I don’t know about you, but I often find that the introduction to a TCC judgment sets the tone of the dispute and (I’m embarrassed to say) influences whether I read the entire judgment or simply pick out the interesting bits and then turn to the end for the result.
I was certainly encouraged to read the entirety of Coulson J’s judgment in Jerram Falkus v Fenice Investments when I discovered that the parties had been “…extraordinarily promiscuous in their attempts at dispute resolution…”. (I have previously blogged on the parties’ dispute over the adjudicator’s fees in one of three adjudications that took place.)
In any event, the Jerram Falkus judgment is a “must-read” because:
- It is a rare thing being a judgment on the merits of a construction contract dispute following a trial, rather than an adjudication enforcement.
- It looks at some interesting issues that many practitioners deal with everyday, including conclusivity in JCT contracts, the serving of withholding notices and the question of what constitutes a “statutory undertaker” under a JCT contract.
However, I want to look at another interesting topic that was covered, namely the relationship between the prevention principle and concurrency.
Background
Fenice employed Jerram Falkus to construct a number of houses in Camden under a JCT Design and Build Contract, 2005 edition, Revision 1 May 2007, together with bespoke amendments. Jerram Falkus contended that it was prevented from completing the works by Fenice’s acts of prevention and that by reason of deletions to the extension of time provisions, such acts of prevention meant that time was at large. As such, Jerram Falkus argued that Fenice was not entitled to liquidated damages.
Prevention and concurrency
Coulson J reviewed some of the relevant authorities concerning the prevention principle (including Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd [1970] 1 BLR 111 and Mulitplex v Honeywell). He also reviewed the recent commercial court judgment in Adyard Abu Dhabi v SD Marine Services, which considered the interaction between the prevention principle and concurrency.
Coulson J concluded at paragraph 52 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.”
Coulson J found that Fenice had not prevented Jerram Falkus from completing the works and, even if Fenice had, the prevention principle would not have been triggered because such delays would have been concurrent with delays that Jerram Falkus was responsible for.
Coulson J’s conclusion that the contractor must prove actual delay beyond its culpable delay for the prevention principle to apply is clearly correct both as a matter of principle and on the basis of the relevant authorities. It provides practitioners with a useful addition to Jackson J’s propositions in Mulitplex v Honeywell.
Extensions of time and concurrency
However, practitioners are more often faced with issues of extensions of time and concurrency. This therefore begs the question of whether Coulson J’s conclusion could also be relevant to such issues?
Coulson J relied on Hamblen J’s analysis in Adyard v SD Marine Services, which considered concurrency in the context of both the prevention principle and extensions of time. However, while Coulson J’s conclusion might be relevant in cases concerning extensions of time and concurrency, I do not consider that it could be relied on as authority in such cases. This is because:
- When deciding whether a contractor is entitled to an extension of time when a Relevant Event occurs during a period of contractor culpable delay, the extension of time mechanism in the contract must be applied. For example, under a JCT contract the reference to a “fair and reasonable” adjustment to the completion date must be taken into account.
- Coulson J did not consider the authorities concerning extensions of time and concurrency. Hamblen J reviewed authorities such as Balfour Beatty Building Ltd v Chestermount Properties Ltd [1993] 62 BLR, Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 and Royal Brompton Hospital NHS Trust v Hammond and others (No 7) 2001 76 Con LR 148, and concluded that, if a Relevant Event occurs during a period of contractor culpable delay:
“…it must be established that the Relevant Event is at least a concurrent cause of actual delay to the progress of the works”.
This clearly isn’t such an onerous test as that set out in Coulson J’s conclusion regarding the prevention principle and concurrency. However, I wouldn’t be surprised to see attempts to rely on Coulson J’s conclusion in disputes concerning extensions of time and concurrency. Inventive replacement of words could crop up such as:
“…for the [contractor to be entitled to an extension of time], the contractor must be able to demonstrate that the [Relevant Event] 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 [contractor will not be entitled to an extension of time].”
Adyard v SD Marine didn’t follow City Inn
As an aside, Adyard v SD Marine Services is also well worth a read because it is one of the few English cases to consider concurrency since the Inner House of the Court of Session’s judgment in City Inn v Shepherd Construction. Hamblen J stated that the apportionment approach in City Inn v Shepherd is not consistent with the English law approach. As such, this is the first clear indication that the English courts will not endorse the apportionment approach adopted north of the border.
Interestingly, Hamblen J also dismissed the SCL Protocol approach of “time no money” in the event of concurrent delay, noting that the Protocol “…is not in general use in contracts in the construction industry and nor has it been approved in any reported case”.
