In White Constructions Pty Ltd v PBS Holdings Pty Ltd [2019] NSWSC 1166 the Supreme Court of New South Wales, Australia, rejected both parties' expert delay analysis and the methodologies on which they were based, holding that their inclusion in the Society of Construction Law Delay and Disruption Protocol was not a relevant factor for their appropriateness for the case.
The facts
The Plaintiff, a developer, brought proceedings against its sewer designer and its water servicing coordinator, for failing to create and submit a sewer design acceptable to the relevant authority, Sydney Water, allegedly causing delay to the completion of the project and additional costs.
Both the Plaintiff and the Defendant engaged experts to assess the alleged delay. The Plaintiff's expert, using an "as planned versus as-built windows analysis", concluded there had been a critical delay of 240 calendar days. The Defendants' expert, using a "collapsed as-built (or ‘but-for') analysis", concluded that, at best, the works could only have been completed only 19 days earlier than it in fact was, but for the alleged delay.
Delay experts beware
Although the delay experts managed to agree the as-built programme, they could not agree on an appropriate delay analysis methodology to be adopted. The experts also disagreed with how the other had applied the methodology the other had selected. The judge described them as "adept at their art" and as having "reached profoundly differing conclusions".
As to their evidence, the judge noted the complexity of the expert reports, describing them as "impenetrable". To resolve the impasse, the judge opted to engage a court-appointed expert, whose methodology and opinion he adopted, dismissing both experts' evidence and the methods they adopted. The judge preferred to apply a ‘common law common sense approach' in reviewing the evidence to determine whether the delay in providing the sewer design caused delay to the entire project. In doing so, he paid considerable attention to the contemporaneous records of progress during the works, including what those records did and did not say on the subject of the alleged delay.
Which methodology?
The SCL Protocol refers to six commonly used methods of delay analysis. The judge remarked that those methodologies (two of which were adopted by the experts in the case) had "apparently been accepted into … delay analysis lore". The Protocol itself states that it "aims to be consistent with good practice, but is not put forward as the benchmark of good practice throughout the construction industry". In proceedings concerning delay claims, whether an expert has applied a recognised methodology is often a point of contention going to the credibility of that expert's conclusions. The SCL Protocol is often cited in construction cases internationally for this purpose. Further, in some jurisdictions, whether an expert has followed an industry-approved method actually goes to the admissibility of that expert's evidence, for example the US (with its Daubert test). A failure to adopt an industry-approved methodology could result in a wholesale rejection of an expert's evidence.
The judge in this case however has cast doubt on the importance and relevance of these commonly used methodologies being referenced in the Protocol, stating "the fact that a method appears in the Protocol does not give it any standing, and the fact that a method, which is otherwise logical or rational, but does not appear in the Protocol, does not deny it standing." He concluded: "[t]he only appropriate method is to determine the matter by paying close attention to the facts, and assessing whether [the Plaintiff] has proved, on the probabilities, that [the] delay … delayed the project as a whole and, if so, by how much."
While it is relatively unusual for a court to appoint its own expert, this case should serve as a reminder to parties and experts that they should cooperate with one another, seek agreement where possible, and present their findings in a logical and coherent fashion. This decision also highlights the importance of the underlying facts and contemporaneous records, and not relying too heavily on expert opinion alone.
The comments in this case on the SCL Protocol should not signal the end of its relevance. Simply adopting a SCL Protocol-approved methodology alone does not demonstrate compliance with industry standards. Indeed, as highlighted throughout the SCL Protocol, its recommendations should be applied with a common sense perspective and with due regard to the contemporaneous documents. The court's findings in this case, therefore, are not at odds with the approach envisaged in the SCL Protocol. This is reinforced by the fact that, as previously reported by us, the SCL Protocol has previously received judicial approval in Queensland, Australia.
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