BuildLaw BuildLaw: Issue 24, June 2016 | Page 39

delay dispute might arise out of the commonly used standard form contract NZS 3910.
NZS 3910 clause 10.3.1 provides:

The Engineer shall grant an extension of the time for completion of the Contract Works or for any Separable Portion if the Contractor is fairly entitled to an extension…
(emphasis added)

As an example, an Engineer might face the issue of whether to grant an EOT claim where both the contractor and the principal are responsible for delays: i.e. the principal cannot give access to the site but the contractor is not ready to commence the works. Should the Engineer refuse such a claim, grant it in part or fully allow the claim?

Helpfully, the UK courts have considered the UK standard form construction contract JCT 1980. The JCT is similar to the wording of NZS 3910 and permits the Architect (contract administrator or Engineer) to extend the completion date on the happening of certain events to a later date estimated to be “fair and reasonable”.

The English case Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 is widely regarded as the leading case in this area. It is helpful to set out the following example and reasoning:

..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 [principal risk]), but also because the contractor has a shortage of labour (not a relevant event [contractor risk]), 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 it 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 have occurred in any event by reason of the shortage of labour.

If the New Zealand courts adopted this case, an Engineer under NZS 3910 would allow the contractor’s claim regardless of the contractor’s own inability to progress the works.

A different approach was taken by a Scottish court in the case of City Inn Ltd v Shepherd Construction Ltd [2010] CSIH 68; 136 Con LR 5. There, the words “fair and reasonable” were said to allow a concurrent delay to be “apportioned” and that such apportionment is generally appropriate in concurrent delay situations. Apportionment means allowing an EOT claim in part but declining the full claim to recognise the joint or “concurrent” causes of delay.

The City Inn apportionment approach has been heavily criticised by English courts and academics. In particular, the leading text, Hudson’s Building and Engineering Contracts (12th ed, Sweet & Maxwell, London 2010 at 6-062) explains that:

The words “fair and reasonable” [in the