time for completion etc article may 2011

8/22/2019 Time for Completion Etc Article May 2011

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Time For Completion, Concurrent Delay and

Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm)

The subject of concurrent delay in construction contracts is well trammelled terrain.

Commentators strive to find a new approach to the topic in order to captivate their jaded

audiences (Editorial, Construction Law Journal, 2011, Vol.27 No.3 p. 163)

Introduction

1. Extra time is an endless source of disputes. Nineteen of the twenty teams in the EnglishPremier League are convinced that the extra time Manchester United gets at the end ofeach game at Old Trafford (so called Fergy time) never makes a fair and reasonable

allowance for the disruption that actually took place in the preceding ninety minutes.

Awards of extra time in construction and engineering contracts cause almost as muchtrouble1.

2. This article suggests that the explanation for the approach taken by the Englishauthorities (including the recent case ofAdyard Abu Dhabi v SD Marine Services)to the

question whether a contractor is entitled to an extension of time where there is delay

(including concurrent delay) can be found in the so called prevention principle. The

first part of the article considers what the prevention principle is and the commercial

purpose of extension of time clauses. The article then moves on to deal with concurrentdelay and questions whether Judge Seymours judgment inRoyal Brompton means that,

where two concurrent delaying events start sequentially, only the first to start should be

regarded as the cause of the delay. Finally, the article notes that the Scots case ofCity

Inn suggests a novel approach to concurrent delay, one which, it is suggested, is unlikely

to be followed south of the border. This suggestion now has the support of Hamblen J in

Adyard.

The prevention principle

3. We start with a question. Why do construction contracts have extension of time clausesallowing the contractor additional time to complete the works where the employer orevents which are at the employers risk cause delay to the completion of the work?

4. The answer can be found by considering the following situation:1) The contract requires the contractor to complete the work in a particular time failing

which the contractor is liable to pay liquidated damages.

2) The employers actions prevent the contractor from completing on time; and1

Note to editor: will this do?


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3) The contract does not contain a provision giving the contractor the right to an awardof the additional time he needs to complete the works as a result of the delay caused

by the employer.

5. In this situation, can the employer recover liquidated damages for delay? The answer isno. What happens (the prevention principle) is that:

1) The completion date is set aside.2) Time becomes at large in other words, the contractors obligation to complete by

the agreed date is replaced by an obligation to complete within a reasonable time.

3) The liquidated damages clause is unenforceable; and4) The employers only remedy is a claim for unliquidated damages in the event of the

contractors failure to complete within a reasonable time.

6. Amongst the older authorities for these propositions areHolme v Guppy (1838) 2 M&W387, Peak Construction (Liverpool) v McKinney Foundations Ltd(1970) 1 BLR 111 and

Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board[1973] 1 WLR

601:

...there are clear authorities, that if the party be prevented, by the refusal of the other

contracting party, from completing the contract within the time limited, he is not liable in

law for the default...It is clear, therefore, that the plaintiffs were excused from performing

the agreement contained in the original contract... The plaintiffs were therefore left at

large; and consequently they are not to forfeit anything for the delay.

Holme v Guppy (1838) 2 M&W 387, Parke B

If the failure to complete on time is due to the fault of both the employer and thecontractor, in my view, the clause does not fit. I cannot see how, in the ordinary course,

the employer can insist on compliance with a condition if it is partly his own fault that it

cannot be fulfilled... I consider that unless the contract expresses a contrary intention, the

employer, in the circumstances postulated, is left to his ordinary remedy; that is to say, to

recover such damages as he can prove flow from the contractors breach. No doubt if the

extension of time clause provided for a postponement of the completion date on account

of delay caused by some breach or fault on the part of the employer, the position would

be different.

Peak Construction (Liverpool) v McKinney Foundations Ltd(1970) 1 BLR 111

It is well settled that in building contracts and in other contracts too when there is a

stipulation for work to be done in a limited time, if the other party by his conduct it maybe quite legitimate conduct, such as ordering extra work renders it impossible or

impracticable for the other party to do his work within the stipulated time, then the one

whose conduct caused the trouble can no longer insist upon strict adherence to the time

stated. He cannot claim any penalties or liquidated damages for non-completion in that

time.

Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board[1973] 1 WLR

601 at 607 (HL), approving a statement of principle by Lord Denning in the CA.

7. There are also two more recent cases.


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8. The first isMultiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd(2007)BLR 195. In paragraphs [47] to [49] Jackson J said:

47. The essence of the prevention principle is that the promisee cannot insist uponthe performance of an obligation which he has prevented the promisor from

performing.

48. In the field of construction law, one consequence of the prevention principle is

that the employer cannot hold the contractor to a specified completion date, if the

employer has by 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. The same principle applies as between main contractor and sub-

contractor.

49. It is to avoid the operation of the prevention principle that many constructioncontracts and sub-contracts include provisions for extension of time. Thus it can

be seen that extension of time clauses exist for the protection of both parties to a

construction contract or sub-contract.

9. Jackson J then reviewed the authorities and at para [56] concluded:(i) Actions by the employer which are perfectly legitimate under a

construction contract may still be characterized as prevention, if those

actions cause delay beyond the contractual completion date.

(ii) Acts of prevention by an employer do not set time at large, if the contract

provides for extension of time in respect of those events.

(iii) In so far as the extension of time clause is ambiguous, it should be

construed in favour of the contractor.

10. The second more recent case isAdyard Abu Dhabi v SD Marine Services [2011] EWHC848 (Comm). This was a case concerning the construction of two ships. The buyer

purported to rescind the shipbuilding contract because of the shipyards failure to have

the vessels ready for sea trials by the date stated in the contract. The shipyard relied on

the prevention principle. The shipyards case was that the buyer was not entitled to

rescind because it had ordered variations to the contract which delayed the work.

11. There were three stages to the shipyards argument. First, the shipyard said that thebuyer had ordered variations. Second, the shipyard said that the contract did not entitle

the shipyard to an extension of time for any delay caused by the variations. Third, the

shipyard said that the variations had caused delay.

12. For the shipyards case to succeed, it had to win at all three stages of the argument. Inthe event, it failed at all three.


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13. First, Hamblen J held that the matters relied on by the shipyard did not in fact amount tovariations [237]. Second, Hamblen J followed Jackson Js analysis of the prevention

principle (see [240] to [243]) and held that it did not apply because even if (contrary to

his first finding) there were any variations, the contract allowed for an extension of timefor the delay caused by them [256]. Third, Hamblen J found that even if (contrary to his

first and second findings) there were any variations and even if the contract did not allow

for an extension of time, the matters that were alleged to have been variations did not in

fact cause any delay to the work [295]. His approach to the question of causation isconsidered further below.

14. After referring to Jackson Js summary of the prevention principle inMultiplex, HamblenJ concluded [243]

243. However, as Jackson J stated the prevention principle does not apply if the

contract provides for an extension of time in respect of the relevant events.Where such a mechanism exists, if the relevant act of prevention falls within the

scope of the extension of time clause, the contract completion dates are extended

as appropriate and the Builder must complete the work by the new date, or pay

liquidated damages (or accept any other contractual consequence of latecompletion) see also Chitty on Contracts at paragraphs 37-115 to 37-117 and

Keating on Construction Contracts at paragraphs 9-018 to 9-20.

15. The prevention principle explains why construction and engineering contracts haveextension of time clauses. They allow (or should allow) the contractor to be awarded

extensions of time to complete the work where completion by the agreed date is

prevented by the employer or by events that are at the employers risk. The EOT clausethereby preserves the integrity of the liquidated damages clause by relieving the

contractor from liability to pay liquidated damages where the delay to completion results

from a relevant event stated in the contract.

16. This is why in many of the reported cases the defendant contractor faced with a claim forliquidated damages tries to argue that the contract when properly construed does not

permit the architect or engineer to award an extension of time for the delay caused by one

or more of the relevant events that occurred during the works if the argument succeeds,

the liquidated damages clause become unenforceable.

Extensions of time

17. AsHudson 12th edition (2010) points out at para 6-051:All standard forms of contract have extension of time provisions with similar but

slightly different wording when defining the circumstances in which an extension of time

is to be granted. For example, some contracts require completion likely to be delayed

(such as the JCT 98 and JCT 2005); others refer to completion being likely to be, or has

been delayed (such as JCT 63, JCT 98 with Contractors Design, IFC98, GC/Works/1,


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IChemE and the FIDIC suite of contracts); and yet others refer to completion of the

works has been delayed (such as MF/1, ICE7 and NEC2).2

18. The precise provisions in the different forms are all different. It is helpful to consider therelevant provisions of the JCT Form because it is the one with which most of the

authorities are concerned.

19. Clause 25.2.1.1 provides:If and whenever it becomes reasonably apparent that the progress of the Works is being

or is likely to be delayed the Contractor shall forthwith give written notice to theArchitect of the material circumstances including the cause or causes of the delay and

identify in such notice any event which in his opinion is a Relevant Event.

20. Clause 25.3.1 provides:If, in the opinion of the Architect, upon receipt of any notice, particulars and estimate

under clauses 25.2.1.1 and 25.2.2

1.1 any of the events which are stated by the Contractor to be the cause of the delayis a Relevant Event, and

1.2 the completion of the Works is likely to be delayed thereby beyond theCompletion Date the Architect shall in writing to the Contractor give an

extension of time by fixing such later date as the Completion Date as he then

estimates to be fair and reasonable.

21. What happens where:1) there is a properly drafted extension of time clause i.e. one which allows the

contractor to be awarded an extension of time where completion by the agreed date is

prevented by the employer or by events that are at the employers risk; and

2) some of the delay to the completion of the works is the result of relevant events andsome of it is the result of events that are the contractors responsibility?

22. In other words, what happens where part of the delay is solely the contractorsresponsibility and part is solely the employers responsibility?

23. In this situation there is no difficulty: the architect or engineer awards the contractor anextension of time for the delay to completion caused by the relevant events but not for the

delay that is the responsibility of the contractor.

2For a more detailed review of the provisions relating to time for completion in the various standard forms

of contract, see the article Delay, Progress and Programming by Tony Marshall in [2010] ICLR 137.


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24. But what happens where there is concurrent delay?

Concurrent delay

What do we mean by concurrent delay?

25. First of all, we need to define precisely what we mean by the term concurrent delay.One of the problems in using such expressions as concurrent delay or concurrent

delaying events is that they may refer to a number of different situations. Confiningattention for a moment to concurrent delaying events, which may be taken to mean

relevant events and other events, or causes of delay, which are not relevant events, there

would seem to be several possibilities. Such events may be described as beingconcurrent if they occur in time in a way in which they have common features. One

might describe events as concurrent on a strict approach only if they were

contemporaneous or co-extensive, in the sense that they shared a starting point and an

end point in time. Alternatively, events might be said to be concurrent only in the sense

that for some part of their duration they overlapped in time. Yet again, events might be

said to be concurrent if they possessed a common starting point or a common end point.

It might also be possible to describe events as concurrent in the broad sense that

they both possessed a causative influence upon some subsequent event, such as thecompletion of works, even though they did not overlap in time. In other words, they

might also be said to be contributory or cooperative in bringing about some

subsequent event. It is in this sense that the use of the term concurrent is perhaps

most likely to be of relevance in the application of clause 25.3 of the Standard Formconditions... It appears to be that one of the problems in the present case is that language

such as that under consideration here has been used in different senses at different times.

It therefore becomes important in the interests of clarity, to try to disentangle this

confusion.

City Inn v Shepherd Construction [2010] BLR 473, Lord Osborne [49]

26. In other words, for present purposes the relevant question it not whether the delayingevents were concurrent in the sense that the events themselves overlapped in time but

whether both events caused the same period of delay to the completion of the work in the

sense that the delaying effect of both events was felt at the same time.3

Of course, to

have this causal effect, it will usually (but not always) be necessary for the events

themselves to happen at the same time or at least to overlap.

27. To take a very simple example, in the first week of November access to the site isrestricted by a burst water main in the road (assume this is a relevant event - an event

3The SCL Delay Protocol takes a slightly different approach: True concurrent delay is the occurrence of

two or more delay events at the same time, one an Employer Risk Event the other a Contractor Risk Event

and the effects of which are felt at the same time. The term concurrent delay is often used to describe the

situation where two or more events arise at different times, but the effects of them are felt (in whole or inpart) at the same time. To avoid confusion, this is more correctly termed the concurrent effect of

sequential delay events.


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which entitles the contractor to an extension of time) and in the same period the

contractor suffers a labour shortage, which means that men are not available to carry out

work that is on the critical path for the completion of the work (assume this is not a

relevant event).

28. In this example, the relevant question is not whether the events happened at the sametime but whether they were both were causative of the same period of delay to the

completion of the works in the sense that the delaying effect of both events was felt at the

same time. Even so, as the cases referred to below demonstrate, the chronology of the

various events will always be relevant when considering whether as a matter of fact they

caused concurrent delay to the completion of the works.

Concurrent delay and extensions of time

29. What is the starting point for considering whether a contractor is entitled to an extensionof time for concurrent delay?

30. The answer is the terms of the contract. In theory, the terms of the contract could spellout in express terms the answer to the question. In practice, contracts never seem to

certainly not the ones that result in disputes before adjudicators, courts and arbitrators. In

the absence of an express term, the answer has to be found by trying to work out what theparties to the contract intended.

31. InBalfour Beatty Building Ltd v Chestermount Properties Ltd62 BLR 1 Colman Jconsidered the way in which the extension of time clause in the JCT contract was meant

to work. In that case the contract was for the construction of the shell and core of an

office block. The completion date was 12 September 1989 (as extended). Thecontractor did not complete by that date, for reasons which it was agreed were at his risk

under the contract. By January 1990 the contractor was expected to finish (for the same

reasons) in July 1990. Between February and July 1990, while the contractor was in

culpable delay, the employer instructed some variations to the contract. The contractor

contended that he was entitled to an extension of time for completion by the period

required to carry out the variations starting from the date of the relevant instructions (the

gross basis). In other words, if a variation was instructed on 1 February 2009 and

would take 2 months to carry out, the completion date should be extended to 1 April

2009. The employer contended that the contractor was entitled to an extension of time

for the period required to carry out the variations added on to the completion date as it

then was (the net basis). In other words, on the same factual scenario, the completiondate should be extended to 12 November 1989. It was held that the net basis approach

was the correct approach. In his judgment Colman J analysed the contractual purpose of

the completion date/extension of time/liquidated damages regime (page 25):

At the foundation of this code is the obligation of the contractor to complete the works

within the contractual period terminating at the completion date and on failure to do so to

pay liquidated damagesBut superimposed on this regime is a system of allocation of

risk. If events occur which are non contractors risk events and those events cause the


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progress of the works to be delayed the contract provides for the completion date to

be adjusted to reflect the period of delay so caused The underlying objective is to

arrive at the aggregate period of time within which the contract works as ultimately

defined ought to have been completed having regard to the incidence of non contractorsrisk events

32. Colman J went on (page 30): the function of the completion date is to identify the end of the period of time

commencing with the date of possession within which the contractor must complete the

works, including subsequent variations The completion date as adjusted retrospectively

is thus not the date by which the contractor ought to have achieved or ought in future toachieve practical completion but the date which marks 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

33. As has been noted already, Colman J held that the net method was the right one. Hiscomments about how this approach would work in practice provide general guidanceabout the application of the concept of causation in the context of extensions of time:

Before leaving this issue it is right to add that the application of the net method to

relevant events occurring within the period of a culpable delay may give rise to particular

problems of causation. These were discussed at some length in the course of argument.

In each case it is for the architect exercising his powers under clause 25.3.3 to decide

whether an adjustment of the completion date is fair and reasonable having regard to the

incidence of relevant events. Fundamental to this exercise is an assessment of whetherthe relevant event occurring during a period of culpable delay has caused delay to thecompletion of the works and, if so, how much delay. There may well be circumstances

where a relevant event has an impact on the progress of the works during a period of

culpable delay but where that event would have been wholly avoided had the contractor

completed the works by the previously fixed completion date. For example, a storm

which floods the site during a period of culpable delay and interrupts the progress of the

works would have been avoided altogether if the contractor had not overrun the

completion date. In such a case it is hard to see that it would be fair and reasonable to

postpone the completion date to extend the contractors time.

34. In other words, the issue is whether the events in question had any and, if so, what effecton the completion of the works. In short, what actual delay to completion, if any, did

they cause? This is the question that has to be answered in all cases of delay, including

those where the issue of concurrency arises. This is also clear, for example, from thepassage from Trollope & Colls quoted in paragraph 4 above. As Hamblen J put it in

Adyard[282] after referring to this passage:

The conduct has to render it impossible or impracticable for the other party to do the

work within the stipulated time. The act relied on must actually preventthe contractor

from carrying out the works within the contract period or, in other words, must causesome actual delay.


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35. InBalfour Beatty the contractor was entitled to an extension of time on a net basis for thevariations (which were instructed after the date set for completion as extended and during

a time when the contractor was in culpable delay) because the contractor would have

needed additional time to carry out the variations whenever they were instructed.However, in the example Colman J gave of the storm, the works would have been

complete before the storm occurred had it not been for culpable delay by the contractor,

with the result that in Colman Js view the contractor ought not to be awarded an

extension of time.

36. It is clear fromBalfour Beatty that the issue of causation is key to the application of anextension of time clause in all cases where the works have been delayed. However, what

rules (if any) fall to be applied when considering the issue of causation? It is important to

keep in mind that the issue arises in the context of a contractual provision intended in

certain circumstances to relieve the contractor from liability to pay the employer

liquidated damages for delay to the completion of the works. It is therefore notimmediately obvious that the law of causation, as applied in claims for damages for

breach of a contractual or tortious obligation or in claims for an indemnity under the

terms of a policy of insurance, should be applied in the present context. How, then, have

the reported cases dealt with the issue?

37. InHenry Boot Construction (UK) Limited v Malmaison Hotel (Manchester) Limited(1999) 70 Con LR 32 the contractor claimed in an arbitration an extension of time as a

result of delay said to have been caused by variations and late information (among other

things). The employer pleaded in its defence firstly that the alleged variations did not

cause any delay because they were not on the critical path and secondly (at paragraph 37

of its defence) that the true cause of the delay was other maters which were contractor-risk events. The contractor contended that the matters pleaded at paragraph 37 wereoutside the jurisdiction of the arbitrator and irrelevant to the Claimants entitlement to

an extension of time in this Reference (since they relate to alleged progress of the works

and not to the effect of relevant events upon the completion date or the Architects

obligation to determine that) (see page 34 of the report and paragraphs 8 and 9 of the

judgment). Dyson rejected the argument and held as follows:

15. It seems to me that it is a question of fact in any given case whether a relevant

event has caused or is likely to cause delay to the works beyond the completion date in

the sense described by Colman J in theBalfour Beatty case In my judgment it isincorrect to say that, as a matter of construction of clause 25 when deciding whether a

relevant event is likely to cause or has caused delay, the architect may not consider theimpact on progress and completion of other events.

38. At [13] Dyson J considered what the position is where there are two concurrent causes ofthe delay:

...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


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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 if fair and reasonable to do so, the architect is required to grant an extension of

time of one week. He cannot refuse to do so on the grounds that the delay would haveoccurred in any event by reason of the shortage of labour.

39. It is clear from the judgment that at this point Dyson J was recording an agreementreached by counsel and therefore a matter on which he had not heard argument. This has

led some commentators to question the weight that can be attached to this passage in

Dyson Js judgment. However, it is clear that Dyson J recorded the point with apparent

approval.

40. Pausing there, there are two points to note about this passage in Dyson Js judgment.First, his simple example is a situation where the two concurrent causes of delay areco-extensive: they both start and finish on the same day. However, it is not obvious that

the principle he sets out in the first sentence is meant to apply only where there are two

concurrent causes of delay in this sense and not, for example, to the period of overlap

where two concurrent causes start sequentially. Second, it is clear that in the situation

where two concurrent causes of delay are co-extensive, the but for test of causation

does not apply: if it did, the result would be that neither of the concurrent causes was

regarded as the cause of delay.

41. InRoyal Brompton Hospital NHS Trust v Hammond & Others (2001) 76 Con LR 148,Judge Richard Seymour QC addressed the issue of concurrency at paragraph 31 of his

judgment:

However, it is, I think, necessary to be clear what one means by events operating

concurrently. It does not mean, in my judgment, a situation in which, work already being

delayed, let it be supposed, because the contractor has had difficulty in obtaining

sufficient labour, an event occurs which is a relevant event and which, had the contractor

not been delayed, would have caused him to be delayed, but which in fact by reason ofthe existing delay, made no difference. In such a situation although there is a relevant

event, the completion of the Works is [not] likely to be delayed thereby beyond the

Completion Date.

The relevant event simply has no causative effect upon the completion date. This

situation obviously needs to be distinguished from a situation in which, as it were, the

works are proceeding in a regular fashion and on programme, when two things happen,

either of which, had it happened on its own, would have caused delay, and one is a

relevant event, while the other is not. In such circumstances there is a real concurrencyof causes of the delay...

42. The example Judge Seymour gives in the first paragraph appears to be one whereconcurrent events start sequentially and overlap for a period of time. In the example, the

relevant event (i.e. the employer risk event) starts after the event for which the contractor

is responsible. Judge Seymour thought that in this situation the relevant event would not


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be causative of the delay to the completion of the work so that no extension of time

should be awarded.

43. InRoyal Brompton Judge Seymour referred to Dyson Js judgment inMalmaison, andsaid Dyson J had in mind the sort of situation in the second part of the quote above viz:

the situation

...in which, as it were, the works are proceeding in a regular fashion and on programme,

when two things happen, either of which, had it happened on its own, would have caused

delay, and one is a relevant event, while the other is not. In such circumstances there is a

real concurrency of causes of the delay...

44. As appears from the report ofRoyal Brompton at page 220, in refusing permission toappeal against Judge Seymours decision, Sir Anthony Evans said at [11]:

The architects task of estimating the likely date for final completion, and of delay

caused to it by a relevant event, becomes particularly complex where there are concurrent

or overlapping causes of delay, as the architects considered here that there were. Nocriticism is made of the judges approach, indeed both parties accept that his analysis of

the legal position was entirely correct.

45. InAdyardHamblen J referred to paragraph [31] of Dyson Js judgment inMalmaisonabove and said [277]:

It is to be noted that this example involves a relevant event which caused a period ofactual delay to the progress of the works no work could be done for a week due to theweather. If that is established then the contractor is entitled to his extension of time even

if there is another concurrent cause of that same delay. A useful working definition of

concurrent delay in this context is a period of project overrun which is caused by two or

more effective causes of delay which are of approximately equal causative potency see

the article Concurrent Delay by John Marrin QC (2002) 18 Const LJ No. 6 436.

46. Hamblen J then went on to refer to the passage in Judge Seymours judgment inRoyalBrompton quoted above and said [279]:

This makes it clear that there is only concurrency if both events in fact cause delay to

the progress of the works and the delaying effect of the two events is felt at the sametime. In HHJ Seymour QCs first example, the relevant event did not in fact cause any

delay to the progress of the works. His first example is consistent with Colmans Js

comments as to the situation in which a variation is instructed during a period of culpable

delay at pages 30-31 of the report inBalfour Beatty.

47. Harking back to what is said above, the crucial issue is whether the delay is concurrentdelay in the sense that the delay was caused by both events and felt at the same time, not

whether the events were concurrent; but as Judge Seymours example shows, the


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chronology of events is important because it will be relevant to or indeed key to the

question whether both events were causative of the same period of delay.

48. But does Judge Seymours judgment go further than this? Should his judgment beinterpreted as laying down a rule of law that in the context of a conventionally worded

extension of time clause, where two concurrent events occur sequentially only the first to

start is to be regarded as the cause of the subsequent delay? It is suggested that it is far

from clear from the judgment that this is what Judge Seymour meant. Similarly, it is not

obvious from what Sir Anthony Evans said, that he meant to give approval to any such

rule.

49. Nonetheless, this is certainly how Judge Seymours judgment has been widelyinterpreted. As a result, it is often said that where there are two or more concurrent

delaying events, one the responsibility of the employer and the other the responsibility ofthe contractor, the contractor is only entitled to an extension of time (the result envisaged

by Dyson J inMalmaison) where there is true concurrency i.e. where the two delaying

events start at the same time.

50. It seems that Judge Seymour reached the conclusion he did by applying the but for test.It is suggested that it is far from clear that the parties to a conventionally worded

extension of time clause intend that where there are sequential concurrent events, only the

first to start should be regarded as a cause of the subsequent delay with the consequence

that the contractor will be entitled to an extension of time only where the first in time is a

relevant event. Where there are sequential concurrent events, it might be argued that the

parties do not intend such a result since the consequence will be to allow the employer torecover liquidated damages in respect of the period of overlap where both events areoperative4. If that argument is correct, then the correct conclusion should be that

although the terms of a conventionally worded extension of time clause require the

architect or other tribunal to consider whether a relevant event has caused or is likely to

cause delay, the parties intend that where two or more delaying events are operative in

respect of the same period of delay, both of those events are to be regarded as causative

of that period of delay.

51. Pausing there, it is suggested that the authorities other than City Inn (see below) supportthe following approach to the issue of concurrency:

1) Is there concurrent delay in the sense that two events were both effective causes ofthe same period of delay causes of the same period of delay in the sense that the

delaying effect of both events was felt at the same time? Or on a proper analysis, is

the correct conclusion that one or more of the allegedly delaying events caused no

delay?

2) Where two or more events are effective causes of the same period of delay in thesense described above, the contractor is entitled to an extension of time provided one

4The term operative is used instead of the term causative since using the second term begs the question

in issue.


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of the events is a relevant event (i.e. one that entitles the contractor to an extension of

time).

3) The court takes a common sense approach to the question of causation. The but fortest of causation will not assist in cases of true concurrency since its application

will result in the conclusion that neither event caused the delay. The chronology and,

in particular, the dates on which each event started and finished are likely to be

important to the factual inquiry what the causative effect of each of the events was.

The authorities suggest that the enquiry leads to the conclusion that where there are

sequential concurrent events, only the first to start is to be regarded as causative of

the delay. However, query whether this is what the parties to a conventionallyworded extension of time clause really intend.

4) These are not rules of law and where the contract evinces a different intention, thecontract will prevail.

52. In the Scots case City Inn v Shepherd Construction [2010] BLR 473 Lord Osborne, withwhom Lord Kingarth agreed, in two respects took a different approach to the award of an

extension of time where there is concurrent delay. He summarised the position as

follows:

42. In the first place, before any relevant claim for an extension of time can 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. In the

second place, 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. In

the third place, the decision maker is at liberty to decide an issue of causation on the basisof any factual evidence acceptable to him... In the fourth place, if a dominant cause canbe 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 an

extension of time will or will not succeed. In the fifth place, 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 therelevant event and the other event...

53. As far as the situation envisaged in his fifth place is concerned, Lord Osborne saidfurther at [51]:

the focus for consideration by the architect, or other decision maker, requires to be thecause of the delay in the completion of the works, upon a fair and reasonable view. Thus,

it may not be of importance to identify whether some delaying event or events was or was

not concurrent with another, in any of the possible narrow senses described, but rather to

consider the effect upon the completion date of relevant events and events not relevant


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events. For that reason, discussion of whether or not there is true concurrency, in my

opinion, does not assist in the essential process to be followed under clause 25. Having

said that, however, I would endorse the view of the Lord Ordinary that where two

causes, neither of which is dominant, are under consideration, a relevant event anda non-relevant event, it may be appropriate for the architect or decision maker toapportion responsibility for the delay between the two causes. [emphasis provided]

54. On the face of it, Lord Osbornes analysis differs from the one offered in paragraph 51above in two respects: in his fourth place he introduces the concept of dominant

cause as an apparently additional step in the process of deciding whether the contractor

is entitled to an extension of time; in his fifth place, he says that where both events are

effective causes of the delay, there should be an apportionment of the delay between the

two causes i.e. between the contractor and the employer.

55. As far as Lord Osbornes fourth place (i.e. dominant cause) is concerned, there is aschool of thought, which appears to say that where two or more events cause the same

period of delay, the contractor is entitled to an extension of time only where the relevant

event is the dominant cause of the delay. However, put in that stark way, the

proposition been widely doubted: see, for example, the discussion in Dominant Cause

and its Relevance to Concurrent Delay, Society of Construction Law Paper 153 January

2009; and Keating Eighth edition (2006) para 8-021, adopted and approved by HHJ

Stephen Davies in Steria Ltd v Sigma Wireless Communications Ltd[2008] BLR 79,

[128]-[132]5. It also appears difficult to reconcile it with the authorities cited above.

56. When the dominant cause approach is viewed in a somewhat different way, it issuggested that it is no different from the approach offered in paragraph 51 above. The

difference is one of language, not of substance. It is suggested that in the context of

extension of time, all the dominant cause approach means is this: where on a properanalysis only one of the events has any real causative effect and the other does not, the

former event is the dominant cause of the delay and the second event has no causative

effect. In this situation, the contractor will be entitled to an extension of time only where

the dominant cause of the delay is a relevant event. Put this way, the dominant cause

approach is no different from step (1) in the analysis in paragraph 51 above.

57. As far as Lord Osbornes fifth place (i.e. apportionment) is concerned, since City Innwas reported, the prevailing view has been that it is unlikely to be followed in England.This view now has the support of Hamblen J inAdyard:

288. [In the fifth place] envisaged by Lord Osborne the English law approach would

be to recognise that the builder is entitled to an extension of time, not an

apportionment see, for example,Malmaison at para 13.

5For an alternative view, see the paper Concurrency, Causation, Commonsense and Compensation in

[2010] ICLR 166 by Andrew Stephenson, a partner in a Melbourne law firm, who argues that thetraditional approach is wrong and that the analysis in Keating is simplistic.


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Conclusion

58. Where an employer prevents the completion of the works, he is not entitled to recoverliquidated damages (the prevention principle - see above).

59. Where there is concurrent delay in the sense described above, if the contractor was notawarded an extension of time, the result would be to allow the employer to recover

liquidated damages for the whole of the period of delay for which he was jointly

responsible. Similarly, the result of the apportionment exercise in City Inn would be to

allow the employer to make a partial recovery of liquidated damages for the period of

delay which he jointly caused. Neither result would be consistent with the preventionprinciple.

60. The position may be different if (unusually) the terms of the contract clearly point to adifferent conclusion. However, the requirement in the JCT Forms for the architect to

award an extension of time that is fair and reasonable does not achieve this result

because the relevant clauses read as a whole make it clear (as do similar clauses) that the

architect has to take a causation based approach: did the relevant event cause delay?6

61. Or putting it another way (to reflect the current interest in methods of voting):1) First past the post (dominant cause) is not the solution.2) But nor is proportional representation (apportionment).3) Instead, where there is a tie, the party whose name begins with CON (the

contractor) wins.

62. A similar approach to electing our MPs seems likely to commend itself to at least one,but probably not all, of our political parties.

Michael Curtis QC

6See the commentary to the first instance decision in City Inn at [2008] BLR 269

time for completion etc article may 2011

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