Alterations to flat — Plaintiffs engaged to carry out works of refurbishment — Defendant wishing to reduce cost — Contract came to end — Further work charged on different basis — Successful claim for unpaid fees — Costs awarded against defendant on indemnity basis — Court of Appeal dismissing appeal against county court orders — Judgment for plaintiffs
The defendant owned a flat at 22 Arrow Street, London E14. The plaintiffs were a firm of architects who were asked to alter and refurbish the flat. On July 22 1992 there was a site meeting when a reduction of the cost of a plan for the alterations to the flat was agreed in the sum of £106,000. On August 27 1992 the plaintiffs wrote to the defendant setting out the terms of the contract between them. It was agreed that the scope of the works would be “architects’ services” as defined in the RIBA booklet and all terms not otherwise covered in correspondence would be as contained in those standard conditions. The architects’ fees were to be calculated at 15% of the cost of the works plus VAT. Out of pocket disbursements were to be charged additionally at cost. The pretender fees were to be based on successive budget estimates while the post-tender fees would be paid monthly in proportion to the amounts due for the works as they progressed corrected as required by the cost reports. The current budget was stated to be £106,000.
On September 1 1992 the plaintiffs sent their invoice for £8,620.90 for pre-tender work. Thereafter, the defendant sought to reduce the tenders received and to reduce the plaintiffs’ fees. Following unsuccessful negotiations for a revision of the budget the defendant terminated the plaintiffs’ services on December 16 1992. On December 20 1993 the county court gave judgment for the plaintiffs in the sum of £12,500.57 plus costs and on an indemnity basis. The defendant appealed against both orders. The defendant argued that the plaintiffs had provided a partial service so that according to the contract, fees were to be charged on a lower partial-service basis.
Held The appeal was dismissed.
1. The contract between the plaintiffs and the defendant had in fact come to an end at the end of September 1992. Thereafter, the plaintiffs did further work for the defendant, but charged on an entirely different basis. There was no further concluded contract.
2. When the invoice was sent on September 1 1992 and up to the end of September 1992 the correct figure to work from was £106,000. There was no evidence that a lower tender was ever accepted and did not form the basis of any contract between the plaintiffs and the defendant. Accordingly, the judge was correct to find for the plaintiffs.
3. As regards costs it was a matter in each case of the judge exercising his discretion to order costs on an indemnity basis when appropriate to the facts before him.
4. In this case, the defendant had exercised every ploy to avoid paying a valid claim. The judge found that he had never had any defence whatsoever to the claim against him and the defendant’s behaviour brought the case into the category of an exceptional case in which the only way the plaintiff could be satisfactorily compensated was by an order of indemnity costs. On the facts found by the judge that order was appropriate and the exercise of the judge’s discretion could not be faulted.
Alexander Charlton (instructed by Shilling & Lom) appeared for the appellant/defendant; Robert Willer (instructed by Peter Mercadante & Co) appeared for the respondents plaintiffs.
