EXTENSION OF TIME
CLAIM PROCEDURES
AND ASSESSMENT
David Fabian and Ian Briggs
Minter Ellison
There are a number of areas of
change to the extension of time
claim provisions:
EXTENSION OF TIME
- QUALIFYING CAUSES
OF DELAY
Clause 35.5 of AS4300 contained
quite complicated references to
the types of delays that would
entitle contractors to claim
extensions of time. These lengthy
provisions have been replaced
with a statement that the
contractor will be entitled to claim
an extension of time if (inter alia)
the contractor 'is or will be
delayed in reaching practical
completion by a qualifying cause
of delay' (Clause 34.3). 'Qualifying
cause of delay' is widely defined to
be anything other than a breach
or omission by the contractor, or
industrial conditions/inclement
weather occurring after the Date
for Practical Completion.
EXTENSION OF TIME CLAIM
-TIME BAR
Under Clause 34.3, the contractor
is only entitled to extension of time
claims if it submits a written claim
for an extension of time 'within 28
days of the time when the
contractor should reasonably
have become aware of that
causation occurring'.
AS4300 contained a similar time
bar, with the contractor being
obliged to give a notice within 28
days 'after the delay occurs'.
Although the new standard avoids
the difficulties with establishing
when the delay 'occurs' it is not
clear whether difficulties will now
arise as to when the 'causation'
occurs, and there is risk of delay
occurring to more than 28 days EXTENSION OF TIME
after causation. - LIQUIDATED DAMAGES
In any event, it is distinctly AND DELAY DAMAGES
possible that these time Under AS4902 (Clause 34.7), the
requirements are not time bars. superintendent is obliged to
That possibility arises because of certify liquidated damages as due
the wording of Clause 41.2. and payable to the principal. This
will create greater certainty as to
EXTENSIONS OF TIME - the principal's ability to recover
ASSESSMENT liquidated damages from the
Assessment of claims is dealt with contractor.
under Clause 34.4. According to
the terms of that clause: Delay costs were dealt with in
Clause 36 of AS4300.They are
• If both qualifying and non- dealt with in Clause 34.9 of
qualifying causes of delay overlap, AS4902, and AS4902 will lead to
AS4902 obliges the recovery of greater amounts than
superintendent to apportion delay AS4300. Under AS4902,'delay
to WUC according to whether it is damages' are payable for
non-qualifying or qualifying cause extensions of time arising from a
of delay. This is a change in risk 'compensable cause' (i.e. a matter
which operates in favour of the within the control of the principal
contractor, as it leaves open the or superintendent). The 'damages'
possibility of the contractor being are to be assessed by the
granted an extension of time even superintendent and (unlike
if it was also delaying the works to AS2124 or AS4300) will include
some extent. This concept loss of profit and fixed overheads
replaces the concept of recovery.
'concurrency' (Clause 35.5)
provisions of AS4300 and AS2124,
which have been notoriously
difficult to apply. However it
remains to be seen whether the
new 'apportionment' approach is
any easier to administer.
• It is the committee's intention
that the contractor still 'owns the
float' although the relevant clause
is not ideal and may give rise to
differing interpretations.
• If the superintendent does not
respond to an extension of time
claim within 28 days of receiving it,
then the extension of time is
deemed to be granted as an
assessment and direction (Clause
34.5). To challenge the claim, the
principal will be forced to go
through the claim provisions (i.e.
challenge a direction of the
superintendent). This is likely to
cause difficulties where the
superintendent complains that
the claim lacks sufficient detail to
enable a proper assessment.
AUSTRALIAN CONSTRUCTION LAW NEWSLETTER #77 MAY/JUNE 2001 23