ExtensionsofTimeClaims

Nicholas Longley
Consultant
JSM

+852 2843 2599

nicholas.longley@mayerbrownjsm.com

17 November 2008

Mayer Brown is a global legal services organisation comprising legal practices

that are separate entities ("Mayer Brown Practices"). The Mayer Brown
Practices are: Mayer Brown LLP, a limited liability partnership established in the
United States; Mayer Brown International LLP, a limited liability partnership
incorporated in England and Wales; and JSM, a Hong Kong partnership, and its
associated entities in Asia. The Mayer Brown Practices are known as Mayer
Brown JSM in Asia.

Introduction
Uncertainty with
What can be claimed?
How to claim?
When to claim?

Two Central Themes

Clear drafting
Clear thinking Do not overly restrict EoT grounds

What is Completion?
Practical or Substantial Completion
Mariner International Hotels v Atlas (2007)
Watts v McLeay (1911)
Balfour Beatty v Chestermount (1993)

Prevention Principle

Essentially it is that a party to the contract has been

prevented from fulfilling its contractual obligations by virtue
of conduct of the other party
Turner Corp v Co-ordinated Industries

Peak v McKinney
Facts
A Fault in the Perimeter Piles
The Employer had to appoint an expert but there were

delays in doing so
The works were suspended for 58 weeks
The Contract contained an extension of time clause but it

did not allow the Employer to extend time for its own
delays

Peak v McKinney
Decision
There was no date from when liquidated damages could
run
If a failure to complete `on time is due to the fault of both
the employer and the contractorthe clause does not bite.
I cannot see howthe employer can insist on compliance
with a condition if it is partly his own fault that it cannot be
fulfilled.

Hong Kong Government Building Contract

Clause 50 (1) (a) Grounds for a EoT claim
Inclement weather and/or its consequences adversely affecting the

progress of the Works

Variations under Clause 60
A substantial increase in the quantity of any item of work
Late possession or being deprived of possession of the Site at a later

date
Disturbance to the progress of the Works
Any special circumstance of any kind whatsoever

HKIA/RICS Building Contract

Clause 23 Grounds for an EoT Claim
Force majeure
Inclement weather or the subsequent effects of such inclement

weather which is expressly defined

Civil commotion, local combination of workmen, strikes and lockouts

affecting any of the trades employed upon the Works

Variations under the contract
Delays by the Architect in providing instructions, drawings, details or

levels
Delays by artists, tradesmen or others engaged by the Employer

HKIA/RICS Building Contract

by reason of the Main Contractor not having received in

due time, necessary, instructions, drawings, details or
levels from the Architect

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HKIS/HKIA Building Contract (2005)

Clause 25.1 - Grounds for an EOT Claim
Excepted risks
Act of prevention, a breach of contract or other default by

the Employer
Late issue of drawings, details, descriptive schedules or

other similar documents

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When to Claim?
Notification Clauses
RICS the Main Contractor shall forthwith give written notice of the
cause of the delay
HK Government the Contractor shall forthwith give notice in writing
to the ArchitectSuch notice shall not in any event be given later than
28 days after the Architect has issued the relevant order or instruction
KCRC cl 45.11 it shall be a condition precedent to the Contractor
being granted extensions of time that he complies strictly with [the
notification requirements]

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The Gaymark Decision

The Facts
The Contractor failed to complete by the Date of Completion

because of Employers Delays

The Contractor had an obligation to comply with strict time limits

which the Contractor did not do

The Employer claimed liquidated damages for delay
The Contractor argued that the Prevention Principle applied.

The Employers acts prevented the Contractor from completing

on time

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The Gaymark Decision

The Decision
The Prevention Principle applies
The contract between the parties fails to provide for a
situation where [the Employer] caused actual delays to
[the Contractor] achieving practical completion coupled
with the failure by [the Contractor] to comply with the
notice provisions.

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City Inn v Shephard Construction

The Facts
The Contract included a condition precedent requiring the

Contractor to notify the architect if any instruction was likely to

delay the Works within 14 days
The Contractor argued that there was an architects instruction

which entitled it to an extension of time

The Contractor did not comply with this clause and completed

late

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City Inn v Shephard Construction

The Contractors Argument
That the condition precedent acted as a penalty as the failure to
comply results in liquidated damages

The Decision
The liability for liquidated damages stems from the failure to
complete late not from the failure to comply with the notification
clause

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How to Claim
Causation
Leyland Shipping v Norwich Union - competing causes
The torpedoes
Hitting the side of the dock
The decision of the harbour master to have the ship towed
out of the harbour
The effect of two days of hitting the ground
The storm

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Causation and Concurrency

Main Test proximate or dominant cause (Leyland

Shipping v Norwich Union)

Laing v Doyle (2004) usual rules of causation apply to

construction contracts
Henry Boot v Malmaison importance of critical path
Royal Brompton Hospital concurrent claims

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Global Claims
Origins Crosby v Portland

A lump sum award is proper, provided that there is no duplication

Wharf v Eric Cumine

The fact that there are evidential problems is not a sufficient

reason to strike out the claim
However a delay of seven years in detailing a claim meant that
the claim was embarrassing and should be struck out

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Global Claims Laing v Doyle

Common Sense Approach
Generally the Contractor must show a causal link
If the Contractor can show that all of the loss stems from

delays which are all the responsibility of the Employer, a causal

link is unnecessary
A global claim cannot succeed where any of the causes is the

responsibility of the Contractor

If the global claim fails, the Contractor might still be able to use

the dominent cause approach to claim for some losses

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Conclusion
When drafting the contract take great care. Keep

the Prevention Principle in mind. Small mistakes can

be costly
When making claims, ensure that you can show

cause and effect

Ultimately many claims are won or lost not on the

law but on the evidence. Ensure that you keep good

records and if you want to claim, get an expert at an
early stage

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