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Concurrent Delay: a Modest Proposal

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Concurrent Delay: a Modest Proposal The Revay Report Volume 20 Published by Construction Consultants Number 2 Revay and Associates and June 2001 Limited Claims Specialists The readers of the Revay Report, in responding to a recent survey, selected delay analysis as their Concurrent Delay: number one interest. We have discussed A Modest Proposal delay analysis in past R.B. Reynolds and S.G. Revay issues more than once, S.G. Revay last time in Number 2 R.B. Reynolds of Volume 13 (June 1994). Nevertheless the request is 1. INTRODUCTION faulty workmanship, strikes caused by the understandable considering the rapid contractor, etc. (see: T.J. Trauner, Construc- evolution of available techniques and more Concurrent delay is experienced on a pro- tion Delays (Kingston, MA: R.S. Means importantly the judicial treatment of this ject when two or more separate delay Company, Inc., 1990) at p. 4). topic. No wonder there is no generally events occur during the same time period accepted technique today. It has often been and each, independently, affects the com- Recent U.S. caselaw continues to demon- said that delay analysis is an art and not a pletion date. Delays may occur as a result strate an emphasis on the critical path science. If this statement is true of delay of the actions, or inaction, on the part of analysis approach to treatment of delay. analysis in general, then it is doubly so with the owner, the contractor, subcontractors, (See, for example, Williams Enterprises respect to concurrent delay analysis. In this or the designer, and when delays do occur Inc. v. Strait Manufacturing and Welding article we are trying to chart a possible claims for both extra time and additional Inc., 728 F. Supp. 12 (D.D.C. 1990); Wilner course for future development. compensation arise. Not infrequently v. United States, 23 Cl. Ct. 241 (1991); PCL such claims are resisted based upon alle- Construction Services Inc. v. United gations of concurrent delay, either a con- Bruce Reynolds, the co-author of this article, States, 47 Fed. Cl. 745 (2000).) This current delay by the claimant or a method, of course, provides fertile for those of you who may not know him, is concurrent delay by another project par- ground for the assertion of concurrent head of the Construction and Surety ticipant, which arguably deprives the delay defences. Professional Group for the national law firm claimant of the ability to establish causa- of Borden Ladner Gervais LLP. He is listed in tion. To understand the underlying rationale the Canadian Legal Lexpert Directory 2000 for the principles derived from U.S. as one of the “most frequently recommended” Most of the literature dealing with concur- caselaw, it is important to recognize that, construction litigators in Toronto. He is the rent delay comes from the United States as noted above, the defence of concurrent co-author of Scott and Reynolds on Surety and the majority of it is based on judg- delay arises where the claimant which is Bonds, and is the author of many papers and ments in the area of federal contracting. contending that certain actions or omis- articles on construction and surety law. He is Generally, viewed from the perspective of sions on the part of the defendant gave Past Chair and Legislative Co-ordinator of the owner-general contractor relationship, rise to compensable delay, is met with the Construction Law Section of the the following principles can be derived either the argument that the claimant Canadian Bar Association (Ontario) and is a from the U.S. caselaw: itself is responsible for either an excus- able or non-excusable concurrent delay, Founding Governor and Past Treasurer • if an excusable (e.g. a force majeure or the argument that another party (1999-2000) of the Canadian College of event) or a compensable delay occurs involved in the project was involved in an Construction Lawyers. His practice area for concurrently with a non-excusable excusable or non-excusable concurrent the past 18 years (called to the Ontario Bar delay, the delay is treated as excusable; delay. In essence, the defendant takes the in 1983) has been construction and surety position that, although it (i.e. the defen- bond law, including construction claims and • if an excusable delay occurs concur- dant) may have delayed completion of the construction insurance claims. rently with a compensable delay, the delay will be treated as excusable but project, the fact that there was a concur- non-compensable. rent delay elsewhere on the project, Mr. Reynolds would like to thank his affecting the critical path, means that the colleagues Sharon Vogel and Dan Boan for Normally, non-excusable delay arises as a claimant would have suffered the same their assistance with this paper. result of an event within the contractor’s damages even if the defendant had not control. Examples of non-excusable delays delayed the project, and that, therefore, S.G. Revay include late performance by subcontrac- the claimant cannot prove that the defen- tors, untimely performance by suppliers, dant caused its damages. The inequitable aspect of the concurrent reduced this amount by 20% to represent caused delay. However, the calcula- delay defence is that, where accepted, it the amount of delay which was attribut- tion of such impact costs is a very results in a wrongdoer avoiding the con- able to Northern. complex exercise and can only be sequences of its acts. In the paradigm sit- accomplished, if at all, at a trial of the uation, an innocent claimant can be met Also, in Foundation Co. of Canada v. Unit- issue. Evidence is before me of the with two or more wrongdoers arguing ed Grain Growers Ltd. (1996), 25 C.L.R. time within which a reasonable con- that the claimant must bear its own loss (2d) 1 (B.C.S.C.), var’d (1997), 33 C.L.R. tractor could complete the contract, due to its inability to establish that any (2d) 159 (C.A.), United Grain Growers Ltd. and this is compared to the actual one of the defendants was the proximate (“United Grain Growers”) entered into a completion time. To reach any proper cause of the claimant’s damage. Interest- contract with Foundation Co. of Canada conclusion as to the costs from the ingly, although the defence of concurrent (“Foundation Co.”) for a renovation of its delay one would be required to delay is widely used by the leading claims grain terminal. CWMM was United Grain analyse the contractor’s progress and consultants in Canada, the Canadian Growers’s engineer. Foundation Co. sub- determine to what extent the differ- jurisprudence dealing with construction contracted the sheet metal work to ent causative factors, such as con- disputes provides no direct assistance in Crosstown Metal Industries Ltd. tractor-caused delays, unavoidable respect of how to address this significant (“Crosstown Metal”). The construction delays and owner-caused delay con- defence. was delayed. Foundation Co. sued United tributed to the overall delay experi- Grain Growers and CWMM for damages enced by the contractor. It would also Importantly, the general concept of con- for breach of contract and negligent mis- be necessary to evaluate the validity current delay has been recognized by representation and advanced a claim for of the contractor’s original contract Canadian courts. For example, in Conti- extras. Crosstown Metal sued Foundation schedule and the “reasonable con- nental Breweries Inc. v. 707517 Ontario Co. for damages for breach of contract, tractor” schedule. Ltd. (C.O.B. Northern Algonquin Brewing however, most of these claims were refer- Co.), [1993] O.J. No. 2395 (Ont. Ct. (Gen. able to the acts and omissions of United However, Wallace J. did not undertake the Div.)) Northern, as owner, entered into an Grain Growers and CWMM, from which analysis described above, because he was agreement with Continental Breweries Foundation Co. claimed contribution and of the view that such an exercise could Inc. (“CBI”), as contractor, to construct a indemnity. United Grain Growers counter- not be undertaken on a motion for judg- brewing facility. The completion of the claimed against Foundation Co. for eco- ment. Unfortunately, there is a dearth of brewery was delayed and the facility did nomic losses caused by Foundation Co.’s Canadian caselaw which directly grapples not “come on stream with a completed delay. At trial, Brenner J. considered each with the issue of the defence of concur- brewing facility” for one year past the portion of the project which the parties rent delay in terms of conducting the kind completion date contemplated in the orig- alleged resulted in delay and found that of analysis described by Wallace J. and inal agreement. As a result, CBI com- Foundation Co. was delayed by the acts determining the resulting apportionment menced an action against Northern to and omissions of United Grain Growers of responsibility for concurrent delay. and/or CWMM for a period of three recover for work and materials supplied In order to appreciate the context within months past completion. Justice Brenner and for delay. Northern counterclaimed which expert claims consultants analyse also found that Foundation Co. estab- for lost profits as a result of the delay. the issues of concurrent delay, it is useful lished that there were other delays which After assessing all the evidence in respect to consider the various analytical were the responsibility of United Grain of the delay, Davidson J. found that CBI approaches available. bore primary responsibility for the delay, Growers and/or CWMM which likely in that the initial schedules drawn up were delayed Foundation Co., but that these never met because of its use of inade- delays were concurrent, and therefore 2.
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