BUILDING STEEL

Evening Post, Volume CXII, Issue 60, 8 September 1931, Page 10

BUILDING STEEL

DISPUTE OVER PRICE

CLAIM BY AN ARCHITECT

AN ENGINEER'S FEE

The method adopted in supplying the reinforcing steel for the New Zealand Trawling and Fish Supply Company's cool store in Cable street in 1927 was described in the Supreme Court yesterday afternoon by the defendant, Samuel Taylor Silver, structural engineer, of Wellington, in the caise in which £778 damages was claimed from him by the architect of the building, Alexander Stewart Mitchell. The claim was based principally on an allegation of misrepresentation as to the cost of the steel, the plaintiff claiming that the steel, which cost £1164, could have been purchased for £652. The case was concluded this morning, decision being reserved. Mr. Justice Blair presided. Mr. E. Parry appeared for the plaintiff, and Mr. D. R. Hoggard, with Mr. T. K. S. Sidey, for the defendant. Continuing his evidence, defendant said that on 10th June, 1027, when he advised Mitchel to allow £7000 for the building frame, Mitchell gave witness instructions to go ahead and prepare the details and tender for the st«el that would be required. He discussed the basis of his remuneration with Mitchell. Witness did not ask Mitchell for a definite fee, because it was common knowledge that Mitchell was not financial at that time. He arranged with Mitchell to supply the indented steel witness had as far as it would go, and then use plain steel for the balance; that he would make the plans, submit incomplete details, estimate the quantity of steel required, submit a tender for the reinforcing steel, and fix a lump sum price. The price submitted for the steel was £1164, less 2% per cent, discount. In the first place, he estimated that 62 tons of steel would be needed, but when details were made and more accurate estimates were possible it was found that 50 to 51 tons was nearer the mark. As far as he was able to recollect, for profit and his services as an engineer be added £200, which would be 1% per cent, on a contract price for the building of from £12,000 to £14,000. Witness said he had to fix that amount before he knew what the tender was. He preferred the straight-out fee rather than the lump-sum method. When he fixed the price for the steel at £1164, it was_ based on the stock prices. After the building was completed, complaints were made by the Trawling Company, and witness urged Mitchell to accompany him to see Mr. Allwood, of the Trawling Company, but Mitchell would not go. Subsequently witness wrote to the Institute of Architects and to Mitchell, enclosing a copy of the letter he had sent to the Institute of Architects. TENDER FOR STEEL. Questioned by Mr. Parry as to 'why the steel was tendered for in the name of •John Duthie and Co. instead of in his own name, witness said that although originally he invoiced up most of the indented steel, the practice developed for Duthie's to do the whole of the invoicing. To his Honour, witness said be paid Duthie's commission for importing the steel, and also handling and storage charges. Mr. Parry: "Can you suggest any reason why Duthie's in invoicing the steel to the Fletcher Construction Co. should make no statement of the tonnage?"—"l ' instructed them not to put it in. There was no necessity to put it in. because it was a lump sum price." "So you say that the weight was of no importance?"—"lt wasn't necessary. They could work it out if they wanted to. We weren't trying to hide it." ■ Mr. Parry asked witness whether, if his interests as a salesman of steel conflicted with his duty towards his client, an architect, would he try to sell his indented steel at his price or advise the client that he could get it cheaper elsewhere. Witness said he might do both. It was difficult to say. "Do you realise that you cannot properly perform your duties as a consulting engineer while selling steel?"—"l do. It is the very last thing I want to do." AT A LOWER PRICE. "Do you agree that the steel could have been purchased nt a sum considerably less than £1164?"—" lam aware of that now, due to the fact that there was no wastage on the job." Closely questioned on the point by Mr. Parry, witness admitted that it was not stated in so many words in his letter to the Institute of Architects that he was really the vendor of the steel and not Duthie's. "I suggest that Mr. Mitchell didn't know you were selling the steel: he thought you were merely arranging for the steel?"—"l can't say what Mr. Mitchell thought." Witness said his '■'merchant's" profit would be roughly over £100, due to the indenting of the steel. Mr. Parry asked whether he agreed that the steel could have been supplied for £686. Witness: "I haven't gone into those figures carefully, and I can't say." "Somewhere round about that figure, then, if you hadn't been using partly indented bars?"—"l think.it would be higher than that." "Not much higher?"—" Somewhere about £700, anyway.'"1 Answering further questions, witness said he had no recollection of Mr. Fletcher asking if he could tender for the supply of the steel. In any event witness would not have agreed. The Court adjourned until this morning. DUTHIE'S PART. When tho hearing was resumed this morning, Francis Beresford Young, warehouso manager for John Duthio and Co., said he remembered a quantity of bars on account of Silver being delivered to the Fletcher Construction Co. iv connection with the erection of tho Trawling Company's building. Some were indented bars held on account of Silver, some were bought in, and others were from Duthie's own stocks. Witness quoted prices, and said that Silver, who was put ou a special footing, received concessions on the ruling market prices. He was well aware of the "lump sum" practice, and Silver was not the only engineer who had used the system". Replying to Mr. Parry, witness said he was unaware that the steel could have been bought for considerably less than £16 a ton. He suggested that no other firm than John Duthie and Co. at that time could have supplied the full order. No further evidence was called. Addressing the Court on points of law, Mr. Hoggard, among a number of submissions, contended there was no evidence that could possibly justify a finding of fraud. Counsel claimed that Mitchell's loss was due entirely to Mitchell making an unauthorised arrangement with Silver without obtaining the confirmation of his employers. It was contended by Mr. Parry that one outstanding feature was that, however wrong Mitchell's part iv the transaction might have been, it could not be gainsaid that Silver was responsible for doing wrong to Mitchell. It appeared clear that Silver put his interests as a steel merchant first. His Honour said he would take time f.o consider his decision. Mr. W. Perry, solicitor, writes: "In connection with a case just concluded in the Supreme Court in which Mr. A. S. Mitchell, of Wellington, architect, was plaintiff and Mr. S. T. Silver, engineer, of Wellington, defendant, certain people have confused the name of the plaintiff in this action with Mr. C. H. Mitchell, of the firm of Atkins and. Mitchell, architects, of Wellington. There is no connection between tho two.''