Background
Clarke Energy contracted with Alinta Energy Transmission (Roy Hill) to engineer, procure and construct a $78 million gas-fired power station at Newman in remote Western Australia. The constrained site lay between existing power stations and near a gas pipeline. The project encountered delays involving Alinta’s removal of underground services and inadequate reinstatement of the disturbed ground, COVID-19 restrictions affecting fly-in fly-out labour, electrical isolation work at Alinta’s existing power station, and Alinta’s failure to make the electricity network available during commissioning.
Alinta claimed liquidated damages capped at approximately $7.8 million, while Clarke sought four extensions of time, associated delay costs, payment for a disputed variation, and outstanding milestone payments. The parties also disputed when practical completion occurred and whether Clarke’s extension claims had satisfied contractual notice requirements. Three successive superintendents administered the project; the first made no determinations, and Alinta replaced the second immediately after he privately indicated that he was inclined to certify practical completion.
The Court’s Holding
Rees J held that Clarke was entitled to extensions totalling 142 days: 92 days for the delayed bulk earthworks, 27.5 days for COVID-19 disruption, 16 days for the relay-panel isolation delay, and 6.5 days for network unavailability. Alinta had breached the contract by failing to provide timely access to a site on which Clarke could perform the work and by failing properly to backfill and compact land disturbed during removal of underground services. Although Clarke initially failed to copy the superintendent on its first extension claim, Alinta waived reliance on that condition precedent by later choosing to have the claim determined substantively.
The Court fixed the contractual date for practical completion at 9 September 2022 and found that practical completion was actually achieved on 10 November 2022. Clarke therefore owed liquidated damages of $2.88 million for 48 days, reduced to $2,502,365 under an early-generation agreement. After accounting for outstanding milestone payments, a $69,000 variation, and delay costs for three extension claims, the Court entered judgment for Clarke for $7,192,414 plus interest, subject to directed calculations and correction of any identified errors. The Court rejected Clarke’s Australian Consumer Law and estoppel claims and held that the superintendents owed it no tortious duty of care because the sophisticated parties’ detailed contract enabled Clarke to protect itself against economic loss.
Key Takeaways
- A court reviewing a non-final superintendent determination may assess project delay and practical completion retrospectively using the evidence available at trial.
- A principal may waive an extension-of-time notice condition by electing to have the claim determined on its merits, despite a contractual no-waiver clause.
- Reasonable delay costs included overheads and the contractor’s usual profit margin, but not days representing only lost activity float.
- Private communications with one party and replacing a superintendent to prevent an unwanted determination undermine the superintendent’s contractual role.
Why It Matters
The decision illustrates how Australian courts may reconstruct complex construction delays after completion rather than confining themselves to the information available when a superintendent acted. It also underscores that principals cannot necessarily rely on strict notice provisions after treating a claim as open for substantive determination.
For major-project participants, the judgment highlights the importance of site-access obligations, reliable commissioning interfaces, disciplined contract administration, and preserving the superintendent’s independence. It also confirms that a comprehensive contractual allocation of risk may preclude a separate negligence duty for pure economic loss.