Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2009] CSOH 146
CA37/09	OPINION OF LORD GLENNIE in the cause EDUCATION 4 AYRSHIRE LIMITED Pursuers; against SOUTH AYRSHIRE COUNCIL Defenders: ­­­­­­­­­­­­­­­­­________________

Pursuers: Young QC, Smith; MacRoberts

Defenders: Howie QC; Burness LLP

4 November 2009

Introduction - the Project Agreement

[1] By a contract ("the Project Agreement") entered into in December 2006, the pursuers ("the Contractor") agreed to carry out for the defenders ("the Authority") certain works ("the Works"), including the design and construction of six schools listed in Part 2 of Schedule Part 4 thereof. The schools included Prestwick Academy. The contract was part of the South Ayrshire Schools PPP. The pursuers sub-contracted the entire Works, that part relating to construction being sub-contracted to Carillion (the "Building Contractor")

[2] In terms of clause 10.1 of the Project Agreement, the pursuers were required to carry out the Works so that each Phase of a Project Facility achieved Service Availability on the Target Service Availability Date ("TSAD") for that Phase. These are all defined terms, but it is not necessary to set out the definitions for present purposes. Prestwick Academy and the Site thereof was one such Project Facility. The Works in relation thereto were to be carried out in three Phases. Clauses 8A.3 and 17 of the Project Agreement contain provisions under which the pursuers might be entitled to an extension of time, a postponement of the TSAD and to payment of asbestosis compensation in the event that achieving the TSAD was postponed as a direct result of the occurrence of a Works Compensation Event.

The Notice provisions of the contract

[3] The Notice provisions relating to Extensions of Time are set out in clause 17 of the Project Agreement. This provides as follows:

"17 EXTENSIONS OF TIME

17.1 Notice

If at any time of the Contractor becomes aware that there will be or is likely to be any delay in achieving a Target Service Availability Date or any delay to the Works the Contractor shall as soon as reasonably practicable and in any event within 20 Business Days give notice to the Authority to that effect specifying:

17.1.1 the reason for the delay or likely delay; and

17.1.2 an estimate of the likely effect of the delay in achieving the relevant Target Service Availability Date (taking into account any measures that the Contractor proposes to adopt to mitigate the consequences of the delay in accordance with Clause 17.3 (Duty to Mitigate)).

17.2 Supply of Information

Following service of a notice by the Contractor pursuant to Clause 17.1 (Notice) the Contractor shall promptly supplied to the Authority any further information relating to the delay which:

17.2.1 is received by the Contractor; or

17.2.2 is reasonably requested by the Authority.

17.3 Duty to Mitigate

The Contractor shall take all reasonable steps to mitigate the consequences of any delay to the Construction Programme.

17.4 Time for Completion of the Works

To the extent that (a) a delay in the Construction Programme or anticipated failure to meet a Target Service Availability Date or (b) the Contractor incurring or expecting to incur or losing or expecting to lose any revenue is directly attributable to:

17.4.1 a Works Compensation Event, then the provisions of Clause 17.5 shall apply; or

17.4.2 a Relief Event, then the provisions of Clause 54 (Relief Events) shall apply; or

17.4.3 a Force Majeure Event, then the provisions of Clause 39 (Force Majeure) shall apply.

17.5 Delays due to a Works Compensation Event

17.5.1 If as a direct result of the occurrence of a Works Compensation Event:

17.5.1.1 there is a delay to the Construction Programme or the issue of an Acceptance Certificate at a Project Facility on the relevant Target Service Availability Date or any delay to the Works thereafter; or

17.5.1.2 the Contractor is unable to comply with its obligations under this Agreement; or

17.5 1.3 the Contractor incurs expects to incur costs or losses or expects to lose revenue other than as a result of a Unitary Charge Adjustment pursuant to Part B of Schedule Part 7 (Payment Mechanism),

then, subject to Clause 17.6, the Contractor will be entitled to apply for relief in terms of this Clause 17 from its obligations and/or claim compensation under this Part 3 of this Agreement.

17.6 Procedure for relief

Subject to Clause 17.8, to obtain relief or claim compensation under this Clause 17 the Contractor must:

17.6.1 as soon as practicable, and in any event within 20 Business Days after it becomes aware that the Works Compensation Event has caused or is likely to cause delay, breach of an obligation under this Agreement or the Contractor to incur costs or lose revenue, give to the Authority a notice of its claim for an extension of time to the relevant Target Service Availability Date, payment of compensation and/or relief from its obligations under this Agreement;

17.6.2 within 15 Business Days of receipt by the Authority of the notice referred to in Clause 17.6.1 (or such longer period as the Authority acting reasonably may agree) give full details of the Works Compensation Event and the extension of time and any Estimated Change in Project Costs claimed (including evidence, on an open book basis, of the calculation of any Estimated Change in Project Costs); and

17.6.3 demonstrate to the reasonable satisfaction of the Authority that:

17.6.3.1 the Works Compensation Event was the direct cause of the Estimated Change in Project Costs and/or any delay in the achievement of the relevant Target Service Availability Date and there were no simultaneous occurrences of delay caused by other events which have been included in the calculation of the Estimated Change in Project Costs And the Delay in Achievement of the Target Service Availability Date; and

17.6.3.2 the Estimated Change in Project Costs, time lost and relief from the obligations under this Agreement claimed, could not reasonably be expected to be mitigated or covered by the Contractor acting in accordance with Good Industry Practice.

17.7 Giving of relief

Subject to Clauses 17.7.5 and 17.8, following compliance by the Contractor with the requirements of Clause 17.6, then:

17.7.1 the relevant Target Service Availability Date shall be postponed by such time as shall be reasonable for such a Works Compensation Event, taking into account the likely effect of delay;

17.7.2 in the case of an additional costs being incurred by the Contractor in respect of the events listed in the definition of Works Compensation Event:

17.7.2.1 as a result of Capital Expenditure being incurred by the Contractor; or

17.7.2.2 in relation to a Phase, on or before the Service Availability Date;

the Authority shall compensate the Contractor for the actual Estimated Change in Project Costs as adjusted to reflect the actual costs reasonably incurred within 30 days of its receipt of a written demand by the Contractor supported by all relevant information, provided however that in relation to Type 3 Asbestos the provisions of Clause 8A and Schedule Part 4 Part 3 will apply in relation to the quantum of any claim for compensation in that respect;

17.7.3 ...

17.7.4 the Authority shall give the Contractors such relief from its obligations under this Agreement as is reasonable for such a Works Compensation Event.

17.7.5 ...

17.8 Late provision of information

In the event that information is provided after the specified number of Business Days contained in Clause 17.6, then the Contractor will not be entitled to any extension of time, compensation, or relief from its obligations under this Agreement in respect of the period of time during which the information is delayed."

Clause 17.9 provides for the application of a Dispute Resolution Procedure in the event of parties failing to agree the extent of any compensation, delay or relief. Clause 72.1 deals with the requirements of formality in the giving of notices under the contract. Notices to the Authority have to be sent by first class post, facsimile or by hand, to the Chief Executive at County Buildings, Wellington Square, Ayr.

[4] Works Compensation Event, a term used in particular in clause 17.5, is also a defined term. It covers a wide range of matters. It includes, for example, a breach by the authority of any of its obligations under the Agreement. So far as is relevant to this case, it includes "the period of time required for Type 3 Asbestos Removal Works being longer than the relevant Type 3 Asbestos Works Period as a result of the nature and/or extent and/or location of Type 3 Asbestos". There had been asbestos surveys for each of the schools covered by the Project Agreement. The surveys had revealed areas of the Site from which asbestos required to be removed and the time (the Asbestos Works Period) estimated to be required for its removal. Type 3 Asbestos refers to asbestos discovered in any relevant school to the extent that it exceeds in nature, extent and/or location the asbestos already revealed by the relevant survey. A Works Compensation Event relating to asbestos is, in effect, the discovery that there is more asbestos to remove, or that it will take longer to remove, than had been expected as a result of the relevant survey. The Asbestos Works Period for Prestwick Academy was one week.

The issue

[5] The pursuers' case on Record is that there was a delay to the Works at Prestwick Academy as a direct result of the discovery of asbestos which was not revealed by the survey. They conclude (1) for declarator that the Construction Programme, the issue of Acceptance Certificates and the Works comprising Phases 1, 2 and 3 of the Prestwick Academy Project Facility have been delayed by a period of 16 weeks owing to a Works Compensation Event, namely the discovery of Type 3 Asbestos at Prestwick Academy, (2) for declarator that they are entitled to a postponement for 16 weeks of the TSAD for Phases 1, 2 and 3 at Prestwick Academy, and (3) for payment of £815,792.00 plus VAT and interest.

[6] The defenders contend inter alia that the pursuers cannot claim such postponement or payment because they failed to give the required notice or notices in terms of clause 17 of the Project Agreement within the required time or at all. In answer to this, the pursuers aver that the earliest that they could have become aware that there was likely to be a delay in achieving the TSAD was when they received a report on 6 April 2007; and that they gave notice to the defenders in terms of Clause 17 by letter to their Chief Executive dated 2 May 2007. That is accepted to be a date within 20 Business Days of 6 April 2007. This is the important communication. The pursuers accept that the other items of correspondence referred to on Record cannot be relied upon as notices under Clause 17 because they were variously wrongly directed, communicated in the wrong form and/or sent out of time.

[7] The case was appointed to debate on the defenders' plea-in-law to the relevancy of the pursuers' case. They contend, in short, that because no valid notice was given in terms of clause 17, the pursuers' case in support of their second and third conclusions must fail and should not be remitted to probation. This leaves only the first conclusion which, on its own, does not achieve anything of substance for the pursuers.

The Notice relied upon - the letter of 2 May 2007

[8] The letter of 2 May 2007 is of central importance to the argument and I should therefore quote it in full. It reads as follows:

"Dear Sir

SOUTH AYRSHIRE SCHOOLS PPP

WORKS COMPENSATION EVENT

ASBESTOS - Prestwick Academy, Building 7

In accordance with Clause 17.1 of the project agreement, we hereby inform you that we anticipate a delay in achieving the Target Service Availability Date in relation to Prestwick Academy. Taking into account the measures we are proposing to adopt to mitigate the delay we estimate that delay will be 19 weeks and is due to the discovery of asbestos in Building 7.

To this end please refer to our previous correspondence of 18 April to Mr Roddy Macdonald and the attached correspondence from the Building Contractor dated the 30/4/07 which provides further details and includes the proposed programme for removal of asbestos.

We will submit our full claim in accordance with clause 17.6 of the project agreement.

By way of background we have held various discussions with the representative from the Health and Safety Executive to ensure all Health and Safety obligations are being met and we have also requested the Employer's Agent to provide a report on the financial effects of the delay.

Please be assured we will continue to work with all parties to ensure every effort is made to mitigate the delay and will keep the relevant people at the council informed as work progresses.

Yours faithfully"

[9] The letter mentions two other items of correspondence to which it is necessary to refer. The first is an e-mail of 18 April 1007 from David Broad, the General Manager of the pursuers, to Mr Roddy Macdonald, of the defenders, copied to a number of others, saying that the pursuers had "been provided with further information on the implications of the asbestos found during the type 3 survey" and suggesting a contingency planning meeting. There is nothing of substance in this e-mail and, lest there be any doubt, it is not in dispute that could not count as a Notice under clause 17 for any number of reasons - it was sent by e-mail, it was not sent to the Chief Executive, and it did not, on any view, seek to invoke any of the provisions of the clause.

[10] The second is a letter from the Building Contractor to the pursuers dated 30 April 2007 in which, under the heading "South Ayrshire Schools, Prestwick Academy - Building 7 - Asbestos", the Contractor updates the pursuers on the delay resulting from the discovery of Type 3 asbestos there and requests a 19 week extension of time. The letter goes into considerable detail about the likely effect on the programme. It identifies the delay to particular areas on the site and concludes:

"The 17 week delay in the Asbestos Removal and Demolition of Building 7 will delay the Service Availability to Phase 1 of Prestwick Academy from 20 June 2008 to 17 October 2008.

The Service Availability to Phase 2 and Phase 3 of Prestwick Academy will also be delayed to 7 August 2009 and 8 January 2010. Please note that due to Christmas 2009, the delay to the Service Availability of Phase 3 will be 19 weeks.

We would therefore request a 19 week extension of time."

The letter goes on to identify the compensation to be claimed. It refers to Clause 8A.3 of the Building Contract (i.e. the sub-contract between the pursuers and the Building Contractors, Carillion) and calculates the compensation as 19 weeks multiplied by the 'A' Rate and the 'B' Rate. These rates are the same as the 'A' and 'B' Rates in the Project Agreement, but, unlike the Building Contract, the Project Agreement also has a 'C' Rate. That part of the letter asks the pursuers to note

"that the above noted compensation excludes any costs for the actual removal of asbestos (Asbestos Expenditure) or any compensation due to E4a (C Rate)";

and ends by referring to the continuing attempts by the Building Contractor to mitigate the delay.

Submissions

[11] In presenting his submissions for the defenders, Mr Howie QC argued that compliance with the procedural requirements of clause 17 was a suspensive condition of, or a condition precedent to, the right of the pursuers to claim payment or an extension of time. It proved unnecessary for him to develop this argument, however, since Mr Young QC, for the pursuers, intervened to make it clear that he accepted that compliance with the provisions of clause 17.1 and 17.6 (whether 16.6.1, 17.6.2 or 17.6.3), as the case might be, was a condition precedent to the relief sought. This concession was, to my mind, properly made, standing the language of the various constituent parts of the clause. The only qualification - and it is not so much a qualification as a point of emphasis - was that the formalities prescribed in clause 72.1 ("Notices"), to which I have referred in para.[3] above, applied only to formal notices required under clause 17, i.e. the notices required in clause 17.1 and 17.6.1, and not to the provision of details or other information such as was required by, for example, clause 17.6.2. Conversely, Mr Howie submitted that the terms of clause 17.8 applied only to the provisions, such as clause 17.6.2, requiring the giving of information and not to those, such as clause 17.1 and 17.6.1, requiring formal notices to be given. Although Mr Young did not accept this, it seems to me to be correct, though nothing turns on it for the purpose of the present dispute.

[12] On that basis, the only question for decision is whether the letter of 2 May 2007 was capable of constituting a valid notice for the purposes of clause 17. Mr Howie was prepared to accept that it was arguable that it was sufficient for the purpose of clause 17.1. But that was not sufficient to enable the pursuers to succeed. The pursuers also had to serve a notice complying with clause 17.6.1. That notice had to be sent "as soon as practicable, and in any event within 20 Business Days" after the pursuers became aware that the Works Compensation Event "has caused or is likely to cause delay, breach of an obligation under this Agreement or the Contractor to incur costs or lose revenue". The letter of 2 May 2007 was the only candidate, being the only notice sent within that period complying with the formal requirements of clause 72.1. However, by such letter the pursuers had to give "notice of [their] claim for an extension of time to the relevant Target Service Availability Date, payment of compensation and/or relief from its obligations under this Agreement". The letter of 2 May 2007 gave no notice of any such claim. It expressly bore to give notice under clause 17.1, and in this context referred to the details given in other correspondence. But it gave no notice of any claim under clause 17.6. Indeed it referred to a claim under clause 17.6 in the future tense: "We will submit our full claim in accordance with clause 17.6 ...". That was insufficient. The purpose of the clause was clear. It was to enable the defenders to know, at the appropriate level of seniority within the company, that a claim is to be made for an extension of time, or for compensation, or for other relief, or any combination of those. No doubt if a claim is intimated in this way, the Chief Executive, or those in his office who deal with such matters, can take such steps as are thought appropriate, maybe to ensure that the information is given to others (for example, the Authority), or to set up some system of checking and reporting on the progress of the works so as to have all necessary information to consider in detail any claim made in due course. The precise steps which the defenders might take after receiving notice was a matter for them. But the very fact that strict formalities were required for such a notice showed that a clear notice was required in order to establish a formal regime regulating the position of the parties. The "notice" could not be left to be inferred from that letter combined with other facts and circumstances. The parties could not be left in limbo, uncertain whether the pursuers had made a claim or not. Certainty was required.

[13] For the pursuers, Mr Young QC sought to put the letter of 2 May 2007, and the contractual terms, in context. The contract was a Public Private Partnership (PPP) contract. The Authority entered into the Project Agreement with the pursuers. The pursuers were a special purpose vehicle set up for this purpose. They subcontracted the building work to the Building Contractor on terms which were almost identical with those of the Project Agreement. This was well known to the parties. In addition, there were various provisions in the Project Agreement giving the Authority a right to be told. I was referred to a number of clauses concerned with site meetings, the Authority's right of inspection and the supply and sharing of information; and to various documents showing how this worked in practice. It was clear, he submitted, that the Authority were kept fully informed of developments concerning the discovery of asbestos at Building 7 at Prestwick Academy. The Building Contractors sent the survey report to Messrs MacRoberts, solicitors acting for the Authority, on 6 April 2007. On the same day they sent MacRoberts a letter informing them that the Works were in delay and that there was likely to be a delay in achieving the TSAD. This was followed by the e-mail of 18 April 2007 to which I have referred. There was a meeting of 19 April 2007 when representatives of the Authority were informed of what had been found in the survey, the programme implications and the options available. And on 27 April 2007 further information was given. In light of this, there could have been no doubt as to what was intended to be conveyed by the letter of 2 May 2007.

[14] Turning to the relevant parts of clause 17, Mr Young remarked that clause 17.1 required a notice to be served on the Chief Executive of the defenders. The notice had to be served "as soon as reasonably practicable" after the Contractor became aware that there would be, or was likely to be, a delay in achieving a TSAD. There was a long stop date of 20 Business Days for giving that notice. The notice needed to specify the reason for the delay and an estimate of the likely effect of the delay in achieving the relevant TSAD and what measures were proposed to mitigate the consequences of the delay. There was a contrast in this respect between the content of a notice given under clause 17.1 and that required under clause 17.6.1. Clause 17.1 did not set out the consequence of failure to serve the required notice within the required time. Clause 17.4 introduced more specific requirements depending upon the cause of the delay. Clause 17.4.1 applied to delay caused by a Works Compensation Event. This pointed one to clause 17.5 and, in turn, to clause 17.6. It was the language of the end of clause 17.5 which pointed clearly towards clause 17.6 being a condition precedent to relief being granted. Clause 17.6 was concerned with three matters: initial notification; the subsequent provision of full details; and justification of the claim. These were dealt with respectively in clauses 17.6.1, 17.6.2 and 17.6.3. 17.6.1 was concerned with the giving of notice. In the present case, the commencement of the period within which notice had to be given was the same as for clause 17.1. Thus, under clause 17.1 the Authority will have been given notice of the reason for the delay and an estimate of the likely effect of the delay in achieving the relevant TSAD. Clause 17.6.1 simply required the bare notice of the claim. In addition, it needed to be made clear that the claim arose out of a Work Compensation Event. But nothing more was required. Clause 17.6.2 laid down the period within which the pursuers were required to give full details of the Works Compensation Event and the extension of time and payment claimed. That period was within 15 Business Days of receipt by the Authority of the notice sent under clause 17.6.1. In many cases that would be too tight - full details might not be available within that time. In such a case, he submitted, the Authority would have to act reasonably in deciding whether or not to agree a longer period for accepting full details of the claim. If information was handed over late without apparent objection by the Authority, the Authority might be held by implication to have agreed to accept it within that longer period.

[15] As to the letter of 2 May 2007, Mr Young submitted that the heading "Works Compensation Event" showed that the circumstances fell not only within clause 17.1 but also within clause 17.4.1 and, therefore, 17.5. The first paragraph of that letter clearly referred to clause 17.1 and "ticked all the boxes" for the purpose of a notice under that clause. The third paragraph was clearly a reference to clause 17.6. The expression "our full claim" suggests that what was intended to follow were "full details" of the claim in terms of clause 17.6.2. On that basis that paragraph could be construed as the notification of a claim in accordance with clause 17.6.1, to be followed with more detailed information under clause 17.6.2. What that paragraph really meant was: "we are now giving notice of a claim - full details will be submitted in due course in accordance with clause 17.6.2". Further, it was clear from the letter of 30 April 2007 from the Building Contractor to the pursuers, which was referred to in the letter of 2 May 2007 and attached to it, that the Building Contractor was claiming a 19 week extension of time and was also claiming compensation at the "A" and "B" Rates for the period of that delay. It would have been clear to the recipient of the letter that the pursuers were passing up to the Authority the claim intimated against them by the Building Contractor, with the addition of a claim for compensation at the "C" Rate. All that was lacking in the letter of 2 May 2007 was a formal statement that the pursuers were claiming for an extension of time to the relevant TSAD, for payment of compensation and/or for relief from their obligations under the Project Agreement. To require such wording would be unduly formalistic. The notice required to be sent as a time when it might well be too early to know the full consequences of the delay or precisely the remedy being sought. In such circumstances the pursuers would wish to serve a notice keeping open all of their options. How could it help the Authority if at the end of the letter the pursuers had written that they were claiming for an extension of time, for payment of compensation and/or relief from their obligations under the Project Agreement? Given that the Authority was being kept fully informed of the likely delay caused by the discovery of Type 3 Asbestos and was aware of the fact that claims from the Building Contractor would be passed up the line to the Authority, the letter of 2 May 2007 and its attachment was sufficient to bring home to the Authority that a claim was being made in terms of clause 17.6.1.

[16] In the course of his submissions Mr Young drew my attention to two authorities, namely Steria Ltd. v Sigma Wireless Communications Ltd. [2008] BLR 79, at paras.79-81 and London Borough of Merton v Leach (1986) 32 BLR 51 at pp.86, 95-8.

Discussion

[17] I prefer the submissions advanced by the defenders. I can express my reasons shortly. Once it is accepted that the requirement to give notice in terms of clause 17.6.1 of the Project Agreement is a condition precedent to the right of the pursuers to obtain relief or claim compensation, then the question is simply: what does the clause require? The answer is equally straightforward. The same factors which point to the clause being a condition precedent also point to the need for any notice served in accordance with the clause to comply strictly with its terms. The concluding words of clause 17.5 make it clear that the Contractor's right to apply for relief is "subject to Clause 17.6". Clause 17.6 states in terms that, to obtain relief, the Contractor "must" do various things, the first of which is to serve a notice in accordance with clause 17.6.1. Further, clause 17.7, in its introductory wording, provides that any relief is conditional upon the Contractor having complied with the requirements of clause 17.6. It is, as I have said, conceded by Mr Young that compliance with the notice requirements of clause 17.6.1 is a condition precedent to the entitlement to the relief sought. But the point, to my mind, goes further than this. The wording to which I have referred in clauses 17.5, 17.6 and 17.7 seems to me to point to a requirement of strict compliance with the terms of the clause. The notice has to be sent within a limited time, as soon as practicable "and in any event within 20 Business Days ...". Clause 17.6.1 does not contain the wording found in clause 17.6.2, "or such longer period as the Authority acting reasonably may agree". The time requirement is strict. The requirement for strict compliance is illustrated further by the fact that certain formalities are insisted upon. Clause 72.1 requires the notice to be sent, not to anyone, but to the Chief Executive of the Authority. Furthermore, it must be in writing and sent by first class post, facsimile or by hand (e-mail will not suffice). Clause 72.5 governs the question of when notices sent by post, delivered by hand or given by facsimile become effective. All this implies a level of formality which would, to my mind, be negated if the notice which had to be sent in a particular way, to a particular person and by a particular time, did not have to say what the clause appears to require it to say.

[18] The requirements of the clause are not onerous. Mr Young submitted that a notice under clause 17.6.1 probably required to state that they delay was caused by a Works Compensation Event. I am not sure that this is right, since in the event of delay caused by a Works Compensation Event, notice will also have to be given under clause 17.1; and a statement of the reason for the delay is one of the requirements of the clause 17.1 notice. But whether that is so or not, what is absolutely clear is that the notice must give to the Authority a notice of the claim for an extension of time, for payment of compensation and/or for relief from obligations under the Project Agreement. There is no ambiguity in the requirements for a notice under the clause. Nor does compliance cause any difficulty. Mr Young suggested that one should make allowance for the fact that notices would be drafted by businessmen, not lawyers. I do not accept this. It is within judicial knowledge that parties to contracts containing formal notice provisions turn immediately to their lawyers whenever there is a requirement to give notice in accordance with those provisions. But even if that were not the case, there is nothing in clause 17.6.1 that would not readily be understood by a businessman unversed in the law.

[19] Where parties have laid down in clear terms what has to be done by one of them if he is to claim certain relief, the court should be slow to seek to relieve that party from the consequence of failure. In some cases there is scope for the application of the principles of waiver or personal bar to operate so as to prevent a party, who has proceeded on the basis of a defective notice without taking the point, from subsequently raising it as a technical defence to the claim. No such argument is raised here, no doubt for good reason. Instead, the pursuers seek to advance a construction of the clause which would, if successful, only introduce uncertainty. The points advanced in argument by Mr Young appear to me to demonstrate that, at least on the ground, the Authority knew about the delay likely to be caused by the discovery of Type 3 Asbestos. But clause 17.6.2 is not directed towards ensuring that the Authority have knowledge at that level. Those arguments do not assist the pursuers on the question of construction. The clause required that a notice be sent within a particular time to the Chief Executive of the Authority giving notice of what claim the pursuers were making. The letter of 2 May 2007 did not do that. It matters not that, at certain levels, employees of the Authority may have been aware of what was going on. Nor, to my mind, does it help the pursuers to say that the letter of 2 May 2007, when read with the letter of 30 April 2007 from the Building Contractor, would have enabled the Authority to infer that the claim by the Building Contractor against the pursuers was going to be passed up the line to them. That may be so, but the purpose of the clause is to avoid such uncertainty. The pursuers were required to tell the Authority what claim they were making. It does not do for them to say: "here is what the Building Contractor has written to us, you work it out for yourself". That is not a valid notice under the clause. The failure to give a valid notice in accordance with clause 17.6.2 is fatal to the pursuers' claim for relief.

[20] It was not suggested that the authorities to which I was referred do more than provide illustrations of how clauses have been construed in similar types of contracts. They lay down no governing principles. I do not propose to consider them in detail. Suffice it to say that the reasoning in Steria was to the effect that the court should be slow to write into a clause requirements for the content of the notice which were not spelt out in the clause. That is a very different position from the present case. In the London Borough of Merton case there was reference to the Architect, to whom notice had to be given, not being a "stranger to the work". But that comment was made in support of an argument that it was unnecessary to imply a requirement for certain matters to be stated in the notice to be given to him. That again is a very different situation from that with which I am concerned.

Bad weather

[21] The 16 weeks for which a postponement of the TSAD is sought, and which forms the basis of the calculation of the sum claimed in the third conclusion, includes some 12.5 days lost during bad weather, in particular high winds, between December 2007 and March 2008. Bad weather is not a Works Compensation Event under the Project Agreement. In their case on Record, the pursuers justify including this period lost due to bad weather on the basis that, had they been able to carry out the works without the delay caused by Type 3 Asbestos, they would have finished the Works before the winter months. Accordingly, the delay caused by the bad weather was a direct consequence of the delay caused by Type 3 Asbestos, and was to be included in the calculation of that delay. On that basis, it seems to me that the failure by the pursuers to give proper notice under clause 17.6.2 of the claim for delay, is fatal to this aspect of the claim too. The bad weather delay is simply one aspect of the overall delay in respect of which the notice provisions provide the defenders with a defence. However, Mr Young sought, somewhat tentatively, to suggest in the alternative that the delay caused by the bad weather could be claimed as an independent delay, and did not therefore fall by reason of the arguments already discussed. This line of argument gives rise to its own difficulties. Quite apart from the fact that it is not pled as an independent cause of delay - and the first and second conclusions make it clear that the delay claimed is all related to the discovery of Type 3 Asbestos - it is difficult to understand how the bad weather could independently give rise to any relief. As I have said, it is not a Works Compensation Event. Therefore, although the pursuers would be required to give a notice under clause 17.1 in the event that they became aware that there was likely to be delay in achieving a TSAD because of bad weather, they would not thereby be entitled to a postponement of the TSAD or to payment of compensation for such period of postponement. In short, therefore, the delay caused by bad weather is either parasitic on the delay caused by the discovery of Type 3 Asbestos, in which case the claim fails for the reasons already discussed; or it is an independent delay, in which case it affords the pursuers no right of relief.

Disposal

[22] For the reasons set out above, I would have been minded to dismiss the action, on the basis that, not having given proper notice under clause 17.6.1, the pursuers were not entitled to the declarator and payments sought in the second and third conclusions; and that the first conclusion, standing by itself, was irrelevant. However, Mr Young submitted that it would be preferable to put the case out By Order. Mr Howie was content that I should follow this course.

[23] Accordingly, I shall put the case out By Order for a time and date to be fixed.