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All standard forms of construction contract allow the contractor an extension of time for certain specified events. The particular entitlement depends upon the wording of the form of contract. Some forms such as the Engineering Construction Contract rely on the analysis of the accepted programme to establish the extension of time which is due. Most forms require the specified event to cause or be likely to cause delay to overall completion. This is the case for instance under the JCT 80 form of contract at Clause 25 in which the specified events are referred to as Relevant Events and it is the Architect who decides if and what extension of time is due. The Architect does not have an easy task, since establishing the appropriate extension of time on a large project requires a multi-disciplinary approach. He needs three basic skills, which can be extracted from the observations of His Honour Judge Richard Seymour QC in The Royal Brompton Hospital NHS v Watkins Gray International (UK) (18 Dec 2000) TCC. The first skill is construction knowledge. Judge Seymour observed that the construction of a modern building involves the carrying out of a series of operations, some of which can be undertaken at the same time as others, but many can only be carried out in sequence. It is not therefore immediately obvious which operations have an impact upon others and which delays affect the ultimate completion date. The Architect must therefore have an in-depth knowledge of construction and the inter-relation between trades and construction operations. The second skill is an understanding of programming techniques. Judge Seymour observed that in order to make an assessment of whether a particular event has affected the ultimate completion of the work, rather than just a particular operation, it is necessary to consider what operations, at the time when the event happens, are critical to the forward progress of the work as a whole. The Architect will usually have to adopt an appropriate programming technique to analyse the effect of various events. There are a number of established methods of analysis, but each is likely to produce different results to others, sometimes dramatically different results. Most importantly the accuracy of any of the methods in common use depends upon the quality of the information used. It is much more difficult to establish the critical path if one does not know how the contractor planned the job. Not only that, but the critical path may well change during the course of the works, and almost certainly will do if the progress of the works is affected by some unforeseen event. The third skill is contractual awareness - the Architect must understand the relevant contractual provisions and be up to date on decided cases. To add to the Architect’s difficulties, as observed by Judge Seymour, often the contractor gives a written notification of delay regardless of whether it really thought that the event would cause delay to the completion of the Works. Notices are given every time anything alters or anything happens which could conceivably delay any individual activity. While, from a contractor's point of view, adopting such a practice has the advantage that he is covered, no matter how things should turn out, it does make life difficult for the Architect. In addition the contractor often makes exceptionally pessimistic predictions of the extent of the likely delay caused by the matters that it notified. Architects can of course overcome many of these difficulties by accurate monitoring of the works and maintaining up to date network programmes. Even if he does so, he may still find that the Employer is unhappy with the extensions of time granted and he may faced with a claim of breach of contract or negligence as occurred in The Royal Brompton Hospital. Judge Seymour explored the proper approach that the Architect must adopt in the assessment of extensions of time. His decision gives useful guidance to all those involved in the operation of extension of time clauses. The main contract was the JCT 80 With Quantities standard form between the Board and Taylor Woodrow Construction Limited for the construction of a six storey hospital in Chelsea London. WGI was named as the Architect in the main contract. WGI entered into an agreement with the Board to carry out administrative duties under the main contract including the assessment of entitlements to extension of time for completion of the Works. It was not disputed that it was a term of the WGI agreement, to be implied as a matter of law, that WGI would perform the tasks under the agreements with the care and skill to be expected of a reasonably competent architect, and that WGI owed the Board a duty of care to that effect. The progress of the Works was delayed and WGI granted various extensions of time. WGI issued a Certificate of Practical Completion on 22 May 1990. Further extensions of time were then granted so that the extended date for completion was also 22 May 1990. The Board alleged that WGI was negligent in the granting of extensions of time. The Board argued that no extensions of time should have been granted for some items and for others that the time granted was excessive. Judge Seymour first considered clause 25 of JCT 80. It was held not surprisingly that two conditions need to be satisfied before an extension of time can be granted, namely:-
Judge Seymour then examined the complex issue of concurrent delays. I suggest that there are three scenarios to be considered in examining concurrent events when only one is at the employer’s risk. Judge Seymour considered only the first two, and by implication gave guidance on the third. Scenario 1- two events occur before either has had an effect on progress and either of which, had it happened on its own, would have caused delay. One event was a Relevant Event, while the other was not. Under the JCT 80 form the contractor is entitled to an extension of time for the period of delay caused by the Relevant Event notwithstanding that the other event has a concurrent effect. This was consistent with the reasoning in one part of the decision in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 referred to and examined by Judge Seymour. Scenario 2 - The first event is at the contractor’s risk and has already caused delay when the second event, the Relevant Event, occurs. The Relevant Event would have caused the contractor to be delayed, but in fact, because of the existing delay, it made no difference. In this scenario the Architect could consider the effects of other events when determining whether a Relevant Event caused delay to the Works beyond the completion date. It was a question of fact. In this scenario there was no entitlement to an extension of time. This was consistent with the reasoning in another part of the decision in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 referred to and examined by Judge Seymour. Scenario 3 – This is the same as Scenario 2 but the Relevant Event did make a difference and further delay occurs. Scenario 3 was considered in Balfour Beatty Building Ltd v Chestermount Properties Ltd (1993) 62BLR 12 a case referred to but not examined in detail by Judge Seymour. It was held in that case that the objective of the Architect in assessing an extension of time was to assess whether the Relevant Event had caused further delay to the progress of the works, and if so how much. The Architect must then apply the result of this assessment by extending the contract period for completion of the works by the further delay. The difficulty in practice in applying this approach is to differentiate the situation where the Relevant Event occurs during a period of contractor’s culpable delay, from the situation where the Relevant Event occurs before the other event has yet had time to have an effect. This is a matter of fact and degree. Inevitably network analysis will be necessary in all but the simplest of case, and generally only a "snapshot" method, involving progressive analysis at key dates, will allow proper analysis. Such an approach requires a great deal of data. Having set out the right approach to analysis of concurrent events, Judge Seymour then considered the standard expected of the Architect. It was emphasised that the vital point was that the duty of a professional man, generally stated, is not to be right, but to be careful. The fact that the Architect is in the event proved to be wrong is not, in itself, any evidence that he has been negligent. His conduct has to be judged having regard to the information available to him, or which ought to have been available to him, at the time he gave his advice or made his decision or did whatever else it is that he did. The appropriate test was that in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582. Broadly, the test is that a professional person is not to be held to have been negligent in the course of exercising his or her profession unless he or she has committed an error that no reasonably competent member of that profession could have made. Following the decision of the Court of Appeal, J.D. Williams & Co. Ltd. v Michael Hyde & Associates Ltd. [2000] Lloyd's Rep PN 823 the test did not apply in three situations, namely;
Judge Seymour held that the court could not substitute its own view for that of a professional person of the appropriate discipline on any matter in respect of which any special skill, training or expertise was required to make an informed assessment. In extension of time cases it was not open to the Court to decide for itself what activities were or were not critical to the completion of the Works as a whole: the making of an assessment of the critical path of activities on a construction project is something which requires a familiarity with the methods by which such an assessment is usually made. Other than in the most straightforward case, the assessment of the impact of the occurrence of a particular event on the progress of a construction project was something which required, if not special skill, at least experience which the Court did not possess. In practical terms the burden shouldered by a claimant who contends that an Architect has been negligent in granting an extension of time for completion of works governed by a contract in the Standard Form is a heavy one: unless the case is very obvious it is most unlikely to succeed. Judge Seymour observed that the Board had made a large number of allegations covering every conceivable criticism that could possibly be imagined as a result of a comprehensive trawl through the vast documentation that the Project generated. The criticisms were stated in legal language that was at the same time all-embracing and imprecise in its identification of what was the real subject matter of any particular complaint. Judge Seymour concluded that the allegations were the product of an examination of the available documentation by someone whose qualifications were as a lawyer, rather than the result of a dispassionate and objective consideration of the performance of WGI by an independent architect. The criticisms therefore relied almost entirely upon the simple proposition that it was obvious from the contemporaneous documentation, and in particular from the progress reports made at monthly intervals by Taylor Woodrow, that no delay to the progress of the Works had in fact occurred. Judge Seymour then proceeded to examine the correspondence and except for the extension of time granted for one particular event dismissed the claims. The particular event related to an instruction to lay hydratite. The instruction introduced into the programme operation of "wall and floor finishes" at each level of the hospital a further element, namely the laying of a dampproof membrane. WGI granted two extensions of time for this instruction. In granting the extensions of time WGI considered what effect the introduction of that element had on the programmed operation. It was held that for an extension of time to be appropriate, there had to be delay to the completion of the Works as a whole, not simply delay to a particular component of the Works. It was recognised that depending upon the precise circumstances, it was possible for the progress of the Works as a whole to be delayed by exactly the same period as a particular operation is delayed, if that operation is critical to the completion of the Works. Consequently, it was not self-evidently wrong to grant an extension of time for the completion of the Works that coincided precisely with the period of delay to a particular operation. What had to be considered was exactly what were the circumstances prevailing at the times at which WGI granted each of the extensions of time. It was held that WGI was not negligent in granting the first extension of time for the hydratite instruction. By the time WGI came to grant the second extension of time for the hydratite the laying of the flooring was complete, or virtually complete. WGI therefore knew how long the flooring operation had taken, notwithstanding what seemed likely when the first extension of time had been granted. It was found that WGI had not directed its mind to whether the progress of the Works, as opposed to the activity "Wall and Floor Finishes", had been further delayed since the grant of the first extension of time. It was held that in relation to the second grant of an extension WGI negligently failed to direct its mind to the correct issue, and, had it done so, it could only have concluded that no further extension of time was appropriate. |
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