Case Insight: Delays and Extensions of Time - A review of Kane Constructions Pty Ltd v Sopov

The contract between Kane Constructions (the builder) and the defendants (the owners) specified a completion period of 130 working days. However, a series of delays led to the works remaining incomplete a year later.

The builder claimed that delays were caused by insufficient detail in plans, lack of a suitably qualified superintendent, refusal or insufficient allowance of extensions of time, and failures in issuing progress certificates and allowing variations. These issues culminated in a series of EOT claims and disputes over liquidated damages.  

Delay Analysis Methods Presented 

Contemporaneous Documentation and Witness Evidence 

The court relied heavily on contemporaneous records, including site diaries, RFIs (Requests for Information), correspondence, and witness statements to reconstruct the sequence of events and the causes of delay. The project manager, and other witnesses provided detailed accounts of the challenges faced, including delays in shop drawings, fabrication, and site works. The court noted that the evidence was “substantial, complex and technical,” with extensive cross-referencing to specifications, plans, and drawings.  

Expert Evidence and Methodology 

Both parties engaged programming and delay experts. The plaintiff’s expert, Gordon Lynas, was tasked with reviewing the EOT claims and analysing the critical path. Lynas’ methodology involved: 

• Reviewing factual evidence to determine the circumstances and chronology of delay. 

• Examining the contractor’s programs to identify the critical path at the time of each delay. 

• Using “as-built” records to verify whether the claimed delays impacted the critical path. 

• Assessing whether delays were concurrent or stand-alone. 

The court emphasised that expert evidence must be based on a clear and testable methodology, referencing Makita v Sprowles and Arnotts Ltd v Trade Practices Commission.  

Critical Path Analysis (CPA) 

Critical path analysis was central to the court’s assessment. The critical path is the sequence of activities that determines the minimum project duration; delays to activities on the critical path directly delay project completion. 

The analysis involved:  

• Identifying the critical path in the contractor’s program. 

• Determining whether the events claimed as causes of delay affected the critical path. 

• Quantifying the number of days of delay substantiated by each EOT claim. 

The court accepted that the critical path could shift during the project and that not all delays would necessarily impact completion. The experts’ approach was to treat the “progressive critical path” as the benchmark for assessing delay claims. If a baseline programme does not exist or is inadequate, there is nothing that precludes the Contractor or Delay Expert from re-creating a baseline programme that accurately reflects the planned intent later.

Judicial Approach to Delay Claims 

Robust, Factual Analysis 

The court adopted a “robust view” of the evidence, consistent with the approach in Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No. 2). Each EOT claim was analysed individually, with the court scrutinising the factual basis for each alleged delay. The court was critical of “global claims” and emphasised the need for a “drawing by drawing, beam by beam, column by column, gutter by gutter factual analysis” to show how specific events delayed the project.  

Concurrency and Causation 

The court recognised the principle of concurrency: where two or more events cause delay at the same time, only the delay attributable to causes for which the contractor is entitled to an extension should be allowed. The contract (AS 2124-1992) and case law required that only delays affecting the critical path and caused by relevant events (e.g., variations, latent conditions, principal’s acts) could justify EOTs.  

Assessment of EOT Claims 

The court’s detailed findings on each EOT claim illustrate the application of CPA:  

• EOT 4 (Structural Steel Delays): The court found that delays in shop drawings and fabrication were critical and allowed 32 days of extension, based on evidence that these activities were on the critical path. 

• Other EOTs: The court allowed or disallowed days based on whether the evidence showed actual delay to the critical path, rejecting claims where delays were not substantiated or were concurrent with non-qualifying events. 

In total, the court allowed 56 days and four hours of extension out of approximately 180 days claimed, demonstrating the rigorous application of delay analysis and CPA.  

Key Lessons and Implications 

Importance of Accurate Programming and Records 

The case underscores the necessity for contractors to maintain accurate, contemporaneous records and to update programs to reflect actual progress and changes in the critical path. The court was critical of programs that did not include procurement or off-site activities, noting that such omissions could undermine delay claims.  

Expert Evidence Must Be Transparent and Testable 

Experts must clearly state their methodology and base their opinions on verifiable facts. The court found the evidence of both Lynas and the defendants’ expert, Degenhardt, admissible but of limited assistance where it was not grounded in the project’s actual records. 

Global Claims Are Disfavoured 

The court rejected “global” or “total cost” claims that did not link specific delays to specific causes and impacts on the critical path. Instead, a detailed, factual, and program-based approach is required. 

Critical Path Analysis Is Essential 

CPA is not just a theoretical exercise; it is the foundation for assessing delay claims. Only delays to activities on the critical path can justify extensions of time and associated costs. 

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In Conclusion

Kane Constructions v Sopov is a leading authority on delay analysis and critical path methodology in construction disputes. The judgment demonstrates the court’s expectation that parties will present detailed, factual, and program-based evidence to support delay claims. For practitioners, the case highlights the importance of robust project management, accurate programming, and transparent expert analysis in both prosecuting and defending delay claims in construction projects. 

Case source: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2005/492.html?context=1;query=Kane%20v%20sopov;mask_path=

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