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Winds of Change – Wellington Conference 2011

Get your next Quasi-Legal fix at conference 2011 - Winds of Change

Venue is the stunning new Holiday Inn.
Event special room rate is $179.00 incl GST.
Check it out [QS Link]

Dates: Wed 15^th through to Friday 17^TH June

Wednesday: NZIQS committees, Registration, cocktails, informal dinner;

Thursday: Day One full conference day;

Friday: Day Two full conference day;

Mark your diary NOW, tell your partner, set the company budget, reserve space in your CPD diary!

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Determining the scope of quantity surveyor's duties
(Recent Case Law - Hot off the Press)

In the case of Dhamija v Sunningdale Joineries Ltd and Ors [2010] EWHC 2396 (TCC), Mr. Justice Coulson held that a quantity surveyor’s contract of retainer would include an implied term (in order to give the contract business efficacy) that the quantity surveyor act with the reasonable skill and care of quantity surveyors of ordinary competence and experience when valuing the works properly executed for the purposes of interim certificates to be issued under a JCT Intermediate Contract, (1998 Edition).  However, the learned Judge held that the quantity surveyor would not owe an implied duty to exclude from his valuations the value of defective works, however manifest and obvious.  This was the exclusive responsibility of the architect appointed under the contract.  Further, the quantity surveyor owed no implied duty to report the existence of defects to the architect however manifest and obvious.

This is an important decision, not least because of the absence of any reported decision on the scope of a quantity surveyor’s duties since the first instance decision of Sutcliffe v Chippendale & Edmondson 40 years ago.

[We have taken our reporting lead above from Pumpcourt.com.]  The case was heard 10 September 2010, decided 12 October 2010 and is now being reviewed and reported in the UK (30 October 2010), see Tony Bingham and Matt Walker 29/30 October 2010, both in build.co.uk where the latter does not agree with former on the rationale of the decision of Justice Coulson.  Discussion here and a copy of the judgement itself can be accessed at Bailii.org which can be downloaded in word format from this site (9 pages).  Essential reading for quantity surveyors.  The question at heart is “what duty of care does a quantity surveyor owe their client with respect of deductions for defective works when preparing an interim valuation?”  McBains Cooper Consulting Limited, the quantity surveyor in the case, clearly outlined the basis of their progress valuations and this served them well come judgement time.  Justice Coulson was critical of the one dissenting text authority Hudson’s Building and Engineering Contracts, Volume 1, (11^th Edition, 1995) which suggests that the quantity surveyor has a positive obligation in relation to defective work.

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In search of the Quantity Surveyor – Canterbury Calling

Canterbury is calling out for quantity surveyors.  This edition has two adverts that are Canterbury focused and our phone is ringing loudly from others who want to advertise.  Members’ attention is drawn to the fact that Canterbury is definitely a region with future work prospects.

Please give your consideration to supporting our advertisers.

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Expert Witness – Tony Dean and Gerard Curry, Conference 2010

Tony and Gerard offer us their unique viewpoints in outlining the requirements of an expert witness.  The session starts with Gerard explaining how you go about preparing to give expert evidence with suitable reference to the codification of the law surrounding this in New Zealand with the enactment of the Evidence Act 2007.  We pick up below where Tony Dean speaks freely of his experience and opinion on the key points of giving expert evidence.  Following this at conference, the audience engages with both speakers for a closing panel discussion.  Both speakers have provided prepared papers and the whole session is available on audio file from national office.

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Tony Dean:  As an expert who has been there a few times, I can tell that I think that it is one of the most frightening things - giving evidence, particularly as an expert.  I don’t say that in an alarmist way.  I have never ever been comfortable before giving evidence, however many times I have been up there.  It doesn’t matter whether it is in arbitration or in the Courts.  I have had an experience that I will never forget.  In the old #1 courtroom with Justice Trevor Henry.  He had obviously had a pretty bad breakfast because he was in a pretty grumpy mood, and he made me feel like $#!^.  Please excuse the language.  I came out of that thing, after about 2 hours, and I felt absolutely terrible.  He had constantly grumbled, and sometimes at me, “is that all you’ve got to say?” or “what do you mean by that!” and the whole thing lasted with me forever.  I learned many lessons in those long two hours.  It is very difficult giving evidence, it is more difficult giving expert evidence.  I will tell you that is especially difficult if the person hearing the evidence gives an indication of disapproval, or disinterest, rather like them saying “Yer right!” or “Is this relevant?

Gerard Curry:  I can assure you it wasn’t his breakfast that day.  His problem was he had a dreadful cook.  And every day was like that.

Tony Dean: I think that we have got many good experts who are qualified to give expert opinions on a range of different subjects.  But we also have some not so good experts, who fuel the belief that experts are simply “hired guns” who say what you pay them to say!  History shows that these sorts of experts dominated the Courts, until, and I think it was towards the end of the last century that we started to get Codes of Conduct.  People started saying “hey, we’ve got have rules. These people are out of hand.”  I am talking about an expert who gives an opinion; is too intransient to consider options, or answer questions objectively; and perhaps doesn’t disclose the totality of their opinion.  In other words, they only expose the bits that suit their client who is calling them.  That’s not on!  If you are going to go there and do that, don’t go!  Stay at home.  There are consequences for not obeying the rules.  The courts can completely disregard your evidence, or they may not give it a lot of “weight”.  They won’t stop you giving evidence, but they may totally ignore it.  Sometimes, if you are a really really bad boy, or girl, you will be mentioned in the judgement as being an unhelpful witness.  If that ever happens to you, go and be an engineer.  Alright?  Give up at that point because that is the kiss of death, for an expert to be criticised by a tribunal.  If it has gone into the judgement, you have gone over the line.

I would like try and put a few pointers out there in that having been an expert, I know it is an extraordinarily difficult job to actually stick to the Code of Conduct.  With the Code, the key point is that your primary task is to help the tribunal or court.  That’s your job!  Forget your client.   Forget who is going to write the cheque out to pay you.  Forget all the, you know, sentiments or feelings you’ve got, you are there to help that judge or arbitrator or jury.  It is extremely difficult to stick to that ideal when you are under the normal pressures that experts are under.  Let’s think it through.  Q. Why are you being called to give evidence? Answer “Because it suits the party who is calling you.”  They would not call you if it wasn’t going to suit them.  That means you are going to be giving evidence that is unsuitable to the other side.  Now it is not surprising to know that the other side might try to challenge this and well “no, we don’t think this is right… let’s have a go at them!”  And then you have a thing called cross examination.  This is the time that the other parties can ask you questions.  Now, cross examination is when garrulous people like me, are really pushed to the limit.  You know, the temptation is to have an argument with the person who is audacious enough to question your opinions!  A good lawyer, and I think I have got one here on my left, knows how to demolish an expert.  Because that is what their task is!  Forget all the nice talk, they want to discredit you and your evidence!  Because, to them, it isn’t suitable evidence. So, some people will shout at you, but I think that is a bit old fashioned.  Trying to put you down doesn’t always work, so they will try more cunning tricks.  They will smile and be nice to you, whilst plotting to stick a knife in your ribs when you are least expecting it.  And the difficulty for the expert is to stick to two or three little criteria.  The first one is tell the truth.  Now that may sound terribly old hat and almost Victorian, but I tell you what, it is the best advice you can ever have.  The truth can never hurt you.  Partial truths or little white lies, that you think are quite excusable are potential dynamite. They are hand grenades and a good lawyer will know when to pull out the pin.  So you tell the truth. The second is that you keep it simple.  The KISS principal.  Experts are normally giving evidence about something that has got a degree of complexity and if you are giving evidence as a quantity surveyor on the quantification of cost increases over a three year contract and your interpretation of how those cost increases should be interpreted, remember that the judge is not a quantity surveyor, remember that the judge is frequently a person who can’t even add up the shopping list in Pak’n’Save.  Sorry about that last comment your honour!

Gerard Curry: Some couldn’t find their way to Pak’n’Save.

Tony Dean: You have to keep it as simple as you can, but that does not mean you have to be patronising.  You have to be sure that what you are saying is clear, is understandable.  Some say “imagine you are talking to your 15 year old daughter”, as they are alleged to have limited patience and attention span.  I wouldn’t even try the 15 year old son because they just wouldn’t listen, but try and think that you are explaining it to somebody who you can relate to, but who does not have a deep understanding of your subject or your lingo.

So tell the truth, keep it simple and keep it as brief as you can.

Yes or No is an extremely good answer to any question.  However, there is one exception to that rule, because we often get asked questions that you can’t answer yes or no.  And there are some cunning advocates who will try and get “well, yes or no?” “What is it. Simple. Yes or no” And knowing that there isn’t a simple thing, like “have you stopped beating your wife yet?” “Yes or no?”

As an expert always start with a yes or a no, even if it needs to be qualified.  But quickly say, “But I would like to expand on that.” “I would like to qualify that.”  Now any judge who is faced with that, despite the fact that Gerard [as an opposing advocate would say] “I’m not interested in your qualifications, next question.”  Any judge will say “well I’d like to hear the qualification.”  So it’s a cunning way, a polite way, of saying well yes or no isn’t really the answer.  So don’t come and say “well I can’t really say yes or no is the answer”, say yes or no, but quickly qualify.  Put the foot in the door.

Lastly, always address the bench.  You are there to help the Court, and you are giving your information to the tribunal, judge or arbitrator.  Personally, I would always address the person who is making the decision.  I want to see if they are wanting further information, further help to understand what I am telling them.

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See website for papers [QS Link] or Contact National office 0800 477 469 if you need help to login.

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QS Snippets

2. Has hardship caused you to consider letting your membership lapse? Contact the executive director in confidence to explore ways in which NZIQS can assist. Otherwise it looks as if a significant number of memberships will be terminated in December being those members who have not responded in any way to their April invoice and several subsequent reminders. If this includes you and you wish to remain a member please contact National Office 0800 469 477;
3. Call for more Mentors. While demand varies in the branches, this is a long term project and all areas are expected to grow. So the Institute needs your help to fulfil the current shortfall in Auckland and in Tauranga so that we can sign an agreement early 2011 with the Bay of Plenty Polytechnic and build a bank of mentors in advance of growth expectations. [QS Link]
4. Do YOU have anything that you would like to say in the Bulletin or which you would like to see mentioned in the Bulletin OR on the website? If so send your contribution to [QS Link]
5. A to M transfers – because united we stand! [Please transfer me to Member]
6. International Blog. We are off to Houston USA for the next three years. Have taken up a promotion/transfer to manage the QS work on a major oil project in the Gulf of Mexico. The Chevron Jack/St Marlo Topsides Deep Water Project. Will be based in Corpus Christi 200 miles from Houston on the coast, not far from the Mexico border. Both looking forward to the challenge and the adventure. Mobilise to site on 1 Dec. The QS team is a yank, an aussie and a kiwi! Have New Orleans (Jazz) and the Monteau Jazz fest (just down the road) on our radar as well. not to mention a cruise or two around the Islands off the Gulf. Ron & Corrine Beazer.
7. Earn CPD Points. Become a NZIQS accredited Student Mentor [email: john@nziqs.co.nz]
8. “Friend Get Friend” NZIQS Fee Rebate Scheme. Become an NZIQS advocate who encourages membership of NZIQS for quantity surveyors. With success comes the NZIQS “friend get friend” bonus. For each new full member you are credited with joining the NZIQS your next annual membership fees will contain a credit of $150.00 + GST.
9. “A QS has been sued for valuing work that was defective”   “Quantity Surveyor in the NEWS” - now on Facebook. [QS Link].

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XD Notices – Graduate Recognition, rewarding the young guns

Extraordinary General Meeting for procedural rules changes.  - Watch out for the e-Notice about proposed Rules changes at an EGM in Auckland 1 December. These relate to changes to the operation of Branch bank accounts progressing with Branch Boards over the past year or so. The Bank accounts will all be additional accounts to the main NZIQS account, still under the control of Branch Boards, with monthly statements etc  but will be audited along with all other NZIQS accounts,. This means we will claim gst refunds for all Branch expenditure and there will no longer be a requirement for Branches to arrange annual audits/reviews of their accounts. Branch monthly statements will also show all NZIQS account balances.

There is so much more to being a QS than passing exams and turning up for work to do the business and collect a pay cheque. NZIQS promotes members ahead of non-members and CPD accredited and Registered QS members before others. MNZIQS category achievement should be recognised as the minimum standard by employers and clients, as the NZIQS assessment panel has assessed the minimum professional work competence of the QS – working in either contractor or consultant roles.

Recording CPD and applying for accreditation under the ICEC internationally recognised programme. ALL qualified members need to be recognised for the effort they make to remain up-to-date with legislation, regulation, construction processes, new products and new tools of work. We have 135 CPD accredited members and 560 Members, Associate and Fellows who are not (yet) CPD accredited. Next year if we have members CPD accredited but not registered, they will be identified in the year book and names will be included on the website for promotion to the public as well as the Reg QS awarded members.

Mentor volunteers – Auckland and Tauranga need mentors for the NZIQS mentoring programme with Unitec and Massey University and for a prospective programme with BOP Polytech at Tauranga. Send an e-mail to a Branch Board member or to XD (Mentor Volunteer)

And so much more…  Voluntary service is the backbone of the institute. Without it NZIQS can not provide the value you deserve. If we can get 90% of the QSs working in New Zealand to be members then your voice will be heard louder and more prominently among the other professions – many of whom are compelled by legislation to be licensed, chartered, registered etc. If you want to contribute contact your Branch Chairmen first; Auckland - Ciaran Corrigan; Wellington – Dan McGuiness, Canterbury – Jim Bucknell, Otago – Mark Burrows or me john@nziqs.co.nz 0800 477 469.

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Cover Pricing

In early 2010 the Commission undertook (limited qualitative) research (12# medium construction firms) to better understand the levels of awareness of competition law in the non-residential construction sector. Cover pricing was mentioned by all respondents.

About Cover Pricing…

When commercial building contractors talk about cover pricing they mean collaborating with another party in order to invent a believable (cover) price, based on the genuine pricing information that one of the parties intends to go to tender with. Higher than the genuine price on which it is based, the cover price is not intended to win the tender, but it is meant to look like a legitimate bid.

Examples and prevalence -

Cover pricing mostly occurs between ‘friendly’ competitors, when one of the parties does not want to win a job, or is too busy to prepare a tender. It may also occur when a project manager or architect asks a contractor to put in a cover price, because they want to prove to their client that a favoured contractor’s price is competitive. Reflecting its prevalence, cover pricing was mentioned by all respondents. While some are very comfortable asking for and giving a cover price, as was evident by the openness with which they talked about this, others are adamant that they do not currently partake in cover pricing, albeit that they may have in the past. Between these two stances are those who may partake in cover pricing but are more reticent to talk about their own involvement (i.e., preferring to talk about what others are doing).

Motivations and inhibitors -

The most powerful motivation to participate in cover pricing is to stay on an architect’s/project manager’s tender list, which is regarded as vital to business survival in the highly competitive current market situation. Importantly, some businesses are adamant that they would continue to cover price even if they were to learn that it is illegal, because the costs of not doing so (i.e., being dropped from a tender list) are greater than any perceived downsides.

Those uncomfortable with cover pricing identify the following inhibitors to asking for/giving a cover price:

1. ethical reasons (i.e., not believing that it is completely honest); and
2. not wanting to break the law.

[Interviews with 12 mid range contractors in Auckland, Wellington and Christchurch were conducted by an independent research firm and complete privacy of the respondents is maintained. See the full report on the research go to [QS Link]

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How to recognise and deter bid rigging

Bid rigging, or collusive tendering, occurs when there is an agreement among some or all of the bidders as to which of them should win a bid.  The Commerce Commission guidelines are intended to be a practical tool to assist procurers (purchasers) to ensure open and effective competition and achieve best value for money by: spotting and reporting potential bid rigging; and designing tender processes that deter bid rigging. Full guideline details see [QS Link]

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Avoid Illegal Agreements

New Zealand businesses may have good reasons to talk with their competitors, for example to discuss industry-wide issues and practices, or to share knowledge and technical information. These discussions are not unlawful in themselves. However, businesses should take care not to engage in anti-competitive behaviour that may breach the Commerce Act. All businesses should familiarise themselves with the relevant provisions of the Commerce Act, and take steps to ensure they are not at risk of breaching the Act. By being familiar with the Act businesses also will be able to recognise anti-competitive behaviour and can take steps to ensure that their business is not harmed by breaches of the Commerce Act by others. Full story see [QS Link]

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Adjudication – Is it working? CPD Event Report

Presentation by: Trina Lincoln, Barrister and Adjudicator with the Building Disputes Tribunal, Thursday 4 November, Auckland Branch CPD event.

Trina Lincoln presented a reminder of the process’s involved in being a participant in adjudication and outlined how industry is using the process.  Trina provided some useful insights into some tactics currently being used by parties to adjudication and some guidance on how to best place yourselves to reduce disputes and to increase your likelihood of being successful at adjudication.

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FULL REPORT ON BOTH THESE SUBJECTS NEXT ISSUE

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Construction Contracts Act 2002 is under review by DBH

The Act is being reviewed in response to feedback received through the Building Act review. The feedback suggested that some people were confused about the types of disputes that can be heard, according to the Minister, although all were supportive of the Act and the process.

If you want to have your say there is a discussion document and questionnaire at  http://www.dbh.govt.nz/consultingon-construction-contracts-act  The consultation closes 16 December.)

NZIQS will also make a submission and will have a representative in DBH review. Let XD know if there if there is a change you would like to promote to CC ACT CHANGE SUPPORTED

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The Australian Standard Code of Tendering (AS 4120-19941)

The Australian Standard Code of Tendering (AS 4120-19941) constitutes a statement of ethics that underpins best-practice tendering procedures and obligates all parties who adopt it to refuse to condone unethical behaviour by others in the industry.

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Tendering Ethics Principles:

1. Tendering at all levels in the construction industry shall be conducted honestly and in a manner that is fair to all parties involved;
2. Parties shall comply with all legislative obligations, including those required by trade practices and consumer affairs legislation;
3. The Principal shall have regard to the costs of tendering and the number of tenderers, recognising that the cost of tendering is a significant industry overhead;
4. Tenderers shall only tender where they intend to carry out the work;
5. The Principal shall call for tenders only after the Principal has arranged funding for the project and has made a firm commitment to proceed with the project;
6. The conditions of tendering shall be the same for each tenderer;
7. Parties shall not engage in practices such as collusion on tenders, inflation of prices to compensate unsuccessful Tenderers, secret commissions or any other such improper arrangements;
8. The Principal and tenderers shall be prepared to attest to their probity, if necessary by statutory declaration and other reasonable means;
9. Tender documents shall specify the Principal’s requirements as clearly and precisely as possible and when documents are altered, sufficient time shall be allowed for all tenderers to review and revise their tenders;
10. The Principal shall specify what information in the tender documents is required to be treated by tenderers as confidential. However, it is acceptable to have public openings of tenders and disclosure of Tender prices;
11. Any party with a conflict of interest shall immediately disclose that conflict of interest.

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Does your practice operate according to a set of Tendering Ethics Principles?

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NZIQS Code of Practice & Professional Conduct Extracts & Cover Pricing

GENERAL

4.       The following Code shall apply to all members individually and collectively.  A member may be liable for any breach of this Code by their partners, fellow directors, employees or others acting on their behalf, if the breach was committed with that member’s concurrence or prior knowledge.

5.       A member shall at all times;

a.       be honest in actions and manner
b.       carry out their work with the high standards to be expected of a professional and always act with integrity
c.       treat others fairly, tolerantly and with respect
d.       set a good example and uphold and improve the dignity, standing and reputation of themselves, the quantity surveying profession and the Institute
e.       comply with any extant standard, policy or order published by the Institute.

6.       No member shall, either directly or indirectly, take any action to injure maliciously, falsely or unjustly the professional or personal reputation of another member, other quantity surveyor or allied professional person but shall have the moral obligation to expose illegal or unethical conduct of any such person to the proper authorities.

CONFLICT OF INTEREST

10.     No member shall:

(a)     hold, assume or consciously accept a position in which their interest would be in conflict with their professional duties;
(b)     act, whether for remuneration or other consideration, for more than one party in respect of any particular work without the specific consent of all the parties concerned;
(c)     act in conflicting positions on the same works;
(d)     price any part of a Schedule of Quantities prepared in their office or at place of employment except on behalf of the client commissioning the original work, unless by client’s consent;
(e)     undertake the pricing of any Schedule of Quantities prepared by another firm for the same works, for more than one client.

11.     Members shall not have any significant financial interest, undisclosed to their client, in any organisation with which they may have occasion to deal on behalf of their client.

12.     A member shall disclose to an employer and/or client any conflict or potential conflict of interest.

FIRMS

14.     Members who carry on their practices as a shareholder or director of a limited liability company shall ensure that the company does not engage in any activity or be guilty of any conduct contrary to this Code, which, if done by the member, would have been contrary to this Code or inconsistent with their responsibility as a Quantity Surveyor.

FALSE STATEMENTS

15.     No member shall knowingly prepare or certify any statement which is false, incorrect, misleading or open to misconstruction by reason of misstatement, omission or suppression of a material fact or otherwise.

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COVER PRICING

It appears Cover Pricing has become part of our industry (refer Commerce Commission). And some members consider it to be acceptable in certain circumstances. But cover pricing is contrary to NZIQS Code Of Practice and Professional Conduct, General Rule 5 (a) to (c), Conflict of Interest rule 10 (b) and False Statements rule 15. Members with knowledge of certain matters are required to report these under the NZIQS Code of Practice and Professional Conduct rules 6 or 12.

Cover pricing is a practice of the weak. The strong will withdraw from tendering and be respected by clients (representatives) for their honesty. That’s right, honesty. If you demonstrate the courage to be honest, you will be trusted when reliance on your word is vital for your business dealings.

It is our Code of Practice & Professional Conduct
that differentiates Members from Non-Members!

Members are strongly encouraged to;

1. discuss Tendering Ethics within their business;
2. develop a tendering ethics policy;
3. communicate that policy to their clients and industry colleagues;
4. Act in accordance with that policy.
5. Raise the tendering ethics bar by challenging consultants, colleagues and competitors to prove their equal commitment to a high standard of tendering ethics.

You have to have a bar, before you can raise it!

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Professional Indemnity for QS’s

Land Professionals Mutual Society Incorporated (LPMS) is a voluntary risk management organisation that represents the interests of surveyors and valuers and kindred professions with its principal objectives being;

1. Guidance to members on the ways and means of avoiding or minimizing liability claims;
2. Providing members with supportive claims assistance and administration including quality technical, legal and insurance assistance;
3. Offering members access to especially tailored group professional indemnity and other liability insurance facilities on a voluntary basis.

LPMS has arranged group professional liability insurances for Member Firms since August 1976. Originally membership was restricted to consulting and land surveying practices but was expanded in 1983 to include valuers in public practice. In 1985 membership was extended to kindred professions involving professional practices who provide consulting services in quantity surveying (including QS’s who practice as project managers), clerk of works, farm management, forestry, planning and property.

Insurance Consultant & Broker : Insurance and Claims Administration

Aon New Zealand Limited, Professional Risks, Doug Morton P 04 819 4086

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DISCLAIMER: The views expressed in this publication do not necessarily reflect the views of NZIQS Council, Institute policy or advertisers and sponsors of the Institute. The content of this publication is not to be construed as legal advice.

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This Electronic Message is from NZIQS. T 0800 469 477
To unsubscribe email “unsubscribe” to office@nziqs.co.nz

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