Good news for quantity surveyors

Dhamija & Another v Sunningdale Joineries Ltd & Ors [2010] EWHC 2396 (TCC)

Facts of the case

In 2009 Mr and Mrs Dhamija pursued their contractors, architects and quantity surveyors alleging hundreds of defects to their newly constructed house. The Third Defenders, McBains Cooper Consulting Ltd, had been accused by the Dhamijas of overvaluation generally and breach of an alleged duty "to only value work that had been properly executed by the contractor and was not obviously defective". McBains sought to strike out the second ground.

There was no written contract between the Dhamijas and McBains and the building contract was a standard JCT form which provided for interim certificates prepared monthly after consideration of documentation and site visits by the QS.

The leading case on the architect/QS duty split on defective work is Sutcliffe v Chippendale & Edmondson (1971) 18 BLR 149. It concerned an allegation of negligence against a firm of architects that their interim certificates hadn't made proper allowance for defective work by contractors. The court held the architects had a duty to tell the QS to exclude defective work from the valuations but the QS did not have to advise them of defects.

Here, the Judge was referred to textbooks. Two (including one of which he was the author and could therefore give little weight to) considered the architect had the duty to decide whether works were "properly executed" and advise the QS. The QS would focus on quantities and take into account the architect's information as to what ought to be valued.

The contrary voice was Hudson's Building & Engineering Contracts 11th edition, often seen as a standard text in construction matters, which stated that a QS did indeed bear a duty to bring defective work to the architect's attention in case the latter has missed it. The Judge considered this paragraph unreliable as it referred only to the Sutcliffe case which did not support the point.

The legal position was backed up by the QS's valuations stating they had relied on the architect for advice on what was defective work. The architect had also attended the property and provided lists of defects to the QS requiring deductions from valuations.

The Judge therefore considered that there was no such implied duty in the QS's appointment. While McBains should only value works which had been "properly executed" being aware of the JCT form of contract, it was the architect's duty to inform them what had not been "properly executed" so they could calculate the correct value for each interim certificate. It would have been illogical to turn the duty on its head and have the QS advise the architect what was defective.

The Judge didn't strike out this aspect of the case as there was a possibility that further evidence might set out more fully the terms of the appointment but did warn if they proceeded, it was quite likely that an indemnity award of costs may be made against the Dhamijas.

Analysis

This is good news for quantity surveyors as it restricts their obligations to an employer and clearly delineates the limits where their responsibility ends and that of an architect or other contract administrator begins in the absence of contractual stipulations. Clearly McBains were lucky to find themselves pushing an open door given the opinion set out in the section of Professional Negligence and Liability textbook which the judge authored.

During the last recession, it was relatively common, and still is, for a disgruntled employer to pursue whole design and professional teams together with the contractor as jointly and severally liable if they consider there is a defect in workmanship or design, hoping that someone or their insurers will pay up. In the absence of express contractual agreement, this decision certainly acts as a deterrent to bringing a QS in.

However, it may go further, supporting attempts in the future by other professionals, and their indemnity insurers, to avoid that kind of joint and several case by arguing that the individual professions have clearly defined roles in a traditional construction contract.

The problem is that it is very difficult in the current climate for any professional, including quantity surveyors, to dictate terms to an employer who is willing to commence a project. Not only is it possible that the obligation to note and exclude defective work, which the Dhamijas alleged was implied into the contract, may be made express but it is not unheard of for employers to go further, seeking to make a QS almost a clerk of works. Particular care has to be taken by the QS if such a role is outlined in a contract as that might prejudice their insurance position. It also means the employer seeking to include such a clause may have a worthless right to pursue without the resources of an insurer in the background.