Cases - Rapid Building v Ealing Family Housing

Record details

Name

Rapid Building v Ealing Family Housing

Date

[1984]

Citation

29 BLR 5

Keywords

Construction contracts - liquidated damages - delay - works commenced late and completed late - failure by employer to give possession of site to carry out works - whether clause granted extension of time - whether contractor liable under liquidated damages clause

Summary

The claimants were building contractors who were responsible for the construction of a housing estate in West London. Possession of the site was delayed past the contractual date for the same as a result of squatters. Works commenced late and were not completed until 26 July 1983, after the contractual date for completion. The architect issued a certificate stating that the works should reasonably have been completed by 22 September 1982.

The Court ruled that the defendants' failure to give possession of the site was a breach of contract, and applied Peak v McKinney, holding that the defendants' counterclaim for liquidated damages could not succeed as the contract did not provide a mechanism for extending time for that particular breach of contract.

It was held (affirming the decision of the judge on this point) that:

• clause 21 provided that, on the date stated in the appendix to the conditions, possession of the site, 'shall be given' to the contractor; and
• EFHA were in breach of clause 21 by failing to remove the squatters until an appreciable time after they had promised to give Rapid possession of the site.

In such circumstances, time is at large, and the employer is permitted to recover unliquidated damages if the contractor does not complete the works within a reasonable time.

The Court of Appeal distinguished LRE v Otto Simon Carves on the basis that the case was concerned with the construction of the words 'affording access' which was irrelevant to the construction of clause 21. Given the more extensive extension of time provisions contained in the JCT 1980, 1998 and 2005 forms, it is possible, but by no means certain that on the facts in Rapid, the case would be decided differently today if these later contracts were utilised.