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The prevention principle and concurrent delays

  • United Kingdom
  • Construction and engineering - Articles
  • Litigation and dispute management

05-02-2018

This case considered the interaction of the prevention principle with concurrent delays.

Facts:

Cyden instructed North Midland to design and construct a house in the Midlands under an amended JCT Design and Build Contract 2005. One of the agreed amendments was to clause 2.25.1, which addresses the obligation of the Employer to grant an extension of time.

The amendment added a condition to the circumstances in which the Contractor was entitled to an extension of time, as set out below (emphasis added):

  1. any of the events which are stated to be a cause of delays is a Relevant Event; and
  2. completion of the Works or of any Section has been or is likely to be delayed hereby beyond the relevant Completion Date,
  3. and provided that

(a)     the Contractor has made reasonable and proper efforts to mitigate such delay; and

(b)     any delay caused by a Relevant Event which is concurrent with another delays for which the Contractor is responsible shall not be taken into account.

Subsequently, delays occurred and the Completion Date was missed. The delays were attributed to: (i) lighting to the main house; (ii) asphalt roofing; and (ii) exceptionally adverse weather. 

Whilst Cyden accepted that, in principle, North Midland would be entitled to an extension of time in respect of the weather.  However, as it ran concurrently with other delays for which North Midland was responsible, Cyden said that no extension was due.

North Midland sought to rely upon arguments that:

  1. the prevention principle should apply (i.e. that events caused by the other party had prevented the contractor from complying with its obligation to complete by the Completion Date); and/or
  2. Cyden’s approach to the applications and dismissal of delays that ran concurrently with contractor delays was unfair and contrary to the terms of the contract, which it had wrongly interpreted.

Decision:

Fraser J contended that this case was a matter concerning the interpretation of additional condition to clause 2.25.1, and rejected the application of the prevention principle. Fraser J readily concluded that the parties had, as they are entitled to do, agreed specific terms as to the operation of the extension of time mechanism under the contract and consequently the parties were bound by this.

However, helpfully, the judgement also discussed application of the prevention principle in circumstances of concurrent delay. Fraser J concluded:

“for the prevention principle to apply, the contractor must be able to demonstrate that the employer’s acts or omissions have prevented the contractor from achieving an earlier completion date and that, if that earlier completion date would not have been achieved anyway, because of concurrent delays caused by the contractor’s own default, the prevention principle will not apply”

The decision accords with the judgment of Lofthouse QC J in Jerram Falkus v Fenice Investments and Hamblen LJ in Adyard Abu Dhabi v SD Marine Services.   

Practical Implications:

In essence this case establishes a helpful test that parties who wish to argue that the prevention principle applies in cases of concurrent delay should consider. The test is:

  1. did the employer’s act or omission prevent the contractor from achieving the completion date?; and
  2. were there any concurrent contractor delays which may have impacted on the ability to achieve completion in any event?

http://www.bailii.org/ew/cases/EWHC/TCC/2017/2414.html

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