Construction professionals beware

Background

The Claimant Respondents (the Burgesses) and the Defendant Appellant (Mrs Lejonvarn) had been “good friends for some years” - having been neighbours for a period of time.

Mrs Lejonvarn is an architect and, over the years, she had provided the Burgesses with professional assistance on a number of projects. The Burgesses had also “showed a degree of commercial generosity” to Mrs Lejonvarn by providing her with (a) office space and (b) graphic design services - at no cost.

In 2012, the Burgesses decided to carry out a “significant” garden landscaping project (the Garden Project). Mrs Lejonvarn agreed to assist, and, for no fee, she secured a contractor who carried out earthworks and hard landscaping. Mrs Lejovarn had planned to provide design work for elements of the Garden Project for a fee; however, the project never got that far.

The Burgesses were unhappy with the quality and progress of the works, and Mrs Lejonvarn’s involvement came to a sour end in July 2013. Subsequently, the Burgesses brought a claim against Mrs Lejonvarn claiming damages for the defective works. Criticisms were also made in respect of project management, budgeting and cost control.

The Burgesses claim was brought in contract and in tort, on the grounds that Mrs Lejonvarn assumed responsibility for the provision of her professional services acting as architect and project manager.

First instance decision

A preliminary issues trial was heard in the Technology and Construction Court in November 2015 and, in summary, the judge held that:

• It was plain that there was no binding contract between the parties (not least because it was impossible to extract any form of offer and acceptance, or discussion about consideration, from the email exchanges between the parties). But:

• Mrs Lejonvarn did owe a duty of care in tort to exercise reasonable skill and care in relation to the professional services provided by her - notwithstanding the absence of a contract and/or payment for the services. The judge found that there is no distinction between the provision of advice and the provision of services where a “special skill” is exercised (and specifically said that construction professionals usually deploy a “special skill”). Therefore, it was decided that Mrs Lejonvarn assumed a responsibility to the Burgesses for performing her professional services and that they specifically relied on her for that purpose.

More on the detail of the first instance decision can be found in our article.

Court of Appeal decision

Mrs Lejonvarn appealed against the first instance judge’s decision that she owed a duty of care in the terms found (or at all).

Did Mrs Lejonvarn owe a duty of care in tort?

The Court of Appeal held that the first instance judge was entitled to conclude that there had been an assumption of responsibility and that Mrs Lejonvarn did owe a duty of care in tort to the Burgesses, to exercise reasonable skill and care in the provision of her professional services. In particular, the Court commented that:

“the context was a professional one. It was not informal or social. There was an obvious relationship of proximity. Although she was not going to be paid initially the expectation was that she would be paid for later work. She held herself out as having professional skills. She said she would perform professional services and did so. She was aware that the Burgesses would be relying upon her to properly perform those services and it was foreseeable that economic loss would be caused to them if she did not.”

The fact that the first instance judge found that there was no contract, did not mean that the parties’ relationship could not be akin to a contractual one. In that regard, the Court decided that although the makings of a contract (eg offer and acceptance and consideration) are relevant considerations to whether there has been an assumption of responsibility - they are not determinative.

Further, the Court stressed that the duty of care is not to provide such services; it is a duty to exercise reasonable skill and care in providing the professional services. In other words, Mrs Lejonvarn did not have to provide the services, but, to the extent that she did so, she owed a duty to exercise reasonable skill and care in the provision of those services.

What was the extent of the duty?

The Court cautioned that:

“no definitive statement of the nature and extent of the duty owed and of what that required can be made until the detailed facts have been considered and any description of the duty made at this stage needs to [be] subject to that qualification.”

This was “neither necessary nor appropriate” for the purpose of the preliminary issue hearing - not least because the first instance judge was not concerned with the issue of, or the evidence relating to, breach.

Accordingly, whilst accepting that the first instance judge was entitled to find that specific duties of care arose in relation to Mrs Lejonvarn’s services, the Court suggested that the definition of these duties should be recast as follows:

“In providing the professional service acting as an architect and project manager of [project managing, preparing designs, cost control etc] Mrs Lejonvarn owed a duty to exercise reasonable skill and care”

Subject to the revision above, Mrs Lejonvarn’s appeal was dismissed.

Comment

The first instance judge was right to describe this case “as something of a cautionary tale”. As tempting as it might be to offer professional services to friends and family, there is always a risk if the arrangement is not properly formalised (or recorded at all). As highlighted in this case, construction professionals can still be found to owe a duty of care in tort in the absence of a contractual arrangement.

Regardless of the size of the project, or the "client", construction professionals should ensure that they have a written contract in place clearly setting out the terms and scope of their appointment (to avoid or narrow the scope of any disputes that may later materialise).