19 October 2011 - Court of Appeal holds that surveyor's fees time-barred in Smales v Lea

The Court of Appeal has held that a contract for the provision of professional services by a surveyor was not an entire contract which required all the surveyor's obligations to be discharged before he had a right to payment, and accordingly that his claim for fees was time-barred.

The claim was brought by the appellant, whose claim for payment of his fees was dismissed in the High Court. The claimant had been engaged in 1995 by the owners of two flats in relation to a two-storey bay window which had been suffering from subsidence. The claimant's engagement letter from one owner (B), the executors of whom were respondents to the appeal, stated that his fees and expenses formed part of the owner's insurance claim. The claimant was obliged under the contract with B to survey the window, oversee the remedial works and deal with B's claim with the insurers.

By 1998, all the works had been completed. The claimant delivered a bill to B in 1999 and to the underwriters in 2001. The underwriters, however, disputed the bill on the basis it was excessive. The claimant did not reply to their correspondence for four-and-a-half years. Once he did, correspondence flowed between the underwriters and the claimant as to the level of fees in the bill and the underwriters indicated that they would pay a reduced sum to the claimant direct (as B had now died).

However, the claimant commenced proceedings for recovery of his fees from B's executors. The High Court held that the claim was time-barred, as the claimant's cause of action for his fees had arisen in 1999 when the works were completed. The claimant appealed to the Court of Appeal.

The Court of Appeal, consisting of a constitution of Lord Neuberger MR, Jackson LJ and Gross LJ, has now dismissed the appeal. The claimant had argued that his cause of action for payment of the fees would not arise until negotiations with the underwriters had been concluded, as the contract was an entire contract which required him to discharge all his obligations before he was entitled to payment.

The Court of Appeal, however, did not agree that the contract was an entire contract. There was no express term stating this and nor was there any reason why such a term should be implied. It was relatively unusual for construction contracts or contracts for the provision of professional services to be entire contracts. Once it was established that the contract did not require the claimant to discharge all his obligations before payment, it was not possible for the claimant to argue that his cause of action had accrued later than 2001. Accordingly the claim was time-barred.

Sarah Haren appeared successfully for the executors.