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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Severfield (UK) Ltd v Duro Felguera UK Ltd (No. 2) [2017] EWHC 3066 (TCC) (29 November 2017) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2017/3066.html Cite as: [2017] EWHC 3066 (TCC), 175 Con LR 266

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Rolls Building, Fetter Lane, London, EC4A 1NL
		29 November 2017

The Hon. Mr Justice Coulson :

1. INTRODUCTION

1. Pursuant to a sub-contract dated 13 August 2013, the defendant engaged the claimant as a sub-contractor for the supply, fabrication and erection of structural steelwork at the Carrington Combined Cycle Gas Technology PowerStation at Power Island at Carrington PowerStation in Greater Manchester ("the site"). The works involved 12 separate steelwork units altogether: two each for the Turbine Hall, the Electrical Modules, the Feed Water, the OTC, the HRSG Enclosure and the Platforms.
2. The claimant's claim in these proceedings comprises its final account. The defendant has chosen not to take part in the trial, but had previously set out those areas of the claim with which it takes issue. Those disputes are largely matters of quantity surveying and programming, although there is a particular legal issue about delay which I address separately. There is also a point about the financial position as at 31 December 2014, which I am told is a date relevant to the guarantee provided by the defendant's parent company to the claimant. Following the defendant's liquidation, that guarantee now represents the claimant's most likely source of financial compensation.
3. I address the claims in the following sequence. In Section 2, I set out briefly the factual context. In Section 3, I summarise the claim history. In Section 4, I give an overview of the claimant's claim. Then at Sections 5-13 inclusive, I deal respectively with the elements of the final account concerned with: measured works; EHS managers; the lump sum discount; the variations where the dispute is worth less than £10,000; the variations where the dispute is worth between £10,000 and £20,000; the 12 largest variation disputes; the legal and factual issues relating to delay; the financial claims and cross-claims relating to delay; and the contra charges. There is a summary of my views on the final account claim in Section 14. I then deal briefly with the position as at the end of December 2014 in Section 15. My conclusions are summarised in Section 16.

2. THE FACTUAL CONTEXT

4. Clause 13.1 dealt with Completion Dates. It provided as follows:

"13. COMPLETION DATES

13.1 The CONTRACTOR shall comply with the following dates fulfilling with all the conditions established in this Contract

	STEEL STRUCTURE END OF ERECTION DATE
BUILDING	Unit 1	Unit 2
TURBINE HALL	01/02/2014	01/03/2014
ELECTRICAL MODULES	10/03/2014	10/04/2014
FEED WATER	28/02/2014	03/03/2014
OTC	11/01/2014	15/02/2014
HRSG ENCLOSURE	17/07/2014	16/08/2014
PLATFORMS	09/04/2014	08/05/2014

"

5. The claimant had two basic requirements in order to meet these dates. First, they needed all necessary design information in good time; and secondly, they needed possession of the relevant parts of the site in order to allow them to complete on time. As a matter of fact, neither of these things happened.
6. As to design information, there was a clear agreement between the parties as to when that information would be provided. On 9 August 2013, the defendant reminded the claimant that the completion dates for the various units had changed (and had become the dates set out in paragraph 4 above). The defendant sought confirmation that the claimant could meet these dates. The claimant replied on the same day in the following terms:

"With reference to the revised delivery schedule noted below we confirm that we can achieve these dates subject to the following parameters been achieved by the Design/Construction Team;

1. All Design Information [Full Construction Drawings with Design Loads] issued to us by 19th August for the following elements -

Turbine Building 1 [Connection details for Internal Platforms to Main Frame also required to insure details are incorporated into Main Frame]

Electrical Module 1

OTC 1

2. All Design information [Full Construction Drawings with Design Loads] issued to us by 2nd September for the following elements -

Turbine Building 2 [Connection details as noted in item 1 above also required]

Electrical Module 2

OTC 2

Feedwater 1

Platforms l & 2.

3. All Design information [Full Construction Drawings with Design Loads] issued to us by 9th September for the following elements -

Feedwater 2

4. All Design information [Full Construction Drawings with Design Loads] issued to us by 6th January 2014 for the following elements -

HRSG Enclosure l

HRSG Enclosure 2"

7. There was no further response by the defendant to that email. Accordingly I find that the defendant agreed that the design information would be provided to the claimant in accordance with that timetable, in order to ensure that the contractual completion dates^[1] were met. The design information was not provided in accordance with that timetable. The evidence was that design information was provided piecemeal by the defendant over the next 18 months, making completion by the relevant contractual completion dates impossible.
8. As to possession, Table 5.2.8 of Mr Williams' expert's report^[2] sets out the contractual completion date for each of the 12 units and the dates when access to the claimant was given to allow them to commence work on those units. It will be seen that the vast majority of the dates on which access was given occurred after the contractual dates for completion. Therefore, for this reason too, it was quite impossible for the claimant to meet the contractual completion dates.
9. In addition to the piecemeal provision of the design information and the failure to provide possession to the clamant to allow them to meet their contractual obligations, a third cause of the delay and disruption on site was the nature and scope of the variations. Some of these works were extensive; some involved re-works; and they all involved the claimant's operatives going back to make changes to the work they had previously carried out.
10. The evidence before me made plain that the defendant wholly failed to control the carrying out and coordination of its own contract works. In consequence, the defendant had numerous sub-contractors on site (including the claimant) whose work they had failed to plan, programme and coordinate. As a result, the defendant was obliged to have twice daily meetings (one for the day shift and one for the night shift) in which very specific tasks were set for each sub-contractor. These meetings were then followed up with detailed documents, provided by the defendant, which had a variety of names such as 'Site Task Brief' and 'Site Co-Ordination'.
11. These contemporaneous documents do not always reflect the work actually carried out. But they do show the scale of the daily (and nightly) restrictions placed on the claimant, and the other sub-contractors. The limited tasks they were permitted to undertake comprised the maximum amount of work actually available to them for that day or night shift; they simply could not do anything else.
12. Some examples of these documents, together with detailed explanations, were provided by Mr Paul Richardson, the claimant's site manager, during his oral evidence. We looked at three sample weeks in detail: the week commencing 2 July 2014; the week commencing 3 November 2014; and the week commencing 1 December 2014. The story was the same in each case. The claimant, along with all the other sub-contractors, was not allowed any sort of run at their work. Instead, the work that they were permitted to carry out, and the areas in which they could physically operate, were tightly prescribed by the defendant. To make matters worse, it was not always possible for even those limited works to be carried out. One example we looked at was where the defendant had failed to see that it was asking the claimant to perform a particular task in an area which was actually an exclusion zone for radiography, where nobody was permitted to work at all.
13. Because of its numerous defaults, the defendant ended up having to micro-manage all of its sub-contractors. That meant that the claimant suffered extensive delay, disruption and uneconomic working. Mr Richardson, who was a palpably honest and direct witness, gave extensive written and oral evidence about the consequences of the defendant's failings, and I accept that evidence.
14. There was no overall completion date. However, it will be seen from paragraph 4 above, that the last 'end of erection dates' in the contract was 17 July and 16 August 2014, in respect of the HRSG Enclosure. In fact, those two elements of the work were not completed until 7 July 2015, a delay of almost a year.

3. CLAIM HISTORY

15. The claimant commenced adjudication proceedings against the defendant claiming the sums by way of its final account. Although the adjudicator decided in the claimant's favour, the enforcement proceedings were unsuccessful because of the complicated jurisdictional issues introduced by the exceptions to the Housing Grants (Construction and Regeneration) Act 1996. At paragraphs 62 and 63 of my judgment in the second enforcement action ([2015] EWHC 3352 (TCC)), I explained how and why those exceptions, casually introduced by Parliament without any serious debate, were the sole reason for the claimant's predicament. Now that the defendant has gone into liquidation without paying any of the sums found due by the adjudicator, the injustice to the claimant caused by Parliament's insistence on the exceptions (and its refusal over many years to remove them) has become even more apparent.
16. Accordingly, the claimant now brings these fresh proceedings, in which the court is not hampered by the same jurisdictional obstacles that prevented justice being done through the adjudication process. By the time of the CMC on 3 July 2017, it had become apparent that the progress of this action depended on the defendant's liquidators. On their making it clear that they did not intend to defend these proceedings, a short form timetable was introduced, so as to enable this claim to be tried in November 2017.
17. The hearing on 14 November 2017 took all day. I was conscious of the absence of the defendant. I therefore asked many questions of counsel, the factual witnesses, and both experts. I set out my conclusions on all those matters in the next Sections of this Judgment.

4. OVERVIEW OF THE CLAIMANT'S CLAIMS

18. Mrs Ann Nash, the claimant's expert quantity surveyor, provided an overview of the claims in her revised appendix 4.2.1. I reproduce that appendix below:

Item	SUK Claim Value     £	DF Value       £	Delta       £		A Nash Assessment Primary position   £	A Nash Assessment Secondary position (high)   £	A Nash Assessment Secondary position (low)	Comments
Measured Works - including night shift sum	7,686,067.12	7,675,113.12	10,954.00		7,732,734.70	7,732,734.70	7,732,734.70
EHS Managers	393,364.00	28,600.00	364,764.00		114,741.00	114,741.00	114,741.00
Sub-total	8,079,431.12	7,703,713.12	375,718.00		7,847,475.70	7,847,475.70	7,847,475.70
Lump Sum Discount	-219,446.32	-219,446.32	0.00		-219,446.32	-219,446.32	-219,446.32
Variation Account Agreed	830,220.45	830,220.45	0.00		830,220.45	830,220.45	830,220.45
Variation Account Unagreed Delta under £10k	247,940.51	178,476.68	69,463.83		247,940.51	247,940.51	247,940.51	Included as SUK Claim Value
Variation Account Unagreed Delta £10k-£20k	627,989.80	502,672.16	125,317.64		627,989.80	627,989.80	627,989.80	Included as SUK Claim Value
Variation Account Unagreed Top 12	2,933,233.15	610,949.66	2,322,283.49		2,333,070.01	2,194,745.95	2,032,804.05	Secondary position (low) only applies to VO 117
VO G - Loss and Expense - on site prelims	1,010,386.44	nil	1,010,386.44		209,464.79	209,464.79	209,464.79
VO G - Loss and Expense - off site prelims	inc above	nil	nil		147,138.69	147,138.69	147,138.69
Parking Charges	0.00	-600.00	600.00		0.00	0.00	0.00
DF Back Charges	0.00	-214,466.36	-214,466.36		0.00	0.00	0.00
Gross Contract Price	13,509,755.15	9,391,519.39	4,118,235.76		12,023,853.63	11,885,529.57	11,723,587.67
Paid to date	8,999,204.76	8,999,204.76	0.00		8,999,204.76	8,999,204.76	8,999,204.76
Net Amount Due	4,510,550.39	392,314.63	4,118,235.76		3,024,648.87	2,886,324.81	2,724,382.91
Liquidated Damages	0.00	960,000.00	960,000.00		Not assessed	Not assessed	Not assessed
Final Amount Due	4,510,550.39	-567,685.37	5,078,235.76		3,024,648.87	2,886,324.81	2,724,382.91

19. The claimant has indicated that it accepts, and is content to be bound by, Mrs Nash's figures. Thus, although the claimant's claim was originally valued at £4.5 million odd, the claim as supported by Mrs Nash is worth at most just over £3 million, with a low figure of £2.7 million odd. 'Delta' is the name given by Mrs Nash for the financial difference between the claimant and the defendant on the original claims.
20. I propose to work through these individual line items, one by one, identifying what I consider is the appropriate sum due in each case.

5. MEASURED WORKS

21. The claimant's claim was for £7,686,067.12. Mrs Nash puts this at a slightly higher figure of £7,732,734.70, but that is because the claimant has included other claims elsewhere which Mrs Nash has dealt with under the heading of Measured Works.
22. The relevant part of Mrs Nash's report in respect of the Measured Works is section 6, in particular, sections 6.2 and 6.3.1-6.3.5. She explains from her spot checks and other investigations how she arrived at the figure of £7,732,734.70. I accept her evidence. I therefore accept her figure for Measured Works of £7,732,734.70.

6. EHS MANAGERS

23. The claimant originally claimed £393,364 in respect of this item. It was the claimant's case that, pursuant to the terms of the original sub-contract, they were not required to provide such managers, and that therefore they were entitled to the total cost of these personnel.
24. Mrs Nash values this item at £114,741. This is because, on her analysis, set out in sections 6.2.22-6.2.36, 6.3.6-6.3.9 and 6.4.2-6.4.4 of her report, there was a requirement in the contract for some EHS Managers. However, the piecemeal way in which the defendant instructed the claimant to work meant that more operatives were on site, and also meant that a night shift (which was not envisaged in the sub-contract) was permanently required. As a result, there was a need for a greater number of EHS Managers than could reasonably have been envisaged at the time of the sub-contract. There was also a need for those managers to provide their services for a longer period, because of the overall delay.
25. Taking all these matters into account, in the sections of her report to which I have previously referred, Mrs Nash arrives at a figure of £114,741. I accept her evidence on the issue of EHS Managers and therefore I accept her figure of £114, 741.

7. LUMP SUM DISCOUNT

26. The figures for Measured Work and EHS Managers produces a total of £7,847,475.70. The parties were agreed that there falls to be deducted from that figure the Lump Sum Discount of £219,446.32. That was an agreed figure.

8. VARIATIONS WHERE THE DISPUTE IS LESS THAN £10K

27. The claimant and the defendant agreed certain variations at a figure of £830,220.45. That must therefore form part of the final account balance sheet. It is then necessary to look at the variations which were not agreed, starting with those where the dispute is worth less than £10,000. The claimant's claim in respect of these variations is £247,940.51. I note that the defendant's value was £178,476.
28. Although Mrs Nash has used the claimant's figure for this item, I do not consider that that is appropriate. Her detailed sampling, noted in section 8.2 of her report, makes plain that, whilst some of these variations were justified in full, others require a downwards adjustment. Those adjustments are then identified in section 8.4. But neither they, nor any extrapolated figures, have been carried through to Mrs Nash's appendix 4.2.1 rev A. In my view, it is necessary for those downwards adjustments to be reflected in the final account calculation.
29. Taking Mrs Nash's evidence on these low-value variations in the round, it seems to me that the most proportionate way of arriving at a figure is to make a 20% reduction to the amounts claimed by the claimant. Thus, instead of £247,940.51, the correct figure for these variations would be £198,352.41.
30. This 20% discount analysis (which could equally be described as 80% substantiated) is based on section 8 of Mrs Nash's report. Such a discount is also in accordance with business common sense, because it produces a figure which is part way between the figure originally claimed by the claimant (which cannot be sustained for the reasons explained by Mrs Nash) and the figure of £178,476.68 advanced by the defendant (which on her analysis, is too low).
31. Accordingly, in relation to the disputed variations worth less than £10k, the correct figure is £198,352.41.

9. VARIATIONS WHERE THE DISPUTE IS BETWEEN £10K AND £20K

32. The claimant's claim for these variations was £627,989.80. The defendant's figure was £502,672.16. Mrs Nash's summary again uses the claimant's figure.
33. As explained in section 9.2 of Mrs Nash's report, she endeavoured to spot check the two largest variations in dispute. One of these produced a figure which is just under £4,000 less than the claimed amount. The other variation she was unable to check in detail. That would again suggest that the right figure was not that claimed by the claimant, but a lesser figure.
34. In arriving at the relevant reduction, it would not be appropriate to utilise the 80% figure for these variations, in part because that would not be justified by Mrs Nash's findings, and partly because that would reduce the amount of the claim to almost precisely the figure advocated by the defendant (a commercially unlikely result).
35. It is appropriate for the court to take a rough and ready approach to this issue. By reference to all the evidence, I have arrived at a figure of £565,331, which is the figure halfway between the figures put forward by the two parties. That is the appropriate figure for the variations where the dispute between the parties was between 10K and 20K.

10. VARIATIONS: TOP 12

36. VO 117
37. The largest single variation in issue was VO 117 which was the return visit costs for HRSG delays. The claimant values this at £458,835.97. The defendant valued it at £51,817.15. As reflected in paragraphs 10.5.42-10.5.45 of Mrs Nash's report, and annexure report 1.8, she arrives at three different figures: a primary case of £454,393.95 based on the claimant's methodology; a so-called secondary (high) case of £379,379.83, based on fair and reasonable rates; and a secondary (low) case of £221,313.22, based on rates derived from particular disruption records.
38. I reject the primary case in respect of this claim. That is based on a methodology which values the whole of the works by reference to dayworks and then knocks off the claimant's tender allowance for the original work in the sub-contract. That is rarely an appropriate methodology. The tender allowance may not have been enough, and had no contractual status in any event.
39. On the other hand, I do not consider that it is appropriate to rely solely on actual costs records (the secondary low position), without making a common sense assessment of the piecemeal way in which these works were carried out overall. In cases of this kind, it is impossible to record everything in the contemporaneous documents, and such omissions cannot automatically limit the amount recoverable.
40. Accordingly, I consider that Mrs Nash's secondary (high) position, using fair and reasonable rates and prices, which arrives at a figure of £379,379.83, is the right approach for this VO 117. I got the impression from her oral evidence that, perhaps for understandable reasons, this was the approach with which Mrs Nash was happiest.
41. I should say for completeness that there was a dispute between the parties at the time that some of the daywork sheets were not signed and therefore could not form the basis of this (and indeed other) claims. If the defendant had been here and had maintained that argument, I am confident that I would have rejected it.
42. First, it is quite clear on the facts that, historically, the defendant accepted many claims which were based on unsigned daywork sheets. That was realistic and appropriate in the circumstances of this case. Secondly, it will rarely be a sustainable defence by a party who should have signed daywork sheets, but who has not done so, to allege that the claim is defective because the daywork sheet does not bear the relevant signature. If it were otherwise, the signature system would be regularly abused. Thirdly, and perhaps the most important reason for these purposes, I am in no doubt that the evidence as to the circumstances in which this work was carried out (see paragraphs 4-14 above) make it plain that this was a case in which much of the work had to be carried out on dayworks, because there was simply no alternative.
43. Other Large Variations
44. It is unnecessary to set out the other larger variations in dispute. These are all dealt with in section 10 of Mrs Nash's report and the relevant annexure reports. Essentially, the issue was again the appropriate evaluation methodology, so the particular dispute which I have resolved in relation to VO 117 also arises in relation to each of these other large variations. I unhesitatingly choose what Mrs Nash has called her secondary position (high) in respect of these items, for the reasons given at paragraphs 37-39 above.
45. Summary
46. Accordingly, for the reasons noted above, in respect of the Top 12 variations, the appropriate value is Mrs Nash's secondary (high) figure of £2,194,745.95. I note that that is some £720,000 less than the amount originally claimed by the claimant.

11. TIME/DELAY

47. Mr Goddard's primary position was that, in all the circumstances of this case, time was at large. That, he said, was a complete answer to the cross-claim for liquidated damages and meant that the claimant's only obligation was to complete the works within a reasonable time, which they did. His alternative case was that the claimant was entitled to an extension of time in respect of each of the 12 steelwork units, down to the date of the completion of their erection, pursuant to clause 13.3.
48. Clause 13.3 of the sub-contract was expressly concerned with delay. That clause provided as follows:

"The CONTRACTOR may only request changes to the Completion Dates when the following circumstances occur: (i) a cause of Force Majeure that affects any Completion Dates or (ii) suspension of the Contract by order of the BUYER or (iii) any act of prevention or default of the BUYER, or (iv) deferment of the giving of possession of the Site or any part thereof as needed to perform the Scope and provided that CONTRACTOR has fulfilled all the conditions required for such access, or (v) modifications to the Scope pursuant to clause 12, or (vi) any strike at the Site, other than strikes of CONTRACTOR's personnel and/or subcontractors, that directly impacts performance of CONTRACTOR's Scope or(vii) in case of CONTRACTOR's suspension In accordance to clause 15.6 or (viii) in the other cases expressly established in this Contract."

49. As to the overall delays for each of the 12 units, those were set out at amended table 6.1.1 of Mr Williams' report as follows:

Building/Unit	Contract Completion Date	Actual Steel structure Completion Date	Delay (Calendar days)
Turbine Hall 11	01/02/14	07/04/14	65
Turbine Hall 21	01/03/14	30/04/14	60
OTC 11	11/01/14	07/08/14	208
OTC 21	15/02/14	15/09/14	212
Feedwater 11	28/02/14	05/09/14	189
Feedwater 21	03/03/14	12/11/14	254
Electrical Module 11	10/03/14	01/10/14	205
Electrical Module 21	10/04/14	01/10/14	174
HRSG 11	17/07/14	07/07/15	355
HRSG 21	16/08/14	17/06/15	305
Turbine Hall Platforms 11	09/04/14	05/02/15	302
Turbine Hall Platforms 21	08/05/14	25/02/15	293

50. With respect to Mr Goddard, I am in no doubt that the appropriate starting point is to consider the question of time and delay as it arose under the contract. As I have indicated, there were three main causes of delay: the failure to provide design information; the failure to give possession in due time; and the carrying out of variations. Each of those three causes of delay was expressly covered by the extension of time provision in clause 13. Thus, the failure to provide design information in accordance with the email exchanges of 9 August 2013 was "an act of prevention or default" by the defendant; the failure to give possession was also an act of prevention or default, and in addition was caught by the provision concerned with "deferment of the giving of possession of the Site or any part of thereof"; and variations were "modifications to the Scope pursuant to clause 12". Thus, all of the delaying events which occurred on site justified the claimant's entitlement to an extension of time under clause 13 for each of the 12 units under the sub-contract.
51. Were the extensions of time due to the claimant coextensive with the actual delays in the completion of the erection of each steel structure? In my view they were. Mr Williams has produced a detailed and comprehensive report explaining how and why the delays occurred. At paragraph 8.19 of his report he said:

"In my opinion, SUK could not reasonably have completed the steel structure works in the Units any earlier than the identified Complete Steel Structure Erection date in the table below [the table set out at paragraph 46 above] taking into account all of the circumstances that it encountered including the access issues caused by DF, the increased scope, the change circumstances in respect of the site logistics and the variation works required by DF."

52. I accept that evidence. Accordingly, I find that the claimant was entitled to an extension of time for the delays to each of the 12 units as set out in the table at paragraph 46 above.
53. In those circumstances, it is unnecessary for me to deal in detail with Mr Goddard's primary argument, to the effect that time was at large. My reticence is increased by the fact that it was not straightforward as a matter of law, and the defendant was not represented at the trial.
54. But I should say briefly that I was not persuaded that it would have been appropriate to find that time was at large. The argument relied on Thorn v London Corporation [1876] 1 App. Cas. 120 (HL), and the well-known passage in which Lord Cairns said that if there was additional or varied work:

"…so peculiar, so unexpected, and so different from what any person reckoned or calculated upon, that it is not within the contract at all; then, it appears to me, one of two courses might have been open to him; he might have said: I entirely refuse to go on with the contract…or he might have said, I will go on with this, but this is not the kind of extra work contemplated by the contract, and if I do it, I must be paid a quantum meruit for it."

55. This dicta found an echo in later cases such as Sir Lindsay Parkinson & Co v Commissioners of His Majesty's Work and Public Buildings [1949] 2 KB 632 and, more recently, Blue Circle Industries PLC v Holland Dredging Company (UK) Limited (1987) 37 BLR 40. However, I consider that Lindsay Parkinson and Blue Circle were particular cases on their specific facts. And whilst Thorn might be of wider application, it was still rooted in a factual situation where the additional works ordered were so different in nature to those contemplated by the contract that they did not properly amount to contractual variations at all.
56. Another thing that these authorities have in common is that they were all concerned with money. None of them was concerned with time for performance, so the proposition that time could be rendered at large because of the happening of many different unexpected events simply did not arise. Moreover, as Mr Goddard agreed, the American doctrines of 'cardinal change' or 'cumulative change' have never been applied in English law.
57. I consider that there is a fundamental conceptual difficulty with the basis of the argument that, in this case, time was at large. Clause 13 was a widely drafted clause which allowed for extensions of time for all the delaying events that actually arose on site. It is therefore very difficult for the claimant to turn round and say that, even though the extension of time provisions capture all of the relevant events that occurred, time was still somehow at large.
58. Finally, as I think Mr Goddard accepted, at least up to a point, there was a risk that his argument that time was at large butted up against the Court of Appeal decision in McDermott International Inc v McAlpine Humberoak Limited [1992] 58 BLR 1. In that case, the judge at first instance found (contrary to the arguments of both parties) that the extensive variations had frustrated the original contract and replaced it with an entitlement to be paid on a quantum meruit basis. That argument was rejected by the Court of Appeal. Although McDermott was not primarily concerned with issues of time, it is I think a signpost that, in modern times, the courts will uphold the contractual mechanism agreed by the parties wherever possible, and avoid, if they can, relying on extra-contractual concepts such as frustration or time being at large.
59. For those reasons, I decline to find that time was at large in this case. However, it makes no difference at all to the outcome because, for the reasons demonstrated so comprehensively by Mr Williams, the claimant is entitled to a full extension of time in respect of each and every one of the 12 steelwork units with which they were concerned.

12. THE FINANCIAL CONSEQUENCES OF DELAY

60. Prolongation
61. The claimant is entitled to recover financial compensation for the delay to the sub-contract works. That claim arises either under the terms of the sub-contract (for example, as part of the additional cost of carrying out the varied works) or as damages for breach of contract (the breaches being the defendant's act of prevention). For the avoidance of doubt, I confirm that the delays in the provision of design information, the delays in the granting of access and the micro-management of the claimant's works to suit the chaotic situation that the defendant had created on site, all amount to breaches of contract, and the damages which flow naturally from those breaches are the cost consequences of the overall delay to the claimant's works thereby caused.
62. The overall delay was dealt with in section 7 of Mr Williams' expert's report. In summary, he found that the critical element of the works were units 1 and 2 of the HRSG. He concluded (paragraph 7.6.2 of his report) that the delayed commencement of the HRSG units delayed overall completion from 16 August 2014 until 17 April 2015. He concluded that, once work had started on those units, there were further delays from 17 April 2015 until 7 July 2015. I accept that evidence: it is the result of a careful assessment of the relevant events.
63. At paragraph 7.6.6 of his report, Mr Williams identified when the overall delay of 325 days actually occurred during the works. This was an important exercise because it identified when the claimant incurred the financial loss caused as a consequence of the delay. It was Mr Williams' conclusion that:

(a) There was 37 days delay between 31 December 2013 and 25 March 2014;

(b) That delay had increased to 128 days by 30 July 2014;

(c) That delay had increased to 244 days by 17 December 2014;

(d) That delay had increased to 272 days by 24 March 2015;

(e) That delay had increased to 325 days by 7 July 2015.

64. I consider that this part of section 7 of Mr Williams' report could have been set out much more clearly. It is plain that Mrs Nash did not originally understand that this was the effect of that part of Mr Williams' report. I sympathise with her: that was not my understanding either, at least until it was explained at the trial.
65. However, having reread section 7 and the various figures included within it, I accept that Mr Williams' explanations for the make-up of the overall delay can be found within that section, and that it would be wrong to penalise the claimant because his presentation of that specific information was less than crystal clear.
66. Furthermore, I am in no doubt that Mr Williams' analysis is accurate. In cases such as this, where a lengthy delay builds up over a long period, it is artificial to calculate the financial compensation simply by reference to the period between the contractual completion date and the actual completion date. That would not compensate the claimant for the fact that many of the delay losses will have been incurred earlier than the overrun period at the end.
67. In section 11 of her report, Mrs Nash calculated loss and expense/damages due to delay by reference to the on and off site preliminaries. That is the standard way of measuring such loss and expense/damages. She has calculated figures of £209,464.79 in respect of the on site preliminaries and £147,138.69 in respect of the off site preliminaries. These figures are considerably less than the amount originally claimed by the claimant. Mrs Nash's calculations are detailed. I accept her figures.
68. I should add that, in calculating her figures, Mrs Nash was provided with background information from the claimant's finance director, Mr Jonathan Rhodes. Mrs Nash confirmed in answer to a question from me that the information provided by Mr Rhodes was clarificatory only, and none of it was a surprise. I accept that evidence.
69. Accordingly, the claimant's claims for loss and expense/damages for delay are assessed at £209,464.79 in respect of on site preliminaries, and £147,138.69 for off site preliminaries.
70. Liquidated Damages
71. The defendant maintained a claim for liquidated damages in the sum of £960,000. It follows from Section 11 above that the defendant was not entitled to levy any liquidated damages at all. The defendant was entirely responsible for the delays on site. The levying of a claim for liquidated damages appears to have been a purely tactical manoeuvre on the part of the defendant.

13. CONTRA CHARGES

72. The defendant had two other contra charges: £600 by way of parking charges, and £214,466.36 by way of back charges. Neither of these claims appears to have any validity whatsoever. At section 13 of her report Mrs Nash values the former at nil. Her appendix 4.2.1 similarly values the defendant's back charges at nil. I accept those conclusions.

14. SUMMARY OF SUMS DUE

73. Accordingly, the summary of the sums that I have found due is as follows:

Item	Amount
Measured Works	£7,732,734.70
EHS Managers	£114,741
Sub-Total	£7,847,475.70
Less Lump Sum Discount	-£219,446.32
Variation Account Agreed	£830,220.45
Variation Account Unagreed (disputes under £10k)	£198,352.41
Variation Account Unagreed (dispute between £10k-£20k)	£565,331
Variation Account Unagreed (Top 12)	£2,194,745.95
VO G On Site Preliminaries	£209,464.79
VO G Loss Expense - Off Site Preliminaries	£147,138.69
Gross Sum Due	£11,773,282.67
Agreed Sum Paid To Date	£8,999,204.76
Net Amount Due	£2,774,077.91
Parking charges	nil
DF Back Charges	nil
Liquidated Damages	nil
Sum Due	£2,774,077.91

74. Accordingly, I shall give judgment in favour of the claimant in the sum of £2,774,077.91.

15. THE FINANCIAL POSITION AS AT 31 DECEMBER 2014

75. The claimant has also calculated the sums due as at 31 December 2014. I am told that this is a relevant exercise because of the terms of the parent company guarantee.
76. Mrs Nash has calculated these figures in her appendix 4.2.2 Rev A. She calculates that the amount due as at the end of December 2014 was £1,816,783.33. However her secondary position (high) is in the lower sum of £1,760,480.27. On the face of it, that is the relevant figure for my purposes, because it reflects my acceptance of her secondary position in respect of the variation account Top 12, identified at paragraphs 36-43 above.
77. The question is whether the deductions I have made in respect of the other two categories of variations (paragraphs 27-35 above) should lead to reductions in the assessment as at 31 December 2014. In my view they should not. For the purposes of her assessment of the position as at 31 December 2014, Mrs Nash has adopted a 'rough and ready' approach, basing her assessment on a proportion of the VO's claimed. It seems to me, therefore, that the necessary adjustments have already been made by Mrs Nash, and it is unnecessary for me to calculate any further refinement of the figures.
78. In those circumstances, I find that as at 31 December 2014, the sum outstanding was £1,760,480.27.
79. That figure includes an amount of £274,000 odd for on and off site preliminaries. That is a direct reflection of the exercises done by Mr Williams in section 7 of his report, which I have accepted at paragraphs 60-62 above.

16. CONCLUSIONS AND INTEREST

80. For the reasons set out in Sections 5-13 above, and summarised in Section 14 above, there will be judgment for the claimant in the sum of £2,774,077.91
81. For the reasons set out in Section 15 above, I find that the sum outstanding as at 31 December 2014 was £1,760,480.27.
82. The claimant is entitled to interest on the sum of £2,774,077.91. Although Mr Goddard QC tried to persuade me that the right rate was 8% over base, I consider that to be excessive. On the other hand, I accept and acknowledge that the sums should have been paid to the claimant years ago, and that the defendant's conduct has generally been obstructive. In those circumstances I consider that it is appropriate to order interest on the Judgment sum at the rate of 4% over base.
83. As to the relevant date, it is appropriate to take a rough mid-point for the period over which these sums were due. Subject to hearing any further submissions on the point, I would have thought that the relevant date for the interest calculation was 31 December 2014, being roughly halfway through the overall period of delay.

Note 1   Which were added to the contract and signed off after this exchange of emails.    [Back]

Note 2   Mr Williams was the claimant’s expert programmer, and his report was dated 20 October 2017.    [Back]