GAYMARK INVESTMENTS PTY LTD V WALTER CONSTRUCTION GROUP LTD
[1999] NTSC 143
Supreme Court of the Northern Territory, 20 December 1999
FACTS
Gaymark Investments Pty Ltd (‘Gaymark’) entered into a modified NPWC 3 contract with Walter Construction Group Ltd(‘Walter’) to construct the Darwin Central Hotel complex. The modified extension of time clause, SC 19.1 provided that the contractor was “only to be entitled” to an extension of time where (inter alia) the cause of the delay arose out of “any breach of the provisions of the contract or other act or omission on the part of the Principal, the Superintendent, or their agents… and where the Contractor had complied strictly with the notices required…”
Walter claimed $4,900,341 on a number of bases, principally for variations, prolongation and disruption/acceleration.
Gaymark counter-claimed for $1,554,059, principally arising through the application of liquidated damages in accordance with the contract. The dispute was arbitrated, the arbitrator concluding that Gaymark was not entitled to liquidated damages .
Walter had been delayed for 77 days “by causes for which Gaymark was responsible either directly or through the Superintendent”. This delay constituted “acts of prevention” by Gaymark with the result that there was no date for practical completion and Walter was obliged to complete within a reasonable time.
The arbitrator adopted the view that the modified extension of time clause provided an entitlement (or right) to an extension of time provided Walter complied strictly with its requirements. However, it afforded the Superintendent no general discretion to extend time in absence of such strict compliance notwithstanding that Walter had been actually delayed by act, omission or breach of contract for which Gaymark was responsible.
Gaymark appealed under the Commercial Arbitration Act, that there was a manifest error of law on the face of the award.
ISSUE
Whether the prevention principle should be applied and whether the fixed date for practical completion should be replaced with an obligation to complete within a reasonable time.
FINDING
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