JUST A LITTLE RESPECT
Foster + Partners turned out to be the architects of their own downfall in a case that centred on a budget — and English snobbery
Every time businessman John Dhanoa landed in London, his eyes focused on a site in Bath Road, right next to Heathrow. For five years he dreamt of acquiring the property and putting up a five-star hotel with luxury hospitality for wealthy travellers arriving in the UK. Finally, in 2007, it was for sale.
He paid £14.5m for the site, and set about realising his grand scheme. He wanted leading UK architects Foster + Partners to create a cutting-edge design, incorporating “green” credentials — and at a cost of no more than £70m. Then things began to go wrong. In 2015, without a brick ever being laid, Dhanoa began litigation against Fosters. Via four of his companies he claimed damages of well over £16m, citing negligence and loss of profits among others. After a trial lasting 11 days in July, he has just won the case, though with reduced damages of £3.6m.
It is an almost unthinkable victory given the international prestige and drawing power of Fosters. Now, architects, lawyers, business people and journalists are trawling the lengthy decision by judge Peter Fraser. In SA, too, where international construction law is a relatively new discipline, readers will be looking for lessons from the judgment.
There is even a local connection. Fosters’ expert witness, Dexter Moren, qualified as an architect at the University of the Witwatersrand, where he also completed an MBA. Moren, who specialises in international hotel design, went on to gain an MSC in architecture and urban design from Columbia University, New York.
The dispute that led to Fosters’ humiliating defeat centres on budget. Dhanoa explained that the ceiling for the project was £70m; Fosters came up with a design described by several of its witnesses as the best yet from the partnership but, at £195m, it was hopelessly over budget.
Fosters told Dhanoa to go ahead with his planning permission application as the design could be “value-engineered” to his slightly increased upper ceiling of £100m.
In the end, though, the gap between Dhanoa’s budget and Fosters’ design was too great, and he was unable to find financing for the project because of the international financial crisis of the time. What should have been a functioning and profitable hotel, ready to open during the 2012 London Olympics, has not yet been built.
The judge found that Fosters had designed the hotel with no thought for the budget at all. In response, lawyers and architects have stressed an architect’s responsibility to keep the client’s budget in mind, even when cost advice is expressly excluded from the designer’s obligations.
Out of their league
The enormously readable judgment contains significant implications for architects, their clients and the construction sectors. But many will scour it for the judge’s scathing comments on the snobby Foster partners who regarded Dhanoa as “somewhat beneath them as a client”.
They scornfully referred to their first meeting with Dhanoa in “what appeared to be [his] home . . . a semi-detached house . . . in Hayes”. While Dhanoa frankly told the partners he wanted their brand for credibility, the reverse was also true: Dhanoa, with his small hotel in Leeds and his modest residential housing development, cut no ice with a firm designing iconic buildings in major cities around the world. They mocked him and his budget, and his suggestion that the hotel might be designed as “a giant clock”. In their view, he was out of his league.
After the judgment, Fosters spoke of its shock and disappointment, adding, however, that it was taking the judge’s comments seriously and had begun a “review” involving an independent law firm, among others, “to see what lessons or actions should be taken from this case.” Like treating people with respect, perhaps?
They mocked him and his budget, and his suggestion that the hotel might be designed as ‘a giant clock’