North Midland Building Ltd v Cyden Homes Ltd

JurisdictionEngland & Wales
JudgeThe Honourable Mr Justice Fraser
Judgment Date02 October 2017
Neutral Citation[2017] EWHC 2414 (TCC)
Docket NumberCase No: HT-2017-000135
CourtQueen's Bench Division (Technology and Construction Court)
Date02 October 2017

[2017] EWHC 2414 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Fraser

Case No: HT-2017-000135

Between:
North Midland Building Limited
Claimant
and
Cyden Homes Limited
Defendant

Mr Simon Lofthouse QC (instructed by Browne Jacobson Solicitors) for the Claimant

Mr Sean Brannigan QC and Mr Matthew Thorne (instructed by Pinsent Masons LLP) for the Defendant

Hearing date: 14 September 2017

Date draft distributed to parties: 22 September 2017

The Honourable Mr Justice Fraser
1

This is the hearing of a Part 8 claim brought by the claimant against the defendant in relation to what is said to be a point of contractual interpretation of one of the clauses of the contract agreed between the parties for the construction by the claimant of a sizeable house in the Midlands. The house is said, by the claimant, to be the most important private house to be constructed in the country for many years. The house is called South Farm, Ashby-cum-Fenby, Lincolnshire, but the works included not only construction of the house but also substantial outbuildings, barns and associated works.

2

The defendant is a corporate vehicle through which different members of the Dyson family chose to structure the different transactions involved in constructing the house. The Dyson family decided to have the house constructed, and were to live in it once finished. The defendant does not admit the claimant's description of the house's national importance. This may be through understandable modesty, and also because formally to admit such a claim would require a considerable amount of research in order for them to be confident that it were correct. However, suffice it to say that the house is exceptionally large, and was to be exceptionally expensive to construct. The nature of the house in comparison to more modest projects is not material to the issues central to the Part 8 claim.

3

The claimant, the contractor, and the defendant, the employer, agreed certain bespoke amendments to the standard form of contract which was that of the JCT Design and Building Contract 2005 form. One of these amendments concerned the way in which extensions of time would be dealt with in certain circumstances. It is in respect of this clause that the claimant seeks declarations in these proceedings. The clause in question is Clause 2.25.1.3(b) of the JCT Design and Building Contract 2005, as amended by the Special Conditions in the contract executed between the parties on 21 September 2009. The contract was executed as a deed. Although there were further documents referred to as the Supplemental Agreement dated 6 October 2010, and a further Supplemental Agreement referred to as the "Parting of the Ways Agreement" executed as a Deed on 28 October 2016, the legal effect of these are not wholly agreed, and are not material to the issues on this Part 8 Claim. Occupation and use of the building(s) took place on 11 November 2016. The content of neither Supplemental Agreement is relevant to the clause in issue in these proceedings.

4

The clause as amended reads as follows, dealing with delay and the circumstances where:

"2.25.

1. any of the events which are stated to be a cause of delay is a Relevant Event; and

2. completion of the Works or of any Section has been or is likely to be delayed thereby beyond the relevant Completion Date,

3. and provided that

(a) the Contractor has made reasonable and proper efforts to mitigate such delay; and

(b) any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken into account

then, save where these Conditions expressly provide otherwise, the Employer shall give an extension of time by fixing such later date as the Completion Date for the Works or Section as he then estimates to be fair and reasonable."

5

The declarations sought are:

(i) that the effect of Clause 2.25.1.3(b) is to make time at large where the claimant has a claim to an extension of time for a delay caused by a Relevant Event where that delay is concurrent with another delay for which the claimant is responsible; and

(ii) in such circumstances, the claimant must complete within a reasonable time and liquidated damages are void.

6

Sub-clause (3) is the part of the clause that has been added by the parties to the standard clause. The clause as amended therefore added into the extension of time machinery in the contract the proviso that, in assessing an extension of time, "any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken into account". It is that passage in respect of which, it is said by the claimant, that a point of construction arises. This assertion is made in the witness statements of Mr Westlake served in support of the Part 8 proceedings. I also have a witness statement from Ms O'Dwyer served on behalf of the defendant. None of the relevant facts are in dispute, and this matter is entirely suitable for Part 8 proceedings.

7

In order to understand the context of the clause in which the amended sub-clause sits it is necessary to consider the concept of concurrent delay. However, before that is done I will deal briefly with the factual background to these proceedings. The facts are simply to put the proceedings into their context, and resolving issues of fact is no part of the function of Part 8 proceedings.

8

The works were delayed and the claimant applied for an extension of time for a variety of reasons. This application, which was followed by various other notices of delay, relied upon a variety of different causes, or Relevant Events. This led to an Employer's Response to the claim for an extension of time (which also had accompanied a claim for loss and expense) which was provided to the claimant dated 29 June 2011. In it, different delay events were considered as, in theory, potentially entitling the claimant to an extension of time. These were lighting to the main house (Delay Event 1), Asphalt Roofing (Delay Event 9). Each of these, in terms of days, had caused substantial delay (163 and 26 days respectively). 9 days of delay was considered in the assessment as having been caused by the weather. However, in reliance upon the clause which is central to these proceedings, Clause 2.25.1.3(b), the response to the contractor's claim stated:

"Whilst no consideration has been made with regards to 'reasonable and proper efforts to mitigate such delay', the delays resulting from Delay Events 1 and 9 have been consumed by culpable delays attributable to North Midland Building [ie the claimant], thus reducing entitlement to an award of an Extension of Time".

9

The only delay event which had not been "consumed by culpable delays attributable to" the claimant was the weather, which entitled the claimant to an extension of time of 9 days. In summary, the defendant maintains that if there are two delaying events, to which I shall refer for these purposes as Event X and Event Y, occurring at the same time and causing concurrent delay to completion of the works, with Event X otherwise entitling the claimant to an extension of time, and Event Y being "another delay for which the Contractor is responsible", then the claimant would not be entitled to an extension of time in respect of those two delaying events. The claimant disagrees.

10

Although, in the years that have passed since these events, much water has passed under the bridge, the parties remain divided as to the correct approach in law of applying the amended clause in question. In submissions before me, that was the justification used for mounting the point of contractual interpretation, or point of construction to use the words of the claimant's solicitor.

11

However, before me the position of the claimant became rather more subtle. Reliance was placed by Mr Lofthouse QC for the claimant upon what is known as the doctrine of prevention. In Multiplex Construction (UK) Limited v. Honeywell Control Systems Limited [2007] BLR 195, Jackson J (as he then was) considered what is often referred to as " the prevention principle", both specifically in relation to the sub-contract before the Court in that case and generally. Essentially the prevention principle is something that arises where something occurs, for which it is said the employer is responsible, that prevents the contractor from complying with his obligations, usually the obligation to complete the works by the completion date. It should be remembered that there are other clauses of the contract in the instant case in these Part 8 proceedings (and in most of the standard forms) that operate in conjunction with the clauses entitling a contractor to an extension of time for completion. Failure to complete the works by the completion date, or the completion date as extended, will usually (and does in the instant contract) entitle the employer to deduct liquidated and ascertained damages ("LADs") from sums otherwise due to the contractor. These are almost invariably pre-estimated in advance in a particular sum per week, and were here; the amount was to be £5,000 per week of delay after the completion date (as extended) had passed. Although this might be thought to be so elementary as to constitute re-inventing the wheel for practitioners in this field, if a liquidated damages clause (for whatever reason) becomes inoperable, the contractor does not enjoy immunity from damages for late completion. Damages are assessed differently, and on the basis of actual loss. In this case, rather than so many weeks multiplied by £5,000 to give an easily calculable total, the employer would have to prove the financial loss caused by the delay. For some employers, such as schools, private...

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2 cases
8 firm's commentaries
  • Construction Arbitration: Ireland
    • Ireland
    • Mondaq Ireland
    • 19 August 2022
    ...In the UK, the Technology and Construction Court in September 2017 held in North Midland Building Limited v Cyden Homes Limited [2017] EWHC 2414 (TCC) that in circumstances of concurrent delay,the prevention principle will only be applicable if the contractor can show that the employer'sact......
  • Projects & Construction Law Update - October 2017
    • United Kingdom
    • Mondaq UK
    • 16 November 2017
    ...Co's latest projects and construction law update from October 2017 CASE UPDATE North Midland Building Limited v Cyden Homes Limited [2017] EWHC 2414 (TCC) The concurrency case that's got everyone Traditionally, construction contracts have remained silent on the issue of concurrency, leaving......
  • Particularly onerous or unusual contract terms: parties have wide freedom to agree
    • United Kingdom
    • JD Supra United Kingdom
    • 12 July 2018
    ...types of construction-related clauses, including exclusions of concurrent delay (North Midland Building Limited v Cyden Homes Limited [2017] EWHC 2414 (TCC)) and penalty clauses, which are relevant to liquidated damages (Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd v B......
  • Responsibility For Concurrent Delay
    • United Kingdom
    • Mondaq UK
    • 14 December 2017
    ...EWHC 1173 (TCC) [2007] CSOH 190 [2010] CSIH 68 See Article in this Review comparing and contrasting the new NEC4 and FIDIC forms 2017] EWHC 2414 (TCC) [2007] BLR 195 (No.4) [2011] EWHC 1935 (TCC) See the Supreme Court decisions of Arnold v Britton [2015] UKSC 36 and Wood v Capita Insurance ......
  • Request a trial to view additional results
3 books & journal articles
  • Damages
    • United Kingdom
    • Construction Law. Volume II - Third Edition
    • 13 April 2020
    ...Pty Ltd v Dalle Projects Pty Ltd [2017] VSC 409 at [35]–[37], per Vickery J; North Midland Building Ltd v Cyden Homes Ltd [2017] EWhC 2414 (TCC) at [11], per Fraser J; North Midland Building Ltd v Cyden Homes Ltd [2018] EWCa Civ 1744 at [10]–[12], per Coulson LJ; Cenric Group Pty Ltd v TWT ......
  • Table of cases
    • United Kingdom
    • Construction Law. Volume I - Third Edition
    • 13 April 2020
    ...Northern Territory v Woodhill & Sons Pty Ltd [2018] NTSC 30 III.24.369, III.24.374 North Midland Building Ltd v Cyden Homes Ltd [2017] EWHC 2414 (TCC) II.11.72, II.11.76, II.13.151, II.13.165 North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744 II.11.60, II.11.72, II.11.76, II.......
  • Time
    • United Kingdom
    • Construction Law. Volume II - Third Edition
    • 13 April 2020
    ...also Adyard Abu Dhabi v SD Marine Services [2011] BLr 384 at 421 [277], per hamblen J; North Midland Building Ltd v Cyden Homes Ltd [2017] EWhC 2414 (TCC) at [12], per Fraser J; North Midland Building Ltd v Cyden Homes Ltd [2018] EWCa Civ 1744 at [16], per Coulson LJ. he events giving rise ......

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