Burgess & Anor v Lejonvarn [2016] EWHC 40 (TCC)

Case No HT-2015-00090

[2016] EWHC 40 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Venue Royal Courts of Justice, The Rolls Building, Fetter Lane,

Date 15 January 2016

London, EC4A 1NL

Before

MR ALEXANDER NISSEN QC

(sitting as a Deputy High Court Judge)

Between

PETER BURGESSClaimants

LYNN BURGESSClaimant

BASIA LEJONVARNDefendant

Seb Oram (instructed by Mayo Wynne Baxter) for Claimants

Louis Flannery and David Sheard

(respectively of and instructed by Stephenson Harwood LLP) for Defendant

Hearing Hearing dates: 17, 18, 19 November 2015

Judgment

MR ALEXANDER NISSEN QC:

Introduction

[1]The Claimants, who are married, are the owners of 11 Highfields Grove, London, N6 6HN (“Highfields”). For 10 years or so prior to the events giving rise to this dispute the Claimants and the Defendant were good friends, having been near neighbours before the Claimants moved to Highfields. Sadly, they are now in dispute over the alleged provision of gratuitous professional services by the Defendant for the Claimants. The alleged services relate to a significant landscape gardening project which involved earthworks on a steep site at Highfields. In view of their former friendship and the fact that the services were said to have been gratuitous, the case serves as something of a cautionary tale.

[2]This judgment concerns the trial of preliminary issues set by the Order of Mr Justice Edwards-Stuart at the Case Management Conference on 10 July 2015. I shall explain the nature of those issues in due course. Suffice it to say, at this stage, that the Court was concerned about the disproportionate costs that these litigants would incur if they were required to participate in a full trial of all the issues between them. The Court considered that a trial of preliminary issues would clarify matters and, hopefully, would enable the parties to settle their differences without recourse to a full trial.

General Background

[3]The Claimants, whom I shall describe as Mr and Mrs Burgess or the Burgesses, purchased Highfields in March 2010. Mr Burgess is a director and principal shareholder in a company called Retail Human Resources plc. That company (which I shall describe as “RHR”) features, to a limited degree, in the story. Mrs. Burgess is a graphic designer and was brought up in Montreal. Mr and Mrs Burgess came to know the Defendant, whom I shall describe as Mrs Lejonvarn, and her husband because they were near neighbours at their previous address in Cromwell Avenue, Highgate. Mr Lejonvarn works in the financial sector. Aspects of Mrs Lejonvarn’s background are an issue in the case and I refer to that below. But it is not controversial that she, like Mrs Burgess, was born in Montreal, obtained a degree in art history from a Canadian University and moved to New York to undertake a Bachelor of Architecture programme at the Cooper Union. On graduation, she was the recipient of the Dean’s Thesis Prize. Post degree, Mrs Lejonvarn worked in various architecture firms in New York and Columbia. She then moved to San Francisco to work as an architect, first with Bechtel, then with Skidmore Owings and Merrill, a significant and well known firm, and then a smaller firm. Whilst working for those larger firms she undertook design work for airports in Dubai, San Francisco and Manila. She also worked on designs for tall buildings. Eventually she moved to the UK and stopped work to bring up her children. From 2007 she was working at a local architectural practice until 2010. She then moved to another firm and, eventually, decided to work on her own account. By the spring of 2013 she had adopted a trading name of Linia Studio.

[4]The detailed background of events leading up to the garden project is set out below. By way of introduction, there came a time in 2012 when the Burgesses decided to move forward with a project to landscape their garden at Highfields. I shall refer to this as the Garden Project. They obtained a quote from a well known landscape gardener to carry out the work at a cost in excess of £150,000 plus VAT. Believing this to be too expensive, they decided to ask for professional assistance from their friend and former neighbour, Mrs Lejonvarn. There is an issue between the parties as to whether she was engaged by a contract with the Burgesses and, if so, on what terms. By spring 2013 Mrs Lejonvarn secured the contractor to carry out the earthworks and hard landscaping at Highfields in pursuit of the Garden Project. The works involved the relevelling of the steep slopes, the formation of terraces and banks supported by railway sleepers, and the creation of paths and lawns. Paving and drainage works were also to be carried out. Mrs Lejonvarn’s intention was to provide subsequent design input in respect of the “soft” elements of the Garden Project such as lighting and planting, when that stage was reached. For that she intended to charge a fee. Sadly, the project never reached that stage. The earthworks and landscaping were done by the contractor secured by Mrs Lejonvarn. Quite what Mrs Lejonvarn herself did during the earthworks and landscaping phase is in dispute and at the core of the action. In July 2013, the parties sent each other emails, bringing Mrs Lejonvarn’s involvement in the Garden Project, whatever it was, to an end. The Burgesses continued with the work using a member of the original workforce but ultimately engaged the specialist landscape gardener who had provided the original quote. It is said that much of the work done during the period of Mrs Lejonvarn’s involvement was defective and that she is legally responsible for it. Mrs Lejonvarn denies being responsible for the quality of the works carried out on site. Criticisms are also made in respect of procurement, project management, budgeting and cost control. Mrs Lejonvarn says that she was not responsible for the provision of any of these services. The Burgesses have sued Mrs Lejonvarn both in contract and in tort and claim, as damages, the difference between the actual cost to them of the Garden Project, including remedial works, and that which they told it would broadly cost. The maximum value of the claim is circa £265,000.

The Preliminary Issues

[5]There are five preliminary issues which I have to determine as part of this trial. They are as follows:(i) Was a contract concluded between the Claimants and the Defendant, as pleaded in paragraphs 21 to 23 of the Particulars of Claim or otherwise?

(ii) If so, what were its terms?

(iii) On the assumption that the defects set out in Schedule 1 to the Particulars of Claim existed as at 9 July 2013, did the Defendant owe any duty of care in tort in light of the matters, and in the terms, pleaded in paragraphs 18 to 20 of the Particulars of Claim, or otherwise?

(iv) If so, what was the nature and extent of her duty?

(v) Was a budget of £130,000 for the Garden Project discussed between the Defendant and either or both of the Claimants as pleaded in paragraphs 10(1)(e), 11, 16(3), 21(2)-(3) and 29(3)(a)(b) of the Defence at any time before 5 July 2013, and if so, when?

[6]Since those questions cross refer to the pleadings, it is convenient to set out the relevant paragraphs of the Particulars of Claim and the Defence here: Particulars of Claim “D. The Garden Project: The Defendant's duty in tort 18. The Defendant well knew that the Claimants would rely on her professional skill and experience in carrying out the tasks set out in paragraphs 14 and 15 above. In particular, the Defendant well knew: 18.1. in light of the matters set out in paragraph 5, that the Claimants were relying on her to exercise the professional skills of an architect and project manager; in particular those that she had held herself out as having, and had in fact performed, in relation to the Bank Project, the earlier refurbishment of the Property, and the Office Project; 18.2. in light of the matters pleaded in paragraphs 9 to 11, that, had the Defendant been incapable of performing those tasks (namely, those set out in paragraphs 14 and 15 above) competently, so as to procure completion of the Garden Project at the Cost (allowing a reasonable margin for necessary changes in design, and events impacting on construction that were, in each case, unforeseen and unforeseeable), that the Claimants would instead have engaged Mark Enright; 18.3. that the Claimants were not intending to seek professional advice or assistance from any other person in relation to the performance of those tasks; and 18.4. that, if she were to perform those tasks without reasonable care and skill, it was a foreseeable consequence that the Claimants would suffer loss, expense and inconvenience. 19. The Defendant assumed responsibility for the tasks set out in paragraphs 14 and 15 above and thereby came under a duty of care to the Claimants to perform those tasks, and to give such advice, with due skill and care. In particular, the Defendant owed a duty to the Claimants, as architect and/or project manager on the Garden Project, to exercise reasonable care and skill in architectural design, budgeting, procurement, project management and supervision, and cost control, so as to complete the Garden Project at the Cost (allowing a reasonable margin as set out in paragraph 18.2). 20. Further or alternatively, the duty of care arose by reason of(a) the foreseeability of damage to the Claimants in the event of those tasks being performed, or that advice being given, negligently; and

(b) the close proximity between the parties. E. The Garden Project: The Defendant's contractual duty 21. The conduct and exchanges of the parties set out above in paragraphs 9 to 13 above, gave rise to a contract between the Claimants and the Defendant ("the Contract"). The Contract came into being on or around 15 May 2013, alternatively 28 April 2013, as a result of the matters pleaded in paragraphs 13 and 12 respectively. 22. By that Contract the Defendant agreed, in consideration of remuneration that she would draw out of the Cost (whether in the first phase or subsequent phases of the Garden Project), alternatively of the financial benefit that the Defendant would receive from her engagement on the Office Project: 22.1. to act as architect and/or project manager on the Garden Project, and to perform the services set out in paragraph 14 above; and 22.2. to procure the design and construction of the Enright Design at the Cost (allowing a reasonable margin as set out in paragraph 18.2). 23. It was an implied term of the Contract that the Defendant would exercise reasonable care and skill in the performance of those services, that term to be implied: by section 13 of the Supply of Goods and Services Act, because the Defendant was acting in the course of her business as Linia Studio; alternatively, because it was obvious, or necessary to give business efficacy to the contract.” 18.1. in light of the matters set out in paragraph 5, that the Claimants were relying on her to exercise the professional skills of an architect and project manager; in particular those that she had held herself out as having, and had in fact performed, in relation to the Bank Project, the earlier refurbishment of the Property, and the Office Project; 18.2. in light of the matters pleaded in paragraphs 9 to 11, that, had the Defendant been incapable of performing those tasks (namely, those set out in paragraphs 14 and 15 above) competently, so as to procure completion of the Garden Project at the Cost (allowing a reasonable margin for necessary changes in design, and events impacting on construction that were, in each case, unforeseen and unforeseeable), that the Claimants would instead have engaged Mark Enright; 18.3. that the Claimants were not intending to seek professional advice or assistance from any other person in relation to the performance of those tasks; and 18.4. that, if she were to perform those tasks without reasonable care and skill, it was a foreseeable consequence that the Claimants would suffer loss, expense and inconvenience. E. The Garden Project: The Defendant's contractual duty 22.1. to act as architect and/or project manager on the Garden Project, and to perform the services set out in paragraph 14 above; and 22.2. to procure the design and construction of the Enright Design at the Cost (allowing a reasonable margin as set out in paragraph 18.2). Defence Paragraph 10(1)(e) “Thereafter, on 28th April 2013 the Defendant met with the First Claimant at the Property to discuss the likely budget for completing a garden in line with the Enright plan in circumstances in which the 2nd phase decorative features and finishes were yet to be designed. The First Claimant was unwilling to incur the costs of a complete design at that stage. At the meeting, it was discussed that an overall budget in the region of £130,000 should be set aside, as was itemised in the Defendant’s handwritten notes for the meeting, which are appended hereto as Appendix 1.” Paragraph 16(3) “Whilst it is admitted that the Defendant told the Second Claimant that the overall budget for the garden was £130,000, it is denied that this was raised for the first time at this meeting. Subparagraph 10(1)(e) above is repeated.” Paragraph 21(2)(3) “(2) Whilst following the Defendant’s meeting with the Second Claimant on 5th July 2013 the First Claimant purported to be surprised by the £130,000 budget figure that the Defendant had mentioned to the Second Claimant, and purported to maintain that this represented an escalation in cost when compared against Hardcore’s cost estimate, in fact this figure had already been clearly set out and discussed at the 28th April 2013 meeting as a likely overall budget for the project as a whole. The figure of £130,000 was also discussed at the meeting on 17th May 2013 between the Claimants, the Defendant and Mr Kodyl of Hardcore. Paragraph 10(1)(e) is repeated. For unknown reasons, the First Claimant appeared to assume that the sum that he was going to have to pay for groundworks only had increased to £130,000, which was not the case. (3) Whilst the completed project would not and was never going to cost £78,500, it is denied if the same be alleged that, as at 9th July 2013, the project could not have been completed within or close to an overall budget of £130,000.” Paragraph 29(3)(a)(b) “(a) Paragraphs 10 and 21(2) and (3) above are repeated. The First Claimant chose to proceed with the project on the basis of a likely budgeted cost of £130,000. It is denied, if the same be alleged, that the Defendant assumed any responsibility towards the Claimants in suggesting this budget, or that the same was negligent. (b) If, which is denied, the Defendant ought to have informed the Claimants that the Garden Project would cost in excess of £130,000, no admissions are made as to what the Claimants would have done had they been so informed.”

E. The Garden Project: The Defendant's contractual duty

[7]It will be noted that most of the preliminary issues can be answered in a brief hard edged way. Issue (iv) is different in that respect as the answer is more of a narrative one. Given that the intention of this Judgment is to assist the parties in endeavouring to avoid a subsequent trial, or at least to minimise the scope for disagreement at any such trial, I have done what I can to set out my conclusions despite the obvious difficulties in formulating a succinct answer.

[8]During the three-day trial, the Burgesses were represented by Mr Oram of counsel. Mrs Lejonvarn was represented both by Mr Flannery, solicitor advocate, and Mr Sheard of counsel. I am grateful for their assistance.

The Witnesses

[9]Mr and Mrs Burgess both gave evidence. In addition, they called Mark Flesch and Rakesh Tailor as witnesses. Mr Flesch is a director of RHR and part shareholder of the company. He is also a friend of the Burgesses. Mr Tailor is the company secretary of RHR. Mrs Lejonvarn gave evidence. She also called both her husband and her former employer, Socrates Miltiadou, as witnesses.

[10]In general terms I found Mr and Mrs Burgess to be reliable witnesses. As will become apparent, I have not invariably accepted the totality of their evidence. But on the whole I found them to be honest, sincere and plausible witnesses. In general terms, I did not find Mrs Lejonvarn to be a reliable witness. I do not discount the fact, which was apparent, that she found the whole experience of giving evidence very distressing. Nonetheless, her answers were often inconsistent with the documents or, to a degree, unfocussed and at times wholly evasive. I do accept she gave her evidence honestly. However, where her evidence conflicted with that of the Burgesses, I have generally, but not invariably, preferred the evidence of the Burgesses.

[11]Mr Lejonvarn’s evidence was of limited compass. Understandably, where he could be, he was supportive of his wife’s version of events and, to the extent that I have not accepted her version, I also do not accept his evidence. Otherwise, I found the remainder of his evidence and the evidence of the other witnesses to be honest and generally accurate.

[12]This brief description of my perception of the witnesses is intended to give colour to my findings but should not be seen as cutting across the specific findings of fact set out below.

Expert Evidence

[13]Prior to the trial, Mr and Mrs Burgess procured evidence from an expert architect and, as a result, so too did Mrs Lejonvarn. In the event, neither party called their expert to give evidence and nor did they submit the reports as written evidence in the case. Mr Oram briefly referred to a passage from his clients’ expert report during closing submissions. It has not been necessary for me to have regard to the expert evidence. The Facts 14. Friendly Relationships

The Facts

[14]I have already mentioned that, for some years, the Burgesses and the Lejonvarns were good friends and were formerly neighbours. But since this case involves the alleged provision of gratuitous professional services by Mrs Lejonvarn it is now important to describe the nature of the relationship in a little more detail. Mrs Lejonvarn’s evidence was that she and her husband enjoyed the hospitality of the Burgesses and “deferred to them as one would to older more experienced friends who had taken us under their wing, so to speak”. Apart from the usual social aspects of their relationship, such as dinner invitations and the like, there were occasions when the Burgesses showed a degree of commercial generosity to the Lejonvarns beyond what some might see as the normal bounds of friendship. There are three instances which I should mention. First, when Mrs Lejonvarn decided to set up her own architectural business, as I describe below, Mr Burgess acting on behalf of his company, RHR, offered her some office space in his company premises at no cost to her. Mr Flesch, a co-director, pointed out that they had spare space at the time and, as she was a friend of Mr Burgess, it was nice to help out. Second, in connection with the new venture, Mrs Burgess helped by providing some gratuitous graphic design services in respect of the logo. Third, when Mr and Mrs Lejonvarn sold their flat and purchased a new property in Hampstead, Mr Lejonvarn asked Mr Burgess if he would lend him £67,000 towards the purchase price for a period of six weeks whilst Mr Lejonvarn waited for his bonus. The sum was duly repaid within the promised timeframe. I mention these features because, in my view, they provide some context to the subsequent decision by Mrs Lejonvarn to offer to provide gratuitous professional services to the Burgesses in respect of the Garden Project as part of her nascent architectural practice. In addition to those examples just mentioned, from time to time in the years preceding the Garden Project Mr Burgess or his company tried to send architectural work to Mrs Lejonvarn, or the firms by whom she was then employed.

[15]In their various written exchanges to which I shall shortly refer, email communications often contained a mixture of social and professional messages. For obvious reasons this judgment will focus on the latter. But the context should always be understood in light of the friendly relationship which existed between the parties. Mrs Lejonvarn’s Qualifications and Experience

[16]The Burgesses say that Mrs Lejonvarn described herself as an architect and, throughout their dealings with her, they had always understood her to be an architect. In the UK, it is necessary to register as an architect in order to be able to so describe oneself See paragraph 14-003 of Keating on Construction Contracts, 9th edition. A false statement that a person is an architect is an offence under the Trade Descriptions Act 1968: see paragraph 14-009. . Mrs Lejonvarn was not registered with the Register of Architects in the UK. Nonetheless she has architectural qualifications and is registered as an architect in the Netherlands. Before she arrived in the UK, she obviously had experience of undertaking design work on some significant projects including airports and high rise buildings. In conversation she described herself as an architect. For example, in her email of 28 October 2007, she wrote:

“Given that I am an architect I often see all the mistakes and the things that bother me but this kitchen seems to me to be perfect”

. In her email of 12 May 2010 she wrote: “as your architect, I feel I should tell you that I can get you the same kitchen for much less”.

[17]By December 2013, some months after the Garden Project, Mrs Lejonvarn described herself on the social media site, Linked In, as follows:

“Overview: Past: Project Architect/Manager at Richard Mitzman Architects. Senior Architect at PAPA Architects.”

[18]By 2015, this entry had been amended to describe herself as “Project Designer” for Richard Mitzman Architects and “Senior Architectural Designer” for PAPA. The description of “architect” had now disappeared.

[19]Mr and Mrs Burgess say that for some time they were simply unware that Mrs Lejonvarn was not a registered architect and, in that regard, feel that they have been deceived. Mrs Lejonvarn says that the Burgesses knew that she was not entitled to describe herself as an architect in this country and that her self description that she was an architect was informal and conversational. In my view, during the early stages of their relationship, the Burgesses did not know that she was not entitled to call herself an architect in the UK. However, I rather doubt that it would have made a difference to them even if they had known. That is because they relied on Mrs Lejonvarn for her experience and expertise, not her title. But in any event, there can be no doubt that, by the time of the Garden Project, the Burgesses knew she was not entitled to describe herself as a qualified architect in the UK. In paragraph 20 of his witness statement, Mr Burgess confirms that his wife was told about this after the Bank Project. As he says:

“Lynn certainly felt that a Canadian architect would be as good as a British one (she being Canadian herself), so this was not an issue for us.”

[20]Finally, I should also mention that Mrs Lejonvarn is a Polish speaker. As such she was able to discuss matters directly with the Polish workforce in their own language. This is material because Mrs Lejonvarn contends that her role on the Garden Project was merely to act as a conduit between the Burgesses and the contractor. Other Projects

[21]For reasons that will become apparent, it is necessary to refer back to previous architectural services provided by Mrs Lejonvarn to Mr Burgess or his company before the Garden Project ever came to fruition. The history of these dealings and the significance of them to the present proceedings are both issues in the case. The Bank Project

[22]The most significant aspect of their previous dealings concerned the so-called Bank Project. RHR owned a building on the Archway Road in Highgate that had formerly been a bank. In 2009 Mr Burgess was considering converting this space into a residential apartment. He sent an email to Mrs Lejonvarn saying that he needed a good architect and wondered if Mrs Lejonvarn or her firm would be interested. In evidence, Mrs Lejonvarn accepted that Mr Burgess was contacting him because she possessed a skill which he did not have and that, at that time, she recognised he would be relying on her advice. At the time, Mrs Lejonvarn was working for a small firm called Papa Architects (“Papa”). Mr Socrates Miltiadou was a director of Papa. Mrs Lejonvarn was an employee of Papa and, whilst there, was not entitled to and did not provide architectural services in her own right. For the reasons I have given, everything she did would have had to be approved by Mr Miltiadou since he was the registered architect and the services were provided in the firm’s name. Mr Miltiadou explained to me that everything done by Mrs Lejonvarn was under his supervision and control and I accept that evidence.

[23]On 7 April 2009 Mr Burgess went for an initial meeting to Papa’s offices. There he met Mr Miltiadou and Mrs Lejonvarn. It was a friendly and informal meeting. Mr Miltiadou said that builders were difficult to manage and needed to have an eye kept on them. He explained why this was not a project which Mr Burgess should ever manage himself.

[24]Immediately after the meeting, Mrs Lejonvarn sent an email to Mr Burgess, copied to Mr Miltiadou. In fact, Mr Miltiadou’s evidence was that he drafted the content of the email. It said:

“Normally our fees are divided into 3 stages and reflect the 3 stages of work that traditionally comprise a full architectural service…However, this project is small enough not to warrant a main contractor and therefore merits a slightly different fee structure. Instead of tendering out to a main contractor, we would be hired to project manage the works ourselves. We would hire the subcontractors, manage them and be involved on a day to day basis on site. This would guarantee you that the works would be carried out to our specifications ensuring a higher quality than what you would get from a main contractor. This is far more than what we would normally do using a standard form of contract. When you enter into a contract with a main contractor the assumption is that he project manages it himself with us as the administrator of the contract. With us acting as project managers you get a much higher quality job and a project manager who acts in your interest. Our fee structure for the project management stage of the job is 15% of the overall building cost. (of which we don’t know the cost of yet, but probably around £100,000)”

[25]This email formed the basis of the contractual relationship between RHR and Papa Architects for the Bank Project. The contract was an oral one based on the terms of this email. There was no other contractual documentation. To the experienced eye, the passage identified above is confusing. One the one hand it suggests that Papa will be the main contractor, hiring subcontractors, and being paid both the cost of the construction work and an additional fee of 15%. On the other hand, it suggests that Papa will be project managing the works without a main contractor, but employing specialist contractors as agents on RHR’s behalf, with that workforce being closely managed by Papa. For those services Papa would be paid a fee of 15%. Mr Miltiadou’s evidence was that he intended to suggest the latter, not the former. He explained that his firm would never have acted as main contractor. Mr Miltiadou explained that the project management approach was advantageous for a client. It generally improved the speed of a project, it allowed the possibility of taking design decisions as the project proceeded and, finally, it avoided the payment of a main contractor’s mark up.

[26]In evidence Mr Burgess said that he was always of the opinion that RHR had not entered into direct contracts with the contractors. He said his understanding was that there was a single contract and that this was between his company and Papa. In effect, he thought that there was a combined contract with Papa to provide both the professional and construction services. Mr Burgess said he still held that view even now.

[27]In order for me to resolve the basis of the contractual relationship between Papa and RHR, the most material consideration (apart from the text of the email set out above) is how payments were made for the construction work undertaken on the Bank Project. The question of who paid for what is as good an indicator as any as to the basis of the relationship. The parties were at odds about the payment history and I must make findings about it. Project management fees were billed monthly by Papa and sent directly to RHR’s company accountant, Mr Rak Tailor, for payment. This is all as I would expect. Separately, the contractors agreed to be paid on a day rate and, so it seems, were paid fortnightly. It is commonly understood, and was known to the parties here, that a day rate basis is often an uneconomic way of proceeding and could be open to abuse. One of the professional services provided by Papa was the checking of the claims for payment by the contractors to make sure that work was done on the day claimed and that it was both productive and justified. There was therefore a process whereby claims for payment by the contractors were reviewed by Papa and those claims were then approved for payment. RHR then made the payments directly to the contractors. Mr Miltiadou confirmed that no payments were made to the contractors by his firm. Mr Burgess points out that the applications for payment were made out in the name of RHR but were sent to Papa (in the persona of Mrs Lejonvarn) for approval. She would then send details of the approved payments to RHR’s company accountant, Mr Tailor, for payment. Payments were therefore made directly by RHR to the contractors. I sensed that Mr Burgess simply saw this as RHR merely being directed to make a payment to a third party of a liability which was actually owed by RHR to Papa. But, in my view, that is not realistic. There would be no point in Papa approving applications for payment of sums which were actually owed to it. It is also of significance that the payments for the professional fees of 15% were kept separate from the invoices to the contractors.

[28]I have come to the clear conclusion that Mr Burgess’ understanding of the contractual arrangement is wrong. In my view, RHR entered into a contract with Papa to provide project management and professional services but nothing more. It entered into a separate agreement with the contractors (or sets of contractors) for the work itself. Whilst the email of 7 April 2009 was confusing, that conclusion is consistent with what I understand it to be saying. Though not strictly relevant, it is also what Mr Miltiadou intended to say.

[29]In fairness to Mr Burgess, his misunderstanding would have been informed by the confusing email described above and one subsequently sent to him by Mrs Lejonvarn on 22 September 2009 which added to the confusion. It said:

“Originally we thought we would cut the cheques to the builder every Friday after receiving their weekly invoice. However, because we are technically your builders (and the builders, in effect, our subcontractors) it makes us liable for their tax if they don’t pay etc etc. If we filter their invoices and you cut them the cheques, then they remain as simply your builders without any tax implications to you. Adam will give us an invoice Friday morning and we will scrutinize it, approve it and then pass the invoice to Rak (your accounting person yes?). If he could then write out a cheque the same day, then they will have their money…”

[30]In my view Mrs Lejonvarn was wholly wrong to have described Papa as “technically your builders” in that email. Mr Miltiadou was visibly surprised when he saw that email for the first time in the witness box and was unable to explain it. But, although that description was wrong, the email correctly described the process of approval for payment which I have described.

[31]Mr Burgess said he had the subjective impression that, within Papa, Mrs Lejonvarn and Mr Miltiadou were of equal standing. Viewed objectively, I do not regard that as an accurate description of the position or that that was how it would have appeared to the outside observer. As she was the contact and link between the client and the firm it is not surprising that Mrs Lejonvarn played a full role in the services being provided but that is nothing to do with the relative standing as between her and Mr Miltiadou. Nonetheless, for the reasons I have already given, Mr Miltiadou was of greater standing than Mrs Lejonvarn. He was the registered architect and a partner of the firm. She was unable to describe herself as a registered architect and was a mere employee of the firm.

[32]The Burgesses also contend that Mrs Lejonvarn became the person in charge of the project. The Burgesses point to the large quantity of emails sent by her in relation to the Bank Project. They contrast that quantity with the very few emails sent by Mr Miltiadou. I accept that Mrs Lejonvarn was the individual most closely involved in the day to day running of the project. However, I also accept that all her work was subject to supervision and guidance from Mr Miltiadou even if RHR were not aware of that at the time.

[33]Mr Miltiadou agreed that Papa had been engaged to and did in fact project manage the Bank Project. He agreed that the firm had been engaged to control and supervise the contractors. By contrast, Mrs Lejonvarn tried to minimise her role on this project. A good example of Mrs Lejonvarn’s wholly unconvincing attempt to do so was in respect of her description of the function of co-ordination. She suggested that co-ordination involved a basic, unsophisticated activity such as dropping off a set of keys. On her view, it had nothing to do with ensuring one trade co-ordinated its works with another. Within the field of project management, co-ordination is a professional service which is far more substantive than dropping off a set of keys. I am quite satisfied that she, through Papa, was involved in proper project management. It seems clear to me that she personally played a considerable role in project managing the Bank Project, monitoring the budget for it, supervising the works (with the exception of specialist trades such as M&E works) and co-ordinating the contractors. It is true that this was all done under Mr Miltiadou’s watch. But I do not consider that this materially dilutes either the level of experience she in fact gained or the expertise which the Burgesses would have concluded she had acquired by the time she started work on the Garden Project. Mr Miltiadou accepted in cross examination that by the end of the Bank Project it would have been right for Mrs Lejonvarn to describe her experience as that of a project architect and project manager. He also said that her experience would have been apparent to Mr Burgess. I agree with both of these comments.

[34]The bulk of the traditional construction work on the Bank Project was undertaken by a workforce including a Polish individual called Przemek Kordyl. Mr Kordyl had a good working relationship with Mrs Lejonvarn. Mr Kordyl subsequently formed a company called Hardcore Ltd who were to become the contractors on the Garden Project.

[35]To give a sense of what Mrs Lejonvarn was doing on the Bank Project I will refer to three emails.

[36]On 18 September 2009 Mrs Lejonvarn sent an email to Mr Burgess saying:

“We have been really cranking things on your project. I go at least twice a day and the boys are moving quickly. I am working on designing and drawing up everything with hopes to have it in building control in 2 weeks….Am pleased with their progress.”

[37]On 4 November 2009 Mrs Lejonvarn sent an email to Mr Burgess saying:

“I have also gone over the bills to date in order to keep close watch on costs. I have prepared a spread sheet and itemized it so we can see where we are. I have attached it here. It is good to keep it all under close scrutiny now that we have so many quotes coming in…”

[38]On 1 March 2010 Mrs Lejonvarn wrote to Mr Burgess in these terms:

“I am attaching an updated spread sheet for the project estimate…We have two more months of labour costs which we anticipate to be around £18,000. Included in this labour cost will be some of the items listed in the project estimate…We have therefore gone slightly over our budget but not more than £5,000 to £10,000. It is always good to account for a contingency.”

[39]The project was completed in around August 2010. A problem arose in September 2010 when there was a gas leak. Apparently it was caused by a faulty installation which could have had serious consequences. This created an awkward situation as between Mr Burgess and Mrs Lejonvarn. He said that, in view of his friendship, it would be better for him to deal with Mr Miltiadou. In an email of 8 September 2010 he said:

“The reason for speaking to Socrates is not “to go over your head”

. We consider you to be a good friend as well as a talented architect. But I do have issues with your employer and I do not want to spoil our relationship by arguing these points with you. I feel it would be much better to deal with contentious issues with Socrates or someone else at Papa. I really do admire your work.”

[40]He went on to complain that, overall, the project had not been a commercial success.

[41]Mrs Lejonvarn replied the same day:

“I do however stand by the work we have done and after working in this profession for many years I know that we have given you not only very good design and project management service not least because I consider you a friend and gave you much more care and attention.”

[42]On the subject of cost, she added:

“However, on the subject of cost you feel that PAPA is responsible for costs exceeding your initial budget. That discussion I feel you should indeed take up with Socrates as I am not responsible for fees. I am however always working with a budget estimate and I feel I did everything I could do to control those cost (sic) in my control.”

[43]Although Mr Burgess did not regard the Bank Project as a financial success everyone appears to agree that the standard of workmanship was good (subject to the gas installation) and that the finished product was of a high standard. The estimate of £100,000 ended up costing around £180,000. At least some of the extra costs were incurred in excavating concrete vaults which had not been expected. In the end, RHR did not hold this cost overrun at Papa’s door. Mr Miltiadou described the Bank Project as a success. Notably, Mr Burgess described the costs as having escalated to £373,000. I accept Mr Miltiadou’s evidence that this is not a like for like comparison in that Mr Burgess has included within that amount items of expenditure which were never part of the construction cost on which Papa charged its percentage fee.

[44]In my view there is no doubt that, at least by the end of the Bank Project, Mr Burgess would reasonably have been left with the impression that Mrs Lejonvarn was professionally capable of carrying out design work, of project managing a small construction project involving third party contractors, of supervising their work, of reviewing applications for payment and of providing a budget and monitoring costs against it. That was the effect of Mr Miltiadou’s evidence and I accept it. It seems to me to be quite irrelevant that this experience was demonstrated whilst she was working as an employee for Papa. It was a skill that Mr Burgess had seen Mrs Lejonvarn demonstrate herself. The Kitchen Project

[45]Once the Burgesses had moved to Highfields they wanted to carry out some work to various rooms including, particularly, the kitchen. Mrs Burgess had seen a kitchen in a studio in Wigmore Street by the name of Roundhouse and a quote had been obtained from them.

[46]On 12 May 2010 Mrs Lejonvarn emailed Mr Burgess:

“Peter, I have been thinking about that kitchen quote. If you feel uncertain about it, please speak to me again about it because as your architect, I feel I should tell you that I can get you the same kitchen for much less.”

[47]On 11 June 2010 Mrs Lejonvarn wrote to Mr Burgess:

“As you know we are a design practice and as such the work we do is first and foremost design. The labour we employ work only from our designs and thus are not building contractors of the regular sort. This is why we have such a long standing history with them. We are, in effect, a team. Adam and his guys are really Interior Fit Out Specialists and they work to our designs exclusively. So I am afraid we are unable to simply act as contractors in this instance. …I hope that we can have other opportunities to be your architects and designers but I completely understand that for Highfields it is not appropriate.”

[48]This message yielded an apology from Mr Burgess who had not wanted to cause offence. He expressed surprise that Mrs Lejonvarn’s “guys” could not do the job but accepted it and invited Mrs Lejonvarn to submit invoices (i.e. from Papa) for the time worked.

[49]In the end, the quote which Mrs Lejonvarn had sourced was not sufficiently cheaper than the Roundhouse quote which the Burgesses had already obtained and the job went no further. Alterations to the rest of the house were also done by others. The Little Venice Office Project

[50]In April 2012, RHR was contemplating the refurbishment of its office premises at 14, Bristol Gardens in Little Venice, to create a new reception and conference area. Mr Burgess asked Mrs Lejonvarn to tender. At this time, Mrs Lejonvarn was working for Richard Mitzman Architects LLP (“Mitzman”). Mr Miltiadou was also working for Mitzman at the time. Following a site visit the day before, on 27 April 2012 Mrs Lejonvarn wrote to Mr Burgess as follows:

“I will prepare what I believe to be your brief, and then you can let me know if you agree, and then you can give me a budget that we can agree on.”

[51]For the purposes of this project, Mrs Lejonvarn got in touch with Mr Kordyl informing him of the opportunity for work for the Burgesses at Archway Rd (see below) and in respect of Little Venice, describing it as a great interiors project for the entire renovation of offices and lobby.

[52]During the period of these early exchanges, Mr Burgess sent an email to Mrs Lejonvarn complaining about the quality of some minor restoration work he was having done at his house. In two emails of 27 April 2012, Mrs Lejonvarn said:

“Peter, leave the builders to me! Although Small Restorations aren’t even builders! I use Small Restorations for simple windows and I don’t think that they would be capable of doing anything without having their hand held! And I mean held!!!” “You have me! Don’t go near them! The thing is that they need to be given drawings, specifications, constant supervision you see! They don’t think on their own!”

[53]Mrs Lejonvarn left Mitzman in October 2012. Nothing of substance had been done in respect of the Little Venice project by then.

[54]Subsequently, there were some exchanges in relation to the design of a reception desk. In June 2013 Mrs Lejonvarn proposed that there should be works in the reception area and suggested a budget of c.£16,000. On 11 June 2013 she asked for a flat fee of £2,300 for project managing the works and Mr Burgess agreed to this.

[55]Works at Little Venice were due to commence on 8 July 2013. As a result of the breakdown of the relationship between the parties in respect of the Garden Project this never happened. Archway Road

[56]Also in April 2012, Mr Burgess was contemplating carrying out work at the first floor residential flat in Archway Rd, London N6. This flat was above the former bank described above. Mr Burgess sought to involve Mrs Lejonvarn in that project, again through Mitzman.

[57]On 31 May 2012 Mrs Lejonvarn sent an email to Mr Burgess in the following terms:

“I have the drawings for the First Floor Flat printed and I wanted to ask you if you would like me to schedule in some design and procurement time in order to get the refurbishments going. I don’t want the boys on site and not have materials ordered as it would not be an efficient method of working. I thought I would present to you the new bathroom layouts, some fitting suggestions, samples of materials etc. Then I can go to my sources and start procurement once you are happy with the choices. What I do need however is a budget to work with.”

[58]In terms of charging, she suggested that the firm could work on a time charge basis as the job was not big enough to warrant a fee proposal. In fact, Mitzman sent a formal letter of appointment dated 18 June 2012 addressed to Mr Burgess of RHR but describing Mr Burgess as the client. The letter of appointment proposed an engagement on terms of the Conditions of Appointment for a Domestic Project 2010 issued by the RIBA.

[59]In the event, the letter of appointment was never signed. On 24 June 2012 Mr Burgess wrote to Mr Miltiadou of Mitzman to say that the project was being put on hold because there was a tenant in the flat whom Mr Burgess did not want to disturb. A small invoice was issued for £500.40 for work done.

[60]On 24 September 2012, Mr Burgess asked Mrs Lejonvarn by email if her “guys” could do a job on the flat during the following few weeks. She said she would speak to them and get it booked in.

[61]In the event, this project came to nothing. Concluding Comments

[62]These various ventures demonstrate that there was a willingness on the part of Mrs Lejonvarn to provide a variety of architectural services, both on an informal and formal basis, to Mr Burgess or his company in the period before the commencement of the Garden Project. Mrs Lejonvarn gave every impression that she, personally, was capable of providing all the services described and Mr Burgess was reasonably left with that impression. However, the most significant model for the Garden Project was in respect of the services provided and the experience gained on the Bank Project. The Garden Project – Primary Facts

[63]I now turn to the project which forms the subject matter of these proceedings. In May 2012 the Burgesses sourced a quotation from Mark Enright of the Landscape Garden Company Ltd. By all accounts, Mr Enright is a successful provider of landscape gardening services and has a degree in horticulture. The quoted cost for the design work was £3,000 plus VAT and this was accepted by the Burgesses.

[64]On 25 July 2012 Mr Enright produced his plan. Unsurprisingly, it is an aesthetic, high level, outline plan. At some point Mr Enright had said that the Burgesses were free to use the plan even if they did not employ Mr Enright to bring the project to fruition. The plan does not contain any of the detail which would be necessary to actually construct the Garden Project. In the event, no such detailed drawings were ever produced either by him or by Mrs Lejonvarn.

[65]On 7 August 2012, Mr Enright sent a brief headed quotation and said that, if the costs were in line with the expectation of Mr and Mrs Burgess, he would produce a more detailed specification. As he was not engaged, he did not do so. I interpose to observe that at no subsequent stage did Mrs Lejonvarn produce a more detailed specification either. The quote was for £155,837 plus VAT. An estimated planting budget of £19,785 plus VAT was also quoted. The total of these, excluding VAT is £175,622 or, including VAT, £210,746.40.

[66]On 2 August 2012 the Burgesses hosted a party to celebrate the London Olympics. Mr and Mrs Lejonvarn were invited along with a number of other guests. There is a conflict of evidence about the events of that day. Mr and Mrs Burgess say that Mrs Lejonvarn asked to see the plan and that it was brought out and displayed on the table. They say that, at that point, the Garden Project became a talking point. They say that Mrs Lejonvarn was “holding court” commenting that the design was good but the price was excessive. Mr Flesch says he recalls Mrs Lejonvarn strongly indicating that it was Mark Enright’s name which pushed up the price and that it did not need to come at anywhere near that price. The Burgesses say she intimated that it could be done at half the price. Mrs Lejonvarn says that she never asked for or saw the plan and did not make the comment attributed to her. Her husband gave supporting evidence to the same effect.

[67]I am satisfied that Mrs Lejonvarn did make the comment attributed to her. But, equally, the significance of the comment was diminished by the evidence from Mr Burgess, which I accept, that he never relied on that comment as constituting some form of advice about the appropriate cost of the Garden Project. He said in terms that he would never have held her to that estimate and agreed it was a casual remark. Nor, in my judgment, would it have been reasonable for him to do so given the informal circumstances in which the comment was made. I am also satisfied that, in making the comment she did, Mrs Lejonvarn was not particularly pushing to be appointed for the project.

[68]On 3 September 2012, Mr Burgess wrote to Mr Enright informing him that the quote was too expensive and indicated that he intended to deploy the design using someone else just as Mr Enright had said was permissible. A design query was raised with Mr Enright on 26 September 2012. On 1 October 2012 Mr Enright agreed to slightly reduce his quote to £150,000 plus VAT.

[69]During this period, Mrs Lejonvarn was working for Mitzman for around twelve hours a week but, by 10 October 2012, she had left that firm. She told Mr Burgess that she had so much work on that she was keen to set up her own office.

[70]Not much happened between then and the Spring of 2013. I accept Mrs Lejonvarn was still not positively putting herself forward to secure the Garden Project during this period. However, Mr Burgess says that, during a casual conversation in the winter of 2012, he specifically asked Mrs Lejonvarn if she and her team had experience of working on garden projects. He says that Mrs Lejonvarn said that she did have such experience and that terracing was a construction job like any other. I do accept the evidence of Mr Burgess that such a conversation took place. The exchange was unsurprising as Mrs Lejonvarn did have some professional experience of domestic landscaping projects although I do not believe it was on anything like the scale of what became the Garden Project. In my judgment, she would not have let that stand in the way of the opportunity to secure a prestigious project for her new venture. As their previous dealings show, Mrs Lejonvarn had always been enthusiastic about offering to provide architectural services either for the Burgesses or for RHR.

[71]The Burgesses and the Lejonvarns dined together in a restaurant on 5 March 2013. On 6 March 2013, Mr Burgess wrote to Mrs Lejonvarn in connection with a reception desk for the office but added:

“Also, do you think your guys could do our garden? I will send you the plans.”

[72]Mrs Lejonvarn replied the same day:

“I will have a look now. Please send me the design of the garden and definitely our guys will be great.”

[73]She later added:

“I spoke with the boys and once you send the plans I can meet with them to go over the job so that they can price it.”

[74]On the same day, Mrs Lejonvarn emailed Mr Kordyl a copy of the design prepared by Mr Enright. By this time, Mr Kordyl had formed a limited company known as Hardcore Builders Ltd (“Hardcore”). She wrote:

“This would be for Peter Burgess. This is his house. It is all outside work, and I think you can do it without a doubt. The gardeners will do all the planting etc, but the main works are the terracing, stairs etc. A lot of it is already there. It is quite a complicated garden built on a steep slope, so you would have to incorporate some drainage but I have someone that can help with that. A nice job I think.”

[75]On 7 March 2013 Mr Kordyl replied With no disrespect to him, I have corrected his spelling for clarity. :

“All right, I let you know. It’s a lot of work and you’ll need to think it over. I think that you cannot give the total price until more design is specified. I also would like to speak with the drainage specialist. It is like it is more or less but it’s true that you need to drain well.”

[76]On 11 March 2013 Mrs Lejonvarn met the Burgesses at their home. They looked at the garden and its boundaries. High level discussions as to the scope of work took place. Mrs Lejonvarn was provided with a copy of the Enright plan. Mrs Lejonvarn says she realised that the plan was lacking in detail and that it would be difficult to obtain a price for any works beyond ground preparation and ground works.

[77]On 12 March 2013, Mrs Lejonvarn wrote an email to Mr Kordyl of Hardcore saying:

“I met with Peter and Lynn yesterday regarding the works to the garden. It looks like they will have approval from their residents association shortly which means you could get started anytime. It is basically a lot of earth moving around and levelling. You will have to get a digger/earth mover. The design they like includes using railway ties and decking. We will need some replacement fencing and then we can call in Matt to do the planting. At the ground level next to the house, we would like to repave the terrace with porcelain tiles. The underground drainage needs to be rodded and checked and that will be a good opportunity to do that.”

[78]On 18 March 2013, there were several email exchanges between the parties. Mrs Lejonvarn emailed Mr Burgess as follows:

“We have done the leg work on what needs to be done in preparation for works and we can be ready very soon at minimum getting things lined up. Do you have a start date or thereabouts in mind…Ideally I would not want to be away the week they start, but actually, that week is a short week due to Easter Monday. Hardcore will prepare the first phase for costing which will relate to all the ground preparation, ground works, etc. to get the levelling done. I would also like to instruct a drains survey as quickly as possible. This is the opportune time to confirm that all the below ground drainage is sound and where exactly we can connect to etc, for additional drainage…I use 2 companies who are both very good and very reasonable.”

[79]Mr Burgess replied the same day saying that the works could start at any time once he knew what the cost would be. In response to that Mrs Lejonvarn said:

“We can cost out the first phase of works to achieve the necessary levels. We have unit costs for the railway ties but we really need to have a more detailed design developed in order to cost out how many ties are needed. What can be achieved is a conservative estimate at the very least. In order to determine full costs for the steps and decking, I will generate areas and number of steps from Mark Enright’s design but I would actually like to make my own drawings to develop the design to a realistic quantifiable level. In the meantime, the first phase of the works would include protection and site preparation, initial removal of existing decking…then the initial ground works to achieve the new levels. That can be priced up now….we need to cost up as much as is known of the works”

[80]Mr Burgess replied saying that he did not want to have to go to the cost of a complete re-design unless he had some sort of feel for what the cost would be. Mrs Lejonvarn responded:

“By no means am I suggesting a re-design. Mark gave you a very good general concept and his design should work but he hasn’t taken it to a level that is necessary both for costing and for building. He gave you a budget estimate but he didn’t give you a breakdown of costs, and once you would have started costs might just have accumulated. I wouldn’t be charging you to work through the initial costing anyway. The only design charges I anticipate are for the exact layout of the deck areas, the paving area (it has to be laid out even for ordering of the tiles) and any design features such as the screens to the hedge, the fencing above and how you want it to be. A drawing helps you visualise the final result and it helps work out how much of each item one needs to order. Effectively, you have a general design, but it is not something anyone (other than Mark Enright of course) can implement without working out some further details. For example the fencing, what type, ready made panels or not, will it need some support members etc. The railway ties all come in different sizes and we need to make sure we get ones that are adequate for the job and keep consistency throughout the garden. It is premature for some of these decisions, but those are the kinds of things I mean when I refer to design. I don’t mean I want to re-design the general layout. Mark has done that and from there you can move forward, but it isn’t quite ready for a meaningful pricing exercise. Remember that Mark Enright does this over and over again, so he will have a good idea of what he needs to charge. From my builder’s perspective, they need to go through the job with a fine tooth comb in order to arrive at a price that is realistic.”

[81]In another email sent shortly after she said:

“So you would prefer for me to get Hardcore to give you another budget estimate for the whole job just like Mark Enright did?...I am not suggesting a re-design, I am suggesting the next step of the initial concept design for the purposes of pricing. I see the project team as follows: 1. Labour: Hardcore (Przemek and Adam) 2. Project Management and detail design (to include layout and procurement of hard materials such as paving, decking, possibly balustrades and design features (possibly a water feature), consideration of technical aspects such as drainage and building of raised beds and or supports, fences, barriers and or other built items such as storage cupboard and all related finishes.) ME. 3. Lighting: Mark DAVIS 4. Trees: Richard Wassels 5. Planting and any pots or decorative features: Matt 6. Misc. items: underground drainage and irrigation. My guys are prepared to do all of the “building work”, the ground works, the raised beds and terraces, the deck areas and stairs, and storage and the paved areas at the ground level and they can have it all ready to receive planting.”

[82]Mr Burgess replied:

“The best option for us, if we don’t take price into account is to let Mark Enright do it since its his design and daftly the fact that he has done it has value. Of course I would love your guys to do it but I certainly don’t want to be in a position where it costs even more than Mark Enright. I was thinking it would be substantially less expensive. I will need a fairly firm price.”

[83]Mrs Lejonvarn answered:

“Ok so we get a firm price from them. I doubt their price would come even close to Mark’s but the only way to find out is to test it. So that is how I will proceed. I will do what is necessary for them to price it out accurately and I will ask Matt to come and have a look at the garden so that he can get us a price too. I will work on finding the tiles so I can get a price for that too. Mark’s design is good and you can always still say it is a Mark Enright designed garden as I am assuming you paid for his design so I don’t see how you would lose that value by using Hardcore to carry it out. …Agreed for Hardcore to price out with my input?”

[84]That was how matters proceeded. On 9 April 2013, Mrs Lejonvarn sent an email to Mr Kordyl, not seen by the Burgesses, commenting on his draft quote. She said:

“…Also when you refer to piling: how do you know it will need to be piled and that implies we need to involve an engineer as the piling has to be designed. Again, if this is the case the price cannot be adequate until we have an engineer’s design how can you price for it. So this item still needs work. I could speak to Martin Redston about this in order to get his take on it.”

[85]On 17 April 2013, Mrs Lejonvarn sent the cost estimate prepared by Hardcore to the Burgesses. The covering email from Mrs Lejonvarn explained:

“Here is the Cost Estimate for the Ground works and first phase works to be carried out according to the design furnished by yourself. Hardcore have given you a price for the 1st phase of works and as such have itemised what this comprises of. The subsequent stages are only budget estimates. If you are happy to accept this first stage pricing (the subsequent prices listed are done so as budget prices but as discussed earlier, we will have to first decide what exactly you will want (ie what kind of decking etc) and then the price can be precise. At present the first stage of works have a final price as shown but once accepted, the full price breakdown will be sent to you. We are just coordinating a start date with the labour team and once you are ready, we can confirm.”

[86]The accompanying cost estimate was a rudimentary one page document. Under the heading “First stage – demolishing and structural works” there were eight listed items with a global cost attached of £45,000. Below that were items for supplying and fitting railway sleepers (£12,000), an allowance for hardwood decking and steps (£9,000), an allowance for the irrigation system (£4,500) and an allowance for new fencing (£8,000). When added together, the total cost was £78,500. VAT was expressly excluded.

[87]Mrs Lejonvarn says that in sending this to the Burgesses she was doing no more than passing on to the Burgesses the price that Hardcore had quoted. In other words, she merely saw herself as a line of communication between the two parties and was not, herself, providing a cost estimate. In my view, that is not a fair description of the role she had already been performing in respect of the Garden Project. By this point in time, she had identified the proposed contractor, discussed the scope of work with that contractor and provided quantified estimates for the work as set out in the cost estimate. She had previously agreed to get Hardcore to price the work in phase 1 with her input and that is what she did.

[88]The immediate reaction from Mr Burgess was that the figure in the cost estimate compared favourably with the previous quote from Mr Enright. He emailed his wife:

“This is more like it”

. But she understood that the cost estimate was not comprehensive and saw that it might approach Mark Enright’s figure. When that was pointed out to him by her Mr Burgess realised this and said he would revert to Mrs Lejonvarn but he still thought it would be much cheaper than Mark Enright.

[89]A series of email exchanges followed in which there was an attempt to make the quotes like for like by defining what was and was not included in the cost estimate sent by Mrs Lejonvarn. Mrs Lejonvarn provided further clarification on 17 April 2013.

[90]On 18 April 2013 Mrs Lejonvarn sent an email to Mrs Burgess in response to one from her. In the reply she said:

“As far as the decking goes, your choices are less exciting but as long as you don’t want the very expensive teak decking, you can still keep costs to the budget.”

[91]On 23 April 2013 Mr Kordyl wrote (on behalf of Hardcore) to Mrs Lejonvarn saying that the team was ready to start but that they could not wait forever and that, if Mr Burgess did not make a decision, it would cause delay.

[92]On 26 April 2013, Mrs Lejonvarn emailed Mr Burgess to suggest discussing Highfields as she had an idea about how the pricing issue could be resolved. In my judgment, that was a reference to a resolution of the earlier exchanges in which Mr Burgess had expressed concern that he needed a fairly firm price because he would proceed with Mr Enright unless the alternative was cheaper.

[93]On Sunday 28 April 2013 it is agreed that Mr Burgess met Mrs Lejonvarn at Highfields. Mrs Burgess was not there as she was abroad from the end of March until mid May 2013. A key issue which divides the parties is whether a budget of £130,000 was discussed at this meeting. Mr Burgess says that this was a short meeting: no longer than half an hour. He says that at that meeting Mrs Lejonvarn asked on behalf of the contractors if they could be paid in cash. As he said it made no difference to him, he agreed. He says that there was absolutely no discussion about an overall budget of around £130,000 and that, if there had been, he would have “choked” on hearing it. He says he would have cancelled the project there and then, given the increase from £78,000 to £130,000. He indicated that the difference between £130,000 and the fixed quote from Mark Enright would not have been sufficient to warrant the risk of proceeding with Mrs Lejonvarn.

[94]Mrs Lejonvarn produced her original notebook as an exhibit in the case. The notes record a meeting on 28 April 2013 between her and Mr Burgess. The notes run to five pages and are quite detailed but do not clearly identify which parts may have been written in preparation for the meeting and which may have been written during or after it. The figure of £130,000 appears on two of the five pages. In her witness statement Mrs Lejonvarn says that before the meeting she tried to work out what the budget price might be.

[95]In his witness statement Mr Burgess was clear that none of these notes were written at the meeting but in oral evidence he accepted that Mrs Lejonvarn may have been writing notes of some kind at the time. During cross examination he raised doubts about the authenticity of the notes but that contention was not pursued by Mr Oram either in cross examination of Mrs Lejonvarn or in closing submissions.

[96]I am satisfied that some of the notes were written before the meeting and some either during or shortly after. I find that Mrs Lejonvarn did identify a (VAT exclusive) budget figure of £130,000 at the meeting. It seems to me most unlikely that Mrs Lejonvarn would have prepared the detailed calculations which contained that figure and yet not discussed them with Mr Burgess. The very purpose of the meeting had been to resolve and discuss the pricing issue. I reject the evidence from Mr Burgess to the contrary. In my view, he would have been and was sufficiently willing to give this project to Mrs Lejonvarn on this basis. The comparison between the budget of £130,000 and £78,000 was not a fair one. The two sums were not comparable. Moreover, a budget of £130,000 was still cheaper than Mr Enright’s equivalent estimate of c.£175,000 and Mr Burgess would have wanted to use Mrs Lejonvarn if he could. I accept that Mr Burgess would not have agreed to proceed with Mrs Lejonvarn and Hardcore without a degree of comfort that the cost was going to be less than that of Mr Enright but, as it seemed to him, he had that level of comfort.

[97]On 7 May 2013 Mrs Lejonvarn reported to Mr Burgess that she had had a successful meeting with the contractors on site at Highfields that day, that they were due to start on 15 May and that it was “All ready to go”.

[98]The Burgesses circulated a letter to their neighbours explaining that the extensive works were about to be undertaken. The letter explained that the contractors were being supervised by an architect and that they had been made fully aware of the rules of the estate. The contact details for the supervising architect, namely Mrs Lejonvarn, were given.

[99]The Burgesses arrived back from Majorca on 14 May 2013.

[100]Work on 15 May 2013 comprised site set up and preliminaries. There was a brief meeting between the Burgesses, Mrs Lejonvarn and the contractors from Hardcore including Mr Kordyl. Unknown to the Burgesses, the earthworks had been subcontracted to Jerry Lacatz of J4Build. He was also there.

[101]The Burgesses attach some significance to the start date. They contend that this was the date on which a contract was concluded between them and Mrs Lejonvarn. I deal with this contention below. In her evidence, Mrs Lejonvarn says that all she had done by this point was to assist the Burgesses by sourcing a cost estimate from Hardcore with whom she had a close working relationship. She says she was hopeful of a future commission to produce detailed designs and specifications for the soft works beyond the groundworks and landscaping phase but that these soft elements were obviously not fixed at that time. In the meantime, her contention is that she was merely an intermediary. She says that she was only involved at this point because of her relationship both with Hardcore and the Burgesses and because she was hopeful of the future commission for the detailed design work for the planting and so on. She also says that she enjoyed working with builders anyway. I reject that as a fair summary of the role she was performing at this time. In my view she was not acting as a mere conduit between Hardcore and the Burgesses. She had already been involved in procuring the contractor and in developing the cost estimate: namely the fixed price element which would be undertaken by Hardcore and the remainder which, whilst not fixed, was estimated. I reject the suggestion that Mrs Lejonvarn merely attended the meeting on 15 May 2015 to translate or assist in communication between the Polish speaking builders and the Burgesses. It is clear to me that this was the first day on site and the start of the period during which Mrs Lejonvarn provided further professional services for the Burgesses.

[102]Mrs Lejonvarn created some design drawings dated 15 May 2013 under the professional title of Linia Studio. Mr and Mrs Burgess are named as the client on the drawings.

[103]Substantive work began on 16 May 2013. That same day, the electrician, Mark Davis, provided Mrs Lejonvarn with an estimate for the garden at Highfields. The price was £17,889.34 plus VAT. She forwarded it to Mr Burgess on the same day, explaining that there was some room for adjustment on site. Mr Burgess thought the estimate was high. Mrs Lejonvarn said that it had been based on the Enright design with the controls being operated from inside the house but that a more economical option would be to have outside controls. She also suggested value engineering it down to something more modest. Mrs Lejonvarn exchanged emails directly with Mr Davis in which she told him that Mr Burgess had not liked the quote and “he just doesn’t understand what goes into these things”. Mr Burgess spoke with Mr Davis who explained the content of the estimate and why it would cost what he had quoted.

[104]On 17 May 2013 there was a meeting in the kitchen at Highfields. According to Mrs Lejonvarn’s diary notes, the meeting was attended by Mr Kordyl, herself and both Mr and Mrs Burgess. There had been an issue as to whether Mr Burgess was even at such a meeting. In his witness statement he says that he was not there. But in his oral evidence he modified that and accepted that it was possible he was at the house that morning. I find that he was. Mrs Burgess says that she cannot recall a meeting on that day but I find that she was probably there too.

[105]Mrs Lejonvarn contends that the budget of £130,000 was discussed again at that meeting. Mr Burgess denies this. He says that he was never told of this figure before the dispute erupted in July 2013. Mrs Burgess also denies it was discussed. On this occasion, Mrs Lejonvarn says that her notes were made shortly after the meeting. The notes include the following comments:

“PB happy, wants them to get cracking”; “discussion about keeping everyone happy – neighbours estate” “Przemek says he is confident that despite the no concrete deliveries constraints, doing it in sleepers will be fine with respect to Jarek’s orig. estimate of 45” “Przemek happy that with budget as generous as 130 room for 45k to increase. Peter agrees.”

[106]Once again, as reflected by the contemporaneous notes, I accept that a budget figure of £130,000 was mentioned at this meeting and that it was done in the presence of (at least) Mr Burgess. It is possible it was not in earshot of Mrs Burgess but I need not reach any conclusion about this.

[107]Prior to the meeting Mrs Burgess went to the bank to collect £7,000 for the contractors. Sensibly, Mrs Burgess prepared a cash log which listed the cash payment of £7,000 which Mr Kordyl signed for. This is also recorded in the notes prepared by Mrs Lejonvarn.

[108]Thereafter the Garden Project got underway. It is not the function of this judgment to describe the subsequent events in detail save in relation to matters which potentially bear on the issues to be determined in this trial of preliminary issues.

[109]From time to time Mrs Lejonvarn visited site. The Burgesses did not really communicate with the contractors (other than pleasantries and making tea) but did discuss substantive matters with Mrs Lejonvarn. In that respect it was mostly dialogue between Mr Burgess and Mrs Lejonvarn.

[110]On 11 June 2013 Mrs Lejonvarn emailed Mr Burgess to tell him that it was a good thing she had been on site because the contractor had been about to put some walls in the wrong place but that it had been sorted out. On that day she also discussed the trees with the contractor. According to Mrs Lejonvarn’s diary note she told the contractor to stay away from some particular trees. There was a further visit on 13 June 2013. Mrs Lejonvarn’s diary note says, of the contractor: “Joe always saying “But Peter wants”, starting to bug me”.

[111]On 13 June 2013 Mr Kordyl told Mrs Lejonvarn how much the dayworks rate was and asked for a further payment for the recent works. He indicated that the works would be likely to cost around £65,000 in all. Mrs Lejonvarn asked Mr Burgess for another payment instalment to be paid in cash.

[112]There was another visit by Mrs Lejonvarn on 18 June 2013 when Mr Burgess and the contractor were present. Mr Burgess had questioned whether an error in setting out had been made and this was investigated on site.

[113]On 24 June 2013 Mr Kordyl sent Mrs Lejonvarn a message saying that he needed 100 railway sleepers and payment of £3,600 from Mr Burgess. The next day Mrs Lejonvarn emailed Mr Burgess saying that 100 sleepers needed to be ordered and asked Mr Burgess if he could transfer a BACS payment to Hardcore Builders Ltd for this. It is appropriate to mention here a suggestion that was put to Mr Burgess in cross examination that he was prepared (dishonestly) to put invoices for materials through his business even though they related to the garden at his home. This was said to be so that VAT could be reclaimed as an item of business expenditure. Mr Burgess denied this suggestion. So too did his accountant Mr Tailor. I make clear that I make no findings one way or the other as regards the allegation about VAT that was put to him. I did not have all the documents available to reach a firm conclusion about this and, since it is not determinative of any substantive issue, would prefer not to do so. Separately, Mr Burgess agreed that, on occasions, lump sum payments were made by RHR for the Garden Project but this was always on the basis that RHR was already indebted to him personally and that any payments made by RHR were offset against that liability. Mr Tailor confirmed this is what took place. Such an arrangement would not have been unlawful.

[114]On 27 June 2013, Mrs Lejonvarn warned Mr Burgess that there would be a need to make a further instalment payment the following week.

[115]On 1 July 2013 Mr Burgess emailed Mrs Lejonvarn with some concerns about the Garden Project. Noting that not a lot had happened whilst he had been away he asked:

“Firstly, are we on budget. I can’t remember how much we’ve paid so far but I think we must be half way through the quote and yet it doesn’t look like they are anywhere near half way through. Also we do not have unlimited time with the fence being down. Has something gone wrong with the workforce?”

[116]Mrs Lejonvarn responded to this the same day. She explained that the workforce had stopped because the order for the sleepers had not arrived although they were expected. In the meantime she explained that they were clearing the land at the top which was steep and that this was therefore slow work. She added:

“I can only say that I have no reason to doubt the efficiency or effort of the guys at present. Given the nature of the work, they have actually made very good progress. The sheer volume of clay that needs to be removed from site in order to create the lawns is in of itself very time consuming. Especially as it is removed skip by skip. I am not concerned with the budget yet as we have a very close eye on where we are. The land works are the greatest proportion of the budget by far. Once Joe and his men leave, you are effectively left with light building work, decoration and gardening.”

[117]Mr Burgess replied:

“As long as you are happy and we are not going to go massively over budget or timings, that’s fine.”

[118]On 3 July 2013 Mr Burgess wrote to Mrs Lejonvarn saying he wanted to be present when the drainage and top soil were laid. He was concerned that the builders would hide rubble there which would stop things growing in the future. Mrs Lejonvarn replied the same day:

“All the lawn related stuff Peter will be done professionally and all rubbish will be removed with spoil. Any builder working with me and Hardcore as a subcontractor is held accountable and works to our standards or he doesn’t get paid.”

[119]On 4 July 2013 Mr Burgess re-iterated his concern that the garden did not go over budget and that the plans prepared by Mr Enright were not watered down too much. He suggested that the stair area had not been properly prepared for planting and that sleepers may have to be moved. Mrs Lejonvarn explained that the ground works were not the finished product and were mainly a road for the machines to get around on. She said the area identified by Mr Burgess would be one of the last things to be done and that the drainage and planting would be done by a different team. Essentially, her email was intended to placate Mr Burgess. She promised to prepare a budget tracking list and provide it to Mrs Burgess.

[120]On 5 July 2013 Mrs Lejonvarn asked Mr Burgess to send Hardcore some money for materials and a down payment of £4,000. Hardcore submitted an invoice on 7 July 2013 for materials and a portable toilet.

[121]On 6 July 2013 Mr Burgess emailed Mrs Lejonvarn following a discussion between her and Mrs Burgess. He said:

“I think there she may have got confused because she seems to think that the cost for the ground works is going to be £130k. I have been working on the premise that this would be 78k as per your quote attached. I know that this quote does not include planting, or the tiling of the patio area. Lynn says you want another £30k this week which is fine but can I assume this is the final payment for the earthworks? If you’re about this weekend can we discuss. If Lynn has understood you correctly then it appears that you are more expensive than Mark Enright and we cannot have his plan anyway. I am sure that there are some lines crossed somewhere.”

[122]On 8 July 2013, Mr Burgess sent a further email saying he was now alarmed about the work on the Garden Project. He said he needed to sort out what the costs were and what could and could not be done. Mrs Lejonvarn replied the same day that the groundworks phase would indeed be £78,000 or thereabouts. She explained the reasons why the costs had increased and added:

“We have made all efforts to keep to the 130 we agreed for doing the project (Linia Design Studio (myself) and Hardcore) and given the adjustments that had to be made which I have described above, we are very close. Have a look at the spreadsheet attached and if you want to discuss it in further detail just let me know. I have discussed with Joe an estimated 2 weeks to finish up this groundworks phase….I hope this will help reassure you that we haven’t gone far from our agreed price which is a very positive given the site constraints at Highfields.”

[123]The attached spreadsheet contained a list of project stages, sums paid and estimates for future stages. Detailing, design and project management fees were included for several of the stages including the Stages A, B and C groundworks, the boundary treatment and the surface finishes. The total projected cost was identified as £132,995.80. Mrs Lejonvarn denied that the detailing and project management costs of £8,000 for Stage A were intended to be fees payable to her. I was not convinced by her explanation that those were costs of the contractors. For my part, I concluded that they probably did represent a belated expectation on her part that she might be paid for what she had done to date. But those fees were never discussed with Mr Burgess in any event so nothing turns on it.

[124]Mr Burgess responded the same day:

“So in fact you are saying that your cost will be more than Mark Enright and we cannot have half the features of that plan. Basia I think we need to stop work now and get Mark Enright in to do the work. This is a disaster. At no point did we agree £130k and Friday was the first time you mentioned this. If you had told me at the beginning that you would be charging more than Mark Enright and couldn’t implement the plan I would clearly have not gone ahead. I am quite shocked by this. We need to meet to work out how to get out of this mess.”

[125]Mrs Lejonvarn responded by saying:

“I am shocked by your email. You and I agreed 130k at your house when you also told me Mark Enright had wanted 178k. You told me that not once but twice. I have written down as such and if you believed that the cost estimate of 78k is what you believe you should be paying then you are saying that you never had any intention to pay for my project management and development of Mark Enright’s “design” which was hardly something anyone can build from. Are you saying you wanted it at cost and managed as a friendly favour on my part? Perhaps then it is I who has wholly misunderstood our Professional relationship….I am very upset by this.”

[126]Mr Burgess replied, again on 8 July 2013. The email is lengthy but extracts of it included him saying:

“You are being very defensive and this isn’t helping. Nor is it a good idea to have an email war. The central issue at the moment appears to be that you feel you had told me that the earth works and sleepers are now going to be £130k and in your quote you stated £57k. That is more than double and will bring your price to much higher than Mark Enright’s. I accept that you genuinely believe that you did tell me this. However, I hope you will accept that I genuinely believe that you did not. One of us has this wrong….Mark Enright’s quote of £178k included planting. The quote without planting was £155k. I will show you the quotes….We are not getting the job we asked for and we are having to pay much more for it…This is a disaster and I simply cannot afford to spend £200k on a garden. Add to that your guys are being paid in cash! ... As for your fee, I have never asked you for a friendly favour. I would have thought that your project management fee should have been included in the quote and I was assuming that this was included. …I am clearly not now expecting you to come in at the price quoted. But we do need absolute clarity going forward. Muddling through with me paying you shed loads of cash is not an option.”

[127]He sent another lengthy email later that evening having reviewed the spreadsheet. Within that email, he said that although he was annoyed and irritated that Mrs Lejonvarn had mismanaged the cost of the work, he did not intend to try and hold her to her commitments. He said he would pay the full amount of Mark Enright’s quote, in cash, if the garden could be delivered in a way that looked similar to his design. Other proposals were made. He also said:

“I am sorry to say that you have not managed the costs of this project at all and you have not actually supervised the work.”

[128]By 8.30am on the following day, it seemed to Mr Burgess that Mrs Lejonvarn had not responded to his emails and he therefore said he wished to call her involvement to a halt. It is clear from the email that Mr Burgess felt let down by Mrs Lejonvarn. He added:

“I think the truth is here that you were not qualified to take on a job such as this and have just muddled through hoping we wouldn’t notice or wouldn’t mind.”

[129]In fact, it seems that Mrs Lejonvarn had already replied at 1am on 9 July 2013, but she re-sent the email at 08.45am. Again, the email is lengthy but it included the following:

“Unfortunately you were working to a budget of £78,000 pounds based on a budget estimate early April well before you and I agreed the weekend of the 26th of April to a budget of £130,000. I did not put it in an email because you wanted to pay in cash and for that reason I wrote it down in my notes and have been working to that budget since that agreement and not via email for obvious reasons….It is my responsibility to work in the best interests of my clients and as such I make great efforts to make clients aware of any potential problems, issues or shortcomings that may affect the success of a project. I am not a Quantity Surveyor and as such I do not price jobs. I have also assembled an experienced team and offered to you their services which I have managed. I promised to work to a budget price that we agreed, and that is exactly what I have done. The budget was £130,000 and we have come in at 132,000 plus change….The work thus far is of a very high standard and the retaining walls are in place according to the design despite you thinking otherwise….Unfortunately I don’t believe we will come to a mutually agreeable conclusion. I am sorry that this has ended our relationship but I cannot work under these circumstances.”

[130]In light of the preliminary issues, it is important to mention the warning which Mrs Lejonvarn added at the end of this email. “I don’t want to leave you with an unfinished project so I will ask my contractors if they would be willing to continue with you directly. There are risks associated with this. Problems may arise on site that require someone to manage them with a knowledge of technical, logistical and design solutions You will be exposed and vulnerable to cost increases, or unacceptable results in terms of how it is finished off or detailed. The fact that you do not have any technical design drawings for the stairs leaves them open to the interpretation of the builders.”

[131]The caution expressed here was, in my judgment, intended to contrast the position which she believed had been applicable hitherto. In other words, so long as Mrs Lejonvarn had been involved, she considered there was someone to manage the works with a knowledge of technical, logistical and design solutions, namely herself. She was warning Mr Burgess that if he was to continue with the contractors directly, without having anyone performing the role she had been providing, he would not have that expertise available to him.

[132]Further acrimonious emails were exchanged that day. Of interest in the present context is an email sent at 10.19am in which Mrs Lejonvarn contrasted two aspects of their relationship:

“You have also overstepped the professional boundaries. Moreover, you have overstepped the boundaries between friends.”

[133]It is common ground that, whoever was to blame, the relationship came to an end at this time.

[134]Thereafter, Mr and Mrs Burgess tried to contact Mr Enright to see if he would complete the Garden Project. Unfortunately it seems that Mr Enright did not receive the messages to contact him. Attempts to source other contractors proved unsuccessful. In the meantime, the Burgesses continued to directly employ one of the workmen on site, Mr Joe O’Sullivan, from July to September 2013 and made a series of direct cash payments to him to enable the groundworks to be completed. This phase of the work continued until early September 2013.

[135]Following some heavy rain, cracks appeared and some of the earthworks started to collapse. A surveyor visited site and made some recommendations. Mr O’Sullivan’s services were dispensed with. Ultimately, the Burgesses did make contact with Mr Enright. He completed the project for the Burgesses from January 2014.

[136]In these proceedings, in addition to the other issues raised, the Burgesses complain that the works executed by Hardcore under Mrs Lejonvarn’s supervision were defective in a number of pleaded respects. The remedial works were done by Mr Enright. In the event of a trial, one of the issues that will have to be determined is whether the allegedly defective work in question was done before or after the key date of 9 July 2013 when Mrs Lejonvarn ceased to be involved. For the purposes of this trial I am to assume that the defects already existed as at 9 July 2013.

The Preliminary Issues

[137]Having recited my principal factual findings I must now turn to the preliminary issues. Preliminary Issue (i)

[138]Issue (i) concerns the question of whether there was a concluded contract between Mrs Lejonvarn and the Burgesses. As I have pointed out, within the Particulars of Claim the Burgesses plead that a contract came into being on or around 15 May 2013, alternatively on or around 28 April 2013. It is submitted that the contract came into being as a result of the written email exchanges of the parties coupled with Mrs Lejonvarn’s conduct in attending the property on the dates relied on, either to start work on 15 May 2013 or by attending the meeting on 28 April 2013 to agree that she would start work. By the end of the trial, Mr Oram had abandoned his alternative case that the contract had been concluded on 28 April 2013. His case was that the contract was concluded by the written exchanges of the parties coupled with Mrs Lejonvarn’s attendance on site on 15 May 2013 which, in light of the circumstances, he submitted should be regarded as acceptance of her role as project manager.

[139]Mr Sheard submitted that the claim in contract suffered from a number of fundamental problems. He submitted that it was not clearly spelled out what constituted the offer which was the subject of the acceptance. He referred to the lack of certainty over the terms of the contract and said that the contract was unsupported by consideration.

[140]It is convenient to begin by considering the applicable legal principles in respect of contract formation. It is trite law that there must be an offer which is accepted.

[141]Mr Oram relied on G Percy Trentham Ltd v Archital Luxfer Ltd

[1993] 1 Lloyds Rep 25

(CA) at 27 in support of the proposition that offer and acceptance is not a necessary mechanism for the formation of a contract alleged to come into existence during and as a result of performance. In that case, Steyn LJ accepted that offer and acceptance will represent the mechanism of contract formation in the vast majority of cases but identified that there are some cases in which a contract comes into existence as a result of subsequent performance. In this case, Mr Oram did not pursue the contention that a contract came into existence as a result of subsequent performance. That was a sensible concession. That case was a world away from the facts of the present case. He limited his case to one in which he submitted that Mrs Lejonvarn’s conduct in attending site on 15 May 2013 constituted acceptance of an offer of the position of project manager.

[142]In connection with contract formation Mr Sheard drew my attention to Tekdata Interconnections Ltd v Amphenol Ltd

[2010] 1 Lloyds Rep 357

but that case was primarily concerned with a contract said to have been concluded within a battle of the forms and, as such, in my judgment it had no real application here. However, Mr Sheard also relied on what I would agree is a convenient summary of the requirements for the formation of a contract at paragraphs 89 to 95 of Assuranceforeningen Gard Gjensidig v International Oil Pollution Compensation Fund

[2014] EWHC 3369 (Comm)

. In that case Hamblen J said:

“89 The applicable general principles were not in dispute. They are set out in Chapter 2 of Chitty on Contracts (31st edition) and conveniently summarised by Lord Clarke in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (UK Production) [2010] UKSC 14, [2010] 1WLR 753. 90 The test for determining whether a contract exists is objective. It depends not on the parties' actual intentions but on what those intentions would reasonably be understood to be from the parties' communications (by words or conduct) with each other. 91 An offer is “an expression of willingness to contract on specified terms made with the intention…that it is to become binding as soon as it is accepted by the person to whom it is addressed” – Chitty para. 2-083. 92 A bilateral contact is formed through an exchange of promises under which both parties undertake obligations – Chitty para. 1-099. 93 A unilateral contact is formed through the promise of a party to perform if the other party does (or forbears from doing) a particular act – Chitty para. 1-099; 2–078. 94 For an agreement to be legally binding it must be supported by consideration; be made with the intention to create legal relations; be sufficiently certain and complete, and comply with any requirements as to form. 95 As stated by Lord Clarke in the RTS case: “The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement.”

[143]In determining whether the parties concluded a contract between them I am obviously concerned with the written exchanges between the parties objectively construed. As is pithily stated in Chitty on Contracts 32nd edition at paragraph 1-017:

“Agreement is not a mental state but an act and, as an act, is a matter of inference from conduct. The parties are to be judged, not by what is in their minds, but by what they have said or written or done.”

[144]Paragraph 2-030 of Chitty on Contracts 32nd edition is also in point:

“Where an offer or an acceptance or both are alleged to have been made by conduct, the terms of the agreement may be more difficult to ascertain than where the agreement was negotiated by express words. The difficulty may be so great as to force the court to conclude that no agreement was reached at all.”

[145]The question of whether there was certainty of terms is similar to but conceptually different from the question of whether the parties ever intended to be legally bound. At paragraph 2-194 of Chitty on Contracts 32nd edition, it says:

“Another factor relevant to the issue of contractual intention is the degree of precision with which the agreement is expressed…Vagueness may also be a ground for concluding that the parties had never reached agreement at all…While the issues of contractual intention and vagueness are conceptually distinct, they may overlap in borderline cases; the question whether an agreement exists will depend on the degree of vagueness or on whether the vagueness can be resolved, e.g. by applying the standards of reasonableness.”

[146]I have carefully considered the written exchanges between the parties. It is quite impossible to draw out from those emails any clear form of offer or acceptance. The written discussions were simply too inchoate for that purpose. Mr Oram frankly conceded that it was not easy to identify any offer and acceptance and did not seek to undertake any real analysis as to what constituted the offer or what constituted the acceptance. I am far from suggesting that there necessarily had to be a precise offer of detailed terms that met with a precise acceptance of such terms. Something looser than that might have been acceptable if I could have been satisfied that there was a sufficient consensus about the broad basis upon which Mrs Lejonvarn was being retained by the Burgesses. In my judgment there was not. Leaving aside the absence of discussion about remuneration, nothing was said about the duration of services, provision for their termination or any other clauses of the type typically to be expected in a professional’s terms of engagement. In addition, the parties never discussed, or even mentioned, the notion that they would be entering into a contract between themselves.

[147]Mr Oram’s submission was that it was plain through the email exchanges between 6 March 2013 and 17 April 2013 that the parties had progressively developed an understanding as to Mrs Lejonvarn’s involvement in the Garden Project. I agree that during this period the nature of the services which Mrs Lejonvarn intended to provide were described but it was never clear upon what terms (if any) those services would be provided.

[148]Mr Oram relied on the meeting on 15 May 2013 as the date on which the agreement was concluded by conduct. In my view this was simply the day on which the works which had been the subject of prior discussion were about to start. There was nothing which occurred that day which suggested that an offer was being accepted. No one mentioned a contract that day. Nor had they ever done. In my judgment, the fact that Mrs Lejonvarn attended site on that day did not create a legal line in the sand.

[149]Accordingly, in my judgment, it is simply impossible to extract any form of offer and acceptance from the email exchanges. The attendance on site on the first day was not an unequivocal acceptance of any offer. In short, there was simply no agreement. Moreover, the parties did not intend to be legally bound by a contractual relationship.

[150]It is worth noting that, even now, Mr Burgess still believes that the contract with Mrs Lejonvarn required her to act as main contractor. That is not the contract which is pleaded on his behalf which is a professional services contract. I do not base my reasoning on this point because it concerns the state of mind of Mr Burgess rather that what he said. But it does tend to reinforce the consequences of not having reduced to writing even the basic structure of the contractual terms.

[151]I now turn to the question of consideration. It is again trite law that a promise is not binding as a contractual obligation unless it is supported by consideration. As is pointed out in Chitty on Contracts 32nd edition at paragraph 4-002:

“The doctrine of consideration is based on the idea of reciprocity: that “something of value in the eye of the law” must be given for a promise in order to make it enforceable as a contract. It follows that an informal gratuitous promise does not amount to a contract.”

[152]In this case, even if there had been an offer and acceptance, I not satisfied that there was any consideration for such an agreement. There was simply no discussion about payment. Both Mr and Mrs Burgess said they assumed Mrs Lejonvarn would take a fee from the sum quoted by Hardcore but, in my view, that was quite unrealistic. Nor, in my view, was it in the nature of the relationship between Mrs Lejonvarn and the Burgesses that she would have been entitled to a reasonable fee in retrospect. In my view, if Mr Burgess had been expecting to pay Mrs Lejonvarn it would have been discussed.

[153]It is common ground that Mrs Lejonvarn was expecting to be paid for her design work in respect of the soft elements once the earthworks phase had been completed. Mr Oram submitted that the expectation of a future benefit was capable in law of amounting to consideration. But, as Mr Sheard countered, the difficulty with that submission is that it was common ground that, even if there was a contract, there was in truth no obligation on the Burgesses to retain Mrs Lejonvarn for the subsequent provision of those design services. He relied on paragraph 4-025 of Chitty on Contracts 32nd edition which states:

“Consideration would again be illusory where it was alleged to consist of a promise the terms of which left performance entirely to the discretion of the promisor. A person does not provide consideration by promising to do something “if I feel like it” or “unless I change my mind”.”

[154]Mr Oram did not contend that Mrs Lejonvarn was inevitably retained for the full Garden Project. Her services could have been dispensed with. On this basis, the notion that Mrs Lejonvarn might be paid for the provision of some future services, if she was still retained, could not amount to consideration for the services provided during the earthworks phase.

[155]For both of those reasons, I have concluded that the contention that the parties had concluded a contract was a hopeless one. It is plain that there was no contract between the parties.

[156]The claim in contract therefore fails. Preliminary Issue (ii)

[157]It follows from my conclusion in respect of Issue (i) that this issue does not arise. Preliminary Issue (iii)

[158]This issue concerns the question of whether Mrs Lejonvarn owed a duty of care in tort to the Burgesses. In light of my finding that there was no concluded contract, this remains the sole basis upon which legal liability could exist as between the parties. It was submitted on behalf of Mrs Lejonvarn that the claim in tort was merely being deployed to meet the evident inadequacies of the claim in contract. However, the claim in tort stands or falls on its own merits irrespective of the success or failure of the claim in contract. In Robinson v P.E.Jones (Contractors) Ltd

[2012] QB 44

Jackson LJ said at paragraphs 76 and 79:

“Contractual and tortious duties have different origins and different functions. Contractual obligations spring from the consent of the parties and the common law principle that contracts should be enforced. Tortious duties are imposed by law, as a matter of policy, in specific situations.” “Contractual obligations are negotiated by the parties and then enforced by law because the performance of contracts is vital to the functioning of society. Tortious duties are imposed by law (without any need for agreement by the parties) because society demands certain standards of conduct.”

[159]As noted above, for the purposes of this issue the factual assumption which I am required to make is that the defects which are pleaded in Schedule 1 to the Particulars of Claim existed as at 9 July 2013. The Law

[160]I must first turn to the law.

[161]I observe that this is a case in which the losses claimed by Mr and Mrs Burgess are pure economic losses. Mr Sheard reminded me that there are conflicting first-instance authorities as to whether a professional designer in the construction sphere owes a duty of care in respect of pure economic loss: see Payne v John Setchell

[2002] BLR 498

; Storey v Charles Church (1995) 73 Con LR 1 and Ove Arup v Mirant Asia Pacific

[2004] EWHC 1750

. The preponderance of authority is that a duty is capable of being owed despite the decision in Payne.

[162]However, Mr Sheard did not rely on Payne to suggest that liability in tort cannot attach in respect of a negligent design. Instead, Mr Sheard submitted that even if a duty of care was capable in law of arising against Mrs Lejonvarn in respect of certain matters such as design it should not extend to the supervision duty of the type that is alleged by the Burgesses in this case. In this respect he drew a distinction between a duty which can arise from advice given and a duty to perform a service. Mr Sheard submitted that the foundation for a duty of care was derived from Hedley Byrne & Co Ltd v Heller & Partners Ltd

[1964] AC 465

HL which was a negligent advice case. His submission was that the law distinguished between advice on the one hand and the provision of services such as supervision on the other. He pointed out that the Courts have clearly rejected the notion that a duty of care should be imposed on a contractor carrying out construction work: see Murphy v Brentwood District Council

[1991] 1 AC 398

. In such circumstances, he submits that it would be anomalous to impose a duty of care on a professional who is “policing” the execution of that work. Thus, it was submitted on behalf of Mrs Lejonvarn that it would be illogical if a party who was generally overseeing work owed a duty which was wider than that of those actually executing the work itself.

[163]So, whilst Mr Sheard accepted that design work could constitute a form of statement or advice giving rise to a Hedley Byrne based liability, he suggested that the act of supervision could not be treated as advice and was a step too far. Unsurprisingly, Mr Oram disputed this submission. His case was that the authorities supported the proposition that there could be an assumption of responsibility in respect of a service and that there was no basis for distinguishing between the service of supervision and any other type of professional service.

[164]I reject Mr Sheard’s submission. Whilst it is true that Hedley Byrne was an advice case, in Henderson v Merrett Syndicates Ltd

[1995] 2 AC 145

(HL) the law expressly recognised the existence of a legal duty to exercise reasonable skill and care in respect of the provision of services beyond advice under an extended application of the principle in Hedley Byrne & Co Ltd v Heller. This is reflected in Jackson & Powell on Professional Liability 7th edition at 9-096 which states:

“Both Lord Oliver in D&F Estates and Lords Bridge and Keith in Murphy drew attention to the possibility that economic loss would be recoverable by application of the decision of the House of Lords in Hedley Byrne v Heller & Partners. Although that decision is typically associated with the giving of information or advice, Lord Goff in Henderson made clear that it extends to a broad range of circumstances in which “special skill” is exercised.”

[165]In Henderson, the leading speech was that of Lord Goff. At page 178 Lord Goff referred to Hedley Byrne, stating:

“The case has always been regarded as important in that it established that, in certain circumstances, a duty of care may exist in respect of words as well as deeds, and further that liability may arise in negligence in respect of pure economic loss which is not parasitic upon physical damage. But, perhaps more important for the future development of the law, and certainly more relevant for the purposes of the present case, is the principle upon which the decision was founded. The governing principles are perhaps now perceived to be most clearly stated in the speeches of Lord Morris of Borth-y-Gest (with whom Lord Hodson agreed) and of Lord Devlin. Lord Morris said, at pp. 502-503: "My Lords, I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."” "My Lords, I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."”

[166]At page 179 Lord Goff then mentioned a passage from Lord Devlin:

“He then cited a number of authorities, and continued, at pp. 528-529: "I think, therefore, that there is ample authority to justify your Lordships in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Lord Ashburton [1914] A.C. 932, 972 are 'equivalent to contract,' that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not. It may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form….” "I think, therefore, that there is ample authority to justify your Lordships in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Lord Ashburton [1914] A.C. 932, 972 are 'equivalent to contract,' that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not. It may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form….”

[167]He cited a further passage from Lord Devlin on page 179/180: “He said, at pp. 531-532: "Since the essence of the matter in the present case and in others of the same type is the acceptance of responsibility, I should like to guard against the imposition of restrictive terms notwithstanding that the essential condition is fulfilled. If a defendant says to a plaintiff: 'Let me do this for you; do not waste your money in employing a professional, I will do it for nothing and you can rely on me;' I do not think he could escape liability simply because he belonged to no profession or calling, had no qualifications or special skill and did not hold himself out as having any. The relevance of these factors is to show the unlikelihood of a defendant in such circumstances assuming a legal responsibility, and as such they may often be decisive. But they are not theoretically conclusive and so cannot be the subject of definition. It would be unfortunate if they were. For it would mean that plaintiffs would seek to avoid the rigidity of the definition by bringing the action in contract as in De la Bere v. Pearson Ltd. [1908] 1 K.B. 280 and setting up something that would do for consideration. That, to my mind, would be an undesirable development in the law; and the best way of avoiding it is to settle the law so that the presence or absence of consideration makes no difference." From these statements, and from their application in Hedley Byrne, we can derive some understanding of the breadth of the principle underlying the case. We can see that it rests upon a relationship between the parties, which may be general or specific to the particular transaction, and which may or may not be contractual in nature. All of their Lordships spoke in terms of one party having assumed or undertaken a responsibility towards the other. On this point, Lord Devlin spoke in particularly clear terms in both passages from his speech which I have quoted above. Further, Lord Morris spoke of that party being possessed of a "special skill" which he undertakes to "apply for the assistance of another who relies upon such skill." But the facts of Hedley Byrne itself, which was concerned with the liability of a banker to the recipient for negligence in the provision of a reference gratuitously supplied, show that the concept of a "special skill" must be understood broadly, certainly broadly enough to include special knowledge. Again, though Hedley Byrne was concerned with the provision of information and advice, the example given by Lord Devlin of the relationship between solicitor and client, and his and Lord Morris's statements of principle, show that the principle extends beyond the provision of information and advice to include the performance of other services. It follows, of course, that although, in the case of the provision of information and advice, reliance upon it by the other party will be necessary to establish a cause of action (because otherwise the negligence will have no causative effect), nevertheless there may be other circumstances in which there will be the necessary reliance to give rise to the application of the principle. In particular, as cases concerned with solicitor and client demonstrate, where the plaintiff entrusts the defendant with the conduct of his affairs, in general or in particular, he may be held to have relied on the defendant to exercise due skill and care in such conduct.” "Since the essence of the matter in the present case and in others of the same type is the acceptance of responsibility, I should like to guard against the imposition of restrictive terms notwithstanding that the essential condition is fulfilled. If a defendant says to a plaintiff: 'Let me do this for you; do not waste your money in employing a professional, I will do it for nothing and you can rely on me;' I do not think he could escape liability simply because he belonged to no profession or calling, had no qualifications or special skill and did not hold himself out as having any. The relevance of these factors is to show the unlikelihood of a defendant in such circumstances assuming a legal responsibility, and as such they may often be decisive. But they are not theoretically conclusive and so cannot be the subject of definition. It would be unfortunate if they were. For it would mean that plaintiffs would seek to avoid the rigidity of the definition by bringing the action in contract as in De la Bere v. Pearson Ltd. [1908] 1 K.B. 280 and setting up something that would do for consideration. That, to my mind, would be an undesirable development in the law; and the best way of avoiding it is to settle the law so that the presence or absence of consideration makes no difference."

[168]At page 186/7 Lord Goff said:

“I have already expressed the opinion that the fundamental importance of this case rests in the establishment of the principle upon which liability may arise in tortious negligence in respect of services (including advice) which are rendered for another, gratuitously or otherwise, but are negligently performed - viz., an assumption of responsibility coupled with reliance by the plaintiff which, in all the circumstances, makes it appropriate that a remedy in law should be available for such negligence. For immediate purposes, the relevance of the principle lies in the fact that, as a matter of logic, it is capable of application not only where the services are rendered gratuitously, but also where they are rendered under a contract.”

[169]In White v Jones

[1995] 2 AC 272

(HL), Lord Browne-Wilkinson said at page 273:

“Just as in the case of fiduciary duties, the assumption of responsibility referred to is the defendant’s assumption of responsibility for the task not the assumption of legal liability. Even in cases of ad hoc relationships, it is the undertaking to answer the question posed which creates the relationship. If the responsibility for the task is assumed by the defendant he thereby creates a special relationship between himself and the plaintiff in relation to which the law (not the defendant) attaches a duty to carry out carefully the task so assumed.”

[170]There is a helpful summary provided by Mr Justice Akenhead in Galliford Try Infrastructure Ltd v Mott MacDonald Ltd (2008) 120 Con LR 1 (TCC) in which he said at page 81:

“I can draw all these eminent authorities together in the following summary in the context of this case: (a) There are in effect two types or manifestations of duties of care which may arise in relation to economic loss, firstly, out of a negligent misstatement or misrepresentation and, secondly, where there is a relationship akin to contract or the non-contractual provision of services. There is no simple formula or common denominator to determine whether a duty of care, in relation at least to economic loss cases, arises or not. (b) The Courts have traditionally observed some caution and conservatism in economic loss cases. Attempts to open the floodgates, such as in Anns v Merton LBC, have ultimately been rejected. An incremental approach is favoured. (c) It is always necessary to consider the circumstances and context, commercial, contractual and factual, including the contractual structure, in which the inter-relationship between the parties to and by whom tortious duties are said to be owed arises. Thus, it is not every careless misstatement which is actionable or gives rise to a duty of care. Foreseeability of loss is not enough. (d) It is necessary for the party seeking to establish a duty of care to establish that the duty relates to the kind of loss which it has suffered. One must determine the scope of any duty of care…. (f) In considering the second type of duty of care, it is material to consider whether the relationship between the parties is akin to contract or whether the party alleged to owe the duty was asked by the person to whom the duty is said to be owed to provide services to or for the benefit of that person. Reliance is important also in this type of negligence to link the damage suffered to the breach of duty. (g) Although the voluntary assumption of responsibility test is not mandatory, it is a useful guide in determining if a duty of care of either sort arises. It is an objective test. The threefold test (of reasonable foreseeability of the economic loss, proximity and fairness, justice and reasonableness) provides no simple answer where, in a new situation, a duty of care is said to arise. These tests are all helpful but are not always determinative.”

[171]In Robinson v P.E.Jones (Contractors) Ltd

[2012] QB 44

Jackson LJ referred to the passage from p.178 of Henderson in which Lord Goff identified the governing principle of Hedley Byrne as assumption of responsibility. He said that Henderson was now taken as the leading authority on concurrent liability in professional negligence: see paragraphs 74 and 75 of the Judgment.

[172]At paragraph 7-108 of Keating on Construction Contracts 9th edition it is said of Robinson:

“In the light of this decision, it is clear that a builder who does no more than build pursuant to a “normal” construction contract does not owe a duty to avoid causing economic loss to a person with whom it is in contract or any other person. A professional, such as an engineer, does owe a duty to avoid causing economic loss to a person with whom he is in contract and may owe such a duty to others to whom he has assumed responsibility for such loss.”

[173]Thus, it is clear from the authorities referred to above (particularly the passages from Lord Goff at pages 178/9 in Henderson) that no distinction is drawn between the provision of advice and the provision of services where a special skill is exercised. In the provision of supervision services in respect of construction work, a professional usually deploys a special skill and, in circumstances where there is an assumption of responsibility, a duty of care arises. That is the case even though the contractor who creates the defective construction work in the first place owes no such tortious duty.

[174]In conclusion, it is established that in law a duty of care extends to the protection against economic loss in respect of both advice and any service in which a special skill is exercised by a professional. The duty can extend to negligent omissions as well as the performance of negligent acts. For present purposes, the relevant ingredients giving rise to the duty are an assumption of responsibility by the provider of the service coupled with reliance by the recipient of the service, all in circumstances which make it appropriate for a remedy to apply in law. The passages above make specific reference to the fact that a duty of care may be found to arise even in circumstances where services are performed gratuitously and in the absence of a contract. However, as identified by Lord Goff, in the absence of a contract it is important to exercise greater care in distinguishing between social and professional relationships.

[175]If I find that a duty of care has arisen on the facts of the present case it will not have been the first occasion in which such a conclusion was reached in the context of gratuitous advice in the construction sphere. In Lidl Properties v Clarke Bond Partnership [1997] Env. LR 662, HHJ Wilcox held that a duty of care in tort arose out of professional advice given about a drainage scheme at a meeting in circumstances where the advice was not paid for and was gratuitously given: see pages 689 to 691. It was provided in the hope that the advice would lead to other benefits in due course. Although a duty of care was found to exist, on the facts the claim failed on causation grounds.

[176]It was submitted on behalf of Mrs Lejonvarn that the question of what she is alleged to have agreed to do or did do is central to the question of the duty of care issue. The embarrassment faced by the Burgesses in being unable to set out a coherent contractual claim was therefore said to be a real problem for them in relation to the duty of care. This passage from Jackson & Powell on Professional Liability 7th edition was relied on:

“The question “what does the concurrent duty of care in tort require?” begs the response “duty of care in doing what?”

[177]I do not consider this to be particularly problematic in the present case. The scope of services which Mrs Lejonvarn agreed to provide was tolerably clear. The contractual claim failed because (amongst other reasons) there was a lack of clarity over the terms (if any) upon which such services would be provided. In Issue (iv) below I have set out those services which I consider Mrs Lejonvarn agreed to and did in fact provide. Discussion

[178]It is important to remind myself that in the context of determining whether a duty of care was owed I should not be concerned with the subjective thoughts and intentions of the parties. The question is how they behaved and spoke to each other from an objective perspective.

[179]Whilst I have reached the clear conclusion that the parties did not conclude a contract for the provision of professional services, I am equally clear that over a period of time Mrs Lejonvarn agreed to and did in fact provide a series of professional services for the Burgesses in respect of the Garden Project. She says that she would never have done so without having agreed a fee in advance and without having professional indemnity insurance in place (which she did not have, although this fact was not known to the Burgesses until comparatively recently). I regret to say that that is all wishful thinking on her part. Although she was not asked about it, it is likely that she simply never turned her mind to the matter of insurance as a result of inexperience of never having run her own practice. In my judgment Mrs Lejonvarn saw this project both as an opportunity to provide professional services for her good friends and so as to enable her to develop her nascent architectural practice. I accept that the only specific financial remuneration she was expecting was for the design work for the later phase (which never eventuated) but that does not mean that the services were not part of a professional relationship.

[180]I reach the conclusion described above in light of the totality of the evidence. Even before the Garden Project, Mrs Lejonvarn was not backward in coming forward when it came to describing the services she said she could perform. She expressed a degree of confidence in her own ability to manage projects, control budgets and to select, organise and approve payments for contractors. The Burgesses had no reason to disbelieve that she had such expertise and experience. Indeed, during the Bank Project Mrs Lejonvarn provided services of the type described. That project seems to have been judged a success irrespective of a financial outcome for which neither Papa nor the contractors were ultimately held responsible. In my view, the project management services which Mrs Lejonvarn was providing on the Garden Project were akin to those which Papa provided on the Bank Project. Mrs Lejonvarn had acquired professional experience of that type of project management whilst working as an employee for Papa and Mr Burgess was happy with the way that project had been run. Although the subject matter of the Garden Project, namely earthworks and landscaping, was different from the subject matter of the Bank Project, which was more traditional construction, the principles of project management were the same. Moreover, Mrs Lejonvarn herself confirmed to the Burgesses that she had experience of landscaping works. The services she was providing were the same. In my view, the thrust of all of Mrs Lejonvarn’s written communications is consistent with that type of service having been provided. The only difference was that, instead of charging a percentage fee on the whole of the construction cost, Mrs Lejonvarn intended to charge a fee for the later phase of the Garden Project beyond the earthworks phase should it ever have come to pass.

[181]Since the inception of these proceedings and with the benefit of hindsight, Mrs Lejonvarn has consistently sought to minimise her role on the Garden Project. But I have come to the conclusion that she was heavily involved in it. I reject her oral evidence to the contrary. The description of the project management and design services Mrs Lejonvarn intended to provide were set out in her email of 18 March 2013. I completely reject her evidence that this was only intended to describe the services she would perform in relation to the second phase beyond the groundworks. The email to Mr and Mrs Burgess on 9 July 2013 was most telling. In that email she admitted her responsibility was to work in her clients’ best interests and described how she had both assembled an experienced team for this project and managed their services. There is no suggestion that the Burgesses were not her clients for this purpose. That email concluded with a warning to which I have referred. I can only make sense of that concluding paragraph as a comparison between how Mrs Lejonvarn saw matters up to then and how things could change for the Burgesses going forward. It is, effectively, her own written confirmation that she had previously been managing the contractor with her knowledge of technical, logistical and design solutions.

[182]Mrs Lejonvarn contended that she was only really involved on the Garden Project on an informal basis which had to be seen in light of the friendship which existed between her and the Burgesses. She said she was merely involved as a friend who happened to have a professional background. At one time during her evidence she said the relationship on the Garden Project was not a professional one but then later accepted it was partly professional and partly friendly. I agree that the provision of services by her was gratuitous in the sense that she only intended to seek specific payment for the second phase once the earthworks element had been completed. But I am clear that the fact the services were gratuitously provided did not mean that they were informal or social in context. In my judgment the evidence is that the services were all provided in a professional context and on a professional footing. I do not accept Mrs Lejonvarn’s evidence to the contrary. Indeed, when matters went wrong, the email exchanges show that Mrs Lejonvarn herself separated the professional boundaries from the personal ones. She was right to do so. That reflected the reality of the relationship on the Garden Project that had already existed between the Burgesses and Mrs Lejonvarn since May 2013. To adopt the terminology of Mr Justice Akenhead in Galliford Try, the relationship between the parties was akin to a contractual one even though no contract had been concluded for the reasons I have given. This is not a case in which the services were, so to speak, imposed on the Burgesses against their will. On the contrary, the services which were provided by Mrs Lejonvarn were freely accepted by the Burgesses. The Burgesses were her clients (albeit not in a contractual sense) and they owned the land in respect of which the services were performed. There was an obvious and sufficient relationship of proximity between them as a result.

[183]I also reject the submission that Mrs Lejonvarn was merely a conduit or facilitator between the Burgesses and Hardcore and its subcontractor. It is true that she may have spoken with the contractors in Polish but that was a peripheral matter and not the primary reason for her involvement. The reality was that Mrs Lejonvarn was the clients’ representative for the purposes of dealing with, instructing and approving payments to the contractor. She was acting as a project manager in just the same way as Papa had done on the Bank Project. As she herself said on 9 July 2013, she had assembled an experienced team and offered up their services which she had managed. Although Mrs Lejonvarn said that she used the word “managed” in the sense of merely liaising between the Burgesses and Hardcore, that suggestion is a strained and unlikely construction which I reject.

[184]Although Mrs Lejonvarn denied that the Burgesses ever relied on her in respect of the Garden Project, I reject that submission. Mrs Lejonvarn was and, in any event should have been, well aware that the Burgesses were relying on her to properly perform those services. The trust they placed in her was manifest. The services that Mrs Lejonvarn provided reflected skills which the Burgesses themselves did not possess. Had she not been responsible for project managing and overseeing the Garden Project they would, instead, have depended on Mr Enright whom they would have employed in a commercial, contractual relationship. Indeed Mr Burgess came close to doing that when it appeared to him that the price difference was insufficient to warrant using Mrs Lejonvarn and Hardcore. Mr Burgess even told Mrs Lejonvarn that. In the past, Mr Burgess, through RHR, had come to experience the array of professional services performed by Mrs Lejonvarn (through Papa) and he and his wife relied on Mrs Lejonvarn to perform analogous services in respect of the Garden Project.

[185]I therefore conclude that Mrs Lejonvarn assumed responsibility to the Burgesses for performing professional services in respect of the Garden Project and that they specifically relied on her for that purpose.

[186]I am also satisfied that the circumstances are such that it is appropriate for a tortious remedy to apply in law. This was a significant project, albeit in a residential setting, and was being approached in a professional way. This was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less formal context. Instead, the services were provided over a relatively lengthy period of time and involved considerable input and commitment on both sides. They also involved significant commercial expenditure on the part of the Burgesses. It would be wrong to categorise this as akin to a favour given without legal responsibility. In my judgment, neither of the parties saw the role in this way at the time. It is true that, viewed through a contractual lens, there was no consideration for the services undertaken and I have taken that fully into account. But it is nonetheless relevant to the context that Mrs Lejonvarn did hope to receive payment for the soft design services that would later be provided. She therefore had a direct interest of her own in properly performing services for the Burgesses (just as there was some hope of a future benefit in Lidl). It was also important to the growth of her new business that she provided a good service. Finally, Mr and Mrs Lejonvarn had been the recipients of benefits provided by the Burgesses beyond the normal bounds of friendship and the provision of gratuitous services by her should be seen in that light. Without descending into their every detail, the losses allegedly sustained are of a type which would be expected to flow from a failure to competently perform the services which Mrs Lejonvarn was apparently providing.

[187]This preliminary issue is specifically directed to paragraphs 18 to 20 of the Particulars of Claim. Those paragraphs refer back to the services listed in paragraphs 14 and 15. I shall deal with the detail of those listed services as part of preliminary issue (iv). For present purposes, it suffices to conclude that Mrs Lejonvarn owed a duty of care to Mr and Mrs Burgess to exercise reasonable skill and care in the provision by her of professional services acting as an architect and project manager on the Garden Project. Preliminary Issue (iv)

[188]Having found that a duty of care existed between Mrs Lejonvarn and the Burgesses, I am required to identify the nature and extent of the duty. It is convenient to do so by reference to the services identified at paragraphs 14 and 15 of the Particulars of Claim. It is important to note that these are services which the Burgesses allege were actually performed by Mrs Lejonvarn. There are six services identified in paragraph 14. Paragraph 15 is concerned with the provision of detailed design services.

[189]By way of over-arching objection to the allegations, it was submitted on behalf of Mrs Lejonvarn that she cannot have assumed responsibility for the various services pleaded against her because she was an architect who neither possessed nor professed to have any particular expertise other than in respect of aesthetic design. I reject that submission. At no stage did Mrs Lejonvarn indicate that aesthetics were the limit of her expertise or ability. She readily took up the task of becoming involved in the Garden Project. If she had wanted the Burgesses to understand that she had no or no sufficient experience of earthworks and landscaping then it was incumbent upon her to dispel the impression that she had created that she had that experience. The emails which she sent in March 2013 professed no doubts in that regard. She portrayed herself and Hardcore as a team and assured Mr Burgess that Hardcore would be suitable for the project. She also said to Mr Burgess that she did have landscaping experience. Whilst I accept that Mrs Lejonvarn’s specific expertise of aesthetics would have come to the fore once the earthworks had been completed that was not the only sphere of responsibility which she assumed.

[190]The first service contended for is the selection and procurement of contractors and professionals needed to implement the Enright design, including agreeing the terms on which they were engaged. In my judgment, subject to an important qualification, this is a professional service which Mrs Lejonvarn performed. Notably, on 9 July 2013, she described herself as having assembled an experienced team whose services she offered to the Burgesses and which she managed. The selection and procurement function was equivalent to that which was provided on the Bank Project. Mrs Lejonvarn was responsible for setting up the contractual relationship between Hardcore and the Burgesses and for agreeing the terms on which Hardcore were engaged. The duty is qualified in one material respect. It was clear that Mr Burgess liked and trusted Hardcore with whom he had had prior experience. When writing to Mrs Lejonvarn he referred to them as “your guys” and asked if they could do the Garden Project. In my judgment, there was no question but that Hardcore would act as the contractor on the project once Mrs Lejonvarn had confirmed, as she did on 6 March 2013, that “our guys will be great” for the Garden Project.

[191]The second service contended for is the planning of site commencement, preliminaries and initial strip out. As I see it, this paragraph describes functions or activities provided by the contractor. It is difficult to see what professional planning of commencement, preliminaries and strip out would have been or was required by an architect or project manager. The planning of those matters should, primarily, have been a matter for the contractors. I would not therefore find Mrs Lejonvarn responsible for the planning of those matters.

[192]The third service contended for is the preparation of such designs as were necessary to enable the Garden Project to be accurately priced and constructed. There is an additional duty alleged in respect of design at paragraph 15 of the Particulars of Claim and I deal with that below. For present purposes I focus on the formulation of the design for pricing purposes.

[193]It is submitted on behalf of Mrs Lejonvarn that she did no more than source a quote from Hardcore and that Hardcore was responsible for the content and adequacy of that quote. She accepts that she tried to assist Hardcore with the information necessary to provide the quote but the price and responsibility for it was that of Hardcore. I reject that submission. I agree that the production of designs to enable the works to be priced was something which Mrs Lejonvarn said would be done. In one of her emails to the Burgesses of 18 March 2013 she pointed out that the Enright design was not sufficient for costing and building purposes. She expressly recognised that his design could not be costed or implemented without working out some further details. It was therefore up to her to decide what further details were required in order to enable Hardcore or its subcontractors (and any additional contractors for other aspects of the work) to provide an estimate. The further design work could have been undertaken by her or by the contractors or a combination of them both. What was important was that it was undertaken by someone and was done properly. Mrs Lejonvarn’s later email of 18 March 2013 also identified her as the person responsible for detailed design. The Burgesses would not have allowed the works to proceed if they knew that those further details were outstanding. I qualify my conclusion by making clear that Mrs Lejonvarn was not obliged to ensure the design was sufficiently detailed to allow the works to be costed with an absolute degree of precision. Mr Burgess was not seeking and was never provided with a fixed price from Mrs Lejonvarn and Hardcore. He wanted a fairly firm estimate. Accordingly, it was necessary for Mrs Lejonvarn to prepare or oversee the preparation of designs to enable a fairly firm budget estimate to be prepared.

[194]The fourth service pleaded is the attendance at site at regular intervals to project manage the Garden Project and to direct, inspect and supervise the contractor’s work, its timing and its progress. I am satisfied that this is a service Mrs Lejonvarn promised she would provide and which she did in fact provide. In opening Mr Flannery accepted that Mrs Lejonvarn conducted some form of supervision albeit to a limited extent. In my judgment, she did supervise the works. She attended site at regular intervals to oversee what was going on. She identified areas where there was non conformance and reported on it: see, for example, the email of 11 June 2013. She was expressly concerned with the quality of the contractors’ work and got involved in it. In her email of 3 July 2013 she reflected the nature of what she had been doing by saying that the subcontractors were accountable to her and had to work to her standards or they would not get paid.

[195]Insofar as Mrs Lejonvarn contended that her duty to attend site was limited to occasions when there was a specific request for her to do so I reject that submission. The duty to attend site was not limited to dates on which there was a specific query to address though it certainly encompassed those days. On her own admission she attended at site on occasions when she had not been asked to do so. In my judgment, that also reflects the nature of what she undertook to do in respect of site attendance. She was required to attend as often as was reasonably necessary to inspect the quality of work being carried out. She had the authority from the Burgesses to issue a direction to the contractor to remedy defective work. Indeed, she was the point of contact with the contractors.

[196]It is submitted that Mrs Lejonvarn cannot have been expected to expose herself to the risk of liability, without insurance or remuneration, in respect of defects in the work carried out by contractors on site. It is said that this is not something she would have done or could be expected to have done or did. I regret to say that, for the reasons I have already given, I cannot accept this. As was pointed out in White v Jones, the issue is whether she assumed responsibility for the task, not whether she assumed legal liability. In my judgment, on the facts of this case, she did assume such responsibility for the task for the reasons I have already given in respect of Issue (iii).

[197]There is an important qualification to make in respect of the duty in respect of workmanship. Some of the older authorities distinguish between the concept of supervision and the concept of periodic inspection See the discussion in Jackson & Powell on Professional Liability 7th edition at paragraph 9-241. . By describing a duty as one of periodic inspection it makes clear that the attendance on site is not permanent (akin to a clerk of works) and the quality of work can only be assessed on those occasions when an inspection did or should have taken place. In this action the parties have not distinguished between the language of supervision and periodic inspection. I would wish to make clear that the duty I find to exist is one of periodic inspection even though it has been colloquially referred to as supervision.

[198]The fifth service contended for is the receipt of applications for payment from the contractor and the provision of advice and direction to the Burgesses in relation to payment of such applications. I am satisfied that this was a service which Mrs Lejonvarn was providing. A review of applications for payment was precisely what happened on the Bank Project and it happened on the Garden Project. Requests for payment were made to her and she passed them onto the Burgesses. It was up to Mrs Lejonvarn to review the applications and to give advice as to whether the sum applied for was appropriate in the circumstances.

[199]The sixth contention is that Mrs Lejonvarn was responsible for exercising cost control by preparing a budget for the works and for overseeing expenditure against it. It is submitted on behalf of Mrs Lejonvarn that she was only keeping an eye on what the groundworks were costing to make sure there was enough money to pay for the finishing elements with which she was hoping to become involved. I reject that. I am satisfied that the pleaded service is one which Mrs Lejonvarn promised to and did in fact undertake. In her email on 1 July 2013 Mrs Lejonvarn told Mr Burgess that she had been keeping a very close eye on where things were as against the budget estimate. The spreadsheet she provided demonstrated that monitoring expenditure against the budget estimate was something she had indeed been doing. The budget estimate in this case was the sum of £130,000 which included the items in the rudimentary quote which had been provided to the Burgesses on 17 April 2013.

[200]The final contention relates to detailed design. In particular it is said that Mrs Lejonvarn undertook detailed design of the conceptual aesthetic design which had been prepared by Mr Enright. I have already referred to the fact that Mrs Lejonvarn described herself as responsible for the detailed design. She had explained to the Burgesses that the Enright plan was insufficiently detailed to serve as a design for construction purposes. It is also correct that Mrs Lejonvarn in fact undertook detailed design work. There are drawings prepared by her using her professional trading name of Linia Design which demonstrate that she did indeed carry out design work. Accordingly, I accept that Mrs Lejonvarn was responsible for the detailed design. Once again, I must qualify my conclusions as to the breadth of this service. If it was appropriate for some of the detailed design decisions to be taken by a specialist contractor (or subcontractor on its behalf) then I would not regard it as a failure on Mrs Lejonvarn’s part not to have undertaken such design work herself. She only undertook to carry out detailed design of the type which would be expected of an architect providing services of the type which arose in this case.

[201]There is a specific allegation that Mrs Lejonvarn failed to appreciate (or advise the Burgesses of) the need for appropriate designs to be prepared by an architect or structural engineer and failed to appreciate that without sufficient designs there was a risk that the works would be unsafe. As with all issues, breach will be a matter for expert evidence. But I would define the duty as follows. If an architect should have appreciated the need for appropriate designs to be prepared beyond those which had in fact been prepared then Mrs Lejonvarn ought to have used reasonable skill and care in ensuring that those further designs were prepared either by a professional or by the contractor provided that, in the latter case, she had reasonable grounds to be satisfied that the contractor had sufficient competence and experience to prepare the appropriate designs and was in fact doing so.

[202]Indeed I would also wish to qualify all the duties identified above in the following respect. Mrs Lejonvarn should be judged by the standards of a reasonably competent architect and project manager but not by the standards of a structural or geotechnical engineer. She never professed to be an engineer and the Burgesses knew that she was not an engineer. To the extent that the services which she had agreed to undertake involved a degree of specialist expertise beyond the remit of a reasonably competent architect or project manager Mrs Lejonvarn was entitled to rely on the specialist experience of others in respect of such matters provided that she had reasonable grounds for so doing. Preliminary Issue (v)

[203]This issue concerns the question of whether a budget figure of £130,000 was discussed between Mrs Lejonvarn and either or both of the Burgesses at any time before 5 July 2013 and, if so, when.

[204]I have already made my factual findings in this respect. A budget (VAT exclusive) figure of £130,000 was discussed with Mr Burgess on 28 April 2013. It was also discussed with him on 17 May 2013.

[205]Mrs Lejonvarn denies that she assumed any responsibility to the Burgesses in suggesting this budget figure. In my judgment, that is unrealistic. As is evidenced by her notes, the figure of £130,000 was the subject of detailed calculation by her even if all the details were not imparted to Mr Burgess. She gave the budget figure at a time when she knew that Mr Burgess would not have proceeded with the works using her and Hardcore unless the budget figure was cheaper than the cost of employing Mr Enright. Accordingly, Mrs Lejonvarn knew that the Burgesses were relying on that figure for that purpose. She assumed responsibility to them for the accuracy of the budget figure.

Summary and Conclusions

[206]For the reasons set out above I answer the preliminary issues in the following terms:(i) No.

(ii) Not applicable.

(iii) Yes. Mrs Lejonvarn owed a duty of care to Mr and Mrs Burgess to exercise reasonable skill and care in the provision by her of professional services acting as an architect and project manager on the Garden Project.

(iv) The duty was to provide those services pleaded in paragraphs 14 and 15 of the Particulars of Claim with the exception of paragraph 14.2 and subject to the additional limitations and qualifications identified in the body of this judgment. (vi) Yes, on both 28 April and 17 May 2013.

Further Steps

[207]I would invite the parties to agree the impact that this Judgment has on the ambit of the allegations contained in the relevant paragraphs of the Particulars of Claim so that there is a clear agenda going forward. In default of agreement within 7 days from handing down I will determine the rival contentions on paper.

[208]My provisional view is that in this case it would not be appropriate to hear any application for costs at this stage. Rather, it presently seems to me that costs should be dealt with in the round at the end of the entire proceedings. However, if either party wishes to contend to the contrary then I will hear any such application.

[209]Subject to that, the Claimants should arrange a second Case Management Conference to set directions for trial.

[210]However, none of the above should discourage the parties from seeking to settle their differences. I cannot think of a more appropriate case to which mediation is suited.

Burgess & Anor v Lejonvarn [2016] EWHC 40 (TCC)

General Background

The Preliminary Issues

E. The Garden Project: The Defendant's contractual duty

The Witnesses

Expert Evidence

The Facts

The Preliminary Issues

Summary and Conclusions

Further Steps

Cited in 2 later judgments