Smales v Lea and Others

[2011] EWCA Civ 1325

Experts fees - Statute Barred

The Facts

The Claimant was a Chartered Surveyor of many years experience. He had been engaged by the occupants of a first floor flat to report into defects with the property in which they lived. They owned the freehold to the whole property and another two people lived in the ground floor fl at. The surveyor noted damage and his services were engaged by the occupants of the first floor flat to commission repairs and to liaise with their insurance company to get those repairs funded. The occupants downstairs thought that that was a sensible suggestion and thus engaged the Claimant on a similar basis.

On the insurance front, the Claimant had to deal with the claims under two separate policies.

The insurers of the downstairs flat were CIS who instructed Ellis and Buckle to act as their loss adjusters.

In relation to the Claimant’s own fees, agreement in principle was reached with Ellis and Buckle on the 12th October 1999 as follows:-

“Insurers have confirmed that they have no objection to you continuing your involvement and they have accepted that an agreed proportion of the final rendered fee should fall to the CIS for financing”.

One of the ground floor occupants died in 1996 and thereafter the other occupant became the sole client. The Claimant was still acting in the expectation that the CIS would meet his fees in due course.

Shortly after the works were finished the Claimant himself suffered ill health. That said during 1999 he managed to sort out final accounts but they did not get delivered to either the resident; to Ellis and Buckle; or to the CIS. During 1999 and 2000 Ellis and Buckle are said to have chased the Claimant on many occasions for his bill.

Eventually the bill was sent in about June 2001 to Ellis and Buckle.

A dispute arose as to whether the bill should be served on the occupant himself.

The Claimant attempted service upon him but discovered that he had moved away without leaving a forwarding address. In the meantime, negotiations continued with Ellis and Buckle and by the 21st October 2006 the occupant died. Shortly afterwards the Claimant discovered, through his researches, the address to which he had moved.

The Claimant continued to correspond with his executors requesting that they should pay the full invoice.

Meanwhile, Ellis and Buckle offered to pay what must have amounted to about one third of the bill saying that the rest was grossly excessive. The proceedings were issued on the 24th November 2008. The matter was deemed to be time barred by the Judge at first instance and therefore the matter was appealed to the Court of Appeal.

The Issues

The issue was whether the matter was statute barred or not.

The Decision

It had been argued that the contract between the Claimant and the resident of the flat was an entire contract such that one party must perform all of his obligations before the other party comes under an obligation to make payment.

There is, of course, very good authority to the fact that this can be the situation. In the instant contract, there were a number of obligations on the Claimant. He had got to get remedial work done and paid for. He was then required to negotiate with insurers about his own fees. However, that was not the same as saying the contract was an entire contract whereby the Surveyor had no entitlement to any remuneration until each one of the obligations set out had been performed.

The Judge commented that it was relatively unusual for a client to have no obligation to pay unless and until the professional firm had performed every single obligation and whilst it could happen, it was not the situation in this case. Therefore, the Claimant had become entitled to his fees long before negotiations as to the size of his fee had broken down. Accordingly, the Court considered when the Claimant had become entitled to recover his fees. It was held that, at the latest, the Claimant was so entitled during 1999 once the remedial works had been finished. The contractors had been duly paid; their accounts had been agreed; and the respective insurance companies had remitted the sums which were due for the construction works. At this point the Court said that the Claimant had carried out the principal part of his obligations and therefore he was entitled to be paid for what he had done. Accordingly, the Claimant’s claim for unpaid fees was statute barred.

Comment

Expert witnesses should bear in mind that cases can go on for some considerable time.

It is worth the date for payment being spelt out in the letter of instruction, even if it is only by reference to the litigation coming to a conclusion or some other description of when the expert is entitled to be paid.

The limitation period to sue on that contract is six years from that date.

TEDR Volume & Issue

TEDR Volume: 
16
TEDR Issue: 
3