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Programming To Complete Early - The Ramifications

The document discusses the ramifications of a contractor programming works to complete early in order to save costs and gain a competitive advantage. It summarizes the key findings of relevant court cases on this issue. Specifically: - Contractors are entitled to complete works before the stated completion date, but employers are not obligated to facilitate an early completion. - If a delay occurs that prevents early completion but still allows completion by the original date, it is unclear if contractors can claim prolongation costs from the delay. Courts in different jurisdictions have reached different conclusions on this issue. - Employers must not deliberately prevent or hinder early completion, as that could result in them being liable for a contractor's losses, according

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Kennith Ng
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85 views

Programming To Complete Early - The Ramifications

The document discusses the ramifications of a contractor programming works to complete early in order to save costs and gain a competitive advantage. It summarizes the key findings of relevant court cases on this issue. Specifically: - Contractors are entitled to complete works before the stated completion date, but employers are not obligated to facilitate an early completion. - If a delay occurs that prevents early completion but still allows completion by the original date, it is unclear if contractors can claim prolongation costs from the delay. Courts in different jurisdictions have reached different conclusions on this issue. - Employers must not deliberately prevent or hinder early completion, as that could result in them being liable for a contractor's losses, according

Uploaded by

Kennith Ng
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Programming to Complete Early - the Ramifications

By John B Molloy, LLB(Hons), BSc(Hons), FHKIS, FRICS, MCIArb, RPS(QS), Managing Director, James R
Knowles (Hong Kong) Limited

In the ever more competitive construction


industry in Hong Kong contractors are
continually looking for that edge when
pricing their tenders that will win them the
contract.
Sometimes, if it is considered that the
contract period is generous a contractor may
seek this edge by tendering on the basis that
it will complete the works in a shorter
period thus saving site and head office
overheads. Contractors who tender on such
a basis are generally reluctant to let this be
known at tender stage, and it will generally
only become apparent to the client that the
contractor intends to finish early when the
initial works programme is produced after
the contract has been awarded.
The ramifications of such actions have been
considered by the courts in a number of
cases and need to be understood by
contractors, clients and their advisors. I will
attempt to summarise the position below:
Is a contractor entitled to programme the
works to finish early, and work in
accordance with that programme to
complete on the programmed earlier date?
This is of course the fundamental question
considering whether such action is
permitted in the first place. This point was
considered in the leading case on this
subject, that of Glenlion Construction Ltd v- The Guinness Trust (1987) 39 BLR 89
where it was held that the contractor
(Glenlion) was entitled to complete before
the date of completion because of the
wording of JCT 1963 Edition
Clause 21 which provides that the contractor
shall "........complete the same on or before
the Date for Completion...", and that he was
entitled to carry out the works in such a
way as to enable him to achieve the earlier

completion date whether or not the works


were programmed in such a manner.
The JCT 1963 Edition is identical in this
respect to the local RICS/HKIA Private
Form of Contract so this principle is directly
relevant to private works in Hong Kong, and
also it is suggested Government projects due
to the similar wording of GCC Clause 49 i.e.
"The Works .. shall be completed within the
time or times stated....".
If the contractor programmes to finish
the works early must the Architect or the
Engineer issue drawings and details in
time to enable such early completion?
This point was again considered in the
Glenlion case where the contractor argued
that there should be a term implied into the
contract that if the programme showed a
completion date before the date for
completion the employer by himself, his
servants or agents (i.e. the Architect or the
Engineer) should so perform the said
agreement as to enable the contractor to
carry out the works in accordance with the
programme and to complete the works on
the said completion date.
However the court disagreed. It was held
that since it was not suggested by the
contractor that he was both entitled and
obliged to finish by the earlier completion
date, if there was such an implied term as
set out above it would impose an obligation
on the employer (Guinness) but not on the
contractor (Glenlion).
It follows therefore that a contractor is
entitled to complete the works earlier than
the contract completion date and has a right
to do so. However there is no corresponding
duty on the part of the Employer to permit
him to do so, and in particular to furnish
him with information or otherwise

positively co-operate so as to enable him to


do so. The contractor is merely free from
any contractual restraint and may complete
earlier. The employer must not prevent him
from doing so but this does not mean that
the employer is bound to facilitate in a
positive way the implementation of the
contractor's privilege or liberty.

if the contractor had taken its


contemplated fifteen months these expenses
would have been incurred in any event.

If the contractor programmes to finish


the works early and a delay occurs which
prevents such early completion (but not
completion by the original date) can the
contractor claim its prolongation costs?

"cost are no less damaging merely because


they occur fortuitously before a contract
dead line rather than after."

This is a difficult question. In such a


situation the contractor is not entitled to an
extension of time because despite the delay
he will still complete by the Date of
Completion or within the Time for
Completion. But what of his prolongation
costs?
The point appears to be open to doubt. In
Keating on Building Contracts (6th Edition)
Keating states:
"Where the programme date is earlier than
the Date for Completion stated in the
Contract, it may be that some direct loss
and/or expense may be recoverable on the
grounds of disruption. However, provided
that the contractor can still complete within
the Contract Period, he cannot recover
prolongation costs".
Keating's position has been followed in the
South Africa case of Ovcon (Pty) Ltd -vAdministrator of Natal (1991) a case where
the contractor showed completion in eleven
months with a contract period of fifteen
months. Three months delay to the
programme period was caused by the
Employer. The Court refused to award
additional preliminary costs saying:

However courts in the USA have taken a


different line. In Sun Shipbuilding and Dry
Dock Co -v- United State Lines Inc (1977)
the courts view was that:

the Government may not hinder or prevent


earlier completion without incurring
liability
Whilst it is true that there is not an
"obligation" or "duty" of defendant [owner]
to aid a contractor to complete prior to the
completion date, from this it does not follow
that the defendant may hinder and prevent a
contractor's early completion without
incurring liability. It would seem to make
little difference whether the parties
contemplated early completion, or even
whether the contractor contemplated an
early completion. Where the defendant
[owner] is guilty of deliberate harassment
and dilatory tactics and a contractor
suffers loss as a result of such action, we
think that the defendant is liable.
All cases therefore appear clear that (at least
under the local Private Form of Contract
and the Government General Conditions) a
contractor is entitled to programme to, and
complete early, but that in such
circumstances the Architect or the Engineer
is not obliged to issue drawings and details
to facilitate such early completion. However
whether a contractor would be entitled to
prolongation costs when a delay occurs to
prevent that early completion is viewed
differently in different jurisdictions.
(Adopted from the HKIS Newsletter 9(3) April 2000)

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