From when should an extension of time period be counted?

Facts

Carillion was the main contractor on the new High Court Building in London (which houses the TCC!) and began proceedings against EMCOR and its guarantor, Woods.  EMCOR was an M&E subcontractor.  Carillion sought damages for delay.

EMCOR/Woods’ defence was that although they were in delay, they had during the delay period been delayed in turn by Carillion.  Most of Carillion’s losses in respect of delays occurred during the period immediately following the original period for completion.  Carillion therefore argued that there was a period when EMCOR were liable for delay followed by a period when EMCOR were not.

EMCOR argued that the extension of time they were entitled to from the contractor should be added to the end of the original period (and thus wipe out most of Carillion’s actual losses).

Held:

The proper approach is to add the period of extension of time to which the subcontractor becomes entitled onto the end of the original contracting period.

Comment

Although this approach did not reflect the actual commercial reality of Carillion’s losses, it creates a simple rule which is easy to apply.  It also follows the approach adopted in 1993 in Balfour Beatty v Chestermount Properties when the same problem occurred, although argued from a different point of view.

For more information, contact Robert Langley on 0191 211 7957 or at [email protected].