Management services claim was too inspecific for proof
A claim in a commercial action for payment for additional work carried out beyond agreed services for a fixed monthly payment under an estate management contract, has been dismissed in large part by the Sheriff Appeal Court as lacking in specification.
Goldsmith & Co (Estates) Ltd sought the payment of £90,981 from Scaliscro Estates Ltd, owners of an estate on Lewis, following the end of a three year relationship between the parties. By email the parties had agreed that the pursuers would provide a variety of services for a fixed monthly fee of £1,500 plus VAT, plus travel costs, any “unforeseen work” to be additionally charged at a fixed hourly rate.
The sum sued for was mainly attributed to “unforeseen services” under various heads. The defenders claimed lack of fair notice; after debate the sheriff excluded the majority from probation apart from a claim for commission payments on rentals.
The largest claim was for “additional hours spent on lodge development tasks including dealing with multiple architects”, quantified as “3.5 years @ 2 full weeks per year, £37,800”. Most other heads were set out in a similar way.
On appeal it was argued that the averments, together with a schedule with a fuller description of the type of works carried out (though not the contractual basis, or the dates or breakdown of hours), gave sufficient notice. It was enough that there was an overall contractual nexus; the work to be carried out had been obvious to both parties at the time. Other information from third parties, such as architects’ invoices, was available to the respondents.
Giving the opinion of the court, Sheriff Principal Nigel Ross, who sat with Appeal Sheriffs Brian Mohan and Harry Small, said the degree of specification required would vary according to what needed to be proved for the claim to succeed, both in fact and in law. “In a commercial action, fair notice may be based on a combination of relatively brief written pleadings together with productions such as affidavits, a Scott schedule, timesheets or other sources of evidence. That flexibility does not, however, relieve the pursuer from giving fair notice.”
The email constituting the contract set out 14 separate functions, and expressly excluded certain other tasks, including the “contractual administration of the refurbishment of the lodge/other built structures”. While it was correct that the respondents, as owner, must have known about, and impliedly approved, the appellants carrying on project management works, that was “not, in our view, equivalent to regarding [them] as adequately informed about the sums claimed”.
This head of claim was not related back to the contract terms; it was not at present possible to identify why the work was done; it was not clear whether it was additional hours for a core task or additional hours outside the core tasks, or of the latter, why the work was carried out at all. “The respondent is entitled to be told why this work was done, particularly where there is an obvious clash with the contract itself”.
Further, the contract was carried on over three years without an invoice being raised, and involved a large number and variety of tasks covered by the monthly fee. The additional works appeared to overlap with the core contract works, and possibly with each other. “In addition, it is not possible to identify from the tasks completed how much work the appellant actually performed in completing them… The fact the respondent was aware, for example, that the lodge was being refurbished by other tradespeople, does not demonstrate that they know, or can discover, how many hours of work the appellant carried out in relation to that individual project.“
Without some explanation of the basis of the entitlement, “a global, rounded figure is entirely inadequate to demonstrate a right to payment” – though it was not necessary, as submitted for the respondents, to identify who carried out the works.
“For these reasons, we consider that the sheriff was correct, with one exception, to repel the heads of claim which he did.” The exception related to travel costs, since the contract provided for these to be invoiced separately.