Barry Urquhart Associates (A Firm) v East Surrey Health Authority

Permission to appeal should be granted where the proposed appeal has a real prospect of success on the construction and formation of a contract. Correspondence may support the conclusion that standard terms were incorporated into an earlier agreement, either expressly or by implication. It may also support the alternative conclusion that a later letter constituted a counter-offer which was accepted by conduct or silence in the circumstances. Where the principal grounds have a real prospect, permission may properly extend to subsidiary grounds so that the dispute can be considered comprehensively.

The claimant architects sought permission to appeal from a judgment of His Honour Judge Hull QC in the Epsom County Court on 4 May 2001. The dispute concerned fees for work undertaken in connection with the redevelopment of a hospital.

The judge treated a letter of 26 April 1990 as the complete agreement. On that basis, the architects were not entitled to the specified payment because they were not appointed project architects, and were not entitled to the alternative percentage because the final scheme did not proceed to completion.

The architects argued that the RIBA terms of engagement formed part of the contract, relying in particular on a letter of 27 April 1990 which enclosed those terms and was not met by any objection. The central issue was whether there was a real prospect that the correspondence established incorporation of those terms or concluded a contract on the basis of the later letter.

1. Permission granted. The application for permission to appeal was allowed. The court was satisfied that the proposed appeal had a real prospect of success.
2. The letter of 27 April 1990, enclosing the RIBA terms relating to architects’ appointments, and the absence of any evidence that the terms were thereafter rejected, could support a finding that those terms formed part of the parties’ contractual arrangement. They might have been incorporated expressly or by implication into the discussions of 25 April and the letter of 26 April.
3. Alternatively, the correspondence could support the conclusion that the contract was concluded when the defendants’ predecessors accepted the letter of 27 April as the counter-offer on which the architects would be entitled to fees for work already carried out.
4. The existence of these alternative contractual arguments meant that the lower court’s conclusion that the 26 April letter was the sole and complete basis of entitlement was open to challenge. The court did not determine the merits of those arguments at the permission stage.
5. Permission was also granted on subsidiary grounds so that the whole matter could be properly considered by the appellate court. The case was directed to be listed for one day on the short warned list, with costs in the appeal.

1. Court of Appeal (Civil Division) — On 8 October 2001, the application for permission to appeal was allowed. The court directed that the case be listed for one day on the short warned list, with costs in the appeal. Citation: [2001] EWCA Civ 1465.
2. Epsom County Court — His Honour Judge Hull QC gave judgment on 4 May 2001, holding that the 26 April 1990 letter contained the whole agreement and that the architects were entitled to no fees on the pleaded bases.