In search of the Gold Standard

“Maison d’Or” was a luxury home being built for a multi-millionaire in Jersey. It was never quite finished, was never occupied, and was eventually demolished, the owner asserting that it was so badly designed and built, that its faults could not be remedied without starting again. He mounted an action against the contractor, architect, engineers (both structural and services), quantity surveyor and project manager in the Technology and Construction Court in London. The mammoth 200 page judgment of His Honour Judge Coulson QC is informative on a number of important issues. Frank Hall discusses the matter of construction quality which was a key ingredient in the case and a lesson for all professional consultants.

The case of McGlinn –v- Waltham Contractors Ltd and Others [2007] EWHC 149 (TCC) is extraordinary in a number of respects. At the very beginning of the judgment, it is recorded that the Claimant, Mr Ian McGlinn, the former co-owner of The Body Shop and therefore a very, very rich man, was able to take legal and financial risks that would never have been contemplated by employers of more modest means. Nevertheless, said the judge, he was “just as entitled as any other employer to a proper and professional service from those that he engaged – at considerable cost- to design and build Maison d’Or”.

By chance, the judgment is particularly relevant for consultants because the contractor, who would otherwise no doubt have been top of the dramatis personae, was in administration and therefore played no part in the proceedings. Accordingly, Mr McGlinn was obliged to turn his guns on the architect, engineer, quantity surveyor and M&E engineer and concentrate on the matters of design, specification, contract management and site inspection for which he had engaged them.

The evidence

One of the major difficulties that the judge said he had experienced in deciding the case was the lack of contemporaneous written evidence from all parties. Mr McGlinn kept no records himself and therefore was obliged to rely upon his (sometimes poor) recollections of important events during the design and construction of the house, including assertions concerning design features and the quality and standards that he required. However, more seriously, there was a complete absence of minutes, notes or notebooks kept by the architect in respect of such matters as the site inspection visits, which not surprisingly, the judge considered to be “of particular concern”.

Another difficulty expressed by the judge was the poor quality of the technical evidence concerning the long list of defects alleged by the Claimant. This was largely the result of the demolition of the house prior to the issue of proceedings. However, the judge rejected the architect’s claim that the demolition had been premature and that there had been insufficient opportunity to inspect. There were in fact an “almost bewildering array” of photographs and a number of video recordings presented to the court. Unfortunately the photographs were largely uncollated and some were of poor quality. The videos were sometimes subject to irreconcilable interpretations by the experts and the judge therefore considered them of less help than ought to have been the case.

The progress of the works

Having been appointed by Mr McGlinn on recommendation, the architect, the Hugh Thomas Partnership, produced initial designs in 1997 and then a planning application for the house in early 1998.

The necessary approvals having been obtained, Waltham were appointed as contractor after a competitive tender exercise. Work on site commenced in February 1999 and continued for 24 months until January 2002, when the contractor left the site, without Practical Completion having been certified. The construction process had been fraught with difficulty and disagreement, not least because of the active involvement of Mr McGlinn. He accepted at trial that if, during his (irregular) visits to the site, he saw some feature that he disliked, he ordered its removal, whether or not it complied with the design information provided. He admitted that his wealth had allowed him to indulge his likes and dislikes. (It was later to be agreed by the experts in the Hearing, that this was a substantial cause of delay and disruption to the works.)

Relationships deteriorated and by the end of 2001, problems with payments to the contractor also occurred and an all too familiar chain of events ensued. An interim certificate was not honoured, a purported default notice was issued, the contractor suspended work, and Mr McGlinn accepted what he considered to be the contractor’s wrongful repudiation of the contract. The contractor then offered to return and complete the outstanding work, which offer was refused. Thereafter, as the judge put it, “the house then stood empty, unheated, unventilated and rather neglected, for the next three years”.

The investigations

However, that period of neglect eventually came to an end, to be replaced by a remarkable phase during which the building was subjected to a most meticulous dissection and forensic examination. In March 2002 Mr McGlinn appointed another firm of architects (who were already engaged on another house for him on the Dorset coast), to record the defects at the Maison d’Or and draw up proposals for their rectification. It would however appear that this task was not left entirely to the new architects, but was “augmented” by Mr McGlinn’s personal assistant and Mr McGlinn himself.

During this process, the records indicate that in addition to the more readily definable building defects, there was an impetus to identify work that was contended to fall below the required high standard or quality of finish to which Mr McGlinn claimed to be entitled. As a result of this process, the new architects produced an extensive defects schedule, which was the basis of the Scott Schedule eventually to be used at trial. Most of the items were identified as matters of bad workmanship on the part of the contractor, and most of those were internal and largely matters of finish.

It was however later noted during the hearing that a number of important items that were eventually included in the Scott Schedule, were not on this original list, despite the fact that most would have required no opening-up, to be identified. There was a suggestion that the bar of acceptability was being raised after the event, for the purposes of the legal action. Further versions of the defects list were produced. However, a final step-change in the investigative process took place in early 2003 when Mr McGlinn and his team, (by now augmented by yet another architect, who was to become an expert witness in the litigation), set about the task of identifying and specifying the remedial works said to be required. It was to be alleged at the hearing that it was at this point that the notion of claiming for demolition and re-building, rather than repair, was first mooted and that subsequent information gathering and report writing was carried out with this objective in mind.

The final phase of the investigative process comprised extensive opening-up, including the stripping of the entire roof, involving the removal of some 10,000 slates on 19 different roof slopes. It was to be alleged at the trial that this extensive and vastly expensive operation was carried out not merely to identify defects of which there were already signs, but also to try to find defects in areas where “there had been no problems and no signs of damage”. It was also alleged that the so-called opening-up had been carried out in such a careless and “vigorous” manner that there could in fact have been no real contemplation that repair rather than demolition could possibly follow.

Finally, in August 2004, the decision was made to demolish the building. In the judgment, it is stated that the precise circumstances in which the decision was taken were “shrouded in mystery”, although there was no doubt that it was made by Mr McGlinn alone. According to the judgment, the building was demolished to ground slab level between February and April 2005 and as yet, there are apparently no formal proposals for its replacement. In fact, it was not completely demolished. Part of the street façade remains, including an impressive garage entrance with a pair of once magnificent doors, as a bleak monument to the fiasco!

The required standards of quality

One of the key allegations running through the Scott Schedule of defects was that the workmanship, particularly of finishes, was not of the required standard. The Court was therefore obliged to ascertain the terms in which the building contract defined the contractor’s obligations in respect of workmanship quality and (because of the contractor’s demise) the consultants’ duty to identify, condemn and withhold payment for work not up to that standard.

One of Mr McGlinn’s first lines of attack was that he had insisted from the outset that he required the highest possible specification and standards of finish. It was however argued by the Defendants that this was irreconcilable with his instructions to the quantity surveyor to make reductions of over £½m to Waltham’s original £2.2m tender. Savings of this magnitude were purportedly made to the scope of the work, at least at the outset!

Another intriguing complication in the story was a line of evidence pursued by Mr McGlinn to demonstrate the quality of work to which he claimed to be entitled. It related to his yacht, the “Tigre d’Or”. In the late summer of 1997 Mr McGlinn had invited the architect Mr Thomas and his wife to the boat, moored at the time in the Mediterranean. Mr McGlinn asserted in the hearing that the main purpose of this invitation was to make it clear to the architect that he required the same standard of finish at the Jersey house as the quality that was to be seen on the yacht. At trial, this definition came to be referred-to as “the boat standard”. This was interpreted by the judge to indicate that Mr McGlinn sought “something like a perfect standard for all the joinery and other interior finishes”. There was some discussion at the hearing as to what might distinguish such a standard from the quality of work to a building. It was suggested that conditions in a boatyard were more conducive to high quality workmanship than those on a building site.

In order to decide upon these matters, the judge quite naturally took as his starting point the relevant express terms of the contract. The building contract was JCT 98 in which unamended clause 2.1 set out the obligations of the contractor. These terms are well known and oblige the contractor to use materials and workmanship of the quality and standards specified in the contract documents or where stated, to the reasonable satisfaction of the architect. There was also a general reference in the Bills to BS 8000 (the “workmanship” series of British Standards) although there were no specific references to the relevant separate parts in which this standard is issued. Finally there was an attempted “back-stop” stipulation where materials, products or workmanship were not fully specified. This required such elements to comply with good building practice and to be “of a standard appropriate to the Works and suitable for the purposes stated in or reasonably to be inferred from the project documents”.

The judge decided that these requirements, (appearing in the preambles of the Bills of Approximate Quantities), were couched in general terms and did not always clearly define the high standards that Mr McGlinn required. It would however normally be the case that as part of an architect’s duties, a much more detailed job-related specification would be produced to accompany the drawings and schedules of the worked-up design. In the present case, no such specification was produced, a shortcoming that the judge described as a major failing on the part of the architect. He concluded that such a situation emphasized even more than usual, the importance of the architect’s periodic inspections. As he put it, “if they had provided such a document, it would have made clear the very high standards of workmanship expected of the contractor in a way that the Approximate Bills do not fully make clear”. The absence of a specification prevented the architect from conveying to the contractor at the outset, the high standard that was required. Thereafter of course the damage had been done, since any further definition by way of instructions on site would have been vulnerable to a claim for a variation to the contract requirements.

It was held that whilst Mr McGlinn may have expected a very high standard – the so-called “boat standard”, he could not expect perfection. Furthermore, the judge was not convinced that, despite the jolly to the Med, Mr McGlinn had communicated those expectations properly to the consultants in the first place. In such circumstances, it was clear that there was a significant mis-match between the standards which Mr McGlinn expected, those which the contract documents encapsulated and those which the consultants’ inspection procedures were able to police.

Conclusions

What seems to be clear from all this is that if the gold standard, (or in this case the boat standard) is what clients require in terms of quality, the first step is to understand absolutely what that term actually means to them, and thereafter to put in place a contractual and procedural framework that is capable of delivering that standard. It was suggested in the hearing that conditions in a boatyard are more favourable for high quality work. This may or may not be quite the point. In fact conditions in a boatyard can be cramped, less well regulated and more uncomfortable environmentally. What you do get with boatbuilding however is a long and honourable tradition, appointment more often than not on the basis of reputation and experience rather than competitive tender, self-assessment motivated by pride in the job and recognition that the highest quality takes time and is likely to come at a premium in terms of cost per square metre, if that’s the way you need to look at it.

That said, there is no intrinsic reason why the machinery of building construction should place a straightjacket on high standards. In many cases it is perfectly possible to specify quality. Numerical performance criteria can be set, provided they can be measured (before and after the event). Reference can be made to standards and codes, provided everyone knows or checks what they actually say. Conformity with samples may also be an appropriate tool, provided the comparison process is defined and agreed. Nevertheless, in circumstances where enhanced norms of quality are likely to be required, consultants would be well advised to look hard and long at all aspects of the procurement process to ensure that it is capable of delivering the goods.

Frank Hall is an architect, expert witness and Regional Director at the Bristol Office of Knowles, a Hill International Company.

frank.hall@jrknowles.com
Tel: 0117 773 8554