No_2_August_1964 — Page 108

considerably extended as a result of the recent decision in the House of Lords in the case of Hedley Byrne & Co. Ltd. v. Heller and Partners.

Previously the quantity surveyor was thought to be liable for negligent miscalculations or omissions only to the person by whom he was employ- ed, if indeed the latter suffered con- sequent injury. In the Hedley Byrne case, however, it was held, reversing a long line of authority, that a person may be liable in tort (i.e. quite inde- pendently of any contract of employ- ment)

for damage resulting from negligent mis-statements of fact.

The liability is owed it seems to any person who is so closely and directly affected by a statement that he ought reasonably to have been in contemplation as being so affected when the statement was made.

This important new principle in the law of tort, and its practical applica- tion to professional and business people of various kinds, has yet to be worked out in detail by the courts, but it may turn out to have important implications, not only for quantity surveyors, but also for architects, engineers and builders and perhaps even for lawyers themselves.

LIABILITY OF ARCHITECT

The architect to-day is becoming painfully aware of his exposed posi- tion, in an age when the use of new materials and techniques brings with it new and unexpected dangers.

The first and most obvious risk is that of liability to his client for improper design or inefficient super- vision causing damage to the client, which may of course include monies which the client is compelled to pay to third parties. But the architect is is also coming to realise that he may indeed be exposed to action by his client, or at least severe criticism, if by his acts or omissions he should expose the owner to claims by the builder which might otherwise have been avoided.

Time was when architect and builder were prepared to live and let live, neither of them looking too closely at the letter of the contract, each endeavouring to ensure a spirit of co-operation with no back-biting. no claims for penalties or liquidated damages, and

no claims by the builder based on supposed negligence or inefficiency on the part of the architect.

Now, as the relationship necessari- ly becomes more impersonal, a different spirit is growing. There is

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perhaps more insistence upon the letter of the law; each side is certain. ly now demanding more of the other. In the end, this will undoubtedly make for greater efficiency all round, but there will be some painful re- adjustments on the way.

The builder finds his opportunity to claim against the owner through the provisions of clauses 1 (e), 2, 18, 21 (g) and 22 (1) (d) of the standard form of lump sum contract. I shall discuss claims under these clauses further in another part of this paper; for the moment, I simply make the builder's point that although the claim is made against the owner, it is obvious that in many or indeed most cases the architect is the person under attack. This could mean that if the builder were successful in such claims, the owner would have a cor- responding right of action against the architect, although this would not follow where the owner himself was to blame for the delay.

There is yet a further way in which an architect may become liable. As we have seen, he may be liable to the client for breach of his contract with the client; secondly, he may be liable to the client in contract for having exposed the client to liability to the builder under the building contract: and now, thirdly, it is coming to be appreciated that he may be liable in tort to third parties who may suffer injury because of his negligence in design or supervision. Latest reports indicate that the Privy Council has refused leave to appeal in the case of Voli v. Inglewood Shire Council in which it was held by the High Court that an architect is liable in such cir- cumstances. Mr. Justice Windeyer put the matter as follows:-

"In this case, however, the prim- ary question does not arise from the duty that an architect has to his employer.

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It is whether the respon- dent architect had a duty to some- one not his employer, a person with whom he had no contract at all, person unknown to him personally whose only relationship with him was that he went into a building de- signed by him and built under his supervision. In the abstract the question, and it is an important question for architects, is: Can an architect be liable for negligence to a person who, after a building is finish- ed and has been taken over by the building owner, lawfully enters it and construction, comes to harm? Whatever might have been thought to be the position before the broad principles of the law of negligence were stated in modern form in

Donoghue v. Stevenson, it is now beyond doubt that. the reasonably foreseeable consequences of careless or unskilful conduct, an architect is liable to anyone whom it could rea- sonably have been expected might be injured as a result of his negligence. To such a person he owes duty of care quite independently of his con- tract of employment."

There seems to be no practicable way for the architect to limit liability for negligence in design; it is ques- tionable how far he may be able to limit his liability for negligence in supervision by giving it another name, a suggestion which I under- stand has been mooted in some quarters.

Current newspaper

rumours

reports, and throughout the industry. confirm that actions are being taken against architects to recover damages pursuant to each of these heads of liability, and the insurance rates quoted for cover against professional negligence are said to be rising.

I would not suggest for one mo- ment that this indicates that the pre- sent generation of architects is less efficient than its predecessors; indeed, I would be sure that the contrary is the case. But perhaps people are now more conscious of their rights, whilst the burden on the architects bears more heavily than ever before, when he is called upon to design and construct not merely in timber, bricks and mortar, and not only in small structures, but in larger and larger dimensions utilising ever changing materials and techniques, each with its hidden risks and dangers.

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Very often the architect will be relying not his own skill and judgment, but on the skill and judg- ment of engineers and other consul- tants, and even that of specialist sub-contractors, for whose acts and omissions he may nonetheless be liable. It is very important therefore that in cases where he does rely on the skill and judgment of others he should ensure at least that they are liable to him or to the owner in con- tract for such damage as he may suf- fer through reliance upon them,

PENALTY OR LIQUIDATED DAMAGES

The distinction between a penalty and liquidated damages is well known. A penalty is a clause in- tended to strike terror into the heart of the person upon whom it is im- posed and bearing so little relation to the damage expected to be suf- fered that the court regards it as void.

THE HONG KONG & FAR EAST BUILDER-VOLUME 19, NUMBER 2