Since the reopening of non-essential construction sites from 18 May, some contractors are reporting that works are progressing at a slower rate due to compliance with the Return to Work Safely Protocol. If delay claims arise a recent Australian case is a timely reminder to both contractors and employers of the importance of maintaining site records in substantiating or defending delay claims.

In the White Construction Pty Limited v PBS Holding Pty Limited  [1] the plaintiff contractor brought a delay claim against two of its sub-contractors. The Australian New South Wales Supreme Court addressed the evidence required to prove delay claims in construction disputes. The case may persuade an Irish court, arbitrator or adjudicator to take a similar approach. In deciding against the plaintiff, the court analysed the alleged delay claim using an “open-textured approach” which meant that it looked at the contemporaneous records of progress during the works (such as the site diary) rather than relying on the results of a specific delay analysis methodology.

While the evidence of experts is useful in a delay claim, contemporaneous records is the best evidence.

Contemporaneous evidence includes photographs, minutes, emails, worksheets, time sheets and, as referred to by the Supreme Court in White Construction, site diaries. A site diary may include information such as a list of who is on site on each day, the planned work for that day, any impediment to that planned work and so on.

Background

The plaintiff, White Construction was a housing developer in Sydney. White Construction engaged the first defendant, Sewer Design Pty Ltd (SWC), as a water servicing coordinator and the second defendant, Illawarra Water (IWS), as a sewer designer to create a sewerage solution that complied with New South Wales regulations.

A modified sewer design was eventually accepted by New South Wales, but White Construction alleged that the original design was flawed and the revised version of the design caused delays of approximately 7.5 months to the completion of the project. It further alleged that this was a breach of contract by the defendants causing White Construction to suffer loss and damage to the tune of approximately $1.93 million.

Case Details

White Construction and IWS assigned delay experts to assess the alleged delay. The plaintiff's expert relied on the As-Planned v As-Built Windows Analysis and concluded there had been a delay of 240 days. On the other hand, the defendants' evidence relied on a Collapsed As-Built Analysis claiming that only 19 days of delay was caused. Both experts came to opposing conclusions and criticised the other's choice of delay analysis.

The analyses presented are well-known delay analysis methodologies provided in the 2nd Edition of the United Kingdom Society of Construction Law's (SCL) Delay and Disruption Protocol. The protocol was published by the SCL to provide guidance on common delay and disruption issues that arise during construction projects. It contains six types of delay analysis that can be used in construction disputes.

The court noted the criticism made by both experts and the complexity of their reports. It stated that both experts could not be right. Justice Hammerschlag appointed a court delay expert, who dismissed both experts' evidence and the methods they had adopted. The expert explained that an open-textured approach - being an analysis unbounded by any specific methodology - was the most appropriate way to analyse the delay. This approach was preferred by the court, who proceeded to apply a “common law common sense approach”[2] to causation by simply reviewing the evidence. The court was of the opinion that the only appropriate method is to determine the matter by paying close attention to the facts.

The court examined the evidence presented to understand if the modified sewage design and approval truly delayed the project. They considered whether White Construction had proved, on the probabilities, that delay in the sewer design delayed the project as a whole and, if it did, by how much. To determine this, the court reviewed the contemporaneous records kept by White Construction during the works. The main evidence provided to demonstrate what precisely happened on site were daily site diaries. The diaries were well-kept, clear and valuable. The court examined them thoroughly and discovered that while there were references to awaiting a new sewer design and statements outlining that the design was approved, the diary entries did not identify the specific activities that were affected by waiting for a new sewer design. The diary entries also revealed another important part of the sewerage installation; an extensive excavation through rock. This work continued pending the approval of the renewed design. The diaries also highlighted that delays were caused by other elements such as inclement weather and, as a result, the project was in any event incapable of earlier completion.

Conclusion

Based on the facts of the case, the court held that White Construction failed to discharge its burden to prove that IWS caused any delay and dismissed the case on the basis that there was insufficient evidence to show that the delays in receiving approval of the sewer design delayed the project. The court dismissed the SCL delay methodologies and approved a broad common-sense approach that paid attention to key facts and contemporaneous evidence.

The judgement is a reminder that the opinion of a delay expert alone will not substitute the requirement for evidence of the actual cause and impact of an alleged delay. The use of expert evidence must be connected to the factual evidence from the project site.

Footnotes

1 [2019] NSWSC 1166

2 [2019] NSWSC 1166 [196]

Originally published 26 June, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.