What it all comes down to

This recent City Inn vs Shepherd Construction judgment is a worthwhile read. It draws many of the arguments together about extensions of time. But watch out – it also talks a lot about “common sense”. And when I once explained to my eight-year-old offspring the error of its ways, and when the countercheck “quarrelsome” was issued in reply, I vividly remember my answer. “Not quarrelsome – common sense!” “Not very helpful,” replied the eight year old.

Shepherd built City Inn a hotel in Temple Way, Bristol. A six-week extension of time was awarded by the architect. But practical completion was five weeks after that. So five times £30,000 liquidated damages was payable by Shepherd.

An adjudicator was called up to review the architect’s extension of time. He said it was too short, and that City Inn had to repay the £150,000. City Inn came to court for a final throw of the dice. All this is under the JCT contract.

Begin with a short and not-so-simple rule: the contractor is bound to complete on the promised completion date except to the extent that delay is caused by prevention events listed in its contract or anyway prevented by his customer. Remove all unlesses and ifs: the contractor must complete on time.

Also begin with a short and not-so-simple rule for the architect. Its job is impartially to decide whether it is fair and reasonable within the rules of the contract to excuse the contractor its contractual completion date and by how much. “Fair and reasonable” is another unhelpful remark. The judge tried to help. “The general notion is that the rule is designed to achieve fairness as between the contractor and the employer, and the architect is given a wide discretion in order to achieve that result.”

As to preventions, the judge appears to be comfortable that when a listed prevention arises to excuse the contractor, it is a good excuse even if the contractor is in delay at the same time for its own reasons. So the architect cannot reject an excusable event just because the contractor was concurrently in culpable delay. None of that involves being fair and reasonable – it is a rule.

The architect cannot reject an excusable event just because the contractor was concurrently in culpable delay. None of that involves being fair and reasonable – it is a rule

But what does demand fair and reasonable judgment is the “how much”. Answering that involves weighing complex, overlapping, interacting events … sniffing, feeling and fathoming – and lo and behold, here enter onto the stage the programming experts.

"Common sense prevaileth"

The judge considered them to be competent. Snag is, they each had a different system for calculating the excused time, if any, due to Shepherd. Alan Whitaker’s approach was to first test Shepherd’s original programme for reasonableness and completeness, then simply seek factual evidence to identify where and how 11 weeks were lost. His theme was to show “events in the construction process that logic, experience and common sense tell you will be critical to completion of the works”.

The other expert, Nigel Lowe, produced on his computer what in his opinion was the as-built programme – that is, he found out what was done rather than analysing the original planned programme. In this way he identified the critical path. Then he looked at the delay events and concluded that none of them fell on the critical path, so there was no excuse for Shepherd losing those 11 weeks.

Now then. The use of an “as built” critical path analysis involves identification of relevant activities based on as-built records, and links of logic between those activities. The tribunal is heavily reliant on those links being correct. Get a few wrong and the clever analysis chart crumples. At the trial a fair number of errors were identified and agreed. Well, said the judge, “in my opinion that makes this as-built analysis of very doubtful value”. Of the other expert’s system, the judge said: “His method of proceeding appeared to be based on sound practical experience and on common sense.” Is there just a hint here that the judge found the computer-driven analysis a tad bewildering?

So, what was the end result? Shepherd got nine of its 11 weeks. There were 11 excusable events and some more that were down to Shepherd. Common sense said so.