Preliminary
From the onset it is submitted that it is a blanket rule under the common law contract law that a contract between two parties legally binds the parties once it has been executed by the parties (L’Estrange v Graucob, 1934). Ideally, the terms of the contract give rise to contractual obligations that must be undertaken all parties to the agreement. However, there is a collective web of judicial decisions that have blossomed over time which gives legal guidance to disputes facing performance of constructions contracts. Precisely this presentation or otherwise a submission on behalf of Security Investment Ltd is anchored on trenchantly settled principles of construction law in the UK and other persuasive precedents from other jurisdictions.
There are various claims that are being fronted by Security Investment Claims and they include:
- That the notice of delay did not meet the requirements under clause 2.27 of the contract
- That the contractors requirements set under clause 2.2 were contravened.
- That the loss and expense claim made by AI builders was inconsistent with clause 4.23 of the contract agreement.
- That the documents envisaged under clause 4.5 of the agreement have not been produced by A1 Builders.
Extension of Time
In seeking an extension of time it has been established in Balfour Beatty Building Ltd Chestermount Properties Ltd (2003) by learned Justice Colman that the delay caused by the relevant event that the contractor argues to be transpiring within the period of delay must actually be the cause of delay hindering the completion of the construction. It has been argued that under English law an general extension of time will be granted to a contractor if the delay was has occurred due to one or more events that have been envisaged in the relevant event clause of the JCT contract (Walter Lilly v MacKay, 2012). As a matter course, Justice Dyson in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) affirmed that if there are two concurrent causes of the delay but only one is a relevant event according to the JCT contract the contractor can be given an extension of time for the period of delay caused by the relevant event.
Recently in Adyard Abu Dhabi v SD Marine Services (2011) Justice Hamblen pronounced that extension of time will be granted to contractor even though another cause which is not relevant event equally contributed to the delay. Extension of time will be granted to the contractor even in cases where the delay has been caused by a relevant event triggered by both the contractor and the administrator (De Beers v Atos Origin IT Services UK Ltd, 2011). It is apparent that there has been three causes of delay in the work undertaken by A1 Builders: the fact that the kitchens did not fit in the flats, the plumbers declining to work and the hiring of a tower scaffold. It is submitted that the aforementioned causes of delay evident in the AI Builders work are not part of the relevant events under clause 2.29 of the JCT contract. The extension of time should therefore not be granted even though the there are concurrent cause of delay because of lack of a relevant event envisaged.
Security Investment Ltd Claims
Notice of Delay
The contract pursuant to clause 2.27 envisages that there may be delay but in such a case the contractor is required to file a notice of delay immediately the contractor learns of a looming delay. The notice should be served within reasonable time after the contractor has learnt of the delay and it should explain in detail the consequences that the client is likely to suffer. In addition, it should indicate the period the delay is to take. Principally, notice of delay creates an opportunity for the parties to measures in response the looming effects of the delay. In London Borough of Merton -v- Stanley Hugh Leach Ltd (1985) it was held that the contractor notice of delay must be served on the architect if there immediately there is reasonable belief that there is an imminent delay and the notice must be express in writing and the delay in the notice musty be on going and not anticipated future delay. It is submitted that the notice that has been served by A1 Builders was not promptly served because they learnt of the possible delays early enough before the construction almost ended. The delay notice given by A1 Builders did not explain in detail the possible consequences of the delay. It was only plain and shallow indicating no serious issue worth the attention of Security Investment Claims.
In Walter Lilly v MacKay (2012) the court held that the claim for loss and expense must be made within sufficiently reasonable time. It has been decided in WW Gear Construction Limited v McGee Group Limited (2010) that the claim must have sufficient details explaining the loss and expenses. It is submitted that the loss and expense claim given by A1 Builders was ambiguous and did not clearly give clear details of the losses and expenses incurred. In Walter Lilly v MacKay (2012) the court held that prior knowledge and information about the losses and expenses is paramount in determine whether a claim for loss and expenses should be granted. It is submitted that the contract administrator, Security Investment Ltd, does not have any prior information and therefore the claim does weak. According to clause 4.23 of the JCT contract the contractor is required to make a loss and expenses claim to the contract administrator of the losses or expenses that may have been incurred due to delay or any relevant events. The clause further states that the claim must be presented to the contract administrator within reasonable time. Additionally, the circumstances in which the loss or expense was incurred must be reasonable. It follows that the circumstances in which the expenses that were incurred by A1 Builders is unreasonable because it has largely been attributed to the contractors fault.
Notice of Delay and Extension of Time
Compensable Delays
A delay under construction law is either an excusable or inexcusable delay. It is excusable if it has been caused by the Architect/employer or both the Architect/employer and the contractor. Excusable delays are those attributed to factors beyond the control of the contractor (Champman et al., 2016). However, a delay is inexcusable if it has solely been contributed by the contractor or third parties such as suppliers and subcontractors (Champman et al., 2016). A Compensable delay is a delay that is inexcusable but the contractor has a right to recover damages in respect of extra costs the contractor has incurred due to the delay. Non-compensable delays are delays that entitle a contractor to an extension of time but not monetary costs or losses incurred due to the delay. A1 Builders are the sole reason that the multiple delays have occurred because third parties which are the plumbers and fitting of kitchen were within their control. The delay is thus inexcusable because it caused a significant disadvantage to Security Investment Ltd and therefore A1 Builders are not entitled to any form of monetary compensation. In fact it is a fundamental tenet in construction law that a contractor will is liable to pay damages suffered to an the employer has a result of damages caused by an inexcusable delay (Jerry Bennett Masonry, Inc. v. Crossland Constr.Co., 2005).
In the case of Co-operative Insurance Society Ltd v Henry Boot Scotland Ltd (2002) it was held that the contractor must strictly adhere to the directions given by the contract administrator. It was stated that the contractor must pay keen attention to the specific details that have been given by the client. It is instructive to note that the court in Equitable Debenture Assets Corporation v Moss (1983) note that contractor is under a duty to disclose to the client any defects that in the design. It is submitted that A1 Builders did not disclose any the defects that was notable in the kitchen that could not fit. Therefore it can be argued that they did not perform their obligation as requested by Security Investment Ltd. The omission by A1 Builders led to the delays and therefore it is submitted that the claim for losses and expenses incurred due to the delays is invalid. As a matter of course clause 2.2 of the JCT contracts obligates the contractor to comply with all the specific instructions given by the contract administrator.
Conclusion
It is a plausible conclusion that the extension of time requested by A1 builders should not be granted because the delay is an inexcusable delay. Further the notice of delay did not meet the legal and contractual requirements. Conversely, A1 Builders are not entitled to loss and expenses incurred due to the delay.
References
Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848
Balfour Beatty Building Ltd v Chestermount Properties Ltd (2003) 62 BLR 1
Chapman, N., Davis, L. & Parkman, H., 2016. Resolving Problems and Disputes on Construction Projects: Tackling Contract Performance Delays. Lorman. Available at:
https://www.lorman.com/resources/resolving-problems-and-disputes-on-construction-projects-tackling-contract-performance-delays-15142 [Accessed April 24, 2017].
Co-operative Insurance Society Ltd v Henry Boot Scotland Ltd (2002) EWHC 1270 (TCC)
De Beers v Atos Origin IT Services UK Ltd [2011] BLR 274
Equitable Debenture Assets Corporation v Moss (1983) 2 Con LR 1
Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32,
Jerry Bennett Masonry Inc. v. Crossland Constr.Co. (2005) 171 S.W.3d 81
L’Estrange v Graucob [1934] 2 KB 394
London Borough of Merton -v- Stanley Hugh Leach Ltd [1985] 32 BLR 51
W W Gear Construction v McGee Group Ltd [2010] EWHC 1460 (TCC)
Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 1773
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