Architect — Contract of retainer — Entitlement to fees — Claimant architect retained by defendants’ predecessor to devise outline scheme for hospital development — Claimant’s scheme not proceeding — Defendant health authority retaining different architect and devising different scheme — Whether claimant entitled to payment even though scheme aborted — Appeal dismissed
The defendant health authorities were responsible for a hospital in Oxted, Surrey. Following discussions with the claimant architectural firm concerning a hospital redevelopment scheme, the defendants’ predecessor wrote to the claimant instructing it to prepare an outline scheme for the proposed development. The letter of instruction stated that the claimant would have to compete with other firms for the job of completing the scheme, but that if another firm were appointed to complete the claimant’s scheme, the claimant would be reimbursed for its initial work on the basis of a specified percentage of the total budget cost of the scheme.
The claimant replied, confirming that the fees set out in the instruction letter were correct and enclosing the RIBA Terms of Architect’s Appointment. That document indicated that payment on a percentage basis was an accepted way of calculating an architect’s remuneration, and it set out the appropriate percentages for various stages of the work.
In the event, the claimant’s scheme did not go ahead. When the defendants later took over responsibility for the hospital, they made an unsuccessful application for planning permission for a different scheme, retaining a different firm of architects.
The claimant sought payment for its earlier work, but the defendants disputed its entitlement to payment. The claimant brought proceedings to recover the money, but the judge dismissed the claim after finding that the letter of instruction represented the contract between the parties, and that it made no provision for payment in the event of the defendants appointing another firm to proceed with any scheme other than the one put forward by the claimant.
The claimant appealed. It contended that the terms of the contract were contained in its own letter, since that letter had represented a counteroffer by reason of the enclosure of the RIBA document, which did provide for payment in the event of the claimant’s proposed scheme being aborted.
Held: The appeal was dismissed.
The letter of instruction had clearly been intended to set out the terms of an oral agreement reached between the parties in the earlier discussions. The claimant’s letter had expressly stated that the claimant accepted the basis for payment of fees set out in the instruction letter, and had contained nothing to suggest that the instruction letter in any way misrepresented what had been agreed. The enclosure of the RIBA document was explicable as confirming that the percentage specified in the instruction letter was an acceptable one. It followed that the judge’s conclusion had been correct, and that the claimant was not entitled to payment.
Simon Cavender (instructed by Howard Kennedy) appeared for the claimant; Jonathan Bellamy (instructed by Capsticks) appeared for the defendants.
Sally Dobson, barrister