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InterimClaimforanExtensionofTimeandresultantand
overtimecosts
SubmittedbyWesternConstructionCo.
ContractNo:MK108007035-W-C02-001
6th
July2010
A wholly owned subsidiary of
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TABLEofCONTENTS
1 Introduction..................................................................................................................... 31.1 Thisdocument .......................................................................................................... 31.2 FormationofContract............................................................................................... 3
2 ExecutiveSummary.......................................................................................................... 82.1 TheContract ............................................................................................................. 82.2 Delays ....................................................................................................................... 82.3 Quantum................................................................................................................... 8
3 StatementofClaim .......................................................................................................... 93.1 Extensionoftime ...................................................................................................... 93.2 Delay,disruptionandresultantincreasedcosts .......................................................113.3 WaiverandEstoppel ................................................................................................123.4 FailuretoprovideaccesstotheWorksinatimescalenecessarytoachievePracticalCompletionofthePortionsortheWorksasawhole ........................................................143.5 FailuretoprovideconstructioninformationinatimescalenecessarytoachievePracticalCompletion.........................................................................................................15
4 Time ...............................................................................................................................164.1 Programme..............................................................................................................16
5 Overarchingcauseofdelay .............................................................................................185.1 MaladministrationbyTiwestRepresentative ...........................................................185.2 TiwestRepresentativeactsofpreventiongenerally .................................................20
6 Eventsgivingrisetoentitlement.....................................................................................23 6.1 Introduction.............................................................................................................236.2 DelayEventandoractsofpreventionIssueofInformationforConstructionandaccesstoSite ....................................................................................................................236.3 Theseparationofevents..........................................................................................39
7 TheQuantumofourClaim..............................................................................................40 8 ScheduleofAnnexureandExhibits .................................................................................41
8.1
Annexure .................................................................................................................41
8.2 Exhibits ....................................................................................................................41
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1 INTRODUCTION1.1 Thisdocument1.1.1 ThepurposeofthisdocumentistodemonstratethattheWesternConstruction
Co.(theContractor)isentitledtoanExtensionofTimeandresultantcosts.
1.2 FormationofContract1.2.1 Tiwest,theownerandoperatoroftheplant,engagedProteusEPCMEngineers
(TiwestsRepresentative)asitsagent.
1.2.2 TiwestissuedtheProjectDocumenton16thMarch2009fortendertotheContractorforpricing.Thisdocumentwasinrespectofthesteelwork,
mechanicalandpipingworksassociatedwiththeTiwestExpansionProject.For
theavoidanceofdoubtthecivilconcrete,electricalandinstrumentationworks
associatedwiththeexpansionprojectwereexcludedfromthescopeandwereto
becarriedoutbyothers.
1.2.3 On24thAugust2009theProjectDocumentwasIssuedforConstruction.1.2.4 ThePlant1.2.5 TheTiwestKPPisaTitaniumDioxide(TiO2)pigmentplantoperatingunderthe
ChlorideRoute.Inthisprocess,theTitaniumbasedore(SyntheticRutile)is
reactedwithChlorine(Cl2)gastomakeTitaniumTetrachloride(TiCl4)gas.Thisgas
isseparatedfromtheothermetalchlorides,condensedandpurifiedbefore
beingreactedwithpureOxygen(O2)toformTiO2.TheTiO2iscleaned,treatedand
processed,beforebeingpackedinto25kgor1tonnebagsforsale.
1.2.6 TheproposedexpansionoftheKPPwillincreaseproductionfrom116,000tonnesperannum(tpa)offinishedpigmentproductto153,000tpa.
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1.2.7 TheTiwestKPPisbroadlysegregatedintosix(6)geographicareascalledproductionunits.TheContractorisresponsibleforallSteelwork,Mechanicaland
PipingWorksinalloftheseareas.Theseareasare:-
a) Unit100-containsthereceivingandstoragefacilitiesfortherawingredients,SyntheticRutileandPETCoke
b) Unit200-containsthechlorinationandTiCl4purificationequipmentc) Unit300-receivespureTiCl4andreactsitwithpureOxygento
producecrudeTiO2pigment.Unit300alsocompressestheresulting
ChlorinegasforrecyclingbacktoUnit200
d) Unit400-receivesthecrudepigmentandmakesitintoapresentablebaggedproductforsale
e) Unit500-encompassesallthechemicalstorageanddistribution,eitherofreactantsorproducts.Unit500alsocontainsalltheservices
forthesite
f) Unit600-processesthesiteprocesseffluentbeforedischargingtheneutralised,clearliquorintoCockburnSound
1.2.8 TheContract1.2.9 Thenoticeofnoticeofaward,whichisdetailedbelow,providesthattheWorks
shallbeinaccordancewiththefollowingdocuments:-
a) Thetenderdocumentsb) TermsandconditionsofTiwestConstructionContractamendedas
agreed
c) TheContractorstendersubmissionreceivedbyTiwest4thMay2009
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d) Posttenderclarificationsandadjustmentsagreedpriortothenoticeofaward
i) Includingrevisedconstructionschedule1.2.10 CommencementandCompletion1.2.11 TheContractorwastomobiliseon15thJuly2009.TheWorkscomprisedof
SeparablePortionseachwithdifferentCompletionDates.Theseportionsareset
outbelow:-
a) Unit100i) Commencesitework17thAugust2009ii) Practicalcompletion30thJanuary2009
b) Unit200i) Commencesitework5thAugust2009ii) Practicalcompletion18thFebruary2010
c) Unit300i) Commencesitework21stAugust2009ii) Practicalcompletion10thFebruary2009
d) Unit400i) Commencesitework27thAugust2009ii) Practicalcompletion30thMarch2010
e) Unit500i) Commencesitework24thAugust2009ii) Practicalcompletion4
th
March2010
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f) Submitasbuilt31stMarch20101.2.12 TheresaclearerrorwithintheCommencementdateandPracticalCompletion
dateofUnit100andUnit300asittheyduetobecompletedpriortoits
commencement.Giventhisambiguitythedateswithintheapproved
programmearetakenasagreed.
1.2.13 NoticeofAwardandContractPrice1.2.14 Tiwestscorrespondencedated29thJune20091awardedtheContracttothe
Contractorforthesumof$15,590,671.00.Thesumwasmadeupof:-
ScheduleReference Description Price(AUD)
A1.1 Contractorindirect $5,317,437.00
A1.2 SteelWorks $2,769,012.00
A1.3 MechanicalWorks $1,601,537.00
A1.4 PipingWorks $5,386,734.00
A1.5 PipingTieinWorks $581,951.00
ContractPrice $15,656,671.00
1TiwestPtyLtdletterdated29
thJune2009
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1.2.15 TheContractoracknowledgedreceiptoftheaboveletterandadvisedthatitwouldworktothetermssetoutthereinon30
thJune2009
2.
2WesternConstructionCo.letterdated30
thJune2009
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2 EXECUTIVESUMMARY2.1 TheContract2.1.1 2.2 Delays2.2.1 2.3 Quantum2.3.1
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3 STATEMENTOFCLAIM3.1 Extensionoftime3.1.1 Clause7.3oftheContractprovides:-
TheContractorisentitledtoanextensionoftimetotheDatefor
PracticalCompletionif,andonlyif:
(a) theContractor:
(i) giveswrittennoticetoTiwest'sRepresentative,ofthe
factoflikelihoodofdelaynotmorethan14daysafter
thecommencementofthecauseofdelay;and
(ii) provideswiththatnoticedetailsofthecauseofthe
delayandhowPracticalCompletionislikelytobe
delayed;
(b) theContractorgivesTiwest'sRepresentative,within14days
afterthecessationofthecauseofthedelay:
(i) awrittenclaimforextensionoftimespecifyingthe
numberofdaysclaimed;
(ii) detailsofwhythecauseofthedelayactuallycausedthe
delay,includingastatementofthefactsandthe
provisionsofthisContractonwhichtheclaimisbased;
(iii) detailedevidenceinsatisfactionoftherequirementsof
clause7.3(c);and
(iv) allotherinformationreasonablyrequiredbyTiwest's
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Representative;and
(c) theContractorreasonablysatisfiesTiwest'sRepresentativein
itsclaimunderclause7.3(b)that:
(i) PracticalCompletionhasactuallybeendelayed:
A. priortotheDateforPracticalCompletion,ina
mannerwhichwillpreventtheContractorfrom
achievingPracticalCompletionbytheDatefor
PracticalCompletion,unlesstheDatefor
PracticalCompletionisextended;or
B. aftertheDateforPracticalCompletion,ina
mannerwhichwilldelaytheContractorin
achievingPracticalCompletion;
3.1.2 MoreoverSpecialCondition3provides:-
SC.3DelayandDisruption
a) FurthertoClause7.2andforthepurposesofclarification,in
theeventtheContractorisunabletoperformhisobligationsundertheContractduetoanydelay,interferenceordisruption
(otherthanthatcausedbytheContractor)theContractoris
entitledtobepaidstandbyratesinaccordancewithSchedule
C1fortheaffectedlabour,plantandequipment.
b) Intheeventthatthedelay,interferenceordisruptionaffects
onlyoneareaoftheplantandlastsforaperiodnotexceeding
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onehour,Tiwestshallnotbechargedstandbyonthebasisthat
theContractorsemployeecanbere-deployedtoanotherwork
area.
c) Ifthedelay,interferenceordisruptionaffectsmorethanone
areaoftheplantorlastsforaperiodofmorethanonehour
thentheContractorisentitledtochargestandbyratesfora
minimumofonehourorthedurationofthedelay,interference
ordisruptionwhicheverisgreater.
3.1.3 TheContractorcontendsthatithasbeendelayedanddisruptedasaresultofTiwestRepresentativesfailuretoprovideConstructionInformationina
timescaleconsistentwiththeapprovedprogramme.Further,theContractor
contendsthatitisentitledtoanextensionoftimeasaresultofTiwest
Representativesfailure.
3.2 Delay,disruptionandresultantincreasedcosts3.2.1 Clause7.2(b)oftheContractDocumentprovides:-
TheContractorisentitledtotheactual,directandunavoidableon-Site
costsitcanestablishtothesatisfactionofTiwest'sRepresentativeit
hasreasonablyincurredasaresultofthedelaycausedby:
(i) abreachbyTiwestofthisContract;
(ii) avariationtotheWorkundertheContractdirectedunder
clause8.1;or
(iii) thesuspensionoftheexecutionoftheWorkundertheContract
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pursuanttoawrittendirectiongivenunderclause7.8(a),unless
thatdirectionwasgivenasaresultofabreachbythe
ContractorofitsobligationsunderthisContract,
forwhichtheContractorhasbeengrantedanextensionoftimetothe
DateforPracticalCompletionunderthisContract.
3.2.2 TheContractorcontendsthatasaresultofitsentitlementtoanextensionoftime,forwhichTiwestanditsRepresentativeareculpable,itisentitledto
recoveractual,directandunavoidableon-Sitecosts.
3.3 WaiverandEstoppel3.3.1 ThewidespreadinterpretationofWaiverandEstoppelreferstoconductwhich
makesitunfairor,inequitableorunconscionableforthepromiseetoinsistona
rightthatithas,bywayofitsconduct,leadtheotherpartytobelievewillno
longerbeutilised.Thispositionhastoalterandbeunconscionableforitto
apply;theutilisationofaconditionprecedent,orasitismorecommonlyknown
atime-bar,whenithaspreviouslybeendisregardedamountstothis.
3.3.2 Estoppel3.3.3
Estoppelisaprinciplewhichprecludesanentityorpersonfromdenyingthetruthofastatementmadebyhimorfromallegingthatafactisotherwisethanit
appearedtobefromthecircumstances.Thereareanumberoftypesof
estoppelalthoughforthepurposeofthisdocumenttheinterestlayswiththatof
estoppelbyrepresentationorconduct.
3.3.4 Tiwesthas,byitsconduct,establishedthattheDateforSubstantialCompletionhas,orwastobe,revisedandthatthecostsassociatedwithsuchextension
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wouldbedealtwithatalaterdate.Ithasdonethisby:-
a) IssuingConstructionInformationaftertheDateforSubstantialCompletion
b) IssuingVariationsaftertheDateforSubstantialCompletionc) Waivingitsrighttoenforcethetimebarassetoutunderthe
Contract
3.3.5 Waiver3.3.6 Waiveristherelinquishmentofarightorremedywhichmaybebyexpress
writtenstatement,impliedand,orbyinactioninenforcingaright.Therefore,in
theeventthattheContractorfailstoenforceatimebarduringtheperiodfor
completionitmaynotseektoestablishadefenceonthatbasisatornearingits
conclusion.
3.3.7 HudsonsBuildingandEngineeringContractsisconsideredanauthorityonsuchmatters.Thereinitstatesthat:-
...thecourtshavenotbeenslowtoapplyprinciplesofwaiveror
estoppels,orimpliedpromiseorunjustenrichment,soastopreventan
ownerinappropriatecircumstancesfromsettingupadefenceofnon-
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compliancewithcontractualrequirementsofformforvariedwork.3
3.3.8 TheconductoftheContractorhasbeenthatishaswaiveditsrightstoenforcethetimebarinrespectof:-
a) Noticeofdelayb) Theextensionoftimeprovisionsc) Noticeofdelayanddisruptioncosts
3.3.9 TheContractorcontendsthatTiwesthasbywayofitsconductandotherwise:-a) WaiveditsrighttoenforceanytimebarwithintheContract
3.3.10 TheContractorfurthercontendsthatanyenforcementofsuchclauseswouldbeanunjustenrichmentonthepartoftheTiwest.
3.4 Failure to provide access to the Works in a timescalenecessary toachieve Practical CompletionofthePortions
ortheWorksasawhole
3.4.1 TiwestanditsRepresentativefailedtoprovideaccesstotheWorksinaccordancewiththeagreedprogrammeorinatimescaleconsistentwiththe
DateforSubstantialCompletion.Moreover,itshouldbenotedthatfailureto
provideaccessconstitutesanactofpreventiononthepartofTiwest.Thecourt
3 Wallace: I.N. Duncan, (1994) Hudsons Building and Engineering Contracts, Eleventh Edition, London ,
Sweet&Maxwell,Section7.042atp.903
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casesbelowprovidethatTiwestoritsRepresentativemaynotenforcethetime
barinrespectofprovidingnoticeintheeventofadelayoranactofprevention:-
a) GaymarkInvestmentsPropertyLtdvWalterConstructionGroup(1999)16BCL449
b) AbigroupContractorsPtyLtdvPeninsulaBalmainPtyLtd[2001]NSWSC752
c) BeckhausvBrewarrinaNo.2[2004]NSWSC11603.4.2 Therefore,theContractorcontendsthatithassuffereddamageasaresultofthe
actsofpreventionandthatthetimebarisnotapplicable.
3.5 Failure toprovideconstruction information ina timescalenecessarytoachievePracticalCompletion
3.5.1
TiwestRepresentativehasissuedConstructionInformationinatimescaleinconsistentwiththeDateforPracticalCompletionfortheSeparablePortions,or
necessarytoachievetheDateforPracticalCompletion.Moreover,ithasissued
ConstructionInformationaftertheDateforSubstantialCompletionpreventing
theContractorfromachievingthisDate.
3.5.2 TheContractorcontendsthatithasincurreddamageasaresultoftheTiwestRepresentativefailingtoissueConstructionInformationinatimescalenecessary
toachieveSubstantialCompletion.AsaresultofthisfailuretheContractorhas
beenpreventedfromcompletingitsWorksonorbeforetheDateforSubstantial
Completion,fortheSeparablePortionsorasawhole,andhasincurreddamage.
TheContractorfurthercontendsthatTiwestRepresentativeisprecludedfrom
utilisingtheconditionprecedent,ortimebar,asadefenceasaresultofthe
abovecaselawandthatanyattempttodosowouldbeunconscionable.
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4 TIME4.1 Programme4.1.1 Clause2.2.1.3oftheScopeofWorksprovides:-
Thebulkoftheworkshalltakeplacewhiletheexistingplantisfully
operational.ThereforetheContractorshallberequiredtocarefullyplan
theworkandliaisewithTiwestonadailybasistoplanworkaheadto
avoidpotentialriskstopersonnel,equipmentandproductionandto
minimisedelaysingainingaccesstoworkareas.
Whenpreparingforplannedshutdowns,theContractorshallliaise
continuouslywithTiwestonsitetoensuretheworkissafelycoordinated
andintegratedwithothershutdownactivities
TheContractorsWorkScheduleshallbeakeycomponentofthe
managementplans[Emphasisadded].TheContractorshallprepareand
maintainaWorkScheduleinGanttChartformusingPrimaveraVersion5
(orabove)software.
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4.1.2 Itisevidentfromthetextabovethattheworkscheduleisoffundamentalimportanceandhadtobestrictlyadheredto.Moreover,on9
thJuly2009,Tiwest
RepresentativeissuedtheContractoralistofkeydatesforthecompilationof
thebaselineprogramme4.
4.1.3 TheContractorsprogrammedated20thAugust2009wassubmittedandapprovedasthebaselineprogrammeon25
thAugust2009
5.
4.1.4 ActivityWCC1020identifiesthedatefortheissueofconstructioninformation.Anextractofthissectionoftheprogrammeisshownbelow:-
4.1.5 ItisthereforeevidenttoTiwestRepresentativethattheinformationwasrequiredtobeissuedonorbythe29
thJune2009andanyfailuretoadhereto
thisdatewouldresultindelaytotheproject.
4ProteusECPMEngineersletterdated9th
July2009
5WesternConstructionCo.letterdated10
thNovember2009
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5 OVERARCHINGCAUSEOFDELAY5.1 MaladministrationbyTiwestRepresentative5.1.1 ItshouldbenotedthattheContractormustdispatchtheburdenofproofuponit
toestablishanextensionoftime.Further,thislevelofproofisonthebalanceof
probabilityandnotbeyondallreasonabledoubt.Itisacommonmisconception
thatthelatterisapplicablealthoughthisisreservedforcriminalmatters.
5.1.2 TiwestRepresentativehasfailedto:-a) Issueconstructioninformationinatimescaleconsistentwiththe
baselineprogram
b) Providefreeissuematerialinatimescaleconsistentwiththebaselineprogram
c) EvaluatetheContractorsclaimsforanextensionoftimeinafairandreasonablemanner
d) AwardanextensionoftimetoeachSeparablePortionratherthantheDateforPracticalCompletion
5.1.3 Further,TiwestRepresentativehasinstructedtheContractortoprovideadditionallabourtositeasaresultofslowprogressatthesametimeithasfailed
toprovidetheContractorinformationthatwouldallowittoprogressworkfronts.
5.1.4 TheresultofTiwestRepresentativesactionswheretoincreasetheworkforce,andincurassociatedadditionalcost,atatimewhentherewerefewareasthat
theContractorcouldactuallyprogresstheWorksasaresultofthelackof
ConstructionInformation.ThisismaladministrationbyTiwestRepresentative.
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5.1.5 Commencementonsite5.1.6 TheContractorsletterof29thJuly20096recordsthatithadbeenprevented
fromcommencingtheWorksonsitebyTiwestRepresentativesduetothe
programmenotbeingapproved.Asidentifiedabovetheprojectwasclearlyfast
trackandanydelayincommencementwouldhaveasignificanteffectonthe
overallprogramme.Moreover,itshouldbenotedthatthiswasthesamedate
thattheConstructionInformationwastobeissuedeitheronorby.Withinthe
samecorrespondencetheContractorrecordedthat:-
a) Itwasoutstandingmarkingplandrawingsforthemajorityofthestructuralwork
b) Ofthe715linesonthelinelistithadonlyreceived128linesinisometricform
c) Thatitwouldtakeupto4weekstomobilisegiventhatitwasntgivenaccess
5.1.7 NotwithstandingTiwestRepresentativesfailuretoissuetheConstructionInformationinatimescaleconsistentwiththebaselineprogrammeithas
directedtheContractortoincreaseitslabourresources7.MoreoverTiwest
Representativenotesthattheadditionalmanpowerhasnotincreased
productivity.Whilstitisinsomewhyattemptingtoinferthatthereissomekind
6WesternConstructionCo.letterdated29th
July2009
7ProteusECPMEngineersletterdated13
thJanuary2010
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ofmanagementissueitisapparentthattheincreaseinresourcesissimply
addingtotheexistingproblemofthelackofConstructionInformationandlack
ofworkfrontsasaresultofthisinformationnotbeingissued.
5.2 TiwestRepresentativeactsofpreventiongenerally5.2.1 PursuanttothetermsoftheContractTiwsestanditsRepresentativeare
responsibleforissuingthenecessaryConstructionInformationinatimescale
consistentwiththeDate/sforPracticalCompletion.Moreover,theapprovalof
thebaselineprogramme,whichsetoutthedateforreleaseofallConstruction
Informationas29th
June2009,providesthattheTiwestRepresentativehas
agreedthedatesthatitwouldissuethisinformation.
5.2.2 OnreviewofthedocumentregisterissuedbyTiwestRepresentativeitisapparentthatthemajorityoftheConstructionInformationwasissuedafterthe
abovedate.AcopyoftheregisterissuedcrossreferencedagainsttheSeparable
PortionDateforPracticalCompletionandthedateforissueofallConstruction
IssueinformationiscontainedatAppendixA.
5.2.3 Unit1005.2.4 AlloftheinformationlistedwithintheregisterthatisidentifiedasbeingforUnit
100hasallbeenissuedafterthedateforreleaseofConstructionInformationset
outinthebaselineprogramme.Further,informationhasbeenissuedafterthe
DateforPracticalCompletion.
5.2.5 InrespectofinformationissuedaftertheDateforSubstantialCompletionforthisSeparablePortionitrangesfrom4daysto285daysaftertheprogrammed
date.
5.2.6 TheConstructionInformationinrespectofthisSeparablePortionwasissuedonaverage100daysafterthebaselineprogrammedate.
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5.2.7 Unit2005.2.8 TiwestRepresentativefailedtoissueanyoftheConstructionInformation
identifiedontheregistertothisSeparablePortionpriorto,oron,theapproved
programmedate.Further,largeamountsoftheinformationwasissuedafterthe
SeparablePortionDateforPracticalCompletion.
5.2.9 TheConstructionInformationinrespectofthisSeparablePortionwasissuedonaverage165daysafterthebaselineprogrammedate.
5.2.10 Unit3005.2.11 AsisthesamewiththeprecedingUnitsTiwestRepresentativefailedtoissueany
oftheConstructionInformation,identifiedfromitsownregister,priortooron
thedatesetoutinthebaselineprogramme.ConstructionInformationhasbeen
issuedfrom7daysto344daysaftertheprogrammeddate.
5.2.12 TheConstructionInformationinrespectofthisSeparablePortionwasissuedonaverage435daysafterthebaselineprogrammedate.
5.2.13 Unit4005.2.14 Again,andasliketheUnitsabove,TiwestRepresentativehasfailedtoissueany
oftheConstructionInformation,thatisidentifiabletothisSeparablePortion,
priortoorontheprogrammeddate.Moreover,largequantitiesofthis
informationwasissuedaftertheSeparablePortionDateforPractical
Completion.
5.2.15 ThedelayinissuingtheinformationbyTiwestRepresentativerangesfrom4daysand336daysaftertheprogrammeddatefortheissueofConstruction
Information.
5.2.16
TheConstructionInformationinrespectofthisSeparablePortionwasissuedon
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average130daysafterthebaselineprogrammedate.
5.2.17 Unit5005.2.18 Again,andasliketheUnitsabove,TiwestRepresentativehasfailedtoissueany
oftheConstructionInformation,thatisidentifiabletothisSeparablePortion,
priortoorontheprogrammeddate.Further,informationhasbeenissuedafter
theDateforPracticalCompletionforthisSeparablePortion.
5.2.19 ThedelayinissuingtheinformationbyTiwestRepresentativerangesfrom4daysand317daysaftertheprogrammeddatefortheissueofConstruction
Information.
5.2.20 TheConstructionInformationinrespectofthisSeparablePortionwasissuedonaverage122daysafterthebaselineprogrammedate.
5.2.21 Releaseofinformationgenerally5.2.22 PursuanttothetermsoftheContracttheContractorwasrequiredtosubmitas-
builtdrawingsonorby31stMarch2010.Itisclearfromtheinformation
containedatAppendixAthatsubstantialinformationwasissuedafterthisdate.
Therefore,itisevidentthatTiwestRepresentativehaspreventedtheContractor
from:-
a) CompletingtheSeparablePortionsinatimescaleconsistentwiththeContractandortheapprovedprogramme
b) CompletingtheWorksinatimescaleconsistentwiththeContractandortheapprovedprogramme
5.2.23 FortheavoidanceofdoubttheinformationcontainedatAppendixAwasprovidedtotheContractbyTiwestRepresentativeandisthereforethedates
thereinaretakenasagreed.
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6 EVENTSGIVINGRISETOENTITLEMENT6.1 Introduction6.1.1 Thissectionofthedocumentidentifiesandillustratestheeventsthathave
delayedandpreventedtheContractorfromcompletingtheWorksinatimescale
consistentwiththebaselineprogramme.Asaresultofthesedelaysthe
ContractorhasbeeninstructedbyTiwestRepresentativetomobiliseadditionalresourcesinanefforttoreducethedelay.
6.1.2 AsstatedabovetheConstructionIssueinformationshouldhavebeenissuedinasingletrancheonorbefore29
thJune2009.Inrealitytheinformation,andaccess
toareasofthesite,wassuppliedoveraprolongedperiodoftime.Duetothe
numberofdrawingissues,andgiventheirrationalordertheywereissuedin,
plustheaccessissues,itisimpossibletoseparatethedelayevents.
Notwithstandingthatitisclear,assetoutbelow,thatTiwestandits
Representativeareculpableforthosedelaysandtheresultantcost.
6.2 Delay Event and or acts of prevention Issue ofInformationforConstructionandaccesstoSite
6.2.1 CauseofDelay6.2.2 ActivityWCC1020ISSUEIFCISOMETRICSofthebaselineprogrammehasa
startandfinishdateof29th
June2009.ThereforeTiwestRepresentativewas
requiredtoissueallConstructionInformationonorbeforethisdate.
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6.2.3 TheContractorscorrespondenceof7thAugust20098recordsthatithadbeenrequestedtoinstalltheChlorAlkaliprioritypipeworkbythe17
thAugust2009
andthatishasbeenunabletodosoasaresultofTiwestRepresentativefailing
toissuethegeneralarrangementdrawings.Further,asiteinspectionconducted
onoraroundthattimeindicatedthatnopipetrayshadbeeninstalledand
therefore,evenifthedrawingshadbeenissued,thepipecouldstillnothave
beeninstalled.
6.2.4 TheContractorservednoticeon30thOctober20099thatitintendedtosubmitanextensionoftimeandresultantcostsasaresultoflateaccesstoareasofthe
site.
6.2.5 TiwestRepresentativeacknowledgedreceiptoftheContractorsnoticeon13thNovember2009
10andadvisedthatitshouldberesubmittedinaccordancewith
thetermsoftheContract.Notwithstandingtheproceduralerrorsitisevident
thatTiwestRepresentativeisawareofthedelays.Moreover,therewasnothing
precludingTiwesttoreviewthesituationandissueanappropriateextensionof
time.
6.2.6 On3rdDecember200911theContractornotifiedTiwestRepresentativethatit
8WesternConstructionCo.letterdated7
thAugust2009
9WesternConstructionCo.letterdated30
thOctober2009
10ProteusECPMEngineersletterdated13th
November2009referenced07035-L-518
11WesternConstructionCo.letterdated3
rdDecember2009
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hadbeendelayedasaresultof:-
a) Rainb) Additionalworksc) Excavationofpiperacksduetoemissionsd) Evacuationduetogase) Demobilisingfromoneofthebuildingsasaresultofadirectionfrom
TiwestRepresentative
6.2.7 TheContractorcontinuedtosufferdelayanddisruptionasaresultofchemicalreleasesintotheworkareaandon22ndDecember200912advisedthatitsought
torecovercostsfortheconstructionofascaffoldthatwouldallowsafeegressin
theeventoffutureevacuationsduetogasleaks.
6.2.8 On23rdDecember200913theContractoradvisedthatithadincurredadditionalcostsinrespectofthedelaysatsiteandintendedtoseekpaymentforthese
costs.OnthesamedatetheContractoradvisedthatitestimatedthatthe
currentassessmentofman-hourstocompletetheprojectwouldbecirca88,000
whereastheContractallowancewasover30,000less.Further,the
correspondenceadvisedthathisequatedtoalmost7weeksofconstructiontime
andthat,asaresultofthedelays,theDateforPracticalCompletionwouldhave
12WesternConstructionCo.letterdated22nd
December2009
13WesternConstructionCo.letterdated23
rdDecember2009
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tobeextendedto1st
May201014
.
6.2.9 NotwithstandingtheongoingdelayanddisruptioninrespectoftheConstructionInformationTiwestadvisedtheContractorthatitwasconductingamajor
shutdownoftheplantstarting15thMarch2010for6days15.Thisclearlyhadan
impactontheprojectastheContractorwasforcedtodemobiliseandremobilise
beforeandaftertheperiodofsuspension.
6.2.10 TheContractorsletterof18thJanuary2010setsoutthat:-
Themainreasonforthelowproductivityistheproportionoflabour
spentonadditionalpipeworkorpipereworkThecontinualreworkis
affectingourworkflowbecauseourcrewscontinuallyneedtostop
workonpipelinesduetoclasheswithexistingsteel.Thestopping,
redesigningandthenreworkingofapipelineismuchslowerthan
puttinginprefabricatedspools16
6.2.11 ItisevidentthatasaresultofTiwestRepresentativesfailuretoissuecogentConstructionInformation,oratall,theContractorwasincurringdifficulty
14WesternConstructionCo.letterdated23
rdDecember2009
15TiwestPtyLtdletterdated13th
January2010
16WesternConstructionCo.letterdated18
thJanuary2010
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installingandorprogressingtheWorks.Ultimatelythiswasdelayingand
disruptingtheContractor.
6.2.12 TheContractorsubmittedarevisedscheduleonoraround1stFebruary2010thatrevisedtheDateforPracticalCompletionto20thApril2010.
6.2.13 ThisprogrammewasacceptedbyTiwestRepresentativeon5thFebruary201017;thereforetherevisedPracticalCompletionDatewasalsoaccepted.
6.2.14 TheContractorissuedadelayregistertoTiwestRepresentativeon10thFebruary2010
18.Thisdocumentsetsoutanumberofthedelaystotheprojectforwhich
Tiwestareculpable.TiwestRepresentativerespondedtothissubmissionon11th
February2010andstatedthattheContractorhadfailedtoisolateeventsfor
whichtheitwasculpable.Giventhattheindividualeventshavebeenidentified
andthereasonwhyTiwestRepresentativehasfailedinitsobligationto
determineanextensionoftimeinafairorreasonablemannerandthereforeits
conductisunconscionable.
6.2.15 TheContactorscorrespondenceof15thFebruary2010recordsthatameetingtookplacebetweenitandTiwestRepresentativeinrespectofanextensionof
timeandresultantcosts.TheletterrecordsthatTiwestRepresentativestated
thatindirectcostsmayonlyberecoveredthroughthere-measureformula;thisis
clearlyincorrectasclauses7.2and7.3apply.Again,thisreiteratesthatTiwest
17WesternConstructionCo.letterdated8th
February2010
18WesternConstructionCo.letterdated10
thFebruary2010
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Representativesconductisunconscionableasitisfailingtotakeconsideration
ofthetermsoftheContractwhenconsideringthematters.
6.2.16 TiwestRepresentativesletterof15thFebruary201019awardsa6.5workingdayextensionoftimeandrevisedtheDateforPracticalCompletionto17thMarch
2010.TiwestRepresentativehasfailedtotakeconsiderationofthefactthatthe
ContractcontainsSeparablePortionsandthateachoftheseportionsshould
havebeenextendedindividually.
6.2.17 On16thFebruary201020theContractorwrotetoTiwestRepresentativetorecordthatameetinghadtakenplacethedaypriorandthat:-
a) ItwasagreedbetweentheContractorandTiwestRepresentativethatthatthefinalnumberofmanhoursusedtocompletetheproject
wouldbereconciledattheDateforPracticalCompletion
b) TheContractorwilladdadditionalresourcestotheprojectandthattheseadditionalresourceswouldbereimbursedthrough:-
i) Re-measurecostsii) Prolongationcostsduetotheincreasedscopeofworkiii) Siteinstructionsincludingallequipmentandindirectcosts
6.2.18 TiwestRepresentativeacknowledgedreceiptofthiscorrespondenceon18th
19ProteusECPMEngineersletterdated15th
February2010referenced07035-L-655
20WesternConstructionCo.letterdated16
thFebruary2010
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February201021
andnotedtheContractorscommitmentand,moreimportantly,
thatitwaswaivingthenotificationperiodwithinclause7.3oftheContractuntil
23rd
February2010.ItisevidentthatTiwestRepresentativeisawareofthe
delays,haswaivedthetimebarwithintheContract,thatEstoppelwouldapply
andthatanyattempttore-applysuchclausewouldbeunconscionable.
6.2.19 On23rdFebruary201022theContractorwrotetoTiwsetRepresentativesettingoutthatithadbeendelayedasaresultof:-
a) Thelackofaccessb) SlippingofequipmentdeliverydateswhichTiwestweretosupplyc) Raindelaysd) Evacuationsfromsitee)
Additionalsiteinstructions
6.2.20 Further,theContractorrequestedthattheDateorPracticalCompletionbeextendedto21
stApril2010andthat,whilstthetendermanninglevelpeakedat
65menonsite,theContractorwasincreasingitsworkforceto100men.Ascan
beeseenfromtheConstructionInformationregisters,thatareanalysedabove
andappended,theContractorhadreceivedasubstantialamountofinformation
inandaroundthistime.Essentiallytheincreaseintheworkforcewasanextra-
21ProteusECPMEngineersletterdated18th
February2010referenced07035-L-657
22WesternConstructionCo.letterdated23
rdFebruary2010
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ordinarymeasuretakenbytheContractortoreducethedelayforwhichitis
entitledtobecompensated.
6.2.21 TiwestwrotetotheContractoron2ndMarch201023advisingthatascheduledshutdownoftheplanthadbeenmovedto19thApril2010andthataccesstothe
sitewouldberestrictedforaperiodof13days.
6.2.22 TiwestRepresentativewrotetotheContractoron3rdMarch201024and,interalia,setoutthatitbelievedthatSpecialConditionstookprecedenceoverthe
GeneralConditionsofContract.OnreviewoftheContractthereisambiguityas
clause1.2states:-
Ingivingadirectionunderthisclause,Tiwest'sRepresentativewill
construethedocumentscomprisingtheContractintheorderof
precedenceinwhichtheyarelistedinthedefinitionoftheContractin
clause1.1.
6.2.23 Onreferencetoclause1.1theordersetoutisasfollows:-a) ThisConstructionContractb) TheContractSpecifics
23TiwestPtyLtdletterdated2nd
March2010
24ProteusECPMEngineersletterdated3
rdMarch2010referenced07035-L-679
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c) TheScopeofWork,includingreferencedDrawingsandDocumentation
d) Theotherschedules,exhibitsandannexurese) Theotherdocuments(ifany)referredtoinItem2
6.2.24 ItisclearfromthisthattheContracttakesprecedenceoverallotherdocumentationandthatthereisnoreferencetoSpecialConditions.
NotwithstandingthisSpecialConditionshavebeeninsertedatAnnexure5,which
fortheavoidanceofdoubtisitemdandbeneaththeContract,whereatit
states:-
Thefollowingmodificationwilltakeprecedenceoverthewordinginthe
standardtermsandconditionscontainedwithinthisContract.
6.2.25 ClearlytherearetwoordersofprecedenceandanambiguitywithintheContract.WhereastheContractallowsforTiwestRepresentativetomakeits
ownrectificationoftheContractthelawprovidesthatthesetermsberead
contraproferentem.Thismeansthatthetermisconstruedagainsttheparty
thatdraftedit;thereforeTiwestisnotentitledtoderiveabenefitfromitsown
error.
6.2.26 NotwithstandingtheaboveprincipleTiwestRepresentativehasindicatedthattheContractorisnotentitledtorecoveranycostsotherthanstandbycostsin
respectoftheinclementweatheranddelayanddisruptionclaims.WhilstSC.2c
providestheContractorisentitledtorecoverstandbyratesalthoughitdoesnot
precludeitfromrecoveringanyothercosts.Therefore,theContractwouldbe
supplementbyimpliedterms.GiventhattheContractorhassuffereddelay,and
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damage,asaresultofeventsforwhichTiwestareculpableitwouldbeentitled
torestitutionandwouldbeabletorecovercostsresultantfromthedelay.
6.2.27 WithinthesamecorrespondenceTiwestRepresentativehasstatedthatthere-measurementclauseonlyappliesintheeventthatthetotalContractpriceis
exceedby20%.Onreviewofclauseitstatesthat:-
RemeasureofquantitiesshallbecarriedoutbytheTiwest
representativeinaccordancewiththelatestrevisionofIssuedfor
Constructiondrawingsandspecifications.TheTiwestrepresentative
shallarrangefortheremeasureoftheactualquantitiestobe
undertakenandupdatedaspartofthemonthlyprogressclaim
process.Thecontractorisentitledtoreviewandifapplicablenotify
Tiwestofanyquantitiesindispute,andprovidesuchsubstantiationas
necessarytoreachanagreementonthequantities.Anyotherclaim
whichmayresultinanadjustmenttothecontractpriceshallbein
accordancewithclause8and16.
6.2.28 ThestatementmadebyTiwestRepresentativeisclearlyincorrect.Further,theContractprovidesthatTiwestRepresentativeistovaluetheWorksonamonthly
basis;itclearlyhasnotdonethiscarriedoutthisoutandasaresultisinbreach
oftheContractasaresultofitattemptingtosetthenotionalvalueof20%
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increase.
6.2.29 On5thMarch201025theContractoradvisedthattheworkforceatsitehadincreasedto152operativesandthatithadincreasedtheworkingweekto60
hours.MoreovertheContractorisstillactivelyseekingtorecruitadditional
operatives.
6.2.30 On11thMarch201026TiwestRepresentativesinformedtheContractorthatitwasconcernedaboutthelackofprogressandthatdirectedthat:-
ThereisnotenoughmanpowercurrentlyonthisjobsothatWCCocan
finishontimeandthemanpowershouldincreaseby4timessothat
thedeadlinecanbeachieved.
6.2.31 FromtheinformationreleaseschedulebelowitisevidentthattheContractorwasstilloutstandingaconsiderableamountofConstructionInformationaround
thistime.Therefore,TiwestRepresentativehasinstructedtheContractorto
quadruplethelabourforceatatimewhenitstillhadnotprovidedallthe
ConstructionInformationandtheContractordidnothaveuninterruptedaccess
tothesite.Thisinstructionclearlyillustratesmaladministrationoftheprojectby
25WesternConstructionCo.letterdated5th
March2010
26ProteusECPMEngineersletterdated11
thMarch2010referenced07035-L-687
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TiwestRepresentative.
6.2.32 Furthermore,onthe15thMarch201027TiwestRepresentativerecordedthatameetingtookplaceon8
thMarch2010.Thecorrespondencenotesthata
proposalwasacceptedthattheContractor:-
a) Wouldemployanother30operativesandseektoincreasethisto40b) Wouldemployanother3supervisors
6.2.33 Again,TiwestRepresentativehasdirectedtheContractortoincreaseresourcesatatimewhenitdoesnothavethenecessary,orcomplete,Construction
Informationoruninterruptedaccesstothesite.
6.2.34 TheContractorraisedtheissueofuninterruptedaccess,ordisruptedaccess,againon18
thMarch2010
28.TheContractorscorrespondencenotedthat:-
OnTuesdaythe16thMarch20105ofouremployeeswereovercome
byfumes.WesternConstructionCo.carriedoutaninvestigationand
forwardedthereportastherootcauseswerenotclarifiedandcould
onlybeidentifiedbybothPorteusandTiWest.Todatewehavehad
noformalresponseintermsof;
DocumentedevidenceofaccidentinvestigationbyProteusorTiWest
27ProteusECPMEngineersletterdated15th
March2010referenced07035-L-688
28WesternConstructionCo.letterdated18
thMarch2010
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detailingthecauseoftheaccidentandtherootcausesofthefailure,
Northeactionsthathavebeentakento
Rectifythesituation Theplansandproceduresthatareadoptedtopreventre-
occurrence.
Thepersonorpersonsresponsibleforimplementingtheactions
6.2.35 ItisevidentthattheContractorwasstillincurringsignificantproblemswiththeworkingconditionsthat,inturn,werecausingdelaytotheproject.Moreoveron
thesamedatetheContractornotifiedTiwestRepresentativethat:-
theprioritypipelinesinsubarea4Ecannotbecompletedbeforethe
Aprilshutdownduetothelackofsupportingsteelwork.29
6.2.36 FortheavoidanceofdoubtTiwestwereresponsibleforthefreeissueofthismaterial.
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6.2.37 On31stMarch201030theContractoradvisedthatcomplexityofthe5KOpiperackstiffeninghadincreasedfromtheagreedScopeofWorkandasaresultithad
takenadditionaltimetoinstallandincurredadditionalcost.Onthesamedate
theContractorconfirmedthattheinsulationwasnotincludedwithinitstender
astheinformationwasissuedafteritssubmissiondate31
.Notwithstandingthis
TiwestRepresentativehadissueddrawingsthatincludedthiswork,whichthe
Contractorhadcarriedout,andasaresulttheContractorhadincurredadditionalcostandtimeasaresultoftheinstallation.
6.2.38 TheContractorscorrespondenceof15thApril201032requestedanextensionoftimeuntilthe13
thJune2010asaresultofthe13and10dayshutdownsplus
TiwestRepresentativerequestingarevisedprogrammeconcentratingonpriority
lines.
6.2.39 TheContractorscorrespondenceof25thMay201033notifiedTiwestRepresentativeofitsintentiontomakeaclaiminrespectoftheengineeringand
procurementattheproject.Therefore,thePartieswereawarethatthesituation
hadprogressedtoapointwherebytheContractorwouldseekrecompensefor
TiwestRepresentativesmaladministrationoftheproject.
30WesternConstructionCo.letterdated18
thMarch2010
31WesternConstructionCo.letterdated18
thMarch2010
32WesternConstructionCo.letterdated18th
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33WesternConstructionCo.letterdated25
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6.2.40 TiwestRepresentativeissuedaresponseon27thMay201034statingthattheforegoingnoticewasnotinaccordancewiththeContractandassuchwas
rejected.TheContractorrespondedon28th
May201035
clarifyingthattheclaim
wasgoingtobesubmittedasaresultof:-
a) Theseverityandfrequencyofdelaysb) DelayanddisruptioncausedbyConstructionInfromationbeing
issuedlate
c) Tiwestissuinglateandincompletefreeissuematerial6.2.41 Almost2monthsaftertheContractorsnoticeinrespectoftheinsulationnot
beingincludedwithintheScopeofWorksTiwestRepresentativerepliedon31st
May201036
statingthattheContractdidnotincludeaclauseforsuchomissions.
ClearlyTiwestRepresentativewaseithernotfamiliarwiththeContract,orwas
simplychoosingtoignoreit,asitcontainsavariationclausethatallowsforthese
workstobeinstructed.TiwestRepresentativehadissuedawritteninstructionin
theformofthedrawinganditstransmittal;thereforetheContractorhadbeen
instructedtocarryouttheseworks.Moreover,thelawallowsforthe
rectificationofacontractintheeventthereisanerrorbyeitherorboththe
parties.TiwestRepresentativeclearlychosetoignoretheseoptionsinaneffort
34ProteusECPMEngineersletterdated27
thMay2010referenced07035-L-795A
35WesternConstructionCo.letterdated28th
May2010
36ProteusECPMEngineersletterdated31
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toderiveabenefitfromthesituation;itsconductwasunconscionable.
6.2.42 On10thJune2010theContractoradvisedthatasaresultof:-a) Tiwestnotprovidingaccessinatimescaleconsistentwiththe
baselineprogramme
b) Tiwestnotprovidingfreeissuematerialinatimescaleconsistentwiththebaselineprogramme
c) TiwestnotsupplyingConstructionInformationinatimescaleconsistentwiththebaselineprogramme
d) Inclementweathere) TiwestsuspendingtheWorksf) Gasleakswithintheplant
6.2.43 Ithadincurreddelayanddisruptionandthatitintendedtosubmitanextensionoftimeupto21
stJune2010
37andresultantcostsof$4,013,538.31.
6.2.44 Summary6.2.45 ItisevidentfromtheeventssetoutabovethattheContractorwas:-
a) PreventedfromcommencingtheWorksb) PreventedfromcompletingtheSeparablePortionsinatimescale
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consistentwiththeDate/sforPracticalCompletionorthebaseline
programme
c) InstructedtocarryoutovertimeworkingasaresultofthedelayssetouthereinandTiwestRepresentativesmaladministrationofthe
project
6.2.46 TheContractorisentitledtorecovertheresultantcostsoftheaboveevents.6.3 Theseparationofevents6.3.1 GiventhenumberandfrequencyoftheeventscausedbyTiwestRepresentative
issuingConstructionInformationinanuncontrolledandad-hocmanneritis
impossibletoseparatetheeffectofeachoftheseevents.TiwestRepresentative
isculpableforthemaladministrationoftheprojectandanyattemptfromitto
deriveabenefitfromthecomplexsituationithascreatedwouldbe
unconscionable.WhilstthismaynotbecompliantwiththeContractitis
acceptedatLaw.
6.3.2 Itshouldbenotedthattheevaluationofanyclaimistobecarriedoutonthebalanceofprobability.TheinformationsetoutinAnnexureAprovidesthat
TiwestRepresentativefailedtocomplywiththeContract,ortheprogrammeit
approved,beyondallreasonabledoubt.Thislevelofproofcarriesafargreater
weightthanthebalanceofprobability.
6.3.3 TiwestRepresentativehasfailedtoacknowledgethedamagecausedtotheprojectasaresultofitsactions.FurtherithassoughttouseContractclauses
whichithaseitherpreviouslywaived,orarestruckoutasaresultofitsactsof
prevention,tomakeadefence.
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7 THEQUANTUMOFOURCLAIM7.1.1
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8 SCHEDULEOFANNEXUREANDEXHIBITS8.1 Annexure8.1.1 AnnexureAInformationreleaseschedule8.2 Exhibits8.2.1 ExhibitACorrespondencereferredtowithinthisdocument