City Inn Ltd v Shepherd Construction Ltd

Another issue which arose in the City Inn case related to clause 13.8 which contained a time bar clause, requiring the contractor to provide details of the estimated effect of an instruction within ten days. The Judge characterised the clause thus:

"I am of opinion that the pursuers' right to invoke clause 13.8 is properly characterized as an immunity; the small defenders have a power to use that clause to claim an extension of time, and the pursuers have an immunity against that power if the defendants do not fulfil the requirements of the clause."

However, the Judge also felt that an immunity can be the subject of waiver. The architect and employer have the power, at least under the JCT Standard Forms, to waive or otherwise dispense with any procedural requirements. This was what happened here. Whilst, the employer (in discussions with the contractor) and the architect ( by issuing delay notices) both made it clear that the contractor was not getting an extension of time, neither gave the failure to operate clause 13.8 as a reason. The purpose of clause 13.8 is to ensure that any potential delay or cost consequences arising from an instruction, are dealt with immediately. Thus, the architect can assess the consequences of the instruction. The point made by the Judge is that whilst clause 13.8 provides immunity, that immunity must be invoked or referred to. At a meeting between contractor and employer, the EOT claim was discussed at length. Given the importance of clause 13.8, in the view of the Judge, it would be surprising if no mention was made of the clause unless the employer, or architect, had decided not to invoke it. Significantly, the Judge held that both employer and architect should be aware of all of the terms of the contract. Therefore, it is important that all certifiers are aware of the potential consequences, if by their actions, they could be deemed to have waived time bar clauses or other condition precedents.