Sectional completion - Construction Contracts - page 319

196 If the architect gives an extension of time for section 1 and all
the sections have dates for possession which depend upon practical
completion of the earlier section, is the architect obliged to give a
similar extension of time for each section?
If sections are linked so that the date for possession of each section depends on the date
of practical completion of the earlier section, difficulties can arise. Some of the problems
arisingfromlinkedsectionshavebeenexploredinthepreviousquestion,togetherwithsome
ways of dealing with them.
Theproblemswereplaced beforethecourtin Liberty Mercian Ltd v Dean & Dyball Con-
struction Ltd. 1 In that case, the parties contracted under the JCT 98 form of contract. The
date for possession of the first section was fixed, but the date for possession of each follow-
ing section depended on the date of practical completion of the previous section. However,
and this is what gave the real potential for difficulty, the completion dates for each section
were fixed. Consequently, when the contractor was in delay for eight weeks in the first sec-
tion, the architect gave four weeks extension of time for the first section and four weeks
extension for each following section. Therefore, there was a period of culpable delay to the
first section of four weeks, for which the employer deducted liquidated damages amount-
ing to £48,000. The problem for the contractor was that it then found itself in a period of
culpable delay for each succeeding section, because the date for possession was delayed by
up to eight weeks each time but only four weeks extension of time had been given in each
case. The contractor argued that for each section after the first section, the extension of time
should reflect the initial eight-week delay to the first section, which irretrievably fixed the
dateofpossessionofthefollowingsections.Thecourtdecidedthatliquidateddamageswere
recoverable for all the weeks of culpable delay in each section. The court referred to what it
called the 'critical feature of this contract':
namely that the building works were always going to be carried out sequentially, and
that the work on one section could not start until the work on the previous section had
reachedpracticalcompletionor(incertaininstances)thestageofcompletionidentified
in the sectional completion schedule. It is plain from that schedule, and from the sec-
tional completion agreement as a whole, that both sides were aware that culpable delay
of 4 weeks on section 1 would automatically mean that work on sections 2, 3, 4 and 5
would start 4 weeks late.
In an old case about a project to be completed in sections which was heard by the House
of Lords, a hospital was to be built in three phases or sections. 2 There was a provision that