Defects @ Large

Defects in design, workmanship or materials during construction can disrupt progress and delay completion.  Standard forms of building contract generally provide mechanisms for dealing with delays.  If the contract provisions are correctly applied, the delays caused by defects can treated as part of the costs of resolving the defects.

 

Difficulty arises where responsibility for delay is unclear and where appropriate contractual mechanisms fail or are not used correctly.  If this occurs or if a contract does not provide for adjusting the completion date where rectifying defects impedes progress, time may become "at large". 

 

“Time at large” is a common law principle where a fixed contractual completion date is rendered ineffective.  Broadly, this is based on the so-called “prevention principle”.  Where the contract either has no mechanism for extending the completion date, or that mechanism has become inoperable, it would be inequitable for the employer to enforce the contractor’s failure to meet the completion date when this was caused by reasons for which the employer was responsible (an “act of prevention”).  In these circumstances, the contractor is relieved of his obligation to complete the works by the specified completion date. Instead, his obligation is to complete the works within a “reasonable time”. At the same time, the employer is no longer entitled to claim or deduct the contractual liquidated damages.  What constitutes "a reasonable time" will be based on the facts to the extent they are ascertainable.  In considering this issue the courts will, based on the principles set out in Pantland Hick v Raymond & Reid, not allow any extension of time for causes of delay which were under the Contractor's control.

 

Responsibilities for defects have to be identified in order to properly assess any adjustment to the completion date which should be made as a consequence of the disruption caused.   One case in which this arose recently involved the refurbishment of an old building.  A partial collapse occurred in part of the retained structure and additional unplanned demolition was necessary to prevent further collapse.  The HSE issued a notice stopping the work pending production of a safe method of work statement.

 

The employer had not appointed a CDM coordinator or principal contractor, in breach of regulation.  The designers had not advised the employer of the CDM regulations and had proceeded with a design without checking a coordinator had been appointed and the HSE notified in further breach of regulation.  No written building contract was in place and no contractual mechanism had been agreed to deal with delays.

 

The employer and his designers had not checked the existing structure was capable of being modified as designed but, by issuing the designs for tender, it might be that they had implicitly warranted that the designs were buildable.  The builder recklessly demolished parts of the building in ways which left the un-demolished remnants in a precariously dangerous condition.  The HSE expressed serious doubt about the builder’s ability to fulfil the role of principal contractor but required a principal contractor to be in place before work recommenced.  The designers had never been to site and knew nothing of these events.  The employer was vacationing abroad.  Work was halted.  Delays were growing.  New people had to be employed to discharge the duties under the CDM regulations.  The designers had to provide the information required of them under the regulations.  This information had to be incorporated into a construction phase plan.  The builder had to modify his work methods accordingly.  Scaffolding had to be installed to maintain stability.  The scaffold restricted access.  The method and sequence of work had to change to allow the progressive removal of the temporary supports.  The time needed for the site work more than doubled.

 

There were defects in the approach taken by designer, employer and contractor which compounded to disrupt progress and cause substantial delay.  Identifying the breaches of statutory regulations and allocating blame was relatively straightforward but isolating the effect of each so as to properly assess the contribution each made to the delay was not practicable.   Compromises had to be reached to allow progress to be resumed.