Most Read Contributor in Hong Kong, September 2016
Originally published 3 August 2010
Keywords: extension of time, EOT, City Inn,
On 22 July 2010, the Extra Division, Inner House, Court of
Session handed down its decision in the long running saga of City
Inn v Shepherd Construction. All three judges in Scotland's
appellate court rejected Shepherd Construction's 17 grounds of
appeal in a case that has been running for the past 10 years. The
decision in this case sheds further light on the often thorny issue
of determining extensions of time, particularly where there is
concurrent delay under standard form construction contracts, in
this case, the JCT 1980 Edition standard form.
The dispute in this case concerned late completion of the
construction of a hotel in Bristol, England. The parties entered
into an amended JCT 80 Edition standard form contract. The
contractor, Shepherd Construction, had been awarded a four week
extension of time ("EOT") by the Architect and a further
five weeks EOT following an adjudication. City Inn was not content
with the award of either EOT and commenced proceedings in the Court
of Session seeking, among other things, a declaration that Shepherd
Construction was not entitled to any EOT. Shepherd Construction
counterclaimed seeking an 11 weeks EOT and associated loss and
expense. It was apparent from the evidence adduced at the hearing
that construction of the hotel was in delay towards the end of the
project. As with many construction projects, the delay analysis
involved both relevant events (Employer delay) and culpable delay
(Contractor delay). Accordingly, issues concerning concurrent delay
had to be decided.
In the court of first instance, Lord Drummond Young decided, in
In granting an EOT under Clause 25 of the Contract, the
decision maker had to award EOT on a fair and reasonable
Where there were concurrent delays, irrespective of when delay
events started and finished, in the absence of one particular cause
of delay being dominant, arriving at a fair and reasonable award of
EOT may involve an apportionment exercise; and
The "but for" test for causation did not apply in
respect of Clause 25 of the contract, (i.e. the delay would not
have occurred "but for" the event giving rise to the
Applying these principles, Shepherd Construction was entitled to
a nine week EOT. City Inn appealed.
On appeal the majority decision was given by Lord Osborne with
Lord Kingarth concurring. In his decision, Lord Osborne set out
what he considered to be the correct approach in applying Clause 25
to EOT assessment as follows:
The relevant event must be likely to have or actually delayed
Causation is to be decided by applying common sense rather than
"philosophical" principles of causation;
If a dominant cause of delay can be identified, other causes
will not be considered and where the dominant cause is not a
relevant event, the claim will fail; and
It is for the decision maker, using a fair and reasonable
approach, to apportion delay where there is a relevant event and a
non-relevant event in the absence of any dominant cause of delay
(Lord Carloway dissenting on this point).
Further, their Lordships all agreed that it is not necessary to
have a critical path analysis in order to determine an EOT. The
court took the view that it is for the decision maker to decide
whether such an analysis would assist in determining EOT. A lack of
a critical path analysis is not fatal to a claim for EOT.
The decision in City Inn appears to be a vote for applying
common sense and reasonableness when deciding EOT issues under
standard form construction contracts, particularly when it comes to
the issue of causation and concurrent delay.
Copyright 2010. JSM, Mayer Brown International LLP
and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a
global legal services organization comprising legal practices that
are separate entities ("Mayer Brown Practices"). The
Mayer Brown Practices are: JSM, a Hong Kong partnership, and its
associated entities in Asia; Mayer Brown International LLP, a
limited liability partnership incorporated in England and Wales;
and Mayer Brown LLP, a limited liability partnership established in
the United States. The Mayer Brown Practices are known as Mayer
Brown JSM in Asia.
This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications Disclaimer.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please briefly describe the main laws that govern real estate in your jurisdiction.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).