Five new cases brought in Children's Hospital contract dispute
Ann O'Loughlin
Five sets of proceedings over the contract for the National Children's Hospital on the St James Hospital Campus in Dublin have been entered into the fast-track Commercial Court.
The proceedings are brought by the builders, BAM Building Ltd of Kill, Co Kildare, against the National Paediatric Hospital Development Board.
On Monday, Mr Justice Mark Sanfey admitted the cases to the commercial list but adjourned for a week the making of directions on the progress of the actions to allow for discussions between the parties.
He said he was anxious to facilitate talks and the delivery of this project was foremost in this mind.
The project, originally expected to cost just under €1 billion, is now expected to cost more than €2.2 billion.
The application to admit the cases to the list was made by Michael Cush SC, for the hospital board, on consent from Eoin McCullough SC, for BAM.
Commercial director of BAM, Seamus Kealy, said in an affidavit that one set of proceedings relates to a dispute under the contract for the construction of the frame of the hospital.
BAM sought an extension of the completion date together with an adjustment to the contract amount, which a conciliator later recommended should be €16,750,195.
A second dispute was over what is called the "global delay claim" whereby BAM sought an extension to the completion date due to a series of delay events between December 2019 and February 2023.
A conciliator recommended a 267 site working day extension for the completion of the works along with an increase in the contract sum by €107,637,334, Mr Kealy said.
A further dispute was about the manner in which inflation was to be calculated in accordance with the global delay extension claim and the adjustment to the contract sum claim. A conciliator recommended that BAM was entitled to just over €19 million for inflation.
A fourth claim related to a dispute over a change in design of the level 7 roof in August 2020. A conciliator recommended an increase of some €2.5 million for this.
Mr Kealy said last August the hospital board made a call for payment of €16.7 million under a bond with Zurich which BAM had been required to take out in relation to the construction of the frame of the hospital.
Mr Kealy said the call on the bond came as a complete shock to BAM and was also "incomprehensible" given the terms of the contract and where the contract provides that the conciliator's recommendation remains binding on the parties until a different decision is made by the courts.
In accordance with a clause in the contract, BAM had been required to issue the four sets of High Court proceedings following the conciliator's various recommendations.
As a result of the call on the bond, BAM issued a fifth set seeking a stay on all other proceedings and said it also intend to ask the court to have all four applications heard as a single application.
A further set of proceedings by the hospital board against BAM is already in being in which the board seeks a declaration that an instruction to begin phase B of the project was valid and legally binding.
