Carillion Construction Ltd v Emcor Engineering Services Ltd & Anor

Under the DOM/2 domestic sub-contract form, an extension of time granted under clause 11.3 lengthens the existing contractual completion period. It must be contiguous with the period already allowed; the clause does not authorise a separate period beginning when the delaying event actually affects the works. Commercial anomalies, including possible mismatches between culpable delay and loss, do not justify departing from the natural meaning where the clause remains workable and accords with the background. The prevention principle is not engaged merely because an extension starts at the original completion date rather than when delay begins. If a workable extension mechanism exists, time does not become at large. The appeal was therefore dismissed.

Carillion, the main contractor for the Rolls Building project, engaged Emcor to carry out mechanical and electrical works under a DOM/2 sub-contract. Delays occurred, and the parties disputed the proper operation of the sub-contract’s extension-of-time clause.

On a preliminary issue, the High Court held that any revised or further revised completion period under clause 11.3 had to be added contiguously to the existing period. Carillion appealed, arguing that where a delaying event occurred after the original completion date, the sub-contract permitted a non-contiguous extension covering only the period during which the event caused delay. The central issue was the proper construction of clause 11.3.

The appeal was dismissed unanimously. Jackson LJ delivered the judgment, with Simon and Flaux LJJ agreeing.

1. Construction of clause 11.3. The natural meaning of clause 11.3, read alone and in the context of clauses 11 and 12, was that an extension of time had to be contiguous. The reference to revised periods indicated an enlargement of the existing periods stated in the appendix, rather than the creation of separate periods with different start and end dates. Clause 11.2.2.2, which referred to expiry of an extended period, supported that reading.
2. Authorities and commercial common sense. The authorities, including Chestermount, concerned contiguous extensions and did not address the proposed non-contiguous approach. They nevertheless formed part of the background against which a reasonable person would understand the clause. Under Arnold v Britton [2015] UKSC 36, commercial common sense could displace natural meaning only in exceptional circumstances. The possible anomalies identified by Carillion did not justify departure. The clause was practicable and workable, and an apparently bad bargain was no reason to alter its meaning.
3. Prevention principle. The principle that time becomes at large where delay occurs without a contractual extension mechanism did not apply. The sub-contract contained a workable mechanism. An extension caused by a delaying event could therefore begin at the original completion date rather than when the event began to affect the works. The approach was consistent with Multiplex Construction (UK) Ltd v Honeywell Control Systems Ltd [2007] BLR 195 and Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm).
4. Emcor remained liable under clause 12 if it failed to complete within the extended period because of its own fault, the fault of those for whom it was responsible, or risks it bore. Whether the extension was contiguous could affect quantification of liability, but did not engage the prevention principle.

1. Court of Appeal (Civil Division) — On 10 February 2017, the court dismissed Carillion’s appeal in [2017] EWCA Civ 65. Jackson LJ gave the judgment, with Simon and Flaux LJJ agreeing.
2. High Court (QBD, Technology and Construction Court) — On 28 April 2016, Miss Recorder Jefford QC decided the preliminary issue in favour of a contiguous extension under clause 11.3.