Andrew Lacey
Managing Principal
Nathan Jones
Senior Associate
ABOUT THE AUTHORS
McCabes is a leading Australian law firm with a reputation for delivering high quality service.
Led by Managing Principal, Andrew Lacey, McCabes was founded in 1991 by Terry McCabe with a small office of five employees. McCabes has since grown to over 100 staff with teams of specialists that provide quality and timely advice across a broad range of industries.
Celebrating over 25 years, McCabes has transformed from a small, trusted legal team, into an outstanding young firm of over 65 lawyers who are passionate about delivering quality work.
www.mccabes.com.au
35 BuildLaw | Dec 2017
First, the NEC3 clause clearly provides that it is actual completion rather than simple delay, which should remove any doubt that the event must affect the critical path. However, things then get less than clear. The measure for the delay is not the anticipated effect on the due date for completion, as outlined in FIDIC or in NZS3910; it is the actual effect of the delay on the planned completion date shown in the programme.
This will have two potential effects. First, the delay is assessed on the time due to the compensation event, which would suggest that the event must be causative – ie, the causative nature of the event must be assessed alone. Second, the Accepted Programme is effectively a contract document which must show the actual progress of the works in terms of clause 32, including how the contractor plans to deal with delays. On that basis, the Accepted Programme should already record the effect of the non-qualifying delay event.
Whether or not the Malmaison test applies to concurrent delay under NEC3 is yet to be tested. It should be recalled, however, that even under the Malmaison test both delay events must have equal causative potency, ie have the same potential for delay.
4. North Midland Building Ltd v Cyden Homes Ltd [2017] EWHC 2414
The issue of contracting for concurrent delay has recently been considered by the Technology and Construction Court in the case of North Midland Building v Cyden Homes.
In that case, the contract included a specific provision that “any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken in to account.” Considering the wording of the clause and the overall context in which it was negotiated2, Fraser J held that the meaning of the clause was crystal clear, and that in the event of concurrent delay, no extension of time was to be granted.
As an interesting aside, the contractor argued in that case that by excluding an extension of time which would otherwise be a qualifying event (but for the concurrent event) offended the prevention principle3. In rejecting this argument, Fraser J observed that the prevention principle did not arise as the case concerned purely a question of interpretation of a clause agreed by the parties, and given that the clause was clear the principle did not operate. Acts of prevention or delay were included in the definition of qualifying event – the only issue was therefore how the delay was to be calculated.
This raises the rather odd result that, while an act of prevention or delay by the owner must be included as grounds for an extension of time the effect of such an event can be excluded without offending the prevention principle, provided the clause does so with sufficient clarity.
Perhaps as a saving grace, Fraser J noted that an act of prevention or delay must actually prevent the contractor from carrying out the work for the prevention principle to apply, which was arguably not the case where the act of prevention was concurrent with a non-qualifying event of delay.
5. Conclusion
The case law supports the view that the Malmaison test would apply to concurrent delay under NZS3910:2013.
While the Cyden Homes case follows the factual matrix approach to contractual interpretation outlined in recent Supreme Court cases, both here and in the UK, it does raise the rather curious argument that the parties may contract (or rather the employer may draft for) that where there is concurrent delay, then no extension of time is granted.
Whether or not this approach would find favour here remains to be seen.
CONCURRENT DELAY: PARTIES FREE TO AGREE
-CONT.