In Mentmore Towers Limited v Fitzroy Robinson Limited, the High Court in England recently held that an architect’s firm, Fitzroy Robinson Limited (“FRL”) were in breach of contract and were guilty of fraudulent misrepresentation, by deliberately withholding from its client, Mentmore Towers Limited, (“MTL”) the fact that an employee was resigning.
FRL were employed as architects by MTL on a number of its projects. The employee in question was a Mr B, a director with the firm, who had played a pivotal role in the tendering process and pre-contract meetings and was to act as the primary contact for the duration of the projects with MTL. Before the contracts were signed Mr B resigned. FRL neglected to tell MTL of the resignation as they feared that MTL would pull out of the project. It was only subsequent to the contract being signed that MTL were told of Mr B’s resignation. On this basis MTL brought proceedings against FRL for breach of contract and negligent and fraudulent misrepresentation. The High Court held that FRL were liable on both counts.
Although this is a UK case, it may be used as a precedent in Ireland and alerts businesses to the fact that where they have key employees involved as relationship or project managers, they should keep their client appraised of any changes in that employee’s ability to act in that capacity. Otherwise they may risk being held liable for breach of contract and misrepresentation.