Fitzroy Robinson Ltd v Mentmore Towers Ltd & Others [2009] EWHC 1552(TCC)  

This dispute, which came before Mr Justice Coulson, arose out of a scheme to develop an exclusive private member’s club in Piccadilly and an associated country house hotel. FRL were involved in putting together a scheme, including producing the design and obtaining planning permission. In March 2006, at about the time when FRL’s work was to commence and before contracts had been ! nalised, Mr Blake who the defendants had been told would be the FRL team leader resigned. Although he had resigned, he was required to work out a notice period of one year. FRL did not inform the defendants of this until November 2006 just as FRL were completing the work on the design that was going to form the basis of the Piccadilly planning application. Mr Blake remained in the employment of FRL until March 2007. However there were at least two years of the project left to run.  

Disputes arose between the parties including in relation to the obtaining of planning permission and non payment of consultants. FRL commenced proceedings for fees which were met by a variety of defences including allegations of professional negligence in relation to the planning application and allegations of misrepresentation arising in connection with the resignation of Mr Blake.  

Mr Justice Coulson commented on the fact that the parties had not undertaken any form of ADR. He was in no doubt that ADR even if it had been unsuccessful, would have brought about a considerable narrowing of the issues between the parties. He gave an example of the defendants’ case for recti! cation. At trial, following exploration of parts for the FRL case, this issue was e" ectively abandoned. The Judge felt that this would have become apparent to the defendants much earlier if they had undertaken ADR. Second, the events surrounding the resignation were, as the Judge with some care put it, one of those instances where a number of disputes between the witnesses could not be ascribed to di" erences of recollection or memory lapse. If the parties had been able to resolve their di" erences by way of ADR, ! ndings on these issues would not have been made in a public judgment.  

The Judge found that FRL repeatedly represented to the defendants during the pre-contract negotiations that Mr Blake would be involved throughout the duration of the project in the crucial role of team leader. The representation was made orally at meetings and in writing in the bid documents. This was a representation of fact, as to the services and personnel that would be provided to the defendants.  

Further, the statements made about Mr Blake’s continuous involvement as team leader were designed to induce the defendants to enter into the contract with FRL. The Judge did note in passing that this aspect of the factual background was atypical as in his experience it was relatively rare in the construction industry for the promised involvement of a particular member of a large professional team to be so clearly and obviously the major reason why the contract was placed. However that was what had happened here.

In March 2006, FRL knew that Mr Blake was not going to be the team leader for anything more than one year of the three years the project was estimated to take. The defendants should have been told of this. Further, in the weeks after Mr Blake’s resignation, FRL knowingly and, in the view of the Judge, dishonestly failed to correct that false representation. At the time of the resignation, the contracts had not been formally entered into.

The consequences, namely the question of loss, # owing from this were left over to a quantum hearing. However the Judge noted that here, that losses (in the form of increased fees) may have been caused by disruption within FRL and there may also have been some duplication of their work. However, the defendants’ claim that the loss of Mr Blake lead to delay failed, as they had not been able to demonstrate what delay had actually been caused.