Negligence – Architect – Duty of care – Appellant involved in garden landscaping project for respondents – Dispute over increasing costs of project – Whether appellant owing duty of care to respondents in respect of project notwithstanding absence of concluded contract between the parties – Extent of any such duty – Appeal dismissed
The claimant married couple wished to landscape the garden of their house. After obtaining a quote from a landscape gardener, which they thought was too expensive, they asked for help from the appellant, a friend who had qualified as an architect in New York and who provided architectural services in London, although she was not a registered architect in the UK.
The appellant secured a contractor who gave a quote to carry out the earthworks and hard landscaping. The appellant herself intended to provide subsequent design work in respect of the “soft” elements of the project, including lighting and planting, for which she would charge a fee. In the event, the project never reached that stage because the respondents were unhappy with the quality, progress and rising cost of the work. Following an exchange of emails, the appellant’s involvement in the project came to an end.
The respondents brought proceedings against the appellant in both contract and tort, claiming that much of the work done during the period of her involvement was defective and that she was legally responsible for it. They sought to recover the difference between the actual cost of the project, including remedial works, and the amount that they had been told it would broadly cost. The maximum value of the claim was around £265,000.
The defendant denied responsibility for the quality of the work carried out or that she had been responsible for procurement, project management, budgeting and cost control.
On a trial of preliminary issues in the court below, the judge held that no contract had been concluded between the parties but that the appellant nonetheless owed a common law duty of care to exercise reasonable skill and care in her provision of professional services as an architect and project manager on the project. The judge found that the appellant had actually provided, and owed a duty of care in providing, the services of: (i) inspection and supervision of the works; (ii) design of the garden project; and (iii) exercising cost control, preparing a budget for the works and overseeing expenditure against that budget, and reviewing and advising in connection with applications for payment: see [2016] EWHC 40 (TCC); [2016] PLSCS 21.
The appellant appealed against the judge’s finding that she owed a duty of care in circumstances where no contract existed.
Held: The appeal was dismissed.
(1) This was a case in which the losses claimed were pure economic losses, in respect of which the proper test for the existence of a duty of care was whether there had been an assumption of responsibility by the appellant. The judge had properly applied that test. The appellant had voluntarily tendered skilled professional services in circumstances where she knew that the respondents would rely on the proper performance of those services. In a case of that kind, the test of assumption of responsibility effectively encompassed all aspects of the usual three-fold test for a duty of care, namely whether the loss was reasonably foreseeable; whether there was a sufficient relationship of proximity; and whether in all the circumstances it was fair, just and reasonable to impose a duty of care. In determining whether there had been an assumption of responsibility by the appellant, the judge was therefore correct to consider whether the circumstances made it appropriate to grant a remedy in law or, in effect, whether it would be fair, just and reasonable to impose liability: Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, Murphy v Brentwood District Council [1991] 1 AC 398, Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 and White v Jones [1995] 2 AC 207 applied; Caparo Industries plc v Dickman [1990] AC 605 considered.
Whether there had been an assumption or responsibility was a mixed question of fact and law. Since much would depend on the detailed circumstances of the particular case and the particular relationship between the parties, in the context of their legal and factual situation as a whole, the findings of the tribunal of fact as to those circumstances were likely to be of considerable significance: Customs and Excise Commissioners v Barclays Bank plc [2006] UKHL 28; [2007] 1 AC 181 applied.
(2) Notwithstanding the judge’s findings that there was no offer and acceptance in the written exchanges between the parties, that the parties did not intend to be bound by a contractual relationship, and that there was no consideration for such a contract, he had nonetheless been entitled to find that the appellant had assumed responsibility so as to give rise to a duty of care. The judge had found that the scope of the services for which responsibility was being assumed was reasonably clear. The obstacle facing the contract claim was not the scope of the services but the terms on which they would be provided. Although the services were being provided gratuitously, they were nevertheless professional services being provided in a professional context and on a professional footing. Further, they were being provided in the expectation that they would lead to the appellant being paid for her services in relation to the “soft” landscaping phase of the works. Carrying out the project was also going to help in the establishment and growth of her business. There was no legal requirement that indirect economic value be derived from the service performed, but, even if such a requirement, there was some indirect value on the judge’s findings. The appellant had been aware that the respondents would be relying on her to perform the services and it was foreseeable that economic loss would be caused to them if she did not.
(3) Accordingly, the appellant owed a duty of care to the respondents. The relevant duty was not to provide certain services but, instead, to exercise reasonable skill and care in providing the professional services which she did in fact provide. She did not have to provide any such services, but, to the extent that she did so, she owed a duty to exercise reasonable skill and care. A duty expressed in these terms did not trespass on the realm of contract.
(4) Given the importance of what the appellant actually did to the nature and extent of the duty of care which she owed, no definitive statement of the nature and extent of the duty owed, and of what that duty required, could be made until the detailed facts had been considered.
Subject to that qualification, the judge had been entitled to find that the appellant owed a duty to the respondents at common law to inspect and supervise the works. That duty required periodic inspection rather than continuous attendance. Although there was no previous case in which a common law duty of care to avoid economic loss had been found to arise in connection with the supervision of another’s work, there was no reason in principle why such a duty could not be owed where it was a professional service for which responsibility had been assumed and which was then performed negligently. While it would not be appropriate for a duty of care to involve a positive obligation to act in a specific manner in the future, the inspection and supervision duty in the instant case was linked to the services which it was alleged that the appellant had actually carried out. In doing so, the appellant owed a duty of care to act with reasonable skill and care.
The judge had also been entitled to find that the appellant was under a duty of care in relation to providing the professional service of preparing designs to enable the garden project to be accurately priced and constructed. This was not a case in which the appellant merely said that she would produce designs to enable the work to be priced, but was a case in which she actually did so. Further, she had been aware that costs and a reasonably accurate budget were crucial to the respondents and to their decision to use her rather than the landscape gardener who had provided the original quote.
The judge had also been entitled to find that the appellant was under a duty of care with regard to exercising cost control, preparing a budget for the works and overseeing expenditure against that budget, and reviewing and advising in connection with applications for payment.
(5) Overall, the relevant duties undertaken by the appellant were properly framed as a duty to exercise reasonable skill and acre in providing the professional service, acting as an architect and project manager, of: (i) project managing the garden project and directing, inspecting and supervising the contractors’ work, its timing and progress; (ii) preparing designs to enable the project to be priced sufficiently for a fairly firm budget estimate to be prepared; (iii) preparing designs to enable the project to be constructed; (iv) receiving applications for payment from the contractor, and advising and directing the respondents in respect of their payment; and (v) exercising cost control by preparing a budget for the works, and overseeing actual expenditure against it.
Fiona Parkin QC, David Sheard and Louis Flannery (instructed by Stephenson Harwood LLP) appeared for the appellant; David Sears QC and Seb Oram (instructed by Mayo Wynne Baxter, of Eastbourne) appeared for the respondents.
Sally Dobson, barrister
Click here to read a transcript of Burgess and another v Lejonvarn.
