International Construction Law Review
CAN PREVENTION BE CURED BY TIME BARS?*
PROFESSOR DOUG JONES
Partner, Clayton Utz, Sydney, Australia
“A party may not rely on the non-performance of the other party to the extent that such non-performance was caused by the first party’s act or omission or by another event as to which the first party bears the risk.”1
1. Introduction
This paper2 addresses the issue of whether liquidated damages for delayed performance can be enforced against a contractor for periods of delay caused by the owner, and for which the contractor cannot obtain extensions of time due to the operation of time bar provisions in the extension of time clause. The issue has been the subject of considerable judicial and other comment in the United Kingdom and Australia.3 It is proposed to examine the principles relevant to the issue and the debate so far, before offering some views on the question.
* This article is based upon the 2008 TECBAR lecture, delivered in London, 17 September 2008.
1 UNIDROIT Principles of International Commercial Contracts 2004, Art 7.1.2.
2 The author would like to gratefully acknowledge the assistance in preparation of this paper of Jennifer Ingram and Lee Power, Legal Assistants of Clayton Utz, Sydney; and that of His Honour Humphrey LLoyd, QC; Mathew Stulic, Senior Associate, Clayton Utz, Sydney; and Matthew Bell, Lecturer and Co-Director of Studies for Construction Law, The University of Melbourne, who have read and commented upon drafts of the paper. Responsibility for the contents is however my own.
3 See Peak Construction (Liverpool) Ltd v. McKinney Foundations Ltd
(1970) 1 BLR 111 (CA); Trollope & Colls Ltd v. North West Metropolitan Regional Hospital Board [1973] 1 WLR 601; SMK Cabinets v. Hili Modern Electrics Pty Ltd [1984] VR 391; Turner Corporation Ltd (Receiver and Manager Appointed) v. Austotel Pty Ltd (1994) 13 BCL 378; Turner Corporation Ltd (In Provisional Liquidation) v. Co-Ordinated Industries Pty Ltd (1994) 11 BCL 202; Gaymark Investments Pty Ltd v. Walter Construction Group Ltd (2000) 16 BCL 449; Peninsula Balmain Pty Ltd v. Abigroup Contractors Pty Ltd (2002) 18 BCL 322; Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Ltd (No 2) [2007] EWHC 447 (TCC); Steria Ltd v. Sigma Wireless Communications Ltd
[2008] BLR 79; Doug Jones, Building and Construction Claims and Disputes (1996); Hudson on Building Contracts (11th ed., 2005); Keating on Construction Contracts (8th ed., 2006); Ian Duncan Wallace, “Prevention and Liquidated Damages: a Theory Too Far?” (2002) 18 Building and Construction Law 82; Ellis Baker, James Bremen and Anthony Lavers, “The Development of the Prevention Principle in English and Australian Jurisdictions” [2005] ICLR 197; Matthew Bell, “Scaling the Peak: The Prevention Principle in Australian Construction Contracting” [2006] ICLR 318; Stephen Rae, “Prevention and Damages: Who Takes the Risk for Employer Delays?” (2006) 22(5) Construction Law Journal 307; Hamish Lal, “The Rise and Rise of Time Bar Clauses”, Management, Procurement and Law (February 2007) 25; Ian Pease, “The Prevention Principle”, Davies Arnold Cooper Construction Wire (April 2007); Crispin Winser, “Shutting Pandora’s Box: the Prevention Principle after Multiplex v. Honeywell” (2007) 23(7) Construction Law Journal 511; David Goldstein and Bree Miechel, “Fairness and Extensions of Time in Construction Contracts” (2007) 2(4) Construction Law International 19.
[2009
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