Spec savers

The law generally looks after professionals even if it is somewhat less assiduous in defending contractors. To quote the Court of Appeal: "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, because no other explanation of those facts makes commercial sense."

So, where work has been done by a professional and they are suing for their fees, the evidential burden is not on the professional to show that there is a contract; rather, the burden is on the client to rebut the normal presumption that they are entitled to be paid. The extent of the task facing a client is demonstrated by Dinkha Latchin (t/a Dinkha Latchin Associates) vs (1) General Mediterranean Holdings SA and (2) Nadhmi S Auchi 2003. Mr Latchin was an architect of Iraqi origin who was asked by Mr Auchi, a businessman also of Iraqi origin, to produce plans for refurbishment of the Hotel Villa France in Tangiers to a four-star standard. In February 1995, Mr Latchin was asked to refurbish to a five-star standard. In May 1994, another project commenced – developing a tennis club in Tangiers. Mr Latchin was also asked to design a private villa for Mr Auchi. Apart from lots of drawings, there were very limited written records, and the inevitable disagreement about who agreed to do what then ensued.

The trial judge found that Mr Latchin began work on the hotel and the tennis club on the basis that he would not be paid until a building permit was obtained. Apparently, Mr Auchi had not reiterated to Mr Latchin, on requesting further work, that he would not be paid. He had just assumed that the previous arrangements continued. But, said the court, "there must have come a point in the relationship when each party, had they addressed the question, would have recognised that there was no longer an intention that further work would be unremunerated".

The judge concluded that after February 1995, when Mr Latchin was told that the refurbishment of the Hotel Villa France was to be to a five-star standard, he was not working speculatively and at some point between May 1994 and February 1995 "the conduct of the parties was such as to give rise to an intention that any further work would be remunerated. Doing the best I can on the evidence presented, I assess this as 1 September 1994."

Given this speculative conclusion, Mr Auchi appealed. He argued that Mr Latchin had started work in the hope that when the project materialised, he would get the job of architect. Nothing changed and he continued to work on that basis. The date of 1 September 1994 was simply plucked out of the air.

You must state that the work has to be done ‘at no cost’, however superfluous and tedious this may seem

The Court of Appeal was reluctant to overturn the trial judge's findings: the evidence showed that by September 1994, Mr Auchi was instructing Mr Latchin to do a great deal of design work, to go to Tangiers to talk to authorities and to engage local architects. Somewhere, a line had been crossed.

Transposed to the sort of repeat relationships that form between developer or contractor client and architect, cost consultant, structural engineer and even lawyer, this seems to be slightly at odds with reality. It is "understood" in many such relationships that the consultant will simply not charge when the scheme remains entirely speculative. But now, in case he falls out with his team subsequently, the client must learn the lessons of this case: if you have asked consultants to work on a speculative basis up to planning, up to funding, up to site acquisition or whatever, you must keep on repeating this, particularly when you issue instructions to do work. You must state that the work has to be done "at no cost", however superfluous and tedious this may seem. If you do not, you may be at risk.