Project by landowner for development — Architect preparing plans and estimates — Written agreement providing for payment on “percentage basis of building contract or final account”– Project not proceeded with — Landowner paying half estimated fees — Architect claiming remainder — Whether contract entered into between the parties — Whether provision for payment when no building contract entered into — First instance judgment in architect’s favour — Landowner’s appeal allowed
On May 27 1988 the landowner at Old Park Farm, Bosham, Chichester, received a letter from the respondent architect, following discussions on the proposals for renovation of a stable block. Five items were listed: item A covered the preparation of drawings for the planning application and forms for the different class of use envisaged; items B-E continued on the assumption that application would be successful. They involved: drawings for building regulations; working drawings; obtaining tenders; cost advice; interim payments and “agreement of the final account with the contractor”.
Item A was to be charged on an hourly basis and for items B-E a fee “of 10% of the building contract or final account whichever is the greater with a minimum fee of £4,500” was suggested. Item A was carried out. After that there was a proposed change from renovation to total demolition for which planning permission was sought. The landowner dropped the project as the budget cost of £150,000 was too expensive. He paid £4,500 to the architect, who commenced proceedings for the balance of the fees.
The judge found that the letter of May 27 was not an entire contract and the architect could claim on a quantum meruit basis of 10% of half the estimated value of the hypothetical works, which were valued at £147,000. The landowner appealed.
Held The appeal was allowed.
1. The background was very common for this type of case. The landowner planned renovation work; the architect produced plans and estimates and obtained planning permission. The landowner lost interest as the costs became clearer. Much of the architect’s work was of no significant value to the landowner. Nevertheless it had cost the architect time and money.
2. In such a common situation a properly drawn contract foresaw the eventuality and made provision for it. The easiest way to achieve rough justice was to divide the architect’s work into stages and arrange that he was not obliged to do work for the succeeding stage until he had been paid for the preceding stage.
3. In the instant case the judge decided the architect’s entitlement under the contract had the project been completed, and made his award accordingly.
4. The contract was contained in or evidenced by the letter. As a matter of construction, it was clear that there was no express agreement to pay anything under heads B-E if a building contract was not signed.
5. There was no need to imply a term that if no building contract were signed then the landowner would pay for what the services were worth. Such a term was unnecessary to give the contract business efficacy.
Michael Duggan (instructed by Furley Page Fielding & Barton, of Canterbury) appeared for the appellant landowner; Charles Taylor (instructed by George Ide Phillips, of Bognor Regis) appeared for the respondent architect.
