The appellant provided architectural services to the respondents with regards to four projects. The respondents failed to pay the appellant for his services and he brought a claim for payment of his fees. The judge at first instance found that an agreement for fees to be paid was implied (an “implied contract”) and therefore the respondents were obliged to pay for the architectural services.
The main issue was whether the judge was wrong to conclude that an implied contract arose.
The court held that in the absence of any other facts, the giving to, and carrying out of, instructions by a professional normally gives rise to an implied promise to pay. No other explanation made commercial sense, and necessity compelled that conclusion.
With regards to this case however, while it was understood at the beginning of the works that the appellant would not be remunerated, there came a point in the relationship between the parties when each, had they addressed the question, would have recognised that there was no longer an intention that further work would be unremunerated. The appellant was therefore entitled to payment and it was well within the judge’s function to form an overall impression of when the normal implication of a duty to pay “kicked in”.
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Dinkha Latchin T/A Dinkha Latchin Associates vs (1) General Mediterranean Holdings SA (2) Nadhmi S Auchi (2003) 16 December 2003, Court of Appeal (LJ Brooke, LJ Sedley and LJ Jacob)
The appellant worked on four projects for the respondents over a two-year period. He had initially started work in the hope that if and when the projects materialised (which depended upon certain permissions being granted) he would get the job of architect. The court recognised the significant time and money the appellant had spent in providing his services by holding that although he was interested in the ultimate job this did not necessarily mean that he would do unlimited work for nothing.
In the circumstances it would appear that there is a continuing obligation to review the situation where one party has agreed to carry out speculative works. It is advisable in such instance to constantly remind the speculating party that the works are being carried out speculatively with no obligation to pay. Silence on the understanding that both parties have agreed that no payment will be made may prove dangerous, especially if significant works are carried out.