https://www.chronosconsult.

com/delay-in-the-past-12-months/

As you might expect, being experts in construction delay, we are always looking out for developments
and changes in the law relating to our work. However, 2021 was a relatively quiet year in the world of
delay claims and disputes.

Nevertheless, there have been a few 2021 cases worth looking at, and some thought-provoking
developments.

Delay Down Under

Firstly, with thanks to the good people at White and Case for highlighting, there have been some
interesting cases in Australia. The key point appears to have been whether a delay analysis should be
‘prospective’ or ‘retrospective’. That is to say, should you predict the impact of a delaying event, or
should you look back at what happened? This reflects a case in Northern Ireland. Then, the judge said,
“Why should I shut my eyes and grope in the dark when the material is available”.

Two cases – Build Qld Pty v Pro-Invest Hospitality, and John Holland Pty Ltd v The Minister for
Works looked at this. The cases highlighted the importance of the contract in assessing Extensions of
Time. Also, parties to a dispute must refer to the contract first in deciding how Extensions of Time
should be determined. White and Case provide a helpful summary of the approaches of different forms
of contract on their website here.

Not So Co-Operative…
Here in England, in CIS General Insurance v IBM UK, an IT dispute made a rare appearance at the
High Court. The moral of this story was the critical importance of good records and contract
management.  Unusually for a technology dispute, a delay expert was used. The judge noted that he
was, “hampered by the absence of project documents and programming tools, tracking planned and
actual progress, that would usually be available for such [an] exercise”.

This is, in our experience, a feature of many projects, particularly where substantial delay claims arise.
Sadly it may be the case that had good records been maintained from the outset, a substantial delay
claim would never have arisen. But if a claim does arise, those records become even more important.

Schindler’s Lifts
Over the pond in Canada, WLG Gowling look at the case of Schindler Elevator Corporation v Walsh
Construction Company of Canada. It involved an examination of the thorny subject of ‘concurrent’
delay and the critical path. The claimant appears to have been unsuccessful in demonstrating that
concurrent delay occurred. Once again, the key element here appeared to be the ability to prove cause
and effect – which relied on records.

Delay on Trial
Last, but by no means least, is the 2021 case of Triplepoint v PTT. In this dispute, Paul Darling QC
took time to explain delay analysis to the Lords and Lady of the Supreme Court.

The case itself is more a legal and contractual examination of the importance of understanding and
getting contract terms right. However, what we find particularly interesting in this case is that we have
the opportunity to see a leading QC discussing delay analysis. The hearing is available to watch on
the Supreme Court website. The afternoon hearing becomes particularly interesting (for us!) from
around 40 minutes in.

Conclusions
In conclusion, a few key points come out of the key delay cases in 2021:
Firstly, and crucially, the well-worn mantra of the importance of records. Next, the importance of
reading, understanding, and following the contract. And finally, the importance of understanding the
impact and cause and effect of delaying events. It is not always the case that a delaying event of one
day will delay a project by one day. 
https://www.whitecase.com/publications/alert/extensions-time-construction-projects-prospective-or-
retrospective-delay
27 OCT 2021

Extensions of time in construction projects: prospective or retrospective delay analysis?

Contractors' extension of time (EOT) entitlements and associated financial rights are always to be
assessed pursuant to the applicable contract mechanism. A recurring question is whether EOT
entitlements are to be determined prospectively, or with the benefit of hindsight. Two recent Australian
cases highlight the conflicting positions which may arise.

Prospective vs. retrospective delay analysis – why does it matter?

The method of delay analysis used for an EOT claim may be significant, because different results may
ensue. For example, if varied work is instructed to a contractor which will clearly cause delay:

 Using a prospective analysis with computer-based CPM modelling and Time-Impact

Analysis, the contractor may predict that the variation will cause 30 days of critical delay,
and therefore a 30 day EOT will be claimed; however

 Looking at the delay retrospectively, once its impact has been felt in full, it may turn out
that the contractor was only delayed by 20 days, as it was able to re-sequence certain
activities and otherwise mitigate the possible delay.

Is the contractor entitled to a 20 day or a 30 day EOT? The difference can be significant, particularly if
it means the difference between having to pay, and not having to pay, liquidated damages for delay.

The issue becomes more complicated and nuanced when it arises in an after-the-event forum, such as
adjudication, arbitration or in court, when the effect of events is known. The argument then becomes:
why consider a prediction of a period of delay when we know how long the works
were actually delayed?

Case 1: Built Qld Pty Ltd v Pro-Invest Hospitality Opportunity (ST) Pty Ltd [2021] QSC 224

The dispute arose out of a contract between the contractor, Built, and the employer, Pro-Invest, for the
design and construction of a hotel in Spring Hill (the "Contract"). In considering Built's claim for an
EOT, the Supreme Court of Queensland was required to consider the appropriateness of the different
methodologies adopted by the parties.
Clause 34.3 of the Contract provided that:

"The Contractor shall be entitled to such EOT for carrying out WUC (including reaching practical
completion) as the Superintendent assesses, if:

(a)     the Contractor is or will be delayed in reaching practical completion by a qualifying cause of
delay." (emphasis added)

Built argued that the use of the words, "is or will be delayed", refers to current or ongoing delay that
required prospective analysis. It further relied upon clause 34.5 of the contract, which provided that the
contract administrator was to assess the contractor's EOT claim within 14 days of receipt; otherwise
there would be a deemed assessment of the EOT claimed. On the basis that EOT claims were required
to be made within 14 days of the contractor reasonably becoming aware of a qualifying delay, Built
submitted that any delay longer than 28 days therefore required a prospective analysis, because there
would be a future element to the EOT claim.

Pro-Invest submitted that it was open to the court to use either methodology, but that a retrospective
methodology should be preferred. It further argued that the "current exercise", i.e. determining Built's
EOT entitlement in court proceedings well after the expiration of both the alleged delay event and
practical completion, was "totally different" from the exercise contemplated by Clause 34.5. On this
basis, Pro-Invest submitted that Clause 34.5 cannot operate to place the Court in the "shoes of the
superintendent at the time of assessment" to now determine the EOT.

The Court agreed with Pro-Invest, holding that the Contract permitted the use of either a prospective or
a retrospective methodology to determine an extension of time.

Case 2: John Holland Pty Ltd v The Minister for Works [2021] WASC 312

In a dispute over the design and delivery of a new hospital in Perth, John Holland, the contractor,
argued that its entitlement to an EOT should be considered prospectively. The State submitted that the
"particulars of the appropriate methodology or methodologies … [would be determined] by way of
exchange [of] expert evidence", but fell short of specifying whether prospective or retrospective
analysis would be undertaken.

The Supreme Court of Western Australia concluded that the correct methodology is "dictated by and
depends on the proper construction of the Contract", and is not a matter for expert evidence.
Accordingly, the court held that the State was required to plead its position as to whether the Contract
requires a prospective analysis, a retrospective analysis or combination of the two. It considered that
the State's failure to do so would pose a "real risk" to John Holland's preparation for trial.
However, the court drew the line at requiring the State to provide particulars as to the methodology by
which the extension is to be assessed: the methodology to be employed was considered to be properly
an area for expert evidence.

Commercial Implications

Both of these Australian cases indicate that:

 The law is not prescriptive as to the method of delay analysis used in making and reviewing
an EOT claim (i.e. prospective, retrospective, or a combination of the two). The contract
terms are paramount.

 Expert evidence on delay cannot be used to interpret, let alone override, the EOT provisions
of a contract.

There is some variation between the approaches taken by construction contracts to EOT issues:


Under the NEC form, the philosophy is for EOT claims to be made and addressed at the time,
based upon known information and predictions as to the impact of events, and without later
revising the EOT assessment based on the actual delay suffered. This suggests that a purely
prospective approach should be taken, not only during the project, but in adjudication,
arbitration or court. However, there is authority from Northern Ireland indicating that later-
acquired information can be relied upon (i.e. a retrospective analysis could be used).1


The JCT form takes a two-stage, hybrid approach under which an EOT is to be claimed and
assessed based on actual and expected delay to completion, however at the end of the
project the Contract Administrator may review its EOT assessments and increase them if it
believes more time was fairly due to the contractor based on the events subsequently
occurring on the project.


The FIDIC form also takes a hybrid approach, in that it requires the Engineer to grant an EOT
for particular causes if completion "is or will be delayed" – suggesting that a prognostication
of delay may be needed. But the EOT clause also permits the Engineer to review previous
EOT assessments and to increase them, if appropriate, which contemplates the use of a
retrospective analysis.

Where the tension between a prospective delay analysis and a retrospective delay analysis becomes
acute, is in after-the-event dispute-resolution forums, such as adjudication, arbitration or in court. A
tribunal may, for illustrative purposes, find it artificial to conclude that a contractor was due a 30 day
EOT (based on a prospective delay analysis) when it was actually delayed by only 20 days. Yet there
may be circumstances in which such a conclusion is justified, i.e. where the contract calls for EOTs to
be assessed on a prospective basis, and there is evidence of the contractor mitigating the delay, or even
accelerating its works. Ultimately, the issue is contract and fact sensitive.

1 Northern Ireland Housing Executive v Healthy Buildings (Ireland) Limited [2017] NIQB 43