Professional Conduct Committee Decisions

ARCHITECTS REGISTRATION BOARD

PROFESSIONAL CONDUCT COMMITTEE

IN THE MATTER OF

Mr PHILIP DADDS (058249B)

held on

9 and 15 August 2011

at
Clifford’s Inn Conference Centre
Fetter Lane London
EC4A 1LD

Present:

Mr Paul Housego (Chair)
Ms Linda Read (PCC Lay Member)
Mr James Cuthbertson (PCC Architect Member)

Mr Stephen Battersby (Clerk to the PCC)

Mr Jonathan Goodwin of Jonathan Goodwin Solicitor Advocate appeared on behalf of the Board
Mr Mark Chennellsof Atkin Chambers appeared on behalf of Mr Dadds

ALLEGATIONS

Mr Dadds faces four allegations:

he failed to perform his work with due skill care and diligence
that he failed to ensure that the person carrying out work on his behalf and under his control was sufficiently competent and/or failed to have in place effective internal procedures to include monitoring and review procedures
that he failed to exercise adequate supervision of staff
that he failed to cooperate fully and promptly with the Architects Registration Board

DECISION

Allegation (a) depends upon (b) and (c). Allegation (b) is itself two allegations – failure to ensure that the person carrying out the work on his behalf was sufficiently competent; secondly failure to have effective internal procedures to include monitoring and review procedures.

The first three allegations are denied. The fourth allegation is admitted, subject to mitigation.

At the commencement of the hearing it was agreed that the facts upon which we should decide the allegations, other than supervision, related to the adjudication clause contained within the contract between the client, Mr and Mrs Daniel and SofiePichler and the contractor Jones construction. The second was the issue of the practical completion certificate and the third alleged over certification of works on 4th September 2009.

Mr and Mrs Pichler lived in Germany. They bought a house in Ramsgate. They wished to have extensive work carried out to it. They engaged Mr Dadds firm as the pre-eminent firm in Ramsgate. Initial scoping of work and tendering resulted in prices well over £200,000. This was considerably in excess of the clients' budget. The work was re-tendered, and Mr Jones firm was successful. This was within budget. The other bids were not shared by Mr Dadds firm with Mr and Mrs Pichler. No allegation arises from that.

In undertaking the work considerable difficulties were exposed with the house. Some 60% or more of the walls had to be rebuilt partly because they were out of plumb and partly because they had inadequate u values. Much of the roof had to be redone. Part of the flooring needed to be replaced as having inadequate damp proofing membranes. This led to considerable extras, all of which were done on a post-work valuation basis and not as fixed-price and extras. No complaint arises from that.

Notwithstanding the very large amount of additional work the contract was brought to a conclusion at the end of May 2009, the original contractual date being April 2009.

This was not entirely at the builder and architects wish, for Mr and Mrs Pichler forced the issue by requiring to move in. The architect and the builder went along with this. However a practical completion certificate could not be issued at the time because the necessary paperwork from building control and about the electrical work was not available. Nevertheless it was accepted by the architect and builder that practical completion took place on 27th May 2009.

At that time Mr Burt Davies (who at all material times had conduct of the contract for the architects firm) wrongly said that the defects period would commence on the issue of the practical completion certificate (not until September). In fact it commenced on 27 May 2009. By the time the practical completion certificate was issued the defects period of 3 months had elapsed because it was backdated to May. Nothing turned on that because defects had been notified to the builder during the three-month period commencing on 27 May 2009.

Mr Pichler received from the builder an indication that the final cost of the works was going to be some £228,000. He objected to this and sent a detailed analysis of his objections to Mr Burt Davis. He did this at the end of August 2009. Mr Burt Davis responded to say “all this is going to take some time digesting". He then spent the next three working days going through the builders figures. He had a detailed and lengthy meeting with the builders. He did not go back to Mr Pichler (whose assertion was that the total cost of the works should be £165,000). The next Mr Pichler heard was an e-mail from Mr Burt Davis to say that the practical completion certificate was issued. That required an interim certificate for payment to be issued also. Mr Burt Davies issued this at a total of £222,000 (or thereabouts) only some £6000 below the figure claimed by the builder.

Mr Burt Davies expected to, and his evidence to us (which we accept) was that he was required to carry out the project on his own initiative. He told us, and we accept, that he did not tell Mr Dadds of the e-mail 30 August 2009 from Mr Pichler. There was some discussion between Mr Dadds and Mr Burt Davies about the penultimate certificate that now needed to be issued. Mr Burt Davis was told to issue the certificate as he thought appropriate, he having great experience, and having had the conduct of the contract.

There was then a reference by the builder to an adjudicator under the “fast track" procedure which resulted in the £58,000 due under the penultimate certificate being reduced to some £17,000. £11,000 of that reduction was additional retention. It is from this that the over certification allegation arises.

For Mr Dadds, it is argued that the certification had to be at the date of the certificate; that is at the end of May 2009. The adjudication process was much later. Part of the reduction was because of defects that had occurred afterwards. It is not put as an allegation, so we do not take it into account, but the evidence that has emerged in front of us is that this was not explained to Mr Pichler. In fact, certification at 27th May 2009 could then be rectified either by a lower final certificate, or by a withholding notice such as Mr Pichler ultimately issued. However where the client of the architect is plainly unhappy about the level of costs, and the architect can see that there is a series of defects which need attention, it is, to say the least, highly unfortunate that the client has to find out for himself that there is a procedure–the withholding notice–which he can follow.

The adjudication process is a fast track holding process to enable a contract to get to a conclusion. It is dealt with by an expert, someone who must produce a result in 28 days, and who does not have great personal knowledge of the contract. We do not think it would be right for us to find that there was over certification of this contract as alleged, and we have to leave our reservations about the way the matter was handled by the practice simply as reservations for they are not part of the allegations put.

Mr Pichler also objects to the fact that he was forced down the adjudication route against his wishes, for this incurred additional expense for him.

We are aware that there is a substantial civil suit between Mr Pichler and the insurers of Mr Dadds limited company, which is no part of this professional conduct hearing.

We return to the three matters put to us as matters of fact for us to decide. First the adjudication clause in the contract. The contract used was the JCT Minor Works contract. The solicitor for the board does not challenge the choice of this form of contract as suitable for the works. It is common ground that the contract is written in reasonably simple English. As part of the document there is an addendum of guidance notes. These are reasonably full and set out the import of the adjudication clause. In some circumstances the adjudication clause is mandatory. For residential occupiers it is not (and nor are any of the other clauses in any contract) other than optional for the householder. Neither Mr Dadds nor Mr Edwards (who was dealing with the matter for Mr Pichler at the time) nor Mr Burt Davies knew that in some other circumstances the clause was mandatory. Nor did Mr Pichler. In our view nothing turns on this.

The JCT minor works contract is the result of a very great deal of work and experience. It is revised from time to time. It is much used in the building industry and by architects. It is a balanced set of terms and conditions applicable to minor works. It contains provisions which need completing – the so-called "optional clauses". In fact, as we have said, all the clauses are optional; some have blanks that need to be completed.

In our estimation it is entirely proper for an architect to select the correct standard form contract to use for the client's project. Having done that, it would be an unwise architect who attempted to make substantial alterations to the contract. Architects are not lawyers. This architectural firm chose a proper form of contract for the work. It is for works up to £250,000, as this was. The contract was sent to the client to read, complete with guidance notes. The contract was discussed; the parts with blanks were completed. The client was asked to read through the contract and to raise any points arising. The client did read the contract and raised various issues that were dealt with. We do not see any criticism should be made of the architect in this regard.

The PC certificate. There was no difficulty with the issue of the PC certificate at 27 May, in principle. The client wished it so as to be able to occupy the house. Insofar as there is a complaint that the letter accompanying the PC certificate said that the defects period would start on the certificate–September 2009–and that was in error, nothing arises from that. It was wrong, but in fact the defects process was undertaken at the correct time. We do not consider this to justify a finding of unacceptable professional conduct or serious professional incompetence.

The house had no certification from the local authority nor for its electrics, but the client was determined to move in, and the certificate was not in fact issued until the paperwork was to hand, and then backdated. This is not ideal, but the work done was subsequently validated. We do not consider this to be unacceptable professional conduct or serious professional incompetence, but a pragmatic way of resolving a very difficult situation.

The adjudicator decided that some £38,000 certified by Mr Burt Davies should not be paid by Mr Pichler. Mr Dadds and Mr Burt Davies disagree, as they inevitably will. Much of this turns on whether sums are fixed price contracts, or on a cost plus basis. There were also some sums disallowed by the adjudicator that were PC sums–prime cost. These found their way into the contract through the tender dealt with by Mr Edwards. There is no provision in the JCT contract for PC sums. In fact, Mr Edwards, the contractor and Mr Pichler took these prime cost sums as if they were provisional sums. When problems arose in September 2009 Mr Pichler found out what PC sums were and then–entirely understandably–objected to their variation upwards.

We find it to be an unattractive argument, although a successful one, that there was no misunderstanding in anyone's mind. It was simply that the wrong term was put into the contractual documentation. It seems to us clear that the sums were intended to be variable. We are conscious that it may be that this is to begin to trespass into the civil litigation matter. We stress that we can only form this as a view as a defence to an allegation that this is serious professional incompetence, and do not intend it to have any reflection upon any civil proceedings there may be between the parties.

Having set out the findings on three issues put to us we return to the way that the practice was run. This is relevant to the matters in allegations (b) and (c).

Mr Dadds says that his was a successful but small practice and that everyone worked in close proximity to one another. He says that he worked within feet of Mr Burt Davis (and before that Mr Edwards). Everyone would know what everyone else was doing. He would hear the phone calls that were made. They would be discussion about workloads. There were no formal procedures precisely because none were necessary.

We heard from Mr Burt Davis, and accept, that it was not only expected, but required of him that he carried out his work without Mr Dadds being involved in it. In particular we are concerned that when Mr Burt Davis received Mr Pichler's e-mail of 30th August 2009 he did not raise this with Mr Dadds at all (we prefer Mr Burt Davies recollection of that to Mr Dadds'). This was despite Mr Pichler's express request that there should be a telephone conversation in which Mr Dadds should take part personally.

We find this is because Mr Dadds method of being informed about what was going on in his practice was simply to wait for people to raise matters with him. There was no formal or informal system of review. Mr Burt Davies was expected by both Mr Dadds and by himself to get on with the project without Mr Dadds intervention.

When there became a real problem with this, in particular with the certification of the penultimate certificate, Mr Burt Davies spent some three working days undertaking that process. Mr Dadds said to him that he (Mr Burt Davis) knew about the contract and should issue a certificate as he thought appropriate.

In the circumstances we cannot consider that this is adequate supervision of staff. We have taken fully into account the fact that the professional standard requires supervision “if necessary". Plainly when a project was running into great difficulty as here supervision was absolutely necessary, and did not occur.

Both Mr Edwards and Mr Burt Davies were people of vast and varied experience whose competence there was no reason to doubt.

Accordingly we find the first limb of allegation (b) not made out. Both Mr Edwards and Mr Burt Davis were persons carrying out work on Mr Dadds' behalf under his control and they were sufficiently competent. Competent people make mistakes. Whether they made mistakes or not on this occasion is not part of our remit. Given that we find that they were people who were competent to carry out the work entrusted to them the first part of allegation (b) fails.

We find that the second part of allegation (b) is made out because there were no effective internal procedures for monitoring and review.

We find allegation (c) made out because there was inadequate supervision of staff. When it comes to mitigation, we find that it was not unreasonable of Mr Dadds to leave the running of the contract to Mr Edwards and then Mr Burt Davies largely unsupervised, but when there began to be problems with the contract then there should have been full supervision and monitoring. At this point delegation of responsibility became abdication of responsibility.

To the extent that 1(b) and 1(c) are made out, then allegation 1(a) also succeeds. Allegation 1(d) is admitted.

We find Mr Dadds guilty of serious professional incompetence in relation to allegations (a) (b) and (c) and unacceptable professional conduct in relation to allegation (d).

PENALTY

Having heard mitigation, we are concerned at the way Mr Dadds dealt with the ARB over a six month period. Notwithstanding the stresses he was under at the time, his serial attempts to hide behind spurious defences was poor.

As to the serious professional incompetence, we note that this relates, in short, to failure to supervise, and there is considerable mitigation for it is not disputed that this was a well-regarded practice that ran in the same way without any problem for in excess of 20 years.

We decide that the appropriate sanction is a penalty of £1,000, payable within 28 days.

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