JCT ICD 2016 - Deferment of posession

JCT Contracts
1

First post and I hope you will be able to help me out.

I have a Contractor who has taken on the following project. I have not been involved from the beginning, but have been approached few weeks ago to provide help:

  • The contract was signed and dated in April 2019 in the sum of £xxxx
  • Completion date has been set:
    • Section A: To be Agreed
    • Section B: 12 February 2021
  • Dates of Possession of Sections: not filled
  • Deferment of possession of Sections (if less than 6 weeks):
    • Section A: None
    • Section B: To be agreed
  • Liquidated damages: £xxxx+VAT per calendar week of part thereof
    Sections:
  • Period of suspension: 2 months

On 30th April 2019 the CA has issued an instruction asking the Contractor to proceed with works to Section A, but Section B is to be instructed when revised planning permission is secured. We are now at the end of 2020, Section A is almost completed and no access to Section B has been granted.

The CA believes that they have not instructed the works to Section B, so that part of the contract is in limbo. In my opinion signing of the contract is considered to be the instruction. The Client and CA both have an option to defer possession, issue variation asking for suspension or omit the works associated with that section if the planning status is unknow. But lack of instruction to proceed with works, after signing the contract is not the same as instruction to stop works.

I believe that my Client is entitled to EoT and this should be treated as a Relevant Matter or basis for termination of the contract and subsequent claim. I note that no dates for possession of either of the sections have been filled in the contract, and only completion of section B has been provided. As such I treat contract singing date as date of possession, and completion of section B as contract end date.

I appreciate your thoughts.

2

A complicated scenario. Quite clearly the Contractor is entitled to an extension of time as the deferment of possession is a relevant event. The Client can of course omit the balance of the Works but it is not allowed to subsequently award the Works to another Contractor. Does this help?

Regards

Mike

3

Thank you, exactly as I thought.

Would you then agree that issuing CAI stating that Section A of works can commence and informing that Section B is not ready due to planning is not really relevant beyond 6 weeks of allowed deferred possession? CA states that Section B has not been instructed to start therefore there is no potential claim. I argue that the contract does not reflect their position, as date of possession of sections has not been filled and they can not withhold the contractor from proceeding with works indefinitely.

4

You also may want to consider whether time is ‘at large’. If there is not fixed completion date for Section A, then the extension of time mechanisms cannot operate. If there is no start date for Section B, then it is difficult to enforce a completion date. I think this is one of those circumstance where ‘it depends’ would be the best answer without a lot more information.