DELAY ANALYSIS – WHITE CONSTRUCTIONS PTY LTD V PBS HOLDINGS PTY LTD [2019] NSWSC 1166
In the recent New South Wale Supreme Court (the “NSWSC”) decision of White Constructions Pty Ltd v PBS Holdings Pty Ltd [2019] NSWSC 1166 (“White v PBS”), the NSWSC dismissed the delay analysis method used by each Party’s expert, even though the delay analysis methods used were referred to in the United Kingdom Society of Construction Law’s Delay and Disruption Protocol.
Summary. The plaintiff, White Constructions Pty Ltd (“White”), is a developer. The first defendant, SWC, is a water servicing coordinator, and the second defendant, IWS, is a sewer designer. As summarized at [7] White v PBS:
“White says that, in breach of contract, IWS failed to prepare a satisfactory sewer design within a reasonable time and that SWC, for its part, failed to ensure that IWS discharged its obligations to do so, with the consequence that completion of the development was delayed, which caused White to suffer loss and damage.”
It follows that White would bear the onus of establishing the delay ([11] – [12] White v PBS).
Parties’ experts reached different conclusions. White and IWS each called an expert civil engineer programmer ([13] White v PBS). As stated at [15] White v PBS, the Parties’ experts:
(a) Disagreed on the appropriate delay analysis method;
(b) Disagreed with how the other expert had applied the delay analysis method which the other expert had selected; and
(c) Reached “profoundly differing” conclusions.
White’s expert, Mr. Jonathan Shahady, used the “as-planned versus as-built windows analysis” ([20] White v PBS). IWS’s expert, Mr. James Senogles, used the “collapsed as-built (or ‘but-for’) analysis” ([19] White v PBS).
Court appointed expert. However, the NSWSC held that:
(a) Both experts could not be right ([18] White v PBS);
(b) It was not “inevitable” that one of the experts was right ([18] White v PBS); and
(c) It was not “inevitable” that one of the methods used by the experts was the appropriate method for the case ([21] White v PBS).
Having regard to the complexity of the reports, the NSWSC relied on Rule 31.54(1) of the Uniform Civil Procedures Rules 2005 (NSW) to obtain the assistance of another expert, Mr. Ian McIntyre ([22] – [27] White v PBS).
The Delay and Disruption Protocol. The NSWSC observed that the descriptions of the methods adopted by the Parties’ experts were “evidently derived from the publication of the United Kingdom Society of Construction Law, the Delay and Disruption Protocol…” ([188] White v PBS).
The NSWSC proceeded to hold that while “The Protocol methods have apparently been accepted into programming or delay analysis lore” ([190] White v PBS), nonetheless, as opined by Mr McIntyre, “for the purpose of any particular case, the fact that a method appears in the Protocol does not give it any standing, and the fact that a method, which is otherwise logical or rational, but does not appear in the Protocol, does not deny it standing” ([191] White v PBS).
Neither Party’s expert’s approach was accepted. The NSWSC then accepted Mr. McIntyre’s opinion that neither method was appropriate for the case, and accepted each Party’s expert’s criticism of the other Party’s expert.
In doing so, the NSWSC applied a “common law common sense approach to causation”:
“196. Mr McIntyre’s opinion, upon which I propose to act, is that close consideration and examination of the actual evidence of what was happening on the ground will reveal if the delay in approving the sewerage design actually played a role in delaying the project and, if so, how and by how much. In effect, he advised that the Court should apply the common law common sense approach to causation referred to by the High Court in March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506.
197. The Court is concerned with common law notions of causation. The only appropriate method is to determine the matter by paying close attention to the facts, and assessing whether White has proved, on the probabilities, that delay in the underboring solution delayed the project as a whole and, if so, by how much.”
On the facts, the NSWSC held that White had failed to discharge its burden to prove that IWS caused a delay ([198] – [199] White v PBS). We note that the NSWSC also made the following observations:
(a) A site foreman’s evidence which was “couched in generalities” was “incapable of founding any satisfactory specific findings of delay” ([202] – [203] White v PBS).
(b) White did not make much reference to a contemporaneous record (a site diary) of what was happening on the ground, resulting in the NSWSC stating that “The inference is open that the Court was not directed to much of it because of the paucity of relevant entries evidencing relevant delay” ([205] – [207] White v PBS).
(c) However, the site diary also did not identify activities that were being affected by the wait(s) recorded in the diary. The result is that the “entries do not enable a finding of particular consequences. The diary reflects significant activities happening on site in any event” ([212] White v PBS).
Takeaways. While White v PBS is a decision by the New South Wales Supreme Court, for local contractors, there are a few takeaways that are of general application:
(a) When it comes to allegations of delay, the use of expert evidence (such as programming evidence) should be connected to and grounded upon the factual evidence.
(b) Just because a delay analysis method was found (or not found, as the case may be) in the Delay and Disruption Protocol does not mean that the method is appropriate (or inappropriate, as the case may be) for use in any particular case.
(c) It is important to note only keep contemporaneous record of delays, but to also ensure that such records are specific: mere generalities, or the failure to record the effects of delay events, can create complications further down the road.
Tags: Building and construction; Delay and Disruption Protocol; Delay analysis method; Failure to prove delay; Factual evidence
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