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Ben Quiney KC and Michele De Gregorio acting in Rolls Building dispute in the TCC

Carillion Construction Ltd v Woods Bagot Europe Ltd & ors [2016] EWHC 905 (TCC)

Ben Quiney KC and Michele De Gregorio, instructed by BLM, appeared for AECOM in a trial of preliminary issues before Miss Recorder Nerys Jefford KC. The claim concerns the construction of the Rolls Building, the home of the TCC and Commercial Court. The main contractor, Carillion, seeks damages for delays and defects from its M&E subcontractor, EMCOR, and acoustics consultant, AECOM.

The preliminary issues hearing raised a novel point about extensions of time under the DOM/2 standard form of subcontract in circumstances where the entitlement to an extension of time arises during a period in which the subcontractor is already in culpable delay. Carillion argued that any additional period of time awarded to the subcontractor need not be added directly (contiguously) to the end of the period previously fixed for completion, but could be a discontinuous period, if that properly reflects the subcontractor’s responsibility for delay.

This can be illustrated by the following (hypothetical) scenario. Say the period for completion of the subcontract works is 100 days. The subcontractor fails to complete by day 100 and is in “culpable delay”. By day 150 a major variation is ordered, which would entitle the subcontractor to an extension of time of, say, another 50 days. If that additional 50 days is added contiguously to the end of the original 100 day period, then the subcontractor is not in breach for failing to complete by day 150. Further if, by day 150, another subcontractor’s default is now driving the delay to the completion of the main contract works, the first subcontractor may be absolved from all liability for delay.

Carillion argued that this would work an injustice. The reasonable and just approach would be for the additional 50 days to be added between days 150 and 200. The subcontractor would remain liable for the first 50 days of delay and would not be liable for the second 50 days of delay.

The Judge rejected Carillion’s argument, finding that for an extension of time under the DOM/2 subcontract any additional period awarded to the subcontractor has to be added contiguously to the end of the original period in which the works are to be completed.

The leading case on extensions of time where a contractor is already in culpable delay is Balfour Beatty Building Ltd v Chestermount Properties [1993] 62 BLR 1 (Colman J). Chestermount concerned the JCT Standard Form. This is the first time this point has been considered in relation to the DOM/2 standard form.

Judgment on the preliminary issues was handed down on 28 April 2016. The judgment is available here. The full trial is in April / May 2017.

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