Factual and Procedural Background
This litigation arises from extensive disputes related to a substantial new building project at 3, Boltons Place, London SW5, commenced around 2004. The main contractor, Company A, was appointed when design work was largely incomplete, and the employer, Company B, had high expectations. The project experienced substantial delays, partly due to incomplete design and deteriorating relations between Company B and its Architect. The litigation involved numerous issues including global claims and concurrent delays, with a significant volume of documentation and expert evidence presented over a lengthy trial.
The property comprised three adjacent houses known as Units A, B, and C, with Unit C being the focus of this case. The project involved complex architectural and interior design elements, including a basement with a swimming pool, a Light Wall feature, Barrisol ceilings, American Black Walnut flooring and joinery (ABW), and bespoke doors known as Stingray doors. Company B was a corporate vehicle formed by three individuals who owned the plots.
The contract between Company B and Company A was based on a JCT Standard Form with amendments, incorporating a Contractors Designed Portion supplement. The contract contained numerous provisional sums and incomplete design elements at the outset. Company A submitted a tender in March 2004, which was accepted after negotiation, with a completion date originally set for January 2006. The contract was later split into three separate contracts for each unit.
Throughout the project, there were repeated delays caused by late instructions, incomplete design, and disputes over responsibility for design and defects. Various contractors and consultants were involved, including multiple architects, interior designers, and specialist subcontractors. The project was characterised by acrimonious relations, particularly between Company B's representatives and Company A and its consultants. The dispute culminated in proceedings issued by Company A in 2010 against Company B, with Company B bringing in third parties as defendants, though these differences were later settled.
Legal Issues Presented
- Whether Company A was entitled to extensions of time due to delays caused by late instructions, incomplete design, and other Relevant Events under the contract.
- Whether Company A had design responsibility for specific elements of the Works, including the American Black Walnut joinery, Courtyard Sliding Doors, Light Wall, and Leather in the Library.
- The extent and quantification of loss and expense recoverable by Company A under Clause 26 of the contract, including prolongation costs, sub-contractor claims, and overheads and profit.
- The validity and effect of the settlement agreement between Company B and third-party consultants on claims against Company A for defects.
- The appropriate apportionment and assessment of concurrent delays and global claims for loss and expense.
- The entitlement to and calculation of interest on late payments under the contract and statutory provisions.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Balfour Beatty Building Ltd v Chestermount Properties Ltd (2003) 62 BLR 1 |
Extension of time must relate to delay actually caused by Relevant Events; prospective and retrospective assessments of delay. |
Confirmed that extensions of time are to be granted for the actual delay caused by Relevant Events, rejecting the notion that delay caused by subsequent events negates earlier extensions. |
| City Inn Ltd v Shepherd Construction Ltd [2010] BLR 473 |
Concurrent delay; apportionment of extension of time where delay caused by multiple events. |
Distinguished and declined to apply the Scottish approach of apportionment, holding that contractor is entitled to full extension for delay caused by Relevant Events. |
| Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 |
Concurrent delay; contractor entitled to extension if one cause is a Relevant Event notwithstanding concurrent non-Relevant Event. |
Endorsed the principle that contractor is entitled to full extension for delay caused by Relevant Events despite concurrent other causes. |
| De Beers v Atos Origin IT Services UK Ltd [2011] BLR 274 |
Concurrent delay and causation principles; extension of time entitlement and loss recovery. |
Confirmed general rule that contractor gets extension for delay caused by employer's breach even if concurrent contractor-caused delay exists. |
| Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) |
Concurrent delay; definition and treatment in delay claims. |
Quoted Henry Boot principles and defined concurrent delay as overlapping effective causes of delay of similar causative potency. |
| Crosby v Portland UDC (1967) 5 BLR 121 |
Global or lump sum claims for delay and disruption; arbitrator's discretion. |
Confirmed that arbitrators may award lump sum for delay where apportionment is impractical, provided no duplication or profit element. |
| London Borough of Merton v Leach (1985) 32 BLR 68 |
Global claims and pleading requirements; condition precedent for loss and expense claims. |
Held that global claims are permissible where apportionment is impractical, subject to timely claims and adequate particulars. |
| Wharf Properties Ltd v Eric Cumine Associates (1991) 52 BLR 1 |
Pleading standards and global claims; requirement to plead causal nexus. |
Distinguished pleading issues from substantive claims; emphasised need for clear pleading of causal nexus in global claims. |
| John Holland Construction & Engineering Pty Ltd v Kvaerner RJ Brown Pty Ltd (1996) 82 BLR 81 |
Global claims; caution in pleading and proof. |
Warned courts to approach global claims with caution and require clear causal nexus to be pleaded and proved. |
| Bernhard's Rugby Landscapes Ltd v Stockley Park Consortium Ltd 82 BLR 39 |
Global claims; distinction between pleading and arbitration awards. |
Clarified that global claims are the antithesis of well-pleaded claims with clear causal nexus. |
| John Doyle Construction Ltd v Laing Management (Scotland) Ltd [2012] BLR 393 |
Global claims; requirement that all causative events be employer's responsibility. |
Held that global claims fail if any material causative factor is for which defendant not liable; mitigated by common sense and proof. |
| Petromec Inc v Petroleo Brasilerio SA Petrobras [2007] EWCA Civ 1371 |
Contract interpretation in claims for additional costs; requirement for particulars and causal nexus. |
Confirmed necessity for clear pleading and particulars linking instructions, work content and costs; no separate costings needed if total reasonable extra cost established. |
| Alfred McAlpine Homes North Ltd v Property and Land Contractors Ltd (1995) 76 BLR |
Loss of overhead and profit claims; use of formulae and ascertainment under contract. |
Discussed formulae for unabsorbed overheads; clarified ascertainment means finding out for certain but allows assessment and opinion. |
| Axa Insurance UK Plc v Cunningham Lindsey UK Ltd [2007] EWHC 2023 |
Reasonableness of settlements; causal link and burden of proof. |
Set out principles for recoverability of settlements including reasonableness, causal link and burden on claimant. |
| Siemens Building Technologies FE Ltd v Supershield Ltd [2010] BLR 145 |
Reasonableness of settlements; assessment of claim strength and settlement range. |
Outlined factors for assessing reasonableness of settlement and causation for recovery. |
| Biggin v Permanite [1951] 2 KB 314 |
Reasonableness of settlements; principle that reasonable settlement losses are recoverable. |
Established that reasonable settlements are recoverable even if liability not proven beyond doubt. |
Court's Reasoning and Analysis
The Court conducted a detailed factual and contractual analysis of the project, the contract terms, the design responsibilities, the causes of delay, and the quantum of loss and expense. It found that the contract incorporated the JCT Standard Form 1998 with amendments including the Contractors Designed Portion supplement, but that the notification of design responsibility to the Contractor (Company A) had to be clear, written, and from the Employer (Company B), which was not done for many disputed elements.
In relation to the major disputed design elements (American Black Walnut joinery, Courtyard Sliding Doors, Light Wall, Leather in the Library), the Court found that Company A had no contractual design responsibility as no clear notification was given. The design defects and delays associated with these elements were primarily attributable to the Employer or its professional team, not the Contractor.
The Court analysed the extensive delays chronologically from February 2007 to July 2008, identifying the primary causes of delay as late instructions, variations, and unresolved design issues for which Company A was not responsible. It rejected the contention that plastering defects or lift issues caused overall delay, finding these to be minor and largely remedied promptly.
The Court preferred the delay expert who adopted an objective, month-by-month analysis of critical path delay based on actual progress rather than a subjective approach focusing on "significant" issues as perceived by the Employer and its consultants.
On the issue of concurrent delay, the Court endorsed the English approach that where one cause is a Relevant Event (employer risk), the Contractor is entitled to a full extension of time regardless of concurrent non-Relevant Events.
Regarding loss and expense, the Court found that Company A had complied with the contractual conditions precedent for claims under Clause 26 and that its detailed claims for extended preliminaries, sub-contractor loss and expense, overheads and profit, and other costs were sufficiently particularised and supported. The Court rejected the Employer's arguments that the claims were "global" or insufficiently particularised, finding the claims reasonably detailed and linked to specific delay events.
The Court accepted the reasonableness of a settlement made by Company A with a major sub-contractor (Norstead) for delay and disruption costs, allowing a prudent reduction to reflect possible unpleaded factors.
The Court held that the settlement of 1.8 million by the Employer with third-party consultants for defects claims overlapped with many of the defects alleged against Company A. In the absence of evidence to the contrary, the Court gave credit to the Employer for these sums against claims for defects against Company A, limiting Company A’s liability for defects to amounts exceeding the settlement allocation.
The Court carefully considered other defects claims and found that many were either not proven, minor, attributable to others, or compensated by the settlement. It allowed limited damages for minor defects such as a roof membrane seam.
On interest claims, the Court found the contract interest rate to be a substantial remedy and deferred detailed ruling on statutory and contractual interest pending further submissions.
Holding and Implications
JUDGMENT IN FAVOUR OF COMPANY A
The Court held that Company A is entitled to an extension of time until 7 July 2008, reflecting the actual delay caused by Relevant Events for which Company A was entitled to extensions. The principal causes of delay were late instructions, variations, and unresolved design issues for which Company A was not responsible.
Company A is entitled to recover loss and expense in the sum of £860,714 for preliminaries, £505,003 for sub-contractor loss and expense, and £276,172 for overhead and profit, together with other sums including minor damages for defects and contractual interest as determined.
The Court gave credit to the Employer for the £1.8 million settlement with third-party consultants, which overlaps with many defects claims against Company A, thereby reducing Company A’s potential liability for defects.
The decision directly affects the parties by confirming Company A’s entitlement to extensions of time and substantial financial recovery for delay and disruption costs, while limiting its liability for defects by reference to the third-party settlement. No new legal precedent is established; the Court applied established principles of contract interpretation, delay analysis, concurrent delay, global claims, and loss and expense recovery.