Burgess & Anor v Lejonvarn

Factual and Procedural Background

The Plaintiff couple are owners of a property known as Highfields in The City. They had been friends and near neighbours with the Defendant for about ten years prior to the dispute, which concerns alleged gratuitous professional services provided by the Defendant relating to a significant landscape gardening project at Highfields. The Defendant, an individual with architectural training and experience, was said to have provided project management and architectural services for this Garden Project without formal contract or agreed remuneration.

The Court was tasked with determining five preliminary issues arising from the dispute, following a Case Management Conference aimed at reducing the costs and scope of litigation. The preliminary issues focus on whether a contract existed between the parties, its terms, the existence and scope of any duty of care in tort, and the discussion of a project budget figure.

The Defendant had prior professional dealings with the Plaintiffs and their company, including involvement in previous projects such as the Bank Project, Little Venice Office Project, and others, which provided context for the parties' expectations and interactions regarding the Garden Project.

During the Garden Project, the Defendant engaged a contractor known as Hardcore Ltd and was involved in procurement, project management, supervision, and cost control activities. Disputes arose over the quality of the work, budgeting, and the scope of the Defendant’s role. The relationship broke down in July 2013, after which the Plaintiffs continued the work with other contractors, incurring additional costs.

The Court heard evidence from the parties and various witnesses including company directors and previous employers. The Defendant’s evidence was found to be less reliable than that of the Plaintiffs. Expert reports were prepared but not formally submitted or relied upon in the trial of preliminary issues.

Legal Issues Presented

1. Whether a contract was concluded between the Plaintiffs and the Defendant in relation to the Garden Project.
2. If a contract existed, what were its terms.
3. Whether the Defendant owed a duty of care in tort to the Plaintiffs regarding the Garden Project defects.
4. If a duty of care existed, what was its nature and extent.
5. Whether a budget of £130,000 was discussed between the Defendant and the Plaintiffs before 5 July 2013, and if so, when.

Arguments of the Parties

Appellant's Arguments (Plaintiffs)

• Asserted that a contract was formed around 15 May 2013 based on written exchanges and the Defendant’s conduct in attending the property to start work.
• Claimed the Defendant assumed responsibility for project management and architectural services, including procurement, supervision, budgeting, and cost control.
• Contended that the Defendant owed a duty of care in tort to exercise reasonable skill and care in providing professional services, even if no contract existed.
• Maintained that the budget figure of £130,000 was not agreed or discussed prior to July 2013 and that the Defendant was responsible for cost overruns and defective work.

Appellee's Arguments (Defendant)

• Denied that a contract was formed due to lack of a clear offer, acceptance, or consideration.
• Argued that no contractual terms were agreed and the relationship was informal and partly social.
• Submitted that the tort claim was a fallback to compensate for the failure of the contract claim.
• Contended that any duty of care did not extend to supervision or project management, only to design advice, and that she was merely a conduit between the Plaintiffs and the contractors.
• Denied any responsibility for the budget figure of £130,000 or for negligence in managing the Garden Project costs or quality.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by assessing whether a contract had been formed between the parties. Applying established contract law principles, including the necessity of offer, acceptance, certainty, consideration, and intention to create legal relations, the Court found no concluded contract. The written communications were too vague and incomplete, lacking clear terms or discussion of remuneration. The Defendant’s attendance on site did not constitute acceptance of an offer. The absence of consideration was decisive, as no payment terms or fees were agreed and the services were largely gratuitous.

Turning to the tortious duty of care, the Court held that despite the absence of contract, the Defendant owed a duty of care to the Plaintiffs. This was grounded in the principle of assumption of responsibility and reliance, as established in Hedley Byrne and expanded in Henderson and White v Jones. The Court rejected the Defendant’s argument that supervision was not a service capable of giving rise to a duty of care, emphasizing that professional services extend beyond advice to include project management and supervision when special skill is exercised.

The Court found that the Defendant had assumed responsibility by providing a range of professional services: selecting and procuring contractors, overseeing site commencement, preparing designs for pricing, attending site regularly to supervise and manage the contractor’s work, reviewing payment applications, and exercising cost control through budgeting and expenditure monitoring. The Defendant’s role was akin to that of a project manager, similar to prior engagements with the Plaintiffs’ company, and was not limited to acting as a mere conduit or friend.

The Court qualified the scope of the duty, excluding responsibility for planning preliminaries (a contractor function) and limiting the duty of supervision to periodic inspection rather than continuous presence. The Defendant was expected to act as a reasonably competent architect and project manager but not as an engineer, and could rely on specialist contractors for technical matters when reasonable.

Regarding the budget, the Court found that the £130,000 figure was discussed and assumed by the Defendant to be a binding budget, communicated to the Plaintiffs on 28 April and 17 May 2013. The Defendant knew the Plaintiffs relied on this figure and thus assumed responsibility for its accuracy.

Overall, the Court concluded that despite the absence of a contract, the Defendant owed a professional duty of care in tort to the Plaintiffs for the services provided in the Garden Project.

Holding and Implications

The Court’s final determinations on the preliminary issues are as follows:

• No, there was no concluded contract between the Plaintiffs and the Defendant.
• Not applicable, as no contract existed.
• Yes, the Defendant owed a duty of care to the Plaintiffs to exercise reasonable skill and care in providing professional services as architect and project manager on the Garden Project.
• The duty encompassed the professional services pleaded, except for the planning of preliminaries, subject to qualifications identified in the judgment.
• Yes, the budget figure of £130,000 was discussed with the Plaintiffs on 28 April and 17 May 2013.

The direct effect of this decision is that the Plaintiffs cannot succeed on their contractual claim but may proceed on their tort claim based on the duty of care found to exist. The judgment clarifies the nature and scope of the Defendant’s professional responsibilities despite the lack of formal contract and despite the services being provided gratuitously. No new precedent is established beyond the application of existing principles to the facts.

The Court encouraged the parties to agree on the implications of this judgment for the ongoing proceedings and suggested mediation as a suitable means to resolve outstanding disputes. Costs are to be addressed at the conclusion of the full proceedings unless either party applies otherwise.