Dascalu v NSW Architects Registration Board
[2012] NSWADT 213
•19 October 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Dascalu v NSW Architects Registration Board [2012] NSWADT 213 Hearing dates: 12 October 2012 Decision date: 19 October 2012 Jurisdiction: General Division Before: Magistrate N Hennessy, Deputy President
P O'Carrigan, Non-Judicial Member
P Watts, Non-Judicial MemberDecision: 1. The disciplinary finding of the NSW Architects Registration Board that Mr Dascalu is guilty of unsatisfactory professional conduct is affirmed.
2. The action taken by the NSW Architects Registration Board to caution Mr Dascalu is affirmed.
3. The application by the NSW Architects Registration Board for costs is refused.
Catchwords: PROFESSIONAL DISCIPLINE - whether the word "should" in Architects Code of Conduct is mandatory - whether a caution is justified where there is non-compliance with a provision of the Code of Conduct relating to entering into a written agreement with a client - Costs Legislation Cited: Architects Act 2003
Architects Regulation 2012
Interpretation Act 1987
Administrative Decisions Tribunal Act 1997Cases Cited: AT v Commissioner of Police (NSW) [2010] NSWCA 131
BHP Billiton Ltd v Parker [2012] SASCFC 73
Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450
Hirst v New South Wales Architects Registration Board [2008] NSWADT 12
South Australian Housing Trust v Development Assessment Commission (1994) 63 SASR 35Category: Principal judgment Parties: Sorin Dascalu (Applicant)
NSW Architects Registration Board (Respondent)Representation: Counsel
TD Anderson (Applicant)
P Griffin (Respondent)
Denes Ebner Solicitors (Applicant)
File Number(s): 123195
REASONS FOR DECISION
Introduction
The NSW Architects Registration Board found Mr Dascalu guilty of unsatisfactory professional conduct because, contrary to the Code of Conduct, there was no written agreement in place with a client concerning the provision of architectural services. The Board cautioned Mr Dascalu. He has applied to the Tribunal for a review of the finding of unsatisfactory professional conduct and of the decision to caution him. He says that the Code of Conduct states that architects 'should' enter into a written agreement with their clients but it is not mandatory to do so. He also says that even if a finding of unsatisfactory professional conduct is the correct finding, the Board should have exercised its discretion to take no action against him.
We do not agree with either of those submissions. The Code of Conduct states that:
An architect should enter into a written agreement with the client concerning the provision of an architectural service. (Emphasis added.)
Mr Dascalu admits that he did not have a written agreement with one of his clients. Unsatisfactory professional conduct is defined in the Architects Act 2003 to mean "a failure by an architect to comply with a provision" of the Code of Conduct. Mr Dascalu has failed to comply with the provision of the Code that he should enter into a written agreement with his client. Regardless of whether should means "must" or "may", he is guilty of unsatisfactory professional conduct.
Mr Dascalu's alternative submission was that, even if the finding of unsatisfactory professional conduct was the correct decision, the Board should not have taken any action against him. We agree that the Board had the option of taking no action in those circumstances. Nevertheless, a caution is justified as a reminder to Mr Dascalu, and to the profession as a whole, that even when dealing with friends or acquaintances, it is crucial to enter into a written agreement to minimise the risk of misunderstanding and disagreement.
Background
The parties filed a statement of agreed facts.
On 26 August 2011, a couple who had known Mr Dascalu and his wife socially for several years, complained to the Board about Mr Dascalu's fees and the lack of a signed agreement as to architectural services. The complaint was made after a meeting on 25 May 2011 when Mr Dascalu presented his clients with the latest version of plans to renovate and extend an existing home. At that meeting, Mr Dascalu gave his clients an invoice for $13,500 plus GST for design services and preparation of the Development Application. The client signed the Development Application but, by email to Mr Dascalu the same day, asked that the Development Application not be lodged. Mr Dascalu responded by saying that the fees would have to be paid whether the Development Application was lodged or not.
Mr Dascalu says that he did not consider a formal agreement in relation to services and fees to be necessary as initially his involvement was only to provide an opinion in relation to the suitability of the design of a project home. Fees would be charged only after the plans had been finalised and accepted and he had started to prepare computer-generated drawings and other documents required for lodgement of a Development Application. He says that his clients accepted that arrangement.
According to Mr Dascalu, he explained to his clients on a number of occasions that his fees were calculated on the basis of 10% of the value of the project. The first third of that amount would be for the costs incurred up to the lodgement of the Development Application. Mr Dascalu provided his clients with a verbal estimate that the fees for the first stage would be approximately $10,000. He also produced a handwritten note left in his client's possession which set out how his fees were to be calculated. He said that the reason for not putting the agreement in writing was partly due to his clients' uncertainty about the scope of works and partly to avoid offending them because they were family friends.
Issues
There are two issues in dispute:
(1) whether the Board made the "correct and preferable" decision by finding that Mr Dascalu was guilty of unsatisfactory professional conduct;
(2) if so, whether the Board's decision to caution Mr Dascalu was the "correct and preferable" decision: Administrative Decisions Tribunal Act 1997, s 63.
Finding of unsatisfactory professional conduct
The only basis on which Mr Dascalu submitted that the finding of unsatisfactory professional conduct was not correct was that the Board interpreted s 7 of the Code of Conduct as being mandatory, when it is not.
The regulations to the Architects Act "may establish a code of professional conduct setting out guidelines that should be observed by architects in their professional practice": Architects Act, s 7(1). Schedule 2 to the Architects Regulation 2012 is the NSW Architects Code of Professional Conduct. Section 7 of the Code provides that:
Client agreements
(1) An architect should enter into a written agreement with the client concerning the provision of an architectural service.
(2) The architect should ensure that the written agreement:
(a) specifies the scope and nature of, and requirements for, the
service to be provided, and
(b) specifies the cost of the service to be provided and the
arrangement for payment (including, where possible,
estimates of disbursements and arrangements for their
payment), and
(c) specifies the method of reporting to the client on the provision
and progress of the service to be provided, and
(d) states the registration number of the architect responsible for
the service to be provided, and
(e) makes provision for arrangements for:
(i) obtaining the client's authorisation to proceed with the
service described in the agreement, and
(ii) obtaining the client's authorisation to change or amend
the service described in the agreement and fees arising
from such a change or amendment, and
(iii) the application of any pre-existing agreement to the
provision of other services for the client, and
(f) makes provision for the termination of the service by either
party, and
(g) makes provision for the withdrawal by the architect from the
provision of the service in the circumstances referred to in
clause 4 (3) of this Code, and
(h) makes provision for contacting the architect at the place of
business of the architect within normal business hours.
Architects Regulation 2004 Schedule1 NSW Architects Code of Professional Conduct 6
(3) The architect should ensure that the cost of architectural services provided to a client:
(a) reflects the fee structure specified in such an agreement, and
(b) accurately reflects the amount of work done or to be done for
the client in the provision of the services (including any
variations to the services).
(4) The architect should enter into such a written agreement before
commencing to provide the architectural service concerned. However, if the service to be provided is urgent, the agreement should be provided to the client within 10 business days of commencing to provide the service.
(5) If the architect is to provide a home design service, the written
agreement may be in the form of the current model home design
client agreement (if any).
Unsatisfactory professional conduct is defined in s 32 of the Architects Act to include "a failure by the architect to comply with a provision of any code of professional conduct established by the regulations and in effect under section 7." The Code of Conduct is established by the regulations and is in effect under s 7 of the Act. Mr Dascalu admits that he has failed to comply with a provision of the Code of Conduct. Consequently, regardless of whether the word 'should' in s 7 of the Code is mandatory or discretionary, the correct decision is that Mr Dascalu is guilty of unsatisfactory professional conduct because he has failed to comply with a provision of the Code. That conclusion is supported by the fact that the introductory note to the Code states that:
A failure to comply with the Code constitutes unsatisfactory professional conduct for the purposes of the Architects Act 2003 and may be grounds for disciplinary action under Part 4 of that Act.
This conclusion means that it is unnecessary to determine the meaning of 'should' in s 7 or in the Code of Conduct generally. The consequences of not complying with the Code are clear. The architect is guilty of unsatisfactory professional conduct. It is irrelevant whether the Code is expressed in absolute or relative terms.
Nevertheless, in case this characterisation of the legislative scheme is incorrect, we will address each of Mr Dascalu's submissions. They were that;
(1) in other comparable legislative contexts, courts have not interpreted the word "should" as expressing a mandatory requirement;
(2) the Act itself envisages that the Code is a guideline and is only one of the relevant considerations to be taken into account: Architects Act, s 7(1) and 8
(3) the Architects Act provides that regulations establishing a code of professional conduct may (as opposed to must) be made.
The question for the Supreme Court of South Australia in South Australian Housing Trust v Development Assessment Commission (1994) 63 SASR 35 was whether a planning requirement that certain dwellings "should" conform with prescribed minimum standards was mandatory. The Court held that the use of the word "should", rather than "shall" or "must" indicated that the sense is not mandatory: at 38 per King CJ, Prior and Perry JJ agreeing. The South Australian Chief Justice went on to say that, "[T]he standards specified in the principle are the goal to be aimed at and the planning authority is to be guided by those standards in considering an application for consent."
That interpretation of the word "should" was recently endorsed by the Supreme Court of South Australia in BHP Billiton Ltd v Parker [2012] SASCFC 73 at [228] - [230]. The question was whether it was mandatory for the Court to award exemplary damages where the relevant provision stated that the court "should" make such an award in certain circumstances. The Court held that it had discretion to award or not to award exemplary damages and gave three reasons for reaching that conclusion. First, that is how the word "should" had been interpreted by the Court in the South Australian Housing Trust decision. Second, the legislature has used different language in each of the three sub-sections of the provision when describing the Court's functions. The words used were: "may", "should" and "must". Third, "if the legislature had intended that there should be a mandatory obligation to award exemplary damages, it would have been easy to say so": per Doyle CJ and White J at [229]-[230].
Mr Dascalu's second point was that other provisions in the Architects Act support his interpretation. Section 8 states that:
The provisions of a code of professional conduct are a relevant consideration in determining for the purposes of this Act what constitutes proper and ethical conduct by an architect.
If the Code of Conduct is merely "a relevant consideration" then it is submitted that non-compliance cannot automatically lead to a finding of unsatisfactory professional conduct. That interpretation is said to be supported by the fact that the Code is referred to as setting out "guidelines" that should be observed: s 7(1).
Mr Dascalu's final point is that the use of the word "may" in s 7 and s 84 means that neither the Minister nor the Governor is required to establish a Code of Practice.
Conclusion
Mr Dascalu's final point is the weakest of the three. The fact that it is not mandatory for the Minister or the Governor to make regulations including a Code of Practice does not assist in determining the meaning of a regulation once it has been made.
The word "should" is not defined in the Code. Dictionary meanings may be helpful. In the Macquarie Dictionary (5th Ed 2009) the primary meaning of "should" is "indicating obligation - I should visit my parents." An alternative meaning is "indicating advisability - You should lock the door." The Oxford Australian Dictionary (1st Ed 1999) defines "should" as "to express a duty, obligation or likelihood." It is equated with "ought".
We agree with Mr Dascalu's submission that when the legislature chooses to use the word "should" rather than "shall" or "must" it would ordinarily suggest that the matter is discretionary. That is how the Supreme Court of South Australia has recently interpreted that word. Nevertheless, meaning always depends on context and on the purpose of the Act. In the context of s 7 of the Code of Conduct more than one construction of the word "should" is open. It could mean "must" or it could mean "may". When more than one construction is open, the construction to be preferred is that which promotes the purpose of the provision: Interpretation Act 1987, s 33.
The objects of the Architects Act set out in s 3:
(a) to ensure that architects provide services to the public in a professional and competent manner, and
(b) to provide mechanisms to discipline architects who are found to have acted unprofessionally or incompetently,
(c) to ensure that the public is appropriately informed about the qualifications and competence of individuals or organisations holding themselves out as architects, and
(d) to promote a better understanding of architectural issues in the community.
The use of the word "ensure" suggests that the Act has specific goals, including that the public is appropriately informed about the qualifications and the competence of architects. That outcome will not be achieved if compliance with the code is not compulsory.
The Act and Regulation contain inconsistent references to the purpose of the Code. The use of the word "should" in the Code itself and its description as a "guideline" in s 7 suggest that compliance is not mandatory. The reference in s 8 to the Code of Conduct as being a relevant consideration when determining what constitutes "proper and ethical conduct" is obscure because the Architect's Act does not provide for any finding to be made of "proper and ethical conduct". The findings are only of "unsatisfactory professional conduct" or "professional misconduct" and those terms are defined elsewhere. If "proper and ethical conduct" is a short hand expression for unsatisfactory professional conduct and professional misconduct, then we agree with Mr Dascalu that describing compliance with the Code as merely "a relevant consideration" supports his case.
On the other hand, the Introductory Note to the Code uses stronger language. It refers to the Code as "a statement of the standards required of architects". We appreciate that Notes do not form part of the legislation but they may be used to determine the meaning in certain circumstances including where the provision is ambiguous: Interpretation Act 1987, s 34.
Section 7 itself is also consistent with the imposition of a mandatory requirement. The provision includes a detailed list of the matters that should be addressed in the written agreement. It provides for an exception where the service needs to be provided urgently. Even where that is the case, s 7 says that an agreement should be given to the client within 10 business days of commencing to provide the service. If the provision of a written agreement were intended to be a discretionary matter, there would be no need for such precise details to be included.
The word "should" is used almost exclusively in the Code to describe an architect's obligations. It is a principle of statutory construction that words are assumed to be used consistently: Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 at 452 per Hodges J. If "should" is to be interpreted consistently whenever it is used in the Code, it is relevant that the Board requires architects to comply with the provisions of s 16 of the Code relating to professional indemnity insurance as a condition of registration.
The converse principle, that if different words are used, a different meaning is intended, no doubt informed the Supreme Court of South Australia when it noted that the words "must", "may" and "should" were all used in various sub-sections of the same provision: BHP Billiton Ltd v Parker [2012] SASCFC 73 at [229].
Of most significance in our view is the fact that unsatisfactory professional conduct is defined in s 32 of the Architects Act to include "a failure by the architect to comply with a provision of any code of professional conduct established by the regulations and in effect under section 7." Non-compliance with the Code means failure to do what the Code says should be done.
Our conclusion is that "should' in s 7 means that unless architects comply with the provisions of the Code they are at risk of a finding of unsatisfactory professional conduct. That conclusion is consistent with the view of the Tribunal when interpreting another provision of the Code in Hirst v New South Wales Architects Registration Board [2008] NSWADT 12 at [31].
It follows that the Board's disciplinary finding that Mr Dascalu is guilty of "unsatisfactory professional conduct" was the correct decision.
Caution
Following the finding of unsatisfactory professional conduct, the Board decided to give Mr Dascalu a caution. He says that that is not the correct decision and that the Board should have decided to take no action.
The Board has the option of taking no action or of taking any of the action listed in s 43(4):
(4) If the Board is satisfied that the architect is guilty of unsatisfactory professional conduct (but not professional misconduct), the Board may take any one or more of the following actions:
(a) caution or reprimand the architect,
(b) order the withholding or refunding of part or all of the payment for the architectural services that are the subject of the complaint,
(c) direct that such conditions relating to the architect's practice of architecture as it considers appropriate be imposed on the architect's registration,
(d) order that the person complete any educational course or courses specified by the Board,
(e) order that the person report on his or her architectural practice at specified times, in a specified manner and to specified persons,
(f) order that the person seek and take advice, in relation to the management of his or her architectural practice, from a specified person or persons,
(g) order the architect to pay a fine of an amount not exceeding 15 penalty units.
Mr Dascalu has been on the Roll of Architects since 23 April 1969. He has operated his own architectural practice since February 1981 and has never been the subject of a complaint or any investigation by the Board. He said that he regards the complaint against him as vexatious.
Conclusion
We accept that Mr Dascalu has never been the subject of a complaint or any investigation by the Board.
There is no admission in the Agreed Statement of Facts that the complaint was vexatious and neither Mr Dascalu nor the clients gave evidence. In those circumstances we are not satisfied that the complaint was vexatious. However, whether the complaint was vexatious or not, the Board may choose to take no action even after it has made a finding of unsatisfactory professional conduct.
Apart from taking no action, a caution is one of the least severe actions the Board may take following a finding of unsatisfactory professional conduct. The Board noted that in determining the appropriate order, it is conscious that the function of a disciplinary order is not to punish but in the interests of the public, to maintain appropriate standards for the regulation of the profession.
Mr Dascalu had known the clients socially for several years and did not want to offend them. He says they were unsure about the scope of works they wanted. He thought a verbal agreement giving a general indication as to how he calculated his fees and an estimate of what they would be was sufficient.
While we understand why Mr Dascalu behaved as he did, providing a written agreement could have avoided this situation arising. As we have said, a caution is justified as a reminder to Mr Dascalu, and to the profession as a whole, that even when dealing with friends or acquaintances, it is crucial to enter into a written agreement to minimise the risk of misunderstanding and disagreement.
Costs
The Board applied for a partial costs order. Mr Dascalu opposed that application.
Section 88 of the Administrative Decisions Tribunal Act 1997 sets out the law in relation to costs in Tribunal proceedings:
(1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section.
(1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as:
(i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or
(ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or
(iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or
(iv) causing an adjournment, or
(v) attempting to deceive another party or the Tribunal, or
(vi) vexatiously conducting the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) any other matter that the Tribunal considers relevant.
(2) The Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.
(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs .
(4) In this section, " costs " includes:
(a) costs of or incidental to proceedings in the Tribunal, and
(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.
The following observations, taken from the Court of Appeal's decision in AT v Commissioner of Police (NSW) [2010] NSWCA 131 at [21] and [33], are relevant:
(1) the general principle is that each party should bear its own costs;
(2) the Tribunal may only award costs if it is "satisfied" that it is "fair" to do so;
(3) the exception to the general principle represents a "relatively low threshold" for an applicant seeking an order;
(4) determining whether the exception applies involves both findings of primary fact and the exercise of an evaluative judgment; and
(5) when exercising the evaluative judgment, relevant considerations include the nature of the jurisdiction and the objects of the ADT Act.
The Board acknowledged that Mr Dascalu and his representative could not be criticised in relation to how the proceedings had been conducted. The basis for the costs application was that Mr Dascalu's case had no tenable basis in law. Furthermore, the Board had incurred unnecessary costs in responding to two grounds for review that were subsequently withdrawn.
We do not agree that Mr Dascalu's case was untenable. There were legitimate arguments in favour of his submission that the use of the word "should" means that compliance with s 7 of the Code is not mandatory. Ultimately we did not accept that proposition but it was not doomed to fail.
In relation to the two grounds of review that were withdrawn, Mr Dascalu's representative withdrew those grounds in a timely manner and the Board was not unfairly disadvantaged.
We do not consider it fair to make a costs order against Mr Dascalu.
Orders
(a) The disciplinary finding of the NSW Architects Registration Board that Mr Dascalu is guilty of unsatisfactory professional conduct is affirmed.
(b) The action taken by the NSW Architects Registration Board to caution Mr Dascalu is affirmed.
(c) The application by the NSW Architects Registration Board for costs is refused.
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Decision last updated: 19 October 2012
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