This article was written by Scott Watson and Aisling Scott and Ethan Hyde.
A recent NSWSC decision in White Constructions Pty Ltd v PBS Holdings Pty Ltd  NSWSC 1166 has revisited the practical application of the “common sense” causation test when considering responsibility for delays to a Project. In doing so, the various methods contained in the UK Society of Construction Law Delay and Disruption Protocol (Protocol) were briefly considered. The case is of interest because some Australian Courts have previously been reluctant to accept delay analyses if such analyses are not “an accepted method of delay analysis” (often by reference to those methods contained within the Protocol).
This decision is a reminder that the common-sense test is not so constrained, and a Court will pay close attention to the facts, and not just the competing expert opinions as to what those facts might establish. For parties regularly engaged in programming disputes, this decision highlights the importance of maintaining detailed site records of the cause and effect of alleged delay events, and in particular, the parts of the works or specific activities which are either affected or unaffected by such events. When it comes to preparing the evidence, while expert opinion evidence remains important, direct evidence from lay witnesses present during the course of the work, ideally by reference to the contemporaneous site records, will be important in demonstrating the causes of the delay.
The plaintiff, White Constructions (White), was a developer, and brought a claim against a sewer designer (IWS) in connection with the development of a 100 lot subdivision in the Illawarra region of New South Wales. The development included the design and installation of sewer infrastructure, in respect of which Sydney Water was the statutory authority. A precondition for the registration by the Land Titles Office of the subdivision was the issue by Sydney Water of a certificate under section 73 of the Sydney Water Act 1994 (NSW) (Act), certifying that the requirements of Sydney Water under the Act have been met in relation to the development.
White alleged that:
- IWS proposed to Sydney Water an installation involving pumping stations rather than a gravity-based solution (as eventually approved by Sydney Water); and
- IWS’s failure to prepare a satisfactory sewer design within a reasonable time delayed the completion of the project by some 8 months.
As can be common in construction litigation, each party appointed an expert programmer. The parties’ experts disagreed on the appropriate delay analysis methodology to be adopted.
The expert appointed by IWS used a “collapsed as-built analysis”, which was described as a retrospective technique that seeks to model when a project would have been completed “but for” the relevant delay to demonstrate the impact that the delay events had on the completion date.
Meanwhile, the expert appointed by White used an “as-planned versus as-built windows analysis”. This methodology breaks the duration of the works into time windows using contemporaneous programs, milestones or significant events. The method uses the as planned program, changes to the critical path, critical path delays and the causes of those delays within and between each of the windows, to model the cause of delay and effect of delay events.
In addition to utilising differing methodologies, both experts also criticised the way in which the other expert had applied the methodology chosen.
Decision on programming aspects
The Court observed that the two experts reached “profoundly differing conclusions”. To assist the Court, his Honour appointed a third expert programmer to assist the Court with the programming aspect of the case. His Honour preferred the approach of the Court appointed expert to the approach taken by the parties’ respective experts, concluding that neither of the methods used by the parties’ experts was “appropriate to be adopted in this case.”
When considering the appropriate programming methodology, Hammerschlag J determined that an otherwise logical or rational methodology should not be jettisoned merely because it is not included in the Protocol. Rather than accepting one of the two competing expert opinions, his Honour applied the “common law common sense” approach to causation referred to in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506. His Honour determined that:
- the “only appropriate method” of delay analysis was “close consideration and examination of the actual evidence of what was happening on the ground”. Such factual analysis would reveal if the delay actually played a role in delaying the project and, if so, by how much.
- the contemporaneous records before the Court were to be preferred over affidavit evidence seeking to summarise the cause and effect of the alleged delay. However these records did not demonstrate that the project was delayed by the relevant event.
His Honour criticised White’s reliance on affidavit material from the site foreman regarding the delays and disruptions to the works. His Honour found that this evidence was “couched in generalities…” such that it was “incapable of founding any satisfactory specific findings of delay.” His Honour preferred to rely on a site diary maintained by the construction contractor for the works as a contemporaneous project record.
Further, despite the Court requesting “raw data” which evidenced the cause and effect of the alleged delay event, his Honour observed that White did not refer the Court to records which supported that delay. In those circumstances, his Honour found that it was open to infer that the Court was not directed to such evidence because of the “paucity” of entries in the site diary evidencing relevant delays and their effects.