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Assignment Question


Alford (A) is a property development company and Balerno (B) is a well-known UK wide contractor. A entered into a contract with B on 4 November 2013 for the construction of an office block in St Vincent Street in London on the Standard Building Contract With Quantities (SBC/Q) 2011 ("the Contract"). The Date for Completion is stated to be 1 December 2015.

B submitted a programme which showed completion on 2 November 2015. The Architect is Mr C R Mackintosh of Advanced Architects. Mr Mackintosh took no issue with the programme showing early completion.

The office block is 8 storeys high with a 2 level car park below ground level. The site had already been cleared through an earlier demolition and enabling works contract. At one end of the site is the gable wall of an adjacent tenement block.

The Date for Possession is 1 December 2013. Work did not commence on site timeously due to B`s piling sub-contractor going into administration just prior to commencing on site. However, a replacement piling sub-contractor was lined up within a fortnight and commenced work on site 5 on January 2014

The sub-contractor installed a secant piled wall around the footprint of the office block and then proceeded to carry out excavation for the underground car park with the installation of temporary propping. The excavation work commenced on 2 March 2014. Three days later the owner of the adjacent tenement building reported substantial cracking of the gable wall. This was investigated by Brunel & Co, a firm of structural engineers appointed by B. They immediately advised that work in the vicinity of the gable wall should stop pending the execution of remedial and strengthening work to the gable wall which was carried out by the owner of the tenement building who indicated that he would seek reimbursement of this cost from A.

The work in the vicinity of the gable wall stopped for a period of 10 weeks. Half way through this period Mr Mackintosh, at the request of B, issued an instruction stating that the work in the vicinity of the gable wall should stop pending the completion of the remedial work to the gable wall. Once Brunel & Co confirmed that the work to the gable was fully complete Mr Mackintosh, again at the request of B, issued an instruction that the works in the area in question could resume. B then applied for a 10 week extension of time on the basis that work in the vicinity of the gable wall had stopped for 10 weeks. Mr Mackintosh issued an extension of time of 10 weeks which was stated to be due to the cracks in the gable wall. At the time when the work stopped to the gable wall B were 6 weeks behind programme.

Thereafter B requested certain changes to the design of the car park for its own convenience and benefit. A had no objection to this and this was confirmed by Mr Mackintosh. B immediately thereafter applied for an extension of time of 3 weeks on the basis of change to the design.

Good progress was made in the final few months and by the end of it B had managed to claw back 1 month of the delay as against programme.

However, the Date for Completion came and went with B on site. On 2 December 2015 the Architect issued a Variation and it was estimated that it would take 2 weeks to carry this work out. Half way through it water damage occurred to certain electrical fittings due to a flood which was caused by a sub-contractor failing to tighten an attachment to a tap properly. It took 2 weeks to remedy the damage caused by the flood.

Practical Completion was finally certified on 19 February 2016. A has made it clear that it intends to deduct liquidated and ascertained damages which are £50,000 per week or part thereof.

A comes to seek your advice. A informs you that B considers that it has a valid extension of time of 10 weeks on the basis of a postponement of part of the Works and that it has submitted a loss and expense claim for £1.6m in respect of this. A is furious that Mr

Mackintosh issued the 10 week extension of time and wants to know how it can claw this back. As far as A is concerned no extension of time at all is due and no loss and expense is due either. A is aware that B is preparing to launch an adjudication and wishes to have your advice on where it stands in relation to B. Does B have a binding extension of time? Can A do anything about the extension of time granted? What is A`s exposure to any other claims for extension of time and also is A exposed to loss and expense? It should be noted that whilst B has mentioned that it is claiming for extensions of time it has not notified this to the Architect in writing. As indicated above, B has submitted a claim for loss and expense in respect of the 10 weeks. This was done by means of its monthly applications to the quantity surveyor under the Contract. B has made it clear at meetings that it is looking for loss and expense for the entire period from the Date of Possession to Practical Completion.

Please provide A with a list of delay events and calculate the extend of delay for each event. Advice A on the extent to which B may be able to pursue claims for extension of time and loss and expense payment.

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