LJ Coulson noted that in the Walter Lilly case, it would have been open to the parties to draft “a proviso to the effect that an extension of time should be reduced if the causation criterion is established”, thereby allowing for a different allocation of risk. That was what the parties here chose to do.The Judge said that: “A building contract is a detailed allocation of risk and reward. If the parties do not stipulate that a particular act of prevention triggers an entitlement to an extension of time, then there will be no implied term to assist the employer and the application of the prevention principle would mean that, on the happening of that event, time was set at large. But it is a completely different thing if the parties negotiate and agree an express provision which states that, on the happening of a particular type of prevention (on this hypothesis, one that causes a concurrent delay), the risk and responsibility rests with the contractor.” The clause here was “clear and unambiguous”. It stipulated that where there is a concurrent delay (properly so called), the contractor will not be entitled to an extension of time for a period of delay which was as much his responsibility as that of the employer. That was an allocation of risk which the parties were entitled to agree. Finally, it was suggested that even if clause 2.25.1.3(b) was enforceable (so that NMBL was not entitled to an extension of time for concurrent delay), there was an implied term which would prevent Cyden from levying liquidated damages. It would be “bizarre” if Cyden could recover liquidated damages for a period of delay for which it was responsible. It could not be said that the liquidated damages flowed from a delay for which the claimant was responsible. This suggestion was rejected for a number of reasons. These included that if clause 2.25.1.3(b) was a valid and effective clause then it would expressly permit the employer to levy liquidated damages for periods of concurrent delay, because it would not grant NMBL relief against such liability by extending the completion date. Finally, the Judge noted that: “I do not consider that this result is in any way uncommercial or unreal. A period of concurrent delay, properly so-called, arises because a delay has occurred for two separate reasons, one being the responsibility of the contractor and one the responsibility of the employer. Each can argue that it would be wrong for the other to benefit from a period of delay for which the other is equally responsible. In Walter Lillyand the cases cited there, under standard JCT extension of time clauses, it has been found that the contractor can benefit, despite his default. By clause 2.25.1.3(b), the parties sought to reverse that outcome and provided that, under this contract, the employer should benefit, despite the act of prevention. Either result may be regarded as harsh on the other party; neither could be said to be uncommercial or unworkable.”
ABOUT THE AUTHOR
Jeremy Glover Partner
Specialising in construction, energy and engineering law for most of his career, Jeremy advises on all aspects of projects both in the UK and abroad, from initial procurement and strategic project advice to dispute avoidance and resolution.