Summary

In the recent case of Carillion v Emcor the Court of Appeal has confirmed that an extension of time award should be contiguous, starting on what was previously the due date for completion. This is notwithstanding that the delaying event giving rise to the entitlement for an extension of time may have occurred after a period of delay by the party awarded the extension of time following the previous date for completion.

The Facts

This case concerned the construction of the Rolls Building on Fetter Lane in London where the Technology Construction Court ("TCC"), amongst other courts, now sits. The developer employed Carillion as the main contractor to construct the Rolls Building pursuant to a JCT Standard Form of Contract with Contractor's design, 1998 edition and incorporating amendments (1) 1999, (2) 2001 and (4) 2002 (the "Main Contract"). Carillion employed a number of sub-contractors including Emcor who were employed under a standard form of Domestic Sub-Contract DOM/2 (1981 Edition) (the Sub-Contract") to provide mechanical and electrical services. Clause 11.2 of the Sub-Contract required Emcor to give notice of any delay or likely delay. Clause 11.3 concerned the Award of an Extension of time as a result and provided:

"11.3 If on receipt of any notice, particulars and estimate under clause 11.2 the Contractor properly considers that:

1.any of the causes of the delay is an act, omission or default of the Contractor, his servants or agents or his sub-contractors, their servants or agents (other than the Sub-Contractor, his servants or agents) or is the occurrence of a Relevant Event; and

2.the completion of the Sub-Contract Works is likely to be delayed thereby beyond the period or periods stated in the Appendix, part 4, or any revised such period or periods, then the Contractor shall, in writing, give an extension of time to the Sub-Contractor by fixing such revised or further revised period or periods for the completion of the Sub-Contract Works as the Contractor then estimates to be reasonable."

Emcor were required to complete their works by the 28 January 2011, this was also the contractual completion date under the Main Contract. Delays occurred and practical completion under the Main Contract was not achieved until the 29 July 2011. Carillion then brought a claim in the TCC against Emcor and a number of other sub-contractors for its costs as a result of the delays, and the liquidated and ascertained damages it had been liable to pay the developer.

As part of those proceedings a trial of two preliminary issues took place, one of which (which we are concerned with here) was whether, if Emcor was entitled to an extension of time, that extension should be either added contiguously to the end of the previously due date for completion, or whether it should be set only to reflect the period for which Emcor was delayed, rather than when it was in delay itself. Such a period might not be continuous from the previous date for completion. Carillion argued that Clause 11 of the Sub-Contract was permissive, where a delaying event occurred after the date when the sub-contractor ought to have achieved completion the main contractor could either grant a contiguous or non-contiguous extension of time, this would enable the main contractor to reflect the fact, as alleged in this case, that its sub-contractor may have been in delay itself after the previously fixed date for completion but before a subsequent delaying event for which it was entitled to an extension of time. To start the extension of time from the previously fixed date for completion would be unfair to the main contractor who could not then seek damages from the sub-contractor for its delay.

The Court of Appeal concluded that however clause 11.3 is read, the natural meaning of the words used is that the extension should be contiguous. Referring to the terms of that clause, Jackson LJ stated:

"Those words indicate that if the employer has granted an extension of time, he will have increased the length of the existing period or periods for doing sections of the work, not creating new periods for doing work, each with their own start and end dates."

Whilst the Court of Appeal was troubled by the anomalies to which clause 11.3 might give rise, including providing an extension of time to a sub-contractor who was in delay for a part of that period, those concerns could not displace the natural meaning of the words used in clause 11.

Conclusion

Jackson LJ noted that:

"It appears that no Contractor or Sub-Contractor in a reported case has ever before felt the need to argue that awards of time should be non-contiguous."

That being the case this decision may not come as much of a surprise to people in the construction industry. But it does provide clarity on the court's thinking.