Dear Robert,

Based on the updated EOT register, it is evident that the 20-day delay can be attributed to various parties. PADCo is responsible for ten days of delay due to unanticipated machinery breakdowns and late ordering of roofing materials. Western Gate Industrial Park, on the other hand, is accountable for five days of delay resulting from tenant-requested changes in Lots 2 and 4. The remaining five days of delay are attributed to neutral causes like inclement weather and industrial action, which are considered qualifying causes of delay under the contract.

In this context, the recent decision in the case of DDI vs Probuild, as discussed in the Chambers Lawyers report (Corrs Chambers Westgarth, 2017), becomes highly pertinent. The court affirmed the prevention principle, which stipulates that "a party cannot rely on a breach of contract where its own actions have caused the breach" (Corrs Chambers Westgarth, 2017). Notably, the court ruled that even if a contractor fails to claim an extension of time formally, the head contractor or owner has an implied duty of good faith to grant an extension for delays they have caused.

Consequently, PADCo can claim an extension of time for the 15 days caused by WGIP and neutral events, as these qualify as delay causes under the contract's provisions. Furthermore, according to the Probuild vs DDI decision, WGIP has a duty of good faith to grant an extension for the five days of delay caused by their actions, even if PADCo did not formally claim it earlier. Failure to grant a reasonable extension could breach this duty, potentially exposing WGIP to legal consequences.

To address this situation effectively, PADCo should take the following steps:

1. Promptly notify WGIP of our claim for a 15-day extension of time, citing the qualifying causes of delay outlined in the contract and supported by the EOT register and other relevant records.

2. Emphasize that, as per the Probuild vs DDI decision, WGIP has a duty of good faith to grant an extension for the five days of delay caused by their actions, regardless of whether PADCo formally claimed it earlier.

3. If WGIP refuses to grant a reasonable extension, PADCo should consider initiating dispute resolution mechanisms specified in the contract, as WGIP's refusal could breach their duty of good faith.

Sincerely,

Ali Haddad

Reference

Corrs Chambers Westgarth. (2017, July 12). Granting extensions of time in construction contracts: a duty of good faith may apply. https://corrs.com.au/insights/granting-extensions-of-time-in-construction-contracts-a-duty-of-good-faith-may-apply