Cases - John Barker Construction Ltd v London Portman Hotel Ltd

Record details

Name

John Barker Construction Ltd v London Portman Hotel Ltd

Date

[1996]

Citation

83 BLR 31

Keywords

Construction contracts – extension of time – delay – extent of delay analysis required

Summary

This case is important because it emphasises the extent of analysis that a contract administrator must prepare when coming to a determination on extension of time entitlements.

The defendants were hoteliers who engaged the claimant contractors to carry out refurbishment works to the Portman Hotel in London, pursuant to a JCT Standard Form of Building Contract, 1980 edition. Different floors were subject to different completion dates, with the final floors to be completed by August 1994. Delays occurred for which the defendants appreciated the contractors were entitled to an extension of time. An agreement was reached between the parties in June 1994 whereby the claimants waived their right to an extension of time in return for entering into an acceleration agreement, whereby they would be paid a bonus of £90,000 if they could complete by August 2004.

Further delays occurred, occasioned by the issue of architect's instructions. Practical completion occurred in September 1994. The contractor obtained an extension of time covering part of the additional time, but not all. The Court held that the hoteliers had prevented the contractors from achieving timely completion and that they were entitled to be paid 50 per cent of the bonus payment, as a result of the claimant's 'loss of a chance' of recovering the same. It appears that the full amount was not payable because the judge recognised that there were 'all manner of [other] reasons' why the contractor may have failed to complete by August 2004.

The claimant was claiming an extension of time for the full construction period from the respondents. The claimant had appointed a delay analyst who had prepared a detailed, logical analysis of the progress on site and reasons for the delay. The respondent's architect had made an impressionistic determination, albeit in good faith, for a shorter period.

Mr Recorder Toulson QC said:

'... in my judgment [the architect's] assessment of the extension of time due to the [claimants] was fundamentally flawed in a number of respects, namely:

[the architect] did not carry out a logical analysis in a methodical way of the impact that the relevant matters had or were likely to have on [the claimant's] planned programme.He made an impressionistic, rather than a calculated assessment of the time which he thought was reasonable for the various items individually and overall (the [respondents] themselves were aware of the nature of [the architect's] assessment, but decided against having any more detailed analysis of [the claimant's] claim carried out unless and until there was litigation).[The architect] misapplied the contractual provisions... Because of his unfamiliarity with SMM7 [the standard method of measurement of building works] he did not pay sufficient attention to the content of the bills, which was vital in the case of a JCT contract with quantities.Where [the architect] allowed time for relevant events, the allowance which he made in important instances bore no logical or reasonable relation to the delay caused.

I recognise that the assessment of a fair and reasonable extension involves an exercise of judgment, but that judgment must be fairly and rationally based.'

If an extension of time decision is held to be invalid, then the matter might be put back before the architect in question to redetermine the relevant facts and make a fresh award. However, on the facts of the case this was not practically possible, given the absence of contemporaneous notes and the passage of time, as well as undesirable from a costs perspective.

In order to get around this problem, the Court ruled that the underlying contractual machinery had broken down to such an extent that the Court could step in to determine what was a fair and reasonable extension of time. The Court hinted that if, on the facts, an architect's award was only invalid in a 'discrete' respect, the matter could be referred afresh for a revised determination.