ARCHITECT HAS NO DUTY OF CARE TO THE CONTRACTOR – THE MALAYSIAN APPROACH

​ARCHITECT HAS NO DUTY OF CARE TO THE CONTRACTOR – THE MALAYSIAN APPROACH

When parties to a dispute, received its decision, be it arbitration or adjudication, the losing party may be disgruntled and look for every avenue to recoup its losses; one possible mean is to find fault with the consultant, mainly the architect; for negligence as an impartial-certifier. The case whether a Main-Contractor can sue the Architect for being negligent is addressed by the Appeal Court, in PCP Construction Sdn Bhd (“PCP”) v L3 Architects Sdn Bhd (“L3”)[1] where the judgement of the HC was unanimously upheld, dismissing PCP’s claim.
 
Against the context that L3 has no-contractual relationship with PCP, the ‘classical-textbook’ test in tort for negligence is taken, i.e. whether L3 has a duty of care towards PCP; whether the L3 has breached the said duty of care; and whether the breach by L3 has caused the PCP to suffer losses. For such, the Session-Court held that there was indeed a duty of care vested on L3; and an appeal was follow through in the HC; on two grounds, one, there is no duty of care vested on L3 and two, there is no actual-loss incurred.
 
The English position was clearly dealt with in Sutcliffe v Thackrah[2], that the Architect enjoys no-immunity.[3] In Arenson v. Casson Beckman Rutley[4], it was held that “there was no reason of public policy to treat the respondent valuers’ task […] to the general rule of liability for negligence whereby immunity is granted to judges and arbitrators.”  
 
In Pacific Associates v Baxter[5], it was held in contrast to Arenson; where courts should be slow to superimpose an added duty of care upon a party when the relevant rights came under a contractual framework that provided for the same; persuasively abided by Malaysia’s court[6]; that scrutinises the meaning of ‘proximity’, based on the facts and circumstances of each case, “as such, the concepts of voluntary assumption of responsibility and reliance are seen as important factors to be established for purposes of fulfilling the proximity requirement […]might lead to an indeterminate liability being imposed on a particular class of defendants, thus leading to policy issues.” [7]
 
HC in PCP v L3, took the view that Thackrah and Pacific were of different contexts, i.e. architect sued by the employer, and should not be persuaded to follow; and held that L3 are not liable for claims for ‘pure economic loss’ in negligence when PAM-Contract has defined rights and liabilities of each party; and notwithstanding the findings of Saga Fire Engineering v Lee Yee Seng[8], where the consultants owed a duty of care to the contractor and were liable for the losses suffered; the Appeal-Court decided to agree with HC’s judgment.
 
Arising from this judgement, it appears that when it is said that the PAM-Contract has defined rights and liabilities of each party, especially with regard to the Architect as impartial certifier and an agent to the employer, wouldn’t that automatically implied that the Architect has a duty of care in tort to the Contractor? Nope? Then, this is good-news, as Architect can thus, do what they wish!
 
Merry Christmas and a Happy New Year!  

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[1] L3 Architects Sdn Bhd v PCP Construction Sdn Bhd [2019] 1 LNS 1321  
[2] [1974]AC727
[3] http://www.davidyek.com/adr/is-there-such-immunity-as-a-certifier-for-the-architect
[4] [1977]AC405 
[5] [1989] 2 All ER 159 
[6] Credit Guarantee Corp Malaysia Bhd v SSN Medical Products Sdn Bhd [2017] 2 MLJ 629; Bodibasixs Manufacturing Sdn Bhd v Entogenex Industries Sdn Bhd [2018] 9 MLJ 417  
[7] Lok Kok Beng v Loh Chiak Eong [2015] 7 CLJ 1008 
[8] Shah Alam High Court Civil Suit No. BA-22C-10-02/2017