationiscontainedatAppendixA.

5.2.3 Unit1005.2.4 AlloftheinformationlistedwithintheregisterthatisidentifiedasbeingforUnit

100hasallbeenissuedafterthedateforreleaseofConstructionInformationset

outinthebaselineprogramme.Further,informationhasbeenissuedafterthe

DateforPracticalCompletion.

5.2.5 InrespectofinformationissuedaftertheDateforSubstantialCompletionforthisSeparablePortionitrangesfrom4daysto285daysaftertheprogrammed

date.

5.2.6 TheConstructionInformationinrespectofthisSeparablePortionwasissuedonaverage100daysafterthebaselineprogrammedate.


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5.2.7 Unit2005.2.8 TiwestRepresentativefailedtoissueanyoftheConstructionInformation

identifiedontheregistertothisSeparablePortionpriorto,oron,theapproved

programmedate.Further,largeamountsoftheinformationwasissuedafterthe

SeparablePortionDateforPracticalCompletion.


5.2.10 Unit3005.2.11 AsisthesamewiththeprecedingUnitsTiwestRepresentativefailedtoissueany

oftheConstructionInformation,identifiedfromitsownregister,priortooron

thedatesetoutinthebaselineprogramme.ConstructionInformationhasbeen

issuedfrom7daysto344daysaftertheprogrammeddate.


5.2.13 Unit4005.2.14 Again,andasliketheUnitsabove,TiwestRepresentativehasfailedtoissueany

oftheConstructionInformation,thatisidentifiabletothisSeparablePortion,

priortoorontheprogrammeddate.Moreover,largequantitiesofthis

informationwasissuedaftertheSeparablePortionDateforPractical

Completion.

5.2.15 ThedelayinissuingtheinformationbyTiwestRepresentativerangesfrom4daysand336daysaftertheprogrammeddatefortheissueofConstruction

Information.

5.2.16

TheConstructionInformationinrespectofthisSeparablePortionwasissuedon


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average130daysafterthebaselineprogrammedate.

5.2.17 Unit5005.2.18 Again,andasliketheUnitsabove,TiwestRepresentativehasfailedtoissueany

oftheConstructionInformation,thatisidentifiabletothisSeparablePortion,

priortoorontheprogrammeddate.Further,informationhasbeenissuedafter

theDateforPracticalCompletionforthisSeparablePortion.

5.2.19 ThedelayinissuingtheinformationbyTiwestRepresentativerangesfrom4daysand317daysaftertheprogrammeddatefortheissueofConstruction

Information.


5.2.21 Releaseofinformationgenerally5.2.22 PursuanttothetermsoftheContracttheContractorwasrequiredtosubmitas-

builtdrawingsonorby31stMarch2010.Itisclearfromtheinformation

containedatAppendixAthatsubstantialinformationwasissuedafterthisdate.

Therefore,itisevidentthatTiwestRepresentativehaspreventedtheContractor

from:-

a) CompletingtheSeparablePortionsinatimescaleconsistentwiththeContractandortheapprovedprogramme

b) CompletingtheWorksinatimescaleconsistentwiththeContractandortheapprovedprogramme

5.2.23 FortheavoidanceofdoubttheinformationcontainedatAppendixAwasprovidedtotheContractbyTiwestRepresentativeandisthereforethedates

thereinaretakenasagreed.


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6 EVENTSGIVINGRISETOENTITLEMENT6.1 Introduction6.1.1 Thissectionofthedocumentidentifiesandillustratestheeventsthathave

delayedandpreventedtheContractorfromcompletingtheWorksinatimescale

consistentwiththebaselineprogramme.Asaresultofthesedelaysthe

ContractorhasbeeninstructedbyTiwestRepresentativetomobiliseadditionalresourcesinanefforttoreducethedelay.

6.1.2 AsstatedabovetheConstructionIssueinformationshouldhavebeenissuedinasingletrancheonorbefore29

thJune2009.Inrealitytheinformation,andaccess

toareasofthesite,wassuppliedoveraprolongedperiodoftime.Duetothe

numberofdrawingissues,andgiventheirrationalordertheywereissuedin,

plustheaccessissues,itisimpossibletoseparatethedelayevents.

Notwithstandingthatitisclear,assetoutbelow,thatTiwestandits

Representativeareculpableforthosedelaysandtheresultantcost.

6.2 Delay Event and or acts of prevention Issue ofInformationforConstructionandaccesstoSite

6.2.1 CauseofDelay6.2.2 ActivityWCC1020ISSUEIFCISOMETRICSofthebaselineprogrammehasa

startandfinishdateof29th

June2009.ThereforeTiwestRepresentativewas

requiredtoissueallConstructionInformationonorbeforethisdate.


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6.2.3 TheContractorscorrespondenceof7thAugust20098recordsthatithadbeenrequestedtoinstalltheChlorAlkaliprioritypipeworkbythe17

thAugust2009

andthatishasbeenunabletodosoasaresultofTiwestRepresentativefailing

toissuethegeneralarrangementdrawings.Further,asiteinspectionconducted

onoraroundthattimeindicatedthatnopipetrayshadbeeninstalledand

therefore,evenifthedrawingshadbeenissued,thepipecouldstillnothave

beeninstalled.

6.2.4 TheContractorservednoticeon30thOctober20099thatitintendedtosubmitanextensionoftimeandresultantcostsasaresultoflateaccesstoareasofthe

site.

6.2.5 TiwestRepresentativeacknowledgedreceiptoftheContractorsnoticeon13thNovember2009

10andadvisedthatitshouldberesubmittedinaccordancewith

thetermsoftheContract.Notwithstandingtheproceduralerrorsitisevident

thatTiwestRepresentativeisawareofthedelays.Moreover,therewasnothing

precludingTiwesttoreviewthesituationandissueanappropriateextensionof

time.

6.2.6 On3rdDecember200911theContractornotifiedTiwestRepresentativethatit


thAugust2009


thOctober2009


November2009referenced07035-L-518


rdDecember2009


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hadbeendelayedasaresultof:-

a) Rainb) Additionalworksc) Excavationofpiperacksduetoemissionsd) Evacuationduetogase) Demobilisingfromoneofthebuildingsasaresultofadirectionfrom

TiwestRepresentative

6.2.7 TheContractorcontinuedtosufferdelayanddisruptionasaresultofchemicalreleasesintotheworkareaandon22ndDecember200912advisedthatitsought

torecovercostsfortheconstructionofascaffoldthatwouldallowsafeegressin

theeventoffutureevacuationsduetogasleaks.

6.2.8 On23rdDecember200913theContractoradvisedthatithadincurredadditionalcostsinrespectofthedelaysatsiteandintendedtoseekpaymentforthese

costs.OnthesamedatetheContractoradvisedthatitestimatedthatthe

currentassessmentofman-hourstocompletetheprojectwouldbecirca88,000

whereastheContractallowancewasover30,000less.Further,the

correspondenceadvisedthathisequatedtoalmost7weeksofconstructiontime

andthat,asaresultofthedelays,theDateforPracticalCompletionwouldhave

12WesternConstructionCo.letterdated22nd

December2009


rdDecember2009


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tobeextendedto1st

May201014

.

6.2.9 NotwithstandingtheongoingdelayanddisruptioninrespectoftheConstructionInformationTiwestadvisedtheContractorthatitwasconductingamajor

shutdownoftheplantstarting15thMarch2010for6days15.Thisclearlyhadan

impactontheprojectastheContractorwasforcedtodemobiliseandremobilise

beforeandaftertheperiodofsuspension.

6.2.10 TheContractorsletterof18thJanuary2010setsoutthat:-

Themainreasonforthelowproductivityistheproportionoflabour

spentonadditionalpipeworkorpipereworkThecontinualreworkis

affectingourworkflowbecauseourcrewscontinuallyneedtostop

workonpipelinesduetoclasheswithexistingsteel.Thestopping,

redesigningandthenreworkingofapipelineismuchslowerthan

puttinginprefabricatedspools16

6.2.11 ItisevidentthatasaresultofTiwestRepresentativesfailuretoissuecogentConstructionInformation,oratall,theContractorwasincurringdifficulty


rdDecember2009

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installingandorprogressingtheWorks.Ultimatelythiswasdelayingand

disruptingtheContractor.

6.2.12 TheContractorsubmittedarevisedscheduleonoraround1stFebruary2010thatrevisedtheDateforPracticalCompletionto20thApril2010.

6.2.13 ThisprogrammewasacceptedbyTiwestRepresentativeon5thFebruary201017;thereforetherevisedPracticalCompletionDatewasalsoaccepted.

6.2.14 TheContractorissuedadelayregistertoTiwestRepresentativeon10thFebruary2010

18.Thisdocumentsetsoutanumberofthedelaystotheprojectforwhich

Tiwestareculpable.TiwestRepresentativerespondedtothissubmissionon11th

February2010andstatedthattheContractorhadfailedtoisolateeventsfor

whichtheitwasculpable.Giventhattheindividualeventshavebeenidentified

andthereasonwhyTiwestRepresentativehasfailedinitsobligationto

determineanextensionoftimeinafairorreasonablemannerandthereforeits

conductisunconscionable.

6.2.15 TheContactorscorrespondenceof15thFebruary2010recordsthatameetingtookplacebetweenitandTiwestRepresentativeinrespectofanextensionof

timeandresultantcosts.TheletterrecordsthatTiwestRepresentativestated

thatindirectcostsmayonlyberecoveredthroughthere-measureformula;thisis

clearlyincorrectasclauses7.2and7.3apply.Again,thisreiteratesthatTiwest


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Representativesconductisunconscionableasitisfailingtotakeconsideration

ofthetermsoftheContractwhenconsideringthematters.

6.2.16 TiwestRepresentativesletterof15thFebruary201019awardsa6.5workingdayextensionoftimeandrevisedtheDateforPracticalCompletionto17thMarch

2010.TiwestRepresentativehasfailedtotakeconsiderationofthefactthatthe

ContractcontainsSeparablePortionsandthateachoftheseportionsshould

havebeenextendedindividually.

6.2.17 On16thFebruary201020theContractorwrotetoTiwestRepresentativetorecordthatameetinghadtakenplacethedaypriorandthat:-

a) ItwasagreedbetweentheContractorandTiwestRepresentativethatthatthefinalnumberofmanhoursusedtocompletetheproject

wouldbereconciledattheDateforPracticalCompletion

b) TheContractorwilladdadditionalresourcestotheprojectandthattheseadditionalresourceswouldbereimbursedthrough:-

i) Re-measurecostsii) Prolongationcostsduetotheincreasedscopeofworkiii) Siteinstructionsincludingallequipmentandindirectcosts

6.2.18 TiwestRepresentativeacknowledgedreceiptofthiscorrespondenceon18th


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February201021

andnotedtheContractorscommitmentand,moreimportantly,

thatitwaswaivingthenotificationperiodwithinclause7.3oftheContractuntil

23rd

February2010.ItisevidentthatTiwestRepresentativeisawareofthe

delays,haswaivedthetimebarwithintheContract,thatEstoppelwouldapply

andthatanyattempttore-applysuchclausewouldbeunconscionable.

6.2.19 On23rdFebruary201022theContractorwrotetoTiwsetRepresentativesettingoutthatithadbeendelayedasaresultof:-

a) Thelackofaccessb) SlippingofequipmentdeliverydateswhichTiwestweretosupplyc) Raindelaysd) Evacuationsfromsitee)

Additionalsiteinstructions

6.2.20 Further,theContractorrequestedthattheDateorPracticalCompletionbeextendedto21

stApril2010andthat,whilstthetendermanninglevelpeakedat

65menonsite,theContractorwasincreasingitsworkforceto100men.Ascan

beeseenfromtheConstructionInformationregisters,thatareanalysedabove

andappended,theContractorhadreceivedasubstantialamountofinformation

inandaroundthistime.Essentiallytheincreaseintheworkforcewasanextra-


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ordinarymeasuretakenbytheContractortoreducethedelayforwhichitis

entitledtobecompensated.

6.2.21 TiwestwrotetotheContractoron2ndMarch201023advisingthatascheduledshutdownoftheplanthadbeenmovedto19thApril2010andthataccesstothe

sitewouldberestrictedforaperiodof13days.

6.2.22 TiwestRepresentativewrotetotheContractoron3rdMarch201024and,interalia,setoutthatitbelievedthatSpecialConditionstookprecedenceoverthe

GeneralConditionsofContract.OnreviewoftheContractthereisambiguityas

clause1.2states:-

Ingivingadirectionunderthisclause,Tiwest'sRepresentativewill

construethedocumentscomprisingtheContractintheorderof

precedenceinwhichtheyarelistedinthedefinitionoftheContractin

clause1.1.

6.2.23 Onreferencetoclause1.1theordersetoutisasfollows:-a) ThisConstructionContractb) TheContractSpecifics

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c) TheScopeofWork,includingreferencedDrawingsandDocumentation

d) Theotherschedules,exhibitsandannexurese) Theotherdocuments(ifany)referredtoinItem2

6.2.24 ItisclearfromthisthattheContracttakesprecedenceoverallotherdocumentationandthatthereisnoreferencetoSpecialConditions.

NotwithstandingthisSpecialConditionshavebeeninsertedatAnnexure5,which

fortheavoidanceofdoubtisitemdandbeneaththeContract,whereatit

states:-

Thefollowingmodificationwilltakeprecedenceoverthewordinginthe

standardtermsandconditionscontainedwithinthisContract.

6.2.25 ClearlytherearetwoordersofprecedenceandanambiguitywithintheContract.WhereastheContractallowsforTiwestRepresentativetomakeits

ownrectificationoftheContractthelawprovidesthatthesetermsberead

contraproferentem.Thismeansthatthetermisconstruedagainsttheparty

thatdraftedit;thereforeTiwestisnotentitledtoderiveabenefitfromitsown

error.

6.2.26 NotwithstandingtheaboveprincipleTiwestRepresentativehasindicatedthattheContractorisnotentitledtorecoveranycostsotherthanstandbycostsin

respectoftheinclementweatheranddelayanddisruptionclaims.WhilstSC.2c

providestheContractorisentitledtorecoverstandbyratesalthoughitdoesnot

precludeitfromrecoveringanyothercosts.Therefore,theContractwouldbe

supplementbyimpliedterms.GiventhattheContractorhassuffereddelay,and


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damage,asaresultofeventsforwhichTiwestareculpableitwouldbeentitled

torestitutionandwouldbeabletorecovercostsresultantfromthedelay.

6.2.27 WithinthesamecorrespondenceTiwestRepresentativehasstatedthatthere-measurementclauseonlyappliesintheeventthatthetotalContractpriceis

exceedby20%.Onreviewofclauseitstatesthat:-

RemeasureofquantitiesshallbecarriedoutbytheTiwest

representativeinaccordancewiththelatestrevisionofIssuedfor

Constructiondrawingsandspecifications.TheTiwestrepresentative

shallarrangefortheremeasureoftheactualquantitiestobe

undertakenandupdatedaspartofthemonthlyprogressclaim

process.Thecontractorisentitledtoreviewandifapplicablenotify

Tiwestofanyquantitiesindispute,andprovidesuchsubstantiationas

necessarytoreachanagreementonthequantities.Anyotherclaim

whichmayresultinanadjustmenttothecontractpriceshallbein

accordancewithclause8and16.

6.2.28 ThestatementmadebyTiwestRepresentativeisclearlyincorrect.Further,theContractprovidesthatTiwestRepresentativeistovaluetheWorksonamonthly

basis;itclearlyhasnotdonethiscarriedoutthisoutandasaresultisinbreach

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increase.

6.2.29 On5thMarch201025theContractoradvisedthattheworkforceatsitehadincreasedto152operativesandthatithadincreasedtheworkingweekto60

hours.MoreovertheContractorisstillactivelyseekingtorecruitadditional

operatives.

6.2.30 On11thMarch201026TiwestRepresentativesinformedtheContractorthatitwasconcernedaboutthelackofprogressandthatdirectedthat:-

ThereisnotenoughmanpowercurrentlyonthisjobsothatWCCocan

finishontimeandthemanpowershouldincreaseby4timessothat

thedeadlinecanbeachieved.

6.2.31 FromtheinformationreleaseschedulebelowitisevidentthattheContractorwasstilloutstandingaconsiderableamountofConstructionInformationaround

thistime.Therefore,TiwestRepresentativehasinstructedtheContractorto

quadruplethelabourforceatatimewhenitstillhadnotprovidedallthe

ConstructionInformationandtheContractordidnothaveuninterruptedaccess

tothesite.Thisinstructionclearlyillustratesmaladministrationoftheprojectby


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TiwestRepresentative.

6.2.32 Furthermore,onthe15thMarch201027TiwestRepresentativerecordedthatameetingtookplaceon8

thMarch2010.Thecorrespondencenotesthata

proposalwasacceptedthattheContractor:-

a) Wouldemployanother30operativesandseektoincreasethisto40b) Wouldemployanother3supervisors

6.2.33 Again,TiwestRepresentativehasdirectedtheContractortoincreaseresourcesatatimewhenitdoesnothavethenecessary,orcomplete,Construction

Informationoruninterruptedaccesstothesite.

6.2.34 TheContractorraisedtheissueofuninterruptedaccess,ordisruptedaccess,againon18

thMarch2010

28.TheContractorscorrespondencenotedthat:-

OnTuesdaythe16thMarch20105ofouremployeeswereovercome

byfumes.WesternConstructionCo.carriedoutaninvestigationand

forwardedthereportastherootcauseswerenotclarifiedandcould

onlybeidentifiedbybothPorteusandTiWest.Todatewehavehad

noformalresponseintermsof;

DocumentedevidenceofaccidentinvestigationbyProteusorTiWest


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detailingthecauseoftheaccidentandtherootcausesofthefailure,

Northeactionsthathavebeentakento

Rectifythesituation Theplansandproceduresthatareadoptedtopreventre-

occurrence.

Thepersonorpersonsresponsibleforimplementingtheactions

6.2.35 ItisevidentthattheContractorwasstillincurringsignificantproblemswiththeworkingconditionsthat,inturn,werecausingdelaytotheproject.Moreoveron

thesamedatetheContractornotifiedTiwestRepresentativethat:-

theprioritypipelinesinsubarea4Ecannotbecompletedbeforethe

Aprilshutdownduetothelackofsupportingsteelwork.29

6.2.36 FortheavoidanceofdoubtTiwestwereresponsibleforthefreeissueofthismaterial.


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6.2.37 On31stMarch201030theContractoradvisedthatcomplexityofthe5KOpiperackstiffeninghadincreasedfromtheagreedScopeofWorkandasaresultithad

takenadditionaltimetoinstallandincurredadditionalcost.Onthesamedate

theContractorconfirmedthattheinsulationwasnotincludedwithinitstender

astheinformationwasissuedafteritssubmissiondate31

.Notwithstandingthis

TiwestRepresentativehadissueddrawingsthatincludedthiswork,whichthe

Contractorhadcarriedout,andasaresulttheContractorhadincurredadditionalcostandtimeasaresultoftheinstallation.

6.2.38 TheContractorscorrespondenceof15thApril201032requestedanextensionoftimeuntilthe13

thJune2010asaresultofthe13and10dayshutdownsplus

TiwestRepresentativerequestingarevisedprogrammeconcentratingonpriority

lines.

6.2.39 TheContractorscorrespondenceof25thMay201033notifiedTiwestRepresentativeofitsintentiontomakeaclaiminrespectoftheengineeringand

procurementattheproject.Therefore,thePartieswereawarethatthesituation

hadprogressedtoapointwherebytheContractorwouldseekrecompensefor

TiwestRepresentativesmaladministrationoftheproject.


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6.2.40 TiwestRepresentativeissuedaresponseon27thMay201034statingthattheforegoingnoticewasnotinaccordancewiththeContractandassuchwas

rejected.TheContractorrespondedon28th

May201035

clarifyingthattheclaim

wasgoingtobesubmittedasaresultof:-

a) Theseverityandfrequencyofdelaysb) DelayanddisruptioncausedbyConstructionInfromationbeing

issuedlate

c) Tiwestissuinglateandincompletefreeissuematerial6.2.41 Almost2monthsaftertheContractorsnoticeinrespectoftheinsulationnot

beingincludedwithintheScopeofWorksTiwestRepresentativerepliedon31st

May201036

statingthattheContractdidnotincludeaclauseforsuchomissions.

ClearlyTiwestRepresentativewaseithernotfamiliarwiththeContract,orwas

simplychoosingtoignoreit,asitcontainsavariationclausethatallowsforthese

workstobeinstructed.TiwestRepresentativehadissuedawritteninstructionin

theformofthedrawinganditstransmittal;thereforetheContractorhadbeen

instructedtocarryouttheseworks.Moreover,thelawallowsforthe

rectificationofacontractintheeventthereisanerrorbyeitherorboththe

parties.TiwestRepresentativeclearlychosetoignoretheseoptionsinaneffort


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toderiveabenefitfromthesituation;itsconductwasunconscionable.

6.2.42 On10thJune2010theContractoradvisedthatasaresultof:-a) Tiwestnotprovidingaccessinatimescaleconsistentwiththe

baselineprogramme

b) Tiwestnotprovidingfreeissuematerialinatimescaleconsistentwiththebaselineprogramme

c) TiwestnotsupplyingConstructionInformationinatimescaleconsistentwiththebaselineprogramme

d) Inclementweathere) TiwestsuspendingtheWorksf) Gasleakswithintheplant

6.2.43 Ithadincurreddelayanddisruptionandthatitintendedtosubmitanextensionoftimeupto21

stJune2010

37andresultantcostsof$4,013,538.31.

6.2.44 Summary6.2.45 ItisevidentfromtheeventssetoutabovethattheContractorwas:-

a) PreventedfromcommencingtheWorksb) PreventedfromcompletingtheSeparablePortionsinatimescale


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consistentwiththeDate/sforPracticalCompletionorthebaseline

programme

c) InstructedtocarryoutovertimeworkingasaresultofthedelayssetouthereinandTiwestRepresentativesmaladministrationofthe

project

6.2.46 TheContractorisentitledtorecovertheresultantcostsoftheaboveevents.6.3 Theseparationofevents6.3.1 GiventhenumberandfrequencyoftheeventscausedbyTiwestRepresentative

issuingConstructionInformationinanuncontrolledandad-hocmanneritis

impossibletoseparatetheeffectofeachoftheseevents.TiwestRepresentative

isculpableforthemaladministrationoftheprojectandanyattemptfromitto

deriveabenefitfromthecomplexsituationithascreatedwouldbe

unconscionable.WhilstthismaynotbecompliantwiththeContractitis

acceptedatLaw.

6.3.2 Itshouldbenotedthattheevaluationofanyclaimistobecarriedoutonthebalanceofprobability.TheinformationsetoutinAnnexureAprovidesthat

TiwestRepresentativefailedtocomplywiththeContract,ortheprogrammeit

approved,beyondallreasonabledoubt.Thislevelofproofcarriesafargreater

weightthanthebalanceofprobability.

6.3.3 TiwestRepresentativehasfailedtoacknowledgethedamagecausedtotheprojectasaresultofitsactions.FurtherithassoughttouseContractclauses

whichithaseitherpreviouslywaived,orarestruckoutasaresultofitsactsof

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7 THEQUANTUMOFOURCLAIM7.1.1


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8 SCHEDULEOFANNEXUREANDEXHIBITS8.1 Annexure8.1.1 AnnexureAInformationreleaseschedule8.2 Exhibits8.2.1 ExhibitACorrespondencereferredtowithinthisdocument

2010_07_06 rev 003 - issue to client

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