City Inn Ltd v Shepherd Construction Ltd
 ScotCS CSIH 68
We have reported on this long-running case before - see Issue 91. It has now reached the Inner House of the Scottish Court of Session or the Scottish Court of Appeal who recently handed down a majority verdict in relation to the claims being made.
Shepherd was engaged by City Inn to build a hotel in Bristol. The contract incorporated the JCT Standard Form of Building Contract (Private Edition with Quantities) 1980 Edition, with further bespoke amendments. At clause 25, the contract contained extension of time provisions that were broadly similar to the standard JCT provisions: the architect could award extensions of time where a relevant event had caused or was likely to cause the works to be delayed.
The court below held that City Inn was responsible for nine causes of delay to the completion of the works (such as late instructions from the architect), with two causes of delay the responsibility of Shepherd. The causes for which City Inn was responsible were relevant events under clause 25. City Inn argued that Shepherd was not entitled to any extension of time, due to the concurrency of the delays caused by both parties.
The issue before the Scottish CA was to determine the correct approach to be taken when awarding extensions of time for concurrent delays under clause 25.
Leading the majority, Lord Osborne upheld the earlier decisions, in that where there are concurrent delays, caused by the employer and the contractor, delay may be apportioned between the competing causes. Following a review of relevant case law in Scotland, England and Wales and the United States., Lord Osborne put forward the following fi ve propositions:
- It must be established that a relevant event has occurred and is a cause of delay, and that completion of the works is likely to be delayed or has been delayed by that relevant event;
- Whether the relevant event has had or will have any causative eff ect is a question of fact to be determined by common sense;
- In deciding whether the relevant event has caused delay, the architect can consider any factual evidence he considers acceptable. A critical path analysis is not essential;
- If a dominant cause can be identifi ed as the cause of a particular delay, eff ect will be given to that by leaving out of account any causes which are not material. Therefore, in those circumstances, the success of an extension of time claim will depend on whether the dominant cause is a relevant event; and
- Where a situation exists in which two causes are operative, and one is a relevant event and the other is caused by the contractor, and neither can be described as a dominant cause, it will be open to the architect to approach the issue in a fair and reasonable way to apportion the delay between the causes.
In contrast Lord Carloway, in his dissenting opinion, agreed with the overall result of the other judges, but applied diff erent reasoning. He considered that apportionment was not the correct method of awarding extensions of time between two concurrent causes of delay. He considered that the architect’s sole task is to decide whether the relevant event is going to, or has, caused delay. If he considers that it has, then he should award an extension of time that is fair and reasonable. If a relevant event occurs, then the fact that the works would have been delayed because of a contractor culpable delay is irrelevant.
This decision does not alter the judgment of the previous hearing in 2007. In summary, the position stands that when an architect is making an award on an extension of time where there are concurrent causes of delay, he should use his common sense and approach the decision in a fair and reasonable manner. In Lord Osborne’s analysis of concurrent delays, he stated that when deciding if two or more delays are concurrent, an overly analytical view should be discouraged. An architect should not be chiefl y concerned with the precise chronology of the delays, but should instead look at the eff ects of the delays on the completion date.