Defective certifications: discharging your professional engineering obligations as certifier

A Queensland case study

The decision in Actron Investments Queensland Pty Limited v DEQ Consulting Pty Ltd[1] serves as a stark reminder to engineers of the importance of discharging your professional obligations as certifier and the serious implications of failing to do so.

By issuing a single defective certificate, you could be struck off the list of professional engineers and expose yourself to personal liability for any loss suffered in respect of the certified work (including, for example, defect rectification costs).

Actron Investments Queensland Pty Limited (Actron) engaged DEQ Consulting Pty Ltd (DEQ) to:

1. prepare preliminary design drawings for an industrial warehouse, which included the design of a floating concrete slab; and
2. certify parts of the works during construction, including the floating concrete slab.

Following construction of the warehouse, Michael Henry, a Director of DEQ and an RPEQ, issued:

1. a ‘Form 15 Compliance Certificate – Design’, which certified the items in the Form, including the floating slab, "[would] comply with the Standard Building Regulation"; and
2. a ‘Form 16 Compliance Certificate – Construction’, which certified specific parts of the works, including the floating slab, had been constructed in accordance with the DA, DEQ's design and the Standard Building Regulation.

The Standard Building Regulation required compliance with the Australian Building Code which in turn required compliance with 'AS 3600 - Concrete Structures' (AS3600). Clause 16.2.1 of AS3600 required foundations to be “investigated and suitably modified, where necessary, to ensure that the sustained and any intermittent service loads, can be resisted by the slab without undue differential or uniform settlement”.

The floating concrete slab subsequently began to subside due to marine clays in the subsurface shrinking and swelling, which led to the slab being unable to withstand certain loads (including forklifts being used by Actron which was the intended purpose of the slab).

Actron sought to recover rectification costs exceeding $1 million on the basis that Mr Henry’s issuance of the Form 15 amounted to misleading and deceptive conduct by Mr Henry and DEQ because the settlement of the slab was “undue” under AS3600.

Mr Henry argued he had discharged his professional duties by providing advice to Actron on alternative foundation designs including the pros and cons of each, with Actron making the final decision on which design to adopt based on that advice.

The Court of Appeal held:

1. The settlement of the slab was "undue" because the building could no longer function as an industrial warehouse under expected loads during its design life.
2. Despite Mr Henry advising on alternative design options and the pros and cons of each, it was for Mr Henry in his capacity as a professional engineer to exercise his professional skill and judgement in deciding on the final design to be adopted. Therefore, Mr Henry should not have delegated decision-making of that nature to a client and had failed to discharge his professional duties.
3. The issuance of the Form 15 amounted to misleading and deceptive conduct. Mr Henry was held liable in his personal capacity for a portion of the rectification costs, with DEQ liable to front the remainder.

Takeaway

In carrying out professional duties when certifying construction work, professional engineers should be mindful of the relevant statutory regime and contract in respect of which their certificate(s) are issued (including the specific requirements of any Australian Standards incorporated by reference).

We have prepared the below checklist setting out some of the reasonable steps you can take to minimise your exposure to risk when carrying out your role as certifier.

Mitigating risk in certifying construction work?

1. Complete all on-site inspections yourself or ensure the person to which you have delegated those inspections is competent and appropriately qualified to complete them.
2. Specify with adequate particularity the aspects of the design that are the subject of your certification.
3. Consider the standards and/or codes that may be incorporated into your certification by reference, and take steps to ensure the subject work complies with those regulations and Australian Standards.
4. Clearly display and identify your RPEQ credentials and engineering qualifications on the certificate.
5. Specify any and all limitations or qualifications to the certification (including the underlying data on which your certification is based).
6. Ensure you or the relevant supervising engineer have had sufficient involvement with, and properly supervised any work completed by, junior engineers, and that the work is within your expertise or the expertise of the relevant supervisor.
7. Ensure your indemnity insurance covers defective certifications.

[1] [2018] QCA 147.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals by email: [email protected] or [email protected]