Estate agency — Professional charges — Instructions by client intending to purchase a night-club to firm of chartered surveyors ‘to provide valuations orally of the premises and business, to prepare an inventory of fixtures and fittings, take details of trading figures and generally to assist’ the client in negotiations with the vendor — The purchase was effected and the plaintiff agents sent their bill to the defendant client based on former RICS Scale 17(b) (a basis which had previously been described to the defendant) for the sum of £5,980 — Defendant denied that the employment was subject to any terms of remuneration save for an implied term that the plaintiffs should receive a reasonable remuneration for work done — After some earlier abortive proceedings the dispute was referred to the county court — County court judge found that there was no express or implied term that the remuneration should be on the RICS scale, but held that the plaintiffs were entitled to be paid on a quantum meruit basis — On this basis he calculated that the plaintiffs were entitled to £80 per hour for 45 hours, which, after adding VAT, came
This was an
appeal by Christopher Edwards from a decision of Judge Gosnay, at Bradford
County Court, in an action by Withey Robinson, a firm of chartered surveyors,
for professional fees alleged to be due from Mr Edwards for services in
connection with his purchase of a night-club.
S Spencer
(instructed by Edwards & Lockwood, of Guisley, Leeds) appeared on behalf of
the appellant; Miss A Woolley (instructed by Sugden & Spencer, of Bradford)
represented the respondents.
Giving
judgment, SIR JOHN ARNOLD P said: In the early summer of 1983 Mr Edwards, the
defendant, and the appellant in this case, was minded to purchase a night-club
which he had seen advertised for sale. He had, at the stage at which the
plaintiffs came on the scene, already entered into some discussions with the
vendor of this night-club, a Mr Abrahams. The defendant dealt, so far as the
plaintiffs are concerned, with a man, Paul Withey, who was one of the partners.
It was eventually agreed between the defendant and Mr Withey that the plaintiff
firm — a firm of chartered surveyors — should be employed by the defendant to
do certain work in connection with the proposed purchase. The work is described
in the defendant’s defence as being:
to provide
valuations orally of the premises and business, to prepare an inventory of
fixtures and fittings, take details of trading figures and generally to assist
the defendant at negotiations conducted by the defendant with the vendors.
No one has
suggested that that is other than an accurate description of what the defendant
employed the plaintiffs to do.
In the event
the purchase went through. On December 23 1983 the plaintiffs delivered to the
defendant a bill in the sum of £5,980 for professional charges for the various
operations set out in that bill. The plaintiffs had earlier on — on October 17
1983 — written a letter to the defendant, arising out of a telephone
conversation which they had had together, in which the plaintiffs described the
basis of their charges. That basis was revealed as being a scale numbered
17(b), which is among the Royal Institution of Chartered Surveyors’ scales of
charges, a scale which is said in that letter to be applicable for negotiating
the purchase of a particular property on clients’ instructions, freehold or
leasehold.*
*Editor’s
note: Most of the scales of charges of the Royal Institution of Chartered
Surveyors concerned with valuation, sales, lettings and management of property,
including scale 17, were abolished by the institution in 1982.
It is apparent
from the coincidence of the figures in the letter of October 17 and the invoice
of December 23 that the two are the same and, therefore, so far as relevant to
this appeal, that the invoice dated December 23 1983 is precisely based on
scale 17(b) of the scales of charges of the Royal Institution of Chartered
Surveyors. So when the bill was not paid and the time came at which the plaintiffs
were minded to sue the defendant, a specially endorsed statement of claim
revealed exactly the same figure of £5,980 and referred back referentially to
the invoice of December 23 1983, so that the figure in the specially endorsed
statement of claim is a figure which, by the means I have described, can be
seen to be one based on the figures in the scale referred to.
The actual
wording of the statement of claim is:
The
plaintiff’s claim is for the sum of £5,980 being the cost of work done on
behalf of the defendant and to his order,
and then for
the make-up of the sum of £5,980 the particulars refer the reader back to the
invoice of December 23 1983. The matter being then pleaded in the High Court,
on March 23 1984 the defendant filed a defence in which he denied that he was
indebted to the plaintiffs in the sum claimed of £5,980. He then described the
circumstances in which the work was done and the employment formed and the
pleading continues thus:
It is denied
that the employment was subject to any terms as to remuneration save for an
implied term that the plaintiff firm should receive a reasonable payment for
work done. The sum claimed is unreasonable and exorbitant. The defendant says
that no more than 20 hours of the plaintiff firm’s time can have been spent in
the employment alleged herein; the hourly rate of pay thereby produced of £250
is manifestly excessive.
‘Thereby
produced’ means by dividing the number of hours into the sum claimed by the
plaintiffs in the action.
The pleading
continues:
The defendant
denies the allegation if it be made, that the plaintiff firm was employed by
him upon terms that it would be entitled to a commission on the purchase price
or a remuneration being a percentage of the purchase price calculated in
accordance with the RICS (or any other) scale.
No reply was
filed, and therefore the matters alleged in the defence remained at issue.
After an abortive attempt to obtain summary judgment under Order 14 by the
plaintiffs, the case was remitted for trial to the Bradford County Court, and
in due course the Bradford County Court heard the case and gave judgment.
The learned
judge from whose decision this appeal comes, after lightly sketching in the
history of the case, concluded first of all that there was no express or implied
term that the remuneration of the plaintiff firm should be on the RICS scale.
He then proceeded thus:
I turn to the
question whether the plaintiff was entitled to a quantum meruit. Counsel
for the defendant says that on the pleadings the plaintiff is not entitled to
rely on a quantum meruit although the defence does say that it is the
appropriate method. The defendant says that either the plaintiff succeeds in
showing that the RICS scale is the appropriate one or he fails completely. I
think it is open to the plaintiff on the statement of claim to claim a quantum
meruit. The statement of claim says that it is for the cost of work done
for the defendant and to his order. That is really accepted. The method of
calculation of the amount in the statement of claim may be wrong, but in view
of the wording in the defence and other matters I find that it is open to the
plaintiff to claim a quantum meruit. It has not been suggested by the
defendant that the work done in this case was of no value to him or useless . .
. I find that the plaintiff was entitled to quantum meruit for his
services.
He then
considers the evidence which had been given on the one side and the other and
he came to the conclusion that, on a quantum meruit basis, the proper
charge was at a rate of £80 an hour, and he then held that there was
effectively 45 hours’ work carried out by the plaintiffs in the course of the
employment. By multiplying the two figures of 45 hours by £80 an hour he comes
out, having added value added tax, at an amount of £4,140, which was the amount
of his award against which this appeal is brought.
The case which
is put forward on the appeal by the defendant is very much the same case which
was put forward to the learned judge in accordance with the account of the matter
which I have read from the learned judge’s judgment. The substance of the case
is that the plaintiffs, having tied themselves — as they plainly did as a
matter of pleading — to a justification of the figure which they put forward as
the appropriate amount that they ought to be paid for what they described as
‘the cost of work done on behalf of the defendant and to his order’, to the
RICS scale, they did not put forward as an alternative basis of quantification
any quantum meruit basis. That was introduced into the case by the
defendant’s defence and so, says the defendant, the learned judge was not
entitled to make an award based on that alternative quantification of the
defendant.
It is plain
that at the stage at which the pleadings closed, and at the stage at which the
matter came on before the learned judge, the plaintiffs were saying that they
were entitled to be remunerated under the contract and the defendant was not
disputing that the plaintiffs were entitled to some remuneration under the
contract, nor did that position change throughout the trial; but the plaintiffs
said throughout that they were entitled to be remunerated on the basis of an
express or implied term in the contract; that they should be entitled to
recover the appropriate amount designated by the Royal Institution of Chartered
Surveyors’ scale. The defendant was saying that the plaintiffs’ remuneration
was limited to that which was appropriate to be computed on a quantum meruit
basis. The learned judge on that point of issue decided in favour of the
defendant, and then quantified the amount which derived as a sum of money from
the acceptance of that approach, and gave judgment in that sum.
There seems to
be no doubt, to my way of thinking, that both contentions were available for
argument before the learned judge, and both were argued, the defendant’s
contention successfully and the plaintiffs’ unsuccessfully. So there emerged at
the end of the day what, in the learned judge’s judgment, was the appropriate
basis upon which the amount claimable by the plaintiffs under the contract
ought to be computed. I cannot, for my part, see why that was not a perfectly
legitimate course of dealing, notwithstanding that it involved deciding the
quantification in a sense and on a basis opposed by the plaintiffs and
advocated by the defendant, and without the
alternative view the basis that was put forward by the defendant. Both points
were, as a matter of pleading, before the learned judge and he took his pick in
favour of the defendant’s quantification basis.
I cannot see
that there was anything wrong in that course and I would accordingly dismiss
this appeal.
PURCHAS LJ
agreed and did not add anything.
The appeal
was dismissed with costs.