What constitutes a project manager? An appeal from a Weathertight Homes Tribunal decision.
In this month’s article I consider the findings in the High Court decision of Sayles v Adams & Adams. Mr Sayles had been found liable as a project manager in the Weathertight Homes Tribunal and brought an appeal on the basis that the Tribunal’s decision was erroneous in fact and law.
The facts.
These leaky building proceedings related to a property on Waiheke Island. Extensive alterations were carried out between 1995/1996 which were not weathertight. The alterations had been designed by an architect, and the building company from a reputable building franchise had been engaged to complete the works. The building company has now been liquidated and struck off the Companies Register. The director of that company took no steps to defend the proceeding. He was in fact adjudicated bankrupt.
Mr Sayles had been sued in the Tribunal proceedings as the project manager on the basis of the responsibilities/liability that came with that. On the one hand, the home owners’ position (Mr and Mrs Adams) was that he had been at the heart of the construction operation, he was the employee of the head contractor who oversaw the work carried out, participated in performing some of that work and was the on-site co-ordinator. In short he was the project manager.
Alternatively it was argued by Mr Sayles that he was mere labourer, with narrow expertise in masonry that he picked up over the years. His authority over the years was limited to being a postman, directing the bits of information such that they were received by the right people, and when the now bankrupt Company Director (from the building company) was not present, being the spokesperson for the building company. On appeal the position for Mr Sayles had altered. It was asserted that even if he had carried on a co-ordinating role, he did not assume the responsibilities of project manager.
In the Tribunal hearing evidence was given by Mr Sayles, Mr Adams (home owner) and Mr Ramsay (the plasterer).
The substantive criticism by Mr Sayles of the Tribunal decision was that based upon the evidence available to the Tribunal Adjudicator, it ought not to have made a finding that Mr Sayles occupied the role of project manager.
However this critical finding of the Tribunal was upheld by Thomas J for the following reasons:-
- Mr Sayles was clearly heavily involved in pre contractual negotiations;
- Mr Sayles took the home owner to another house which he had built or been involved in the construction of prior to entering into the building contract;
- Mr Sayles gave the assurance of quality prior to the contract being entered into;
- The home owner perceived Mr Sayles to be in charge of the site;
- The plasterer also considered Mr Sayles to be in charge of the site;
- The correspondence to the construction company was often addressed to Mr Sayles along with the company director, and it also referred to Mr Sayles;
- Mr Sayles had been involved in a clear discussion with the home owner about the use of the cladding material, the balustrading, the roofing, walls and windows;
- Mr Sayles was the person who was contacted when the problems became apparent. The architect suggested the homeowner contact him. In the minds of the homeowners, he was the person best placed to explain what might have happened. He volunteered to undertake the remedial work.
For all these reasons, the Court ruled that Mr Sayles occupied the role of Project Manager. The Tribunal finding as against Mr Sayles was upheld, he was found jointly and severally liable with the other liable respondents for the full extent of the claim.
Summary.
This case establishes the key factual ingredients in terms of establishing that a party involved in construction is in fact a project manager. It also demonstrates the risk paid employees/contractors take on when occupying such a critical building role, where their employer is not financially robust. An experienced builder that takes on such a senior role ought to satisfy himself/herself of the financial viability of his/her employer before agreeing to occupy this role.
NOTE: This article is not intended to be legal advice (nor a substitute for legal advice). No responsibility or liability is accepted by Legal Vision to anyone who relies on the information contained in this article.