Case in focus: MW High Tech Projects UK Ltd vs Balfour Beatty Kilpatrick Ltd

The case

MW High Tech Projects UK Ltd vs Balfour Beatty Kilpatrick Ltd [2020] EWHC 1413 (TCC)
Before Mrs Justice O’Farrell DBE
Technology and Construction Court
Judgment delivered 5 June 2020

The facts

In 2016 MWHTP engaged BBK under an amended JCT Design and Build subcontract to carry out mechanical and electrical work at a new laboratory in Hull.

Clause 2.17.1 provided that if it became reasonably apparent that the works were likely to be delayed, BBK should give notice. Clause 2.17.2 required BBK as soon as practicable thereafter to provide particulars including an estimate of the delay to completion. Clause 2.17.3 required BBK to forthwith notify MWHTP of any material change in the estimated delay and clause 2.18.2 required MWHTP to decide on any extension of time within 16 weeks of receipt of the particulars.

On 2 March 2018 BBK issued a notice of delay and claimed a seven-week extension of time due to MWHTP’s delayed builders’ work including first side boarding, mist coating and studwork. BBK issued four further notices between 13 April 2018 and 27 February 2019 citing lack of progress by MWHTP on studwork and claiming a cumulative extension of time of 31 weeks. MWHTP did not respond to any of these claims.

On 30 July 2019 BBK served an expert’s report that concluded MWHTP’s under-resourcing and delayed boarding and studwork had caused a critical delay of 282 days to BBK’s works. MWHTP failed to respond so BBK commenced adjudication on 8 August 2019. MWHTP participated in the adjudication but reserved its position on jurisdiction. In a decision dated 10 October 2019 the adjudicator awarded BBK an extension of time of 282 days.

In a Part 8 application issued on 22 January 2020 MWHTP contended that the expert report amounted to a new notification for the purposes of clause 2.17.1 where the report relied on the novel ground of delay to second side boarding and included a critical path analysis not previously submitted. MWHTP further argued that if not a new notification, the report contained further particulars of earlier notifications and that in either case there could be no crystallised dispute until MWHTP responded or the 16-week period provided for in clause 2.18.2 expired.

In reply, BBK submitted that the five earlier delay notices comprised adequate notice and particulars of the delay claim and that MWHTP’s failure to respond to any of these gave rise to a crystallised dispute well before the commencement of the adjudication. BBK additionally contended that the service of notices under clause 2.17.3 did not necessitate fresh notices under clause 2.17.1 or restart the 16-week period.

The issue

Did the adjudicator have jurisdiction to determine BBK’s extension of time claim?

The decision

The judge found the 16-week period was triggered by receipt of the clause 2.17.1 delay notice and the particulars required by clause 2.17.2, but observed that the notice and particulars could be provided in the same document. She also found that a notice under clause 2.17.3 would not restart the 16-week period unless it concerned a delay claim so different from any previously notified that it would as a matter of fact and degree, amount to a new notice displacing the original.

The judge stated that MWHTP’s failure to respond to the delay notices preceding 30 July 2019 meant a dispute in respect of the cumulative delay claim crystallised 16 weeks after MWHTP’s receipt of the notice dated 27 February 2019. Having failed to respond, MWHTP could not contend that it was awaiting particulars pursuant to clause 2.17.2.

Finally, the judge found that on a proper analysis, the expert report served by BBK did not include any novel issues sufficient to restart the 16-week period. Although the extension of time claimed in the report was longer than that previously claimed, the grounds relied upon were not materially different from those asserted in previous notices, for example, delays to MWHTP’s preceding builders’ works and the references to second side boarding were covered by the mist coating delays previously noted. Thus the expert’s report comprised evidence in support of BBK’s claims in a dispute that had previously crystallised.

Commentary

Experts’ reports are typically introduced in support of delay claims at a late stage, often shortly before adjudication commences. Although each case will turn on its own facts, this judgment suggests that as long as the report does not substantially digress from the grounds upon which delay has previously been claimed, the report will not in itself give rise to a new and potentially uncrystallised dispute.

Ted Lowery is a partner in Fenwick Elliott