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Prevention

Principle
Reviewed by Goh Hweh
Tze

What is prevention principle???


The prevention principle is a long established England common
law doctrine.
Generally, the prevention principle means that a party may not
enforce a contractual obligation against the other party when
the party has prohibited the other party from carrying out that
obligation (Stewart & Fillion, 2014)
The prevention principle is to ensure a party cannot obtain
benefit from the fault that the party had done (Pickavance J;
Mendelblat M; Smith H, 2011; Stewart & Fillion, 2014).

In the construction industry, the contractor is


responsible to complete the project within the agreed
period. If the employer causing delay and do not grant
extension of time, prevention principle would be
enlivened result the time became at large and the
liquidated damages regime would unenforceable

The necessity of prevention principle had been question. In the


case of Bluewater Energy Services BV v Mercon Steel
Structures BV and others, the court highlighted that if the
contract had a good extension of time (EOT) provisions, the
prevention principle was no need to be considered.
Ramsey J said that:
The principle is of some antiquity and has a surprising effect on
the contractual obligations as to the time for completion. As I
have found that there is an extension of time mechanism for acts
of prevention and I am able, so far as is necessary, to determine
the appropriate adjustments to the Schedule of Key Dates, this is
not the opportunity to consider the underlying basis for the
principle.

Whether Malaysia still applied the


prevention principle?
In the case of Kerajaan Malaysia v Ven-Coal Resources Sdn Bhd [2014] 11 MLJ 218, the
judge, Lee Swee Seng said:
When the SO improperly refused to grant an EOT in a situation that would warrant an
EOT, then time for completion is set at large. As was held in the Singapore Court of Appeal
case of Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86 :
... the concept of time being set at large is not at all alien to construction disputes. It is
firmly established that, as mentioned above, time may be set at large due to acts of
prevention where there is no contractual provision governing the situation or where the
architect fails to properly grant an extension of time under the contract. See also, IN
Duncan Wallace QC, Hudson's Building and Engineering Contracts (Sweet and Maxwell,
11th Ed, 1995) vol 2 at para 10.040; Keith Pickavance, Delay and Disruption in
Construction Contracts (Lloyd's of London Publishing Ltd, 3rd Ed, 2005) at ch 6 ...
(Emphasis added.)

Based on the case of Kerajaan Malaysia v Ven-Coal Resources Sdn

Bhd, the prevention principle still applied in Malaysia when there had
extension on time provision.
This is because superintending officer (SO) refused to grant the
extension on time to the contractor.
Hence, the prevention principle is still usable in Malaysia since that
are people unwilling to follow the term in the contract.
In Malaysia, prevention principle is still importance although the
contract has adequate extension on time provision. This is for the
fairness toward both of the contractual parties.
Referred to the Malaysian case, it seems that as long as the extension
of time (EOT) does not issue accordingly, even the contract provide
extension of time provision, the prevention principle can be enlivened.

Extent of employers act that would


trigger prevention principle
There are some international cases hold that any employer's act
will cause the prevention principle.
It is quite startled because of the extent toward the action that
would enliven the prevention principle is very wide.
However, there are case hold that things likes variation would not
create the prevention principle.
Hence, there are suggestion that there should be an extent for
employer's act that can cause prevention principle (Pickavance,
2011)

In the case of SMK Cabinet v Hili Modern Electrix [1984] VR 391 and the case
of Rapid Building Group v Ealing Family Housing Association (1984) 29 BLR
5, the courts held that include any act of employer will trigger the prevention
principle.
On the other hand, Act of employer that will trigger the prevention principle
does not have to be a breach of the construction contract. Oppositely, the
action that trigger the prevention principle is entirely expected or allowed
event (Sharpe Pritchard, 2015) for example increase the work load.
However, the decision was opposite in the case of Balfour Beatty Building Ltd
v Chestermount Properties Ltd (1993) 62 BLR 27. In this case the Court held
that the variation order could not destroyed the liquidated damages regime.
It can be concluded that the extent of action of the employer that would
trigger the prevention principle is still unclear until now. But generally the
extent of the employers act that would enliven the prevention principle is
very wide.

when the contract expressly stated that the


notice to claim extension of time is the
condition precedent to entitle the contractor
with extension of time, in the event that the
contractor failed to apply for extension of
time to contract administrator and the
extension of time does not issue to the
contractor, whether the prevention principle
will applied and the time will be set at large?

From the research of Sim (2009), with reference to the


cases of:
Gaymark Investments Pty Ltd v Walter Construction
Group Limited
Peninsula Balmain Pty Ltd v Abigroup Contractors
Corp Pty Ltd
City Inn Ltd v Shepherd Construction Ltd
Multiplex Constructions v Honeywell Control System
Steria Ltd v Sigma Wireless Communication Ltd

There was only one case,


Gaymark Investments Pty Ltd v Walter
Construction Group Limited
The judge held that even the contractor did
not apply for extension of time, the employer
still had the right to grant extension of time
to the contractor. Therefore, the employer
could not avoid the prevention principle and
benefit from his own fault thus the time is set
at large.

However, the other cases


Peninsula Balmain Pty Ltd v Abigroup
Contractors Corp Pty Ltd
City Inn Ltd v Shepherd Construction Ltd
Multiplex Constructions v Honeywell Control
System
Steria Ltd v Sigma Wireless Communication Ltd

held that the prevention principle did not


apply in this situation because the contractor
had waived his right to claim extension of time
by his failure to operate the extension of time
correctly and failure to make a successful

It can be concluded that the Court of


law will tend to reject the prevention
principle provided that the notice to
claim extension of time is clearly made
as a condition precedent.

Conclusion
Although the prevention principle is a long established England
common law doctrine, this principle is still useful in Malaysia.
Generally, the extent of the employers act is very wide to apply
prevention principle.
Lastly, the prevention principle will not apply even an extension
of time did not granted to the contractor. This occurred when
the contractor did not successfully claim the extension of time
and the contract requires the contractor to give notice to claim
extension of time as a condition precedent.

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