Delay Claims for Builders in Australia

What it is

A delay claim is the way a builder protects time on a project that has fallen behind. Two distinct claims sit under the umbrella. An extension of time (EOT) moves the date for practical completion outwards so the owner cannot trigger liquidated damages. A delay damages or delay costs claim seeks money to cover the builder's prolongation costs on site during the extended period.

The two are different remedies with different evidentiary tests and different state contract treatments. A builder can be entitled to an EOT without being entitled to delay damages, and the contract usually says which causes give rise to which remedy.

Qualifying causes and EOT entitlement

Standard residential contracts list the events that entitle the builder to an EOT. They include inclement weather above thresholds in the schedule, owner-caused delays, variation work, latent conditions and force majeure events such as supply chain failures or pandemic restrictions. The QBCC New Home Construction Contract sets these out in clause 14 and the equivalent NSW Building Commission form follows the same structure.

The builder must show two things. First, that the event is a qualifying cause within the contract. Second, that the event actually delayed the works on the critical path. A delay to a non-critical item that does not push out the completion date does not support an EOT claim.

Notice provisions are central. Most Australian contracts require the builder to give written notice within a short window after becoming aware of the cause and extent of the delay. The QBCC contract requires notice within ten business days. The owner then has ten business days to accept, reject or partially reject the claim. Cases such as Gaymark v Walter Construction Group and later authorities treat strict notice requirements as conditions precedent, so missing the notice window can lose the EOT entitlement entirely.

Concurrent delay

Concurrent delay is where two independent causes contribute to the same period of delay, one a qualifying cause (such as wet weather or owner variation) and one a contractor-caused cause (such as a subcontractor failure). Australian standard contracts and case law take different positions.

Under standard AS 4000-1997, clause 34.4 directs the superintendent to apportion the resulting delay between qualifying and non-qualifying causes. Under most residential contracts, the position defaults to common-law principles, which generally allow a full EOT for the qualifying cause but deny the contractor any delay damages for the concurrent period. The reasoning is that the contractor cannot recover prolongation costs they would have incurred anyway because of their own delay.

The practical effect for the builder is that EOT relief saves the builder from LDs, but delay damages are likely off the table during any concurrent period unless the contract specifically apportions cost as well as time.

Delay damages versus EOT

Delay damages (often called prolongation costs) cover the builder's site overheads, head office overheads and finance costs during the extended period. Owner-caused delay and breach by the owner are the most common triggers. Inclement weather usually gives a time EOT but no delay damages, because the contract puts weather risk on the builder for cost while sharing the time impact.

The builder must prove the costs were actually incurred and would not have been incurred but for the delay. Records, daily diaries and verified subcontractor invoices carry the case. Industry texts and the AustLII Australian Construction Law Newsletter back issues are useful primary reading on what evidence stands up.

Practical checklist for builders

Read the contract notice clauses before the project starts and put diary reminders on the notice windows. Keep daily site records, weather logs and photos for every working day. Send EOT notices in writing with the cause, the date the cause arose, the extent of the delay claimed and the supporting documents. Decide at the time whether the cause supports both an EOT and a delay damages claim and frame the notice accordingly.

Read this with the related entries on liquidated damages, fixed price and cost plus contracts, and provisional sums. The delay regime is the time half of the risk picture; LDs are the money half.