Arnold Project Services Ltd. (t/a APS Project Management) v Musanda Investments Ltd

A lump-sum fee payable by regular instalments for management services is not ordinarily subject to abatement merely because some defined services remained unperformed when the contractual period ended. The contractual terms must identify a link between payment and particular services, or provide machinery for valuing incomplete performance. Where the contract instead provides for management services over a stated period, with no allocation of the lump sum to individual services and no valuation mechanism, the fee may be earned through performance during that period. A party seeking to resist payment on the basis of incomplete performance must identify the contractual breach and provide sufficient detail of the alleged shortfall and its value.

Arnold provided project management and construction management services to Musanda in connection with extensive refurbishment works. The written contract provided for lump-sum fees payable in monthly instalments during a contractual period ending on 31 December 2004. The services were described in detail, but the contract did not allocate parts of the lump sums to particular services or provide valuation machinery.

Musanda resisted Arnold’s claim for approximately £75,000, contending that some services remained unperformed when the contractual period ended and that the fee should therefore be proportionately abated. It did not allege a quantified cross-claim or set-off for breach of contract. The issue was whether the contractual structure entitled Musanda to withhold or abate the unpaid instalments.

1. Judgment for the claimant. Arnold was entitled to judgment for £75,000, together with interest and costs summarily assessed on the standard basis.
2. The contract was properly construed as providing for management services over a period of months in return for a regular monthly lump-sum payment. Although the services were described in detail, no price or value was assigned to any particular service, and the contract contained no machinery for valuing individual services or incomplete performance.
3. The contractual reference to completion of the project by 31 December 2004 did not create a proportionate abatement mechanism. If the necessary instructions and information had been supplied and Arnold had not been delayed by circumstances beyond its control, its services were to be completed within a reasonable time measured by reference to the intended project completion date. If the project was not completed by that date without Arnold’s fault, the services would terminate unless the parties agreed an extension, but Arnold would have earned the entirety of the lump sum payable by instalments.
4. An abatement might have required consideration at trial if Musanda had identified a breach by Arnold or provided details and a valuation of services not performed, supported by a cross-claim for damages. No such detail was provided. On the contractual analysis and evidence before the court, Musanda had no defence to the claim for payment.