Extensions of time after Mackay


The Honeywood File(1) is a hilarious account of the catastrophes befalling the design, construction and agreement of the final account for a domestic residence. The book purports to be the architect’s file of correspondence with all parties. It was written in the 1920s and was ready for an updated version. This has now been provided (possibly inadvertently) in the judgment of Mr Justice Akenhead in the case of Walter Lilly v Mackay(2). The judgment starts with many extracts from the client’s emails and letters, as opposed to the architect’s, but tells a similar tale of woe (or disaster, to use the judge’s description) over the design, construction and agreement of the final account on a residential project.

The judgment covers every possible element of a final account but this article is concentrating on just one – extensions of time under the JCT contract.

The client contended that all the delays to completion were caused by the poor workmanship or defective design by the contractor and delays in completing remedial works. The contractor argued that the alleged defects were design defects, for which he had no responsibility. Given the potential for concurrent delays, the court also gave consideration to the current case law in this area.

There was no baseline programme for the works, and the delay experts had devised their own methods for analysing the causes of, and effect of, delaying events. Again, the court expressed views on the preferable forms of analysis to use.

Mr Justice Akenhead concluded as follows:

  1. The JCT contract requires the contract administrator to forecast likely delay during the works but the final judgement of the contract administrator for the 12 week review required by the contract, or of an arbitrator or court, must be retrospective, i.e. testing the actual, known effects of Relevant Events on delays to the Completion Date.
  2. Even where there has been concurrent delay, the contractor is entitled to a full extension of time for whatever delay was caused by Relevant Events. The apportionment of time between client and contractor for concurrent delay(3) was not good law in England. If the contractor is not given a full extension of time for client delays, it would offend the principle that a client cannot both prevent completion and claim liquidated damages.
  3. To analyse delay, a consideration of the project at regular intervals, assessing which Relevant Event was causing delay at that point, and for how long (commonly referred to as "windows analysis"), was appropriate and helpful, particularly where there were no contemporaneous programmes. However, all conclusions had to be tested against the established facts.
  4. Eventually the court must do a factual analysis of what Relevant Event(s) probably delayed completion.

The effect of the judgment is that a contractor is entitled to an extension of time for all events which are at the client’s risk, even if the contractor is in culpable delay for part of the delay period. In the light of the judge’s comments about the prevention principle, care will also need to be taken over any amendments to the JCT (or other) contracts which attempt to hold the contractor partly responsible for concurrent delay and entitle the client to liquidated damages for the element of the delay calculated to have been caused by the contractor.

1. The Honeywood File: an Adventure in Building, Harry B Creswell.
2. Walter Lilly & Company Limited v GPC Mackay [2012] EWHC1773 (TCC).
3. As was done in the Scottish case of City Inn Ltd v Shepherd Construction Ltd.

Frances Alderson, Partner, Fladgate LLP (falderson@fladgate.com)

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