Fitzroy Robinson Ltd v Mentmore Towers Ltd

Architects’ fee instalments calculated by reference to a project programme were not automatically payable in full merely because time had elapsed. The contractual machinery linked payment to the services performed and permitted adjustment where delay altered the services and resource allocation. A contractual reference to an agreed programme could be identified from contemporaneous resource schedules even though those schedules were inadvertently omitted from the executed contracts.

A representation that a named professional would remain involved throughout a project could be a representation of existing fact, rather than a statement of future intention, where it concerned the personnel and services to be provided. Once the representation became false, failure knowingly and dishonestly to correct it before contracting constituted fraudulent misrepresentation. Causation was established, but recoverable loss was confined to proved disruption and duplication, not unproved project delay.

Fitzroy Robinson Limited was appointed as architect for a proposed development of properties at Piccadilly and Mentmore Towers. The defendants claimed that monthly fee instalments required adjustment because the project programme had been delayed and the services performed did not correspond with the resources used to calculate the instalments.

The defendants also alleged that Fitzroy Robinson had misrepresented that Jeremy Blake would remain team leader throughout the project, failed to disclose his resignation, and acted negligently in relation to the Piccadilly planning application. The central issues were the construction of the payment provisions, the legal character and effect of the representation about Mr Blake, causation and loss, and alleged professional negligence.

1. Payment provisions. The claims for the scheduled instalments could not be determined simply by the passage of time. Clause 10.1 linked the fee to performance of the services, clause 5 linked performance to the programme, and Schedule 2 expressly contemplated review and adjustment where delay altered the resource and fee allocation. The agreed programme was the updated bar-chart programme in the resource schedules used to calculate the instalments, notwithstanding their inadvertent omission from the executed contracts. This was construction, not rectification.
2. The instalments were therefore prima facie subject to adjustment to reflect delay, services actually performed, agreed hourly rates, the fixed overall fee and the subsequent suspension. The court declined to prescribe the detailed mechanism without proper submissions. The absence of withholding notices did not entitle the claimant to judgment for the unadjusted instalments, although the sums had been due when invoiced and interest was payable for non-payment.
3. Misrepresentation. The repeated representation that Mr Blake would remain team leader throughout the project was a representation of fact concerning the personnel and services to be supplied. It was intended to induce the contracts and became false when, on 21 March 2006, he rejected the only counter-offer and his departure became inevitable. The failure to correct the representation was not an imposition of a general duty of disclosure; it was a continuing and materially false representation.
4. The representation was fraudulent under Derry v Peek and actionable under section 2(1) of the Misrepresentation Act 1967. The court inferred that, but for the fraudulent misrepresentation, the contracts would not have been entered into. However, the defendants proved no delay caused by Mr Blake’s departure and no disruption or duplication suffered by them or BSH. Any recoverable loss was limited to the financial effect of disruption and duplication within Fitzroy Robinson, to be assessed when the fee claim was quantified.
5. If the pre-contract claim had failed, Fitzroy Robinson would nevertheless have breached express or implied obligations of co-operation by failing promptly to notify the defendants of Mr Blake’s resignation and to allow them to consider a replacement.
6. Professional negligence. The appointment of specialist planning consultants did not remove Fitzroy Robinson’s contractual co-ordination obligations. Nevertheless, the original acoustic report was limited by the preliminary state of the design and by restrictions imposed by BSH on the acoustic consultant’s appointment. Fitzroy Robinson was not negligent in accepting the planning consultants’ advice about the strategic omission of roof plant. The professional negligence counterclaim therefore failed. In any event, the defendants failed to establish that either matter caused delay to planning permission or to the project, which was suspended for unrelated reasons.

First-instance judgment. No appellate history is stated in the judgment.