In April 2016 the court assessed whether an extension of time under the DOM/2 form of subcontract should be added on to the end of the original subcontract period or be treated as a standalone period separate from the original subcontract period. The court decided that the extension of time should follow immediately (contiguously) after the current completion date rather than standing on its own (separately) at the time that the relevant event occurred (for further details please see "Clarification on subcontractor's extension of time").
However, this meant that the subcontractor might have no liability to the contractor for resulting loss or damage during a period when it was actually in delay. The subcontractor would then be liable to the contractor during a period when it was actually not in delay. However, as the loss suffered by the contractor during those two periods was unlikely to be the same, one party could gain a windfall benefit.
The Court of Appeal in Carillion Construction Ltd v Emcor Engineering Services Ltd (2017 EWCA Civ 65) could not resolve this issue, but it did uphold the 2016 decision. While the consequence of the contiguous approach was, at the very least, an oddity, anomalies of this kind do not displace the natural meaning of the extension of time clause, which is practicable and workable.
For further information on this topic please contact Chris Fellowes at Mayer Brown International LLP by telephone (+44 20 3130 3000) or email ([email protected]). The Mayer Brown International LLP website can be accessed at www.mayerbrown.com.