REUTERS | Kim Hong-Ji

Conditions precedent to claim: it’s a matter of fact

No doubt there will be considerable column inches written in the coming days (not to mention the many water-cooler discussions taking place) over the Scottish court’s latest decision in City Inn v Shepherd.

I’m not surprised, as it is rare these days to see a judgment that tackles issues such as concurrent delay and extension of time. As Alastair Walls notes, adjudication has all but replaced court-based litigation in construction disputes and therefore what happens in practice so often remains behind the “closed doors” of that process.

City Inn may generate a lot of excitement about the law on extension of time and, in particular, global claims and concurrent delay. However, in the majority of instances where I’ve had to deal with extension of time claims in adjudication, the outcome has ultimately been decided on the facts presented by the parties.

I find that the most credible delay analysts are those who base their opinion evidence on facts that they are able to marshal together in a readily understandable and presentable way. Again, in City Inn, the judge preferred the contractor’s expert evidence to that of the employer’s expert. The contractor’s expert based his report on the factual evidence, including the contractor’s original programme, which the judge found to be based on sound practical experience and common sense. He rejected the critical path analysis advanced by the employer’s expert, which he found contained errors and was based on the project’s as built programme.

Conditions precedent to claim: it’s usually a matter of fact

In recent times, I have noticed an increased reliance on arguments that one party has failed to comply with a condition precedent clause (usually the employer argues that the contractor has, allegedly, failed to give the right notice, in time, with the right sort of information in support).

I don’t know if this has anything to do with Lord Drummond Young’s 2007 judgment in City Inn, but the question of whether a party has complied with such a clause will usually be a matter of fact. For example, in City Inn, neither the employer, the contractor or the architect referred to the condition precedent clause (clause 13.8) when the contract was being administered and the contractor was applying for an extension of time. Instead, everyone acted as though the clause did not exist and reliance was placed on clause 25 (the extension of time clause). It was only later, during the court process, that the employer realised (no doubt with the assistance of its lawyers) that the condition precedent argument was available to it.

What assists me?

When I am assessing a contractor’s entitlement to an extension of time, the fundamental questions I have to address are whether an event:

  • Has occurred.
  • As a matter of principle, gives rise to an entitlement.
  • On the balance of probabilities, caused or (in the case of interim or prospective claims) is or was likely to cause delay to the works.

When considering the last question, while an expert’s technical knowledge and practical experience can be helpful (in terms of offering an opinion on the extent of the delay), I find that the most useful information is evidence relating to the dates that the event started and ceased to affect the progress of the works. If this can be presented in a straightforward and readily understandable format, like a graph or table, then all the better.

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