Civil Engineering Reference
In-Depth Information
The process by which the length of extension of time to be granted is calculated is usefully
considered in the next case.
Balfour Beatty Building Ltd v. Chestermount Properties Ltd
QUEEN'S BENCH DIVISION
(1993) 32 Con LR 139
By a contract dated 16 June 1988, which was substantially in JCT 80 Form, private
edition with approximate quantities, the appellant (the contractors) agreed to carry out
the construction of a seven-storey office block at 126-137 Houndsditch, London EC3,
for the respondent (the employers).
The works comprised the construction of the shell and core of the building, together
with certain elements of developer fit-out. Under clause 2.2 of the contract, the employ-
ers could elect by a particular date to confine the contract to the shell and core works
only. Work commenced on 18 September 1987, prior to the execution date, and the
date for completion was 17 April 1989. In March 1988, the employers gave notice con-
fining the scope of the work to shell and core only. On 11 October 1988 the architect
granted an extension of time for completion of 15.5 days, taking the completion date
to 9 May 1989.
The work had not been completed by 9 May 1989 and on 8 June 1989 the architect
issued a certificate of non-completion under clause 24.1 of the contract. The shell and
core works remained uncompleted in January 1990 and the anticipated completion date
was the beginning of July 1990. Between 31 January 1990 and 9 February 1990, there
were discussions between the parties and correspondence, the agreed effect of which
was to entitle the employers to reinstate the fit-out works as part of the works, but not
varying any of the other provisions of the contract.
Pursuant to that agreement, between 12 February and 12 July 1990 the architect
issued variation instructions for the carrying out of the fit-out works, at which time
the contractors were in culpable delay. The shell and core works were practically com-
pleted on 12 October 1990 and the fit-out works reached practical completion on 25
February 1991. Two further extensions of time were granted, one on 18 December 1990,
which fixed the revised completion date as 12 September 1989, and a second and final
one on 14 May 1991 which fixed the revised completion date at 24 November 1989,
which was some 2½ months before the issue of the first of the architect's instructions
for the carrying out of the fit-out works as variations on the contract.
On 15 May 1991 the architect issued a further and final certificate of non-completion
under clause 24.1, which gave rise to a claim by the employers to be entitled to deduct
from payments to the contractors under the contract the sum of £3.84m as liquidated
and ascertained damages.
The contractors challenged the employers' entitlement to deduct that amount. They
contended that the consequence of the issue of variation instructions by the architect
during the period of culpable delay was to set time 'at large', so that no liquidated
damages were recoverable. Alternatively, they contended that, even if the structure of
the completion date and liquidated damages was intact, the architect should have given
