Fitzroy Robinson Ltd v Mentmore Towers Ltd & Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Coulson |
| Judgment Date | 26 January 2010 |
| Neutral Citation | [2010] EWHC 98 (TCC),[2009] EWHC 3070 (TCC),[2009] EWHC 1552 (TCC) |
| Docket Number | Case No: HT-08–97,Case No: HT-08-97, HT-08-129 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 26 January 2010 |
[2009] EWHC 1552 (TCC)
Before: Mr Justice Coulson
Case No: HT-08–97
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Mr Peter Fraser QC and Mr Zulfikar Khayum (instructed by Laytons) for the Claimants
Mr Paul Darling QC and Mr Marc Rowlands (instructed by Mishcon de Reya) for the Defendants
Hearing Dates: 11th, 12th, 13th, 14th, 18th, 19th, 20th, 21st May and 11th June 2009
Mr Justice Coulson:
INTRODUCTION
This case concerns two of England's most iconic buildings: the former In & Out Club on Piccadilly 1, and Mentmore Towers, the former home of the Rothschild family, in Buckinghamshire 2. The claimant, Fitzroy Robinson Limited (“FRL”) were engaged to act as architects in connection with an ambitious scheme to develop the In & Out Club, and a number of surrounding buildings on Piccadilly, into an exclusive private member's club, with Mentmore Towers as an associated country house hotel. The overall project was referred to as the PM Club (“the project”). Sadly, the project was put on hold at the end of 2007 and there appears to be no imminent plan to revive it. In consequence, the In & Out Club, and the buildings that surround it on Piccadilly, stand empty and not a little desolate.
The In & Out Club, and some of its surrounding buildings, including Green Park Mansions at 90–93 Piccadilly, No 95 Piccadilly, and 12 White Horse Street, are all owned by Anglo Swiss Holdings Limited, a company incorporated in Jersey. On the other side of White Horse Street, in a large building which it is intended to link to the other buildings by a 'bridge of sighs', is 96–100 Piccadilly, owned by another Jersey company, Good Start Limited. A third Jersey company, Mentmore Towers Limited, owns the Buckinghamshire property.
Although the three defendant companies are linked, those involved in their control and operation are not altogether easy to identify. It appears that all three companies are owned by a trust called Ironzar III Trust and are run from Jersey by a company called Equity Trust (Jersey) Ltd. There was no evidence about the identity of their trustees or beneficiaries, nor the identity of their directors. I shall refer to the three companies collectively as “the Defendants”.
For the purposes of the project, the Defendants were advised by Buckingham Securities Holdings Plc (“BSH”). They were named as the Employer's Representative in all three Contracts between the Defendants and FRL. The Defendants' principal witness at this trial, Mr Simon Halabi, described himself as an advisor to BSH. However it was clear that Mr Halabi had a much closer relationship to the project than that, since the evidence was that he lived at Mentmore Towers, and had a large office at 100 Piccadilly. He referred at one point to the owners of the properties as “my trustees”. However, he denied that he was the beneficiary of the trusts.
FRL became involved in the project in the summer of 2005. The key member of the FRL team was Mr Jeremy Blake, the director who put together the two FRL Bid documents and was involved in all the pre-contract meetings. A period of 38 months was identified and agreed as being the period from the commencement of architectural work by FRL to the opening of the PM Club. Within this timetable, the period allowed for producing the design and obtaining planning permission for the Piccadilly element of the project was about 13 1/2 months. It rapidly became apparent that this was a serious underestimate of the work
involved and the time required to obtain planning permission for such a complex and high-profile proposal.
At the Defendants' request, FRL started design work in March 2006, at a time when their three separate Contracts of appointment were largely agreed, although some of the details (including the payment arrangements) were still being negotiated and had not been signed off. Documents produced at the time showed the future projection of the agreed 38 months, starting in April 2006 and leading to completion of the works at both Piccadilly and Mentmore Towers at the end of May 2009. On this basis, the planning phase on Piccadilly should have been completed by May/June 2007.
On 17 th March 2006, almost at the outset of FRL's work, and before the Contracts had been finalised and executed, Jeremy Blake, the person whom the Defendants had been told would be the team leader throughout the project on behalf of FRL, running the PM Club project on both sites, tendered his resignation. A few days later, on 21 st March 2006, he rejected a counter-offer made to him by Mr Thompson, the CEO of FRL. No further counter-offer of any sort was ever made to him, but he was required to work out his notice period of one year. FRL did not inform the Defendants, or BSH, or Mr Halabi, that Mr Blake had tendered his resignation, either in March 2006 or at any time prior to 14 th November 2006.
The two Contracts between FRL and Goodstart Limited and Anglo Swiss Holdings Limited, relating to the Piccadilly element of the project, were executed by FRL on 28 th March 2006. They were counter-signed by the two defendant companies on 8 th May 2006. FRL executed the Mentmore Contract on 20 th April 2006 and that was counter-signed by Mentmore Towers Limited on 30 th May 2006.
Throughout 2006, FRL, and Mr Blake in particular, were engaged in putting together the design documents for the purposes of the two planning applications. It was recognised by everyone involved that the application that was going to be the most difficult was the one in respect of the Piccadilly properties.
In November 2006, just as FRL were completing work on the design that was going to form the basis of the Piccadilly planning application, they informed BSH and Mr Halabi that Mr Blake had resigned. Unsurprisingly, this created a good deal of upset. Despite this, the planning application for Piccadilly was lodged on 1 st December 2006. Mr Blake remained in the employment of FRL until 16 th March 2007. Thereafter, he did some further work for them on an hourly basis, so as to allow the planning application for Mentmore Towers to be lodged in April 2007. That planning application was granted on 10 th August 2007, and there are no issues arising out of that process in these proceedings.
The planning application in relation to the Piccadilly properties was much more troublesome. Two of the particular matters that emerged during 2007 as concerns on the part of Westminster City Council, the relevant planning authority, were the absence of a detailed acoustics report dealing, in particular, with the noise of the plant on the roofs, and a failure to identify the plant that would be sited there, particularly on the new (and higher) roof of 12 White Horse Street. It is now said by the Defendants that these concerns stemmed from failures on the part of FRL, which delayed the obtaining of planning permission and/or delayed the project. On 25 th October 2007, Westminster City Council resolved to grant planning permission in respect of the Piccadilly element of the project, although there were a number of matters identified that required further resolution before the officers, through their delegated powers, could formally grant permission. It was common ground that these outstanding matters would be relatively straightforward to resolve.
After about May 2007—the time when, in accordance with the programme, planning permission for the Piccadilly element ought to have been obtained—there were complaints about the Defendants' failure to make prompt payment to their various consultants. Payments to FRL stopped in June 2007. Some consultants stopped work during this period; others, like FRL, continued to work. It was common ground that, by Christmas 2007, FRL had achieved completion of Stage D, and were about 50% of the way through Stage E, with some fairly minimal work commenced on Stage F 3. However, on 24 th December 2007, FRL received notices of suspension in relation to their work under all three Contracts. On the evidence, it seems that the Defendants decided to put the entire project on hold at that point, although the reasons for their doing so were and are not at all clear. The project remains suspended.
In April 2008, FRL commenced proceedings for unpaid fees incurred in connection with Mentmore Towers. The claim was for £504,416 plus VAT and interest. A month later, on 7 th May 2008, FRL commenced separate proceedings, against Good Start and Anglo Swiss, in respect of the Piccadilly element of the project. In that claim, the total outstanding fees was said to amount to £1,075,000 odd, together with VAT and interest. Both claims were based on the monthly instalment figures identified in Schedule 2 to the three Contracts.
FRL issued an application for summary judgment on their fee claims, pursuant to CPR Part 24. However, in response, on 2 nd September 2008, the Defendants served defences and counterclaims in both proceedings which raised a raft of disputes. In essence, however, those points boiled down to three principal issues, namely:
a) An issue as to the true construction of the Contracts between the parties, and whether, in the circumstances, the instalments needed to be adjusted. This point was put, in the alternative, as a claim for rectification, on the basis that the amounts of the monthly instalments were based on a programme which had long since failed to reflect the delayed progress on site, but which had not been expressly incorporated into the contract documents.
b) A variety...
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