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  • Robert J Gemmell

DD09: Concurrent delay and the prevention principle

Updated: May 6

Introduction

This article looks at the interrelationship between the ‘prevention principle’ and concurrent delay.

As set out in my previous article DD08, the prevention principle comes into operation where the employer’s act or omission prevents the contractor from complying with its obligations to complete the works by the completion date. If the employer’s act of prevention causes critical delay to the works, and there is no mechanism in the contract to extend time for completion as a result of that act or omission, time may become ‘at large’. If time is ‘at large’ the contractor’s obligation will be to complete the works within a reasonable time and the employer is unable to deduct liquidated damages (unless time is again made of the essence).


Analysis

In Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd,[1] the court said:

“From this review of authority I derive three propositions:

(i) Actions by the employer which are perfectly legitimate under a construction contract may still be characterised as prevention, if those actions cause delay beyond the contractual completion date.

(ii) Acts of prevention by an employer do not set time at large, if the contract provides for an extension of time in respect of those events.

(iii) Insofar as the extension of time clause is ambiguous, it should be construed in favour of the contractor.”

Where there is concurrent delay, arguably, both the employer and the contractor are causing the same delay. If the contractor is not granted an extension of time for that delay, unless the contract expresses a contrary intention, would it therefore be correct that the ‘prevention principle’ operates to render time at large?

Some commentators and courts have opined that the prevention principle may not apply to cases of concurrent delay.[2] In Adyard Abu Dhabi v SD Marine Services,[3] the court held that a party seeking to rely on the prevention principle must establish that actual delay was, on the facts, caused by the particular acts of prevention relied upon. Adyard did not establish actual delay and was not entitled to rely on the prevention principle and its claim was dismissed.

In Jerram Falkus Construction v Fenice Investments,[4] the court considered that the prevention principle does not apply in cases of concurrent delay and said:

“Accordingly, I conclude that, 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.”

In his paper,[5] Marrin points out that the Australian Supreme Court of Victoria in SMK Cabinets v Hili Modern Electrics,[6] considered the application of the prevention principle where the acts of the contractor also contributed to delay. The court said:

“The sole remaining matter is the soundness of the ground on which the arbitrator in fact rejected the defence of prevention. He evidently considered that where acts or omissions of a proprietor do in fact substantially delay completion, the proprietor nonetheless cannot be said to have prevented the contractor from completing by the relevant date unless the contractor would have been able to complete by that date had it not been for the supposed prevention. Mr McCurdy asks us to uphold that view. But it has been accepted for more than one hundred years that this is not the law. The cases are all one way.”

Marrin further points out that,[7] in Jerrum Falkus, the court was referred to a footnote in Keating[8] and to SMK Cabinets and Adyard. In relation to the footnote in Keating, the court in Jerrum Falkus said:

“In fact, on an analysis of that case, and indeed the other cases referred to in the Keating footnote, it becomes apparent that they were not dealing with concurrent delay, but instead with the situation where the contractor was in delay for part of the time but where, for other peiods of delay, the contractor could show that they were the result of the acts of prevention on the part of the employer. I am in no doubt that, in those circumstances, the prevention principle applies. But none of those cases deal with concurrent causes of delay, and in my judgment, in that situation, the right analysis is provided by Mr Justice Hamblen in Adyard.”

Marrin says that there are some difficulties with this conclusion.[9] Marrin points out that Mr Justice Hamblen in Adyard did not go so far as to hold that the prevention principle was inapplicable in cases of concurrent delay. Marrin also points out that no rationale is offered for distinguishing between cases of concurrent delay and the other cases of contractor-caused delay referred to. Marrin says that the ‘suggestion’ appears to be that the prevention principle applies where the employer’s act is the sole cause of the relevant period of delay but not when the same act is one of two concurrent causes – but is this correct?

Marrin suggests that on analysis this question involves two issues:[10]

1. The first concerns whether the prevention principle depends on the employer’s act being the sole cause of delay in the relevant period, as opposed to being a concurrent cause; and

2. The second concerns the relationship between the prevention principle and the terms of the contract agreed between the parties.

In relation to Marrin’s first point, whether the prevention principle depends on the employer’s act being the sole cause of delay in the relevant period, as opposed to being a concurrent cause, Marrin’s preferred view is expressed by the editors of Hudson as follows:[11]

“Thus, it is well established that an Employer is not entitled to liquidated damages if by their acts or omissions they have prevented the Contractor from completing their work by the completion date.


Whether concurrent with another Contractor delay or not, there is no reason why the principle should not be the same. As Salmon LJ observed: “If the failure to complete on time is due to the fault of both the employer and the contractor, in my view the clause (giving the employer liquidated damages) does not bite. I cannot see how, in the ordinary course, the employer can insist on compliance with a condition if it is partly his own fault that it cannot be fulfilled … I consider that unless the contract expresses a contrary intention, the employer, in the circumstances postulated, is left to his ordinary remedy; that is to say, to recover such damages as he can prove flow from the contractor’s breach.” [Author’s emphasis added]

Where there is employer delay, whether concurrent with contractor delay or not, the contractor should be entitled to an extension of time for the period of employer delay.

In relation to Marrin’s the second point, that is the relationship between the prevention principle and the terms of the contract agreed between the parties, Marrin points out that the prevention principle applies unless the contract expresses a contrary intenton.

In North Midland v Cyden Homes,[12] the parties included an extension of time clause which gave the contractor an entitlement to an extension of time for an act of prevention by the employer except for when there was concurrent delay. If this exception had not been written into the contract, the contractor , North Midland, may have been entitled to an extension of time when there was concurrent delay.[13] The contractor argued that the ‘prevention principle’ was a rule of law which protected it from being held to a completion date which the employer had prevented it from achieving. However, the Court of Appeal disagreed. The prevention principle applies where a contract is silent as to whether an act of prevention by an employer entitles a contractor to an extension of time. Where the contract is silent, the law will imply a ‘non-hindrance’ provision into the contract which the employer will be in breach of if it attempts to take advantage of its own acts of prevention.


Summary

It therefore appears that, the stronger argument is that the prevention principle operates where there is concurrent delay unless the contract expresses a contrary intention.

The prevention principle does operate where the employer’s act or omission is the only cause of critical delay and again, where the contract does not express a contrary intention.


Next article

My next article will cover the various approaches to assess contibutory causes of delay and/or additional cost.


Finally

If you have any queries on concurrent delay, in relation to any of the previous articles, or any other matter, please do not hesitate to contact us (Robert Gemmell: robert.gemmell@ddquantumexpert.com).


This and previous articles

This and previously published DD articles on the DD Quantum Expert website blog page are:

DD01: Why is it necessary to distinguish between delay and disruption? What’s the distinction?

DD02: A global claim is doomed to fail, unless…

DD03: Comply with the notice provisions in the contract, or else…

DD04: ‘Prevention’ causing ‘time at large’: what does this all mean?

DD05: Float: what is float, who owns the float and how is float different to contingency?

DD06: Construction project delays 101 – plus concurrency!

DD07: What is concurrent delay? An overview

DD08: Concurrent delay: it is not parallelism or pacing

DD09: Concurrent delay and the prevention principle

[1] Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd [2007] EWHC 447 (TCC), [2007] BLR 195, 111 Con LR 78, [2007] CILL 2458, para [47]; note 19, para 56 [2] See John Marrin QC, ‘Concurrent Delay Revisited’ paper for the Society of Construction law 2013, pages 5, 6 and 7 [3] Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm), [2011] BLR 384, 136 Con LR 190 [4] Jerram Falkus Construction Ltd v Fenice Investments Inc (No.4) [2011] EWHC 1935 (TCC), [2011] BLR 644, 138 Con LR 21, [2011] CILL 2072, para [52] [5] John Marrin QC, ‘Concurrent Delay Revisited’ Society of Construction law 2013, page 5 [6] SMK Cabinets v Hili Modern Electrics Pty Ltd [1984] VR 391 at 392. [7] John Marrin QC, ‘Concurrent Delay Revisited’ Society of Construction law 2013, page 6 [8] Keating (8th edn, Sweet & Maxwell, 2006) [9] John Marrin QC, ‘Concurrent Delay Revisited’ Society of Construction law 2013, page 6 [10] John Marrin QC, ‘Concurrent Delay Revisited’ Society of Construction law 2013, page 6 and 7 [11] Nicholas Dennys, Mark Reaside and Robert Clay (general editors), Hudson’s Building and Engineering Contracts, (12th edn, Sweet & Maxwell, 2010), para 6-060 [12] North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744 [13] Walter Lilly v Mackay [2012] EWHC 1773

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