IN THE SUPREME COURT OF JUDICATURE
QUEEN’S BENCH DIVISION (TECHNOLOGY AND CONSTRUCTION COURT)
BEFORE RECORDER JOHN UFF QC
Wednesday, 19th February 2003
Between:
-and-
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1. This Judgment follows the trial of Preliminary Issues ordered by HH Judge Richard Seymour QC on 25th February 2002 as to:
(i) whether the Claimant had entered into any binding contract or contracts with the First and Second Defendants or either of them as alleged in the Re-Amended Particulars of Claim; and
(ii) if and insofar as the Claimant did enter into any contract or contracts with the First and Second Defendants or either of them, what were the terms of such contract or contracts as to the making by the First and Second Defendants or either of them of any payments to the Claimant.
The claim against the third Defendant was dismissed by order of HH Judge Seymour QC dated 12th July 2002 on the ground that the Claimant had no real prospect of succeeding on such claim.
2. The Claimant, which is effectively Mr. Dinkha Latchin, is an experienced Architect of Iraqi origin who has worked for many years, with success, on the International architectural circuit. The Second Defendant, Mr. Nadhmi Auchi is a highly successful international businessman, also of Iraqi origin. The First Defendant (GMH) is described as an International Investment Company with interests in real estate, construction, hotel and leisure industries, incorporated in Luxembourg but with its central management in London. Mr. Auchi is or was at the relevant time Chairman and Chief Executive Officer (CEO) of GMH and a substantial shareholder both directly and indirectly. Mr. Auchi’s indirect shareholdings were through a chain of subsidiary and associated companies in many of which Mr. Auchi also held executive offices. One of these is Compania Rentistica (the Third Defendant), of which Mr. Auchi is President. It is sufficient for present purposes to refer to the chain of companies headed by GMH as the GMH Group, although ownership and control of the different companies was more complex than this suggests. Rentistica held, directly or indirectly, interests in a number of prestigious properties in Tangiers, which form the principal subject of this action. At the relevant time both Mr. Auchi and Mr. Latchin were resident and domiciled in England. Since then Mr. Latchin has moved his operations to Dubai.
3. The subject of this action is a series of claims by Mr. Latchin for fees arising from architectural work carried out in respect of three or four projects, all located in Tangiers. The total value of the claims is some £240,000. For Mr. Auchi, it is evident that the sum in issue is modest, compared to the time needing to be invested in the action. Yet both parties (having, as I understand, unsuccessfully attempted mediation) now insist on a full trial of the merits of the claim with Leading and Junior Counsel. Evidently both parties regard this action as involving matters of principle. That is their privilege and the amount in issue and its relative importance to the parties has no bearing whatsoever on the outcome.
4. The claim, in a nutshell, is for payment of architectural fees, the calculation or assessment of which does not presently concern the Court, arising out of the following projects:
Project 2: commencing in about April 1994, Mr. Auchi produced sketches and design studies for refurbishment of the existing Hotel Villa France to a four star standard. ‘The work involved visits to Tangiers and continued until February 1995.
Project 1: was a development of Project 2 which followed on from February 1995 when Mr. Latchin contends that he was informed that the refurbished Hotel was to be to five star standard. The work continued until March 1996 involving further sketches, plans and drawings.
Project 3: from about May 1994 this work concerned the development of the Old English Tennis Club in Tangiers, involving sketches and drawings of three separate plans. The work continued until January 1996.
Project 4: was for a private villa for Mr. Auchi, situated on elevated land above Tangiers and involved plans and drawings produced between about December 1995 and August 1996.
5. Mr. Latchin has produced a large number of drawings and prints concerning the four projects. Apart from this, however, very few records have been produced to confirm details of the events between April 1994 and August 1996. In consequence, and not surprisingly, Mr. Latchin and Mr. Auchi disagreed in their recollection of the detailed events. It will be necessary to decide whose evidence is to be preferred. However, these issues pale into significance against the real difference that forms the heart of this case. The difference is that Mr. Latchin says that he was engaged by Mr. Auchi or GMH, under a contract, to carry out the work that he did and consequently that he should be paid for it. Mr. Auchi on behalf of himself and GMH says that the whole of the work carried out by Mr. Latchin was done without any contractual basis and was carried out, if not gratuitously, at least on a speculative basis anticipating that fees would be earned if, but only if, any of the projects went ahead and Mr. Latchin was then appointed formally as Architect. This did not happen and consequently Mr. Latchin has not been paid. He now claims that all agreements were formed in the course of meetings and discussions with Mr. Auchi or, alternatively, that Mr Auchi gave oral instructions to carry out the work in question and, in either event, it is to be implied that Mr. Latchin would be paid a reasonable amount for his services. It is alleged that there were additional express terms that the fees would be paid in pounds sterling or US dollars, in London or in Luxembourg, and further that the fee would be calculated in accordance with the RIBA Scale. These matters, however, are secondary to the main issue of whether Mr. Latchin is entitled to be paid at all.
6. At first sight the Defendants’ position is surprising in that Mr. Latchin has plainly carried out work which is, or may be, of benefit to the Defendants. However, on behalf of the Defendants a number of points are made. It is said that the work revealed by the drawings and sketches is of a preliminary and unspecific nature and was far from constituting a detailed design even in the most advanced sections of the Hotel plans. Perhaps even more important than this, it is said that Architects regularly carry out speculative work, sometimes without instructions, and it is accepted that the right to payment will be dependant upon the project going ahead. Even then, there is no guarantee that an Architect who has carried out such speculative work would be appointed and therefore Architects in Mr. Latchin’s position should know that they may not receive any recompense for their work.
7. It should also be mentioned at the outset that each side saw fit to mount attacks on the credibility of the principal witness on the other side. Thus, Mr. Latchin was accused of not revealing the fact that his professional UK architectural membership had been ,allowed to lapse in early 1994. Rather more serious, he was accused of concealing the fact that he had a longstanding relationship with a lady of the Muslim faith in Tangiers who was described as the “mother of his children,” in addition to which Mr. Latchin conveniently adopted a Muslim name when in Tangiers. For their part Mr. Latchin’s team accused Mr. Auchi of having been involved in international financial crime and being subject to an international arrest warrant that now prevented Mr. Auchi entering France to enjoy the comfort of his villa there. Finally, it is to be noted that Mr. Latchin testified that he had been subjected to an anonymous telephone threat, suggested by him to have some connection with the present case but strongly denied by Mr. Auchi. All such exchanges are a matter of regret and it is to be recorded that both Mr. Latchin and Mr. Auchi dealt with the matters put to them with relatively good humour and with the maturity that both of them possess. In the result, I do not think that any of these allegations affects the issues that I have to deal with, subject to one exception. The exception is that Mr. Latchin’s relationship with the lady in Tangiers does seem to me relevant, first to Mr. Latchin’s apparent desire to obtain work in Tangiers, and secondly to his readiness to pay visits to that city and the length of time spent there. These matters do not have any bearing, and nor do the matters put to Mr. Auchi, on whose evidence is to be accepted, where there were differences. Nor do these matters have any material effect on the major issue of whether the whole enterprise was a matter of speculation as the Defendants contend, or whether there was, as the Claimant contends, an implication or assumption that an appropriate fee would be payable for the work done. On this basis I now turn to the facts.
8. The events relevant to this claim begin in April 1994 (Project 2) when it is agreed that a meeting took place between Mr. Latchin and Mr. Auchi in the Kensington Offices of General Mediterranean Holdings (UK) Limited, a subsidiary of GMH. It is Sufficient to note that the Kensington office was used by Mr. Auchi for his regular business activities in London, including those of GMH The purpose of the meeting was to discuss the Hotel Villa France, a well-known landmark in Tangiers which was in need of refurbishment or redevelopment. The outcome of the meeting was that Mr. Latchin agreed to produce an initial sketch study for the Hotel, which had been closed down in 1992 on safety grounds. The Hotel was owned by Rentistica and it appears that they had already applied, unsuccessfully, to demolish the building. Mr. Latchin was given copies of plans of the existing building bearing the name Rentistica. There was a dispute as to who had initiated the meeting, in relation to which the background to the meeting is of some relevance. Mr. Auchi was initially reluctant to accept that there existed any previous relationship between the two gentlemen, which was somewhat surprising given that both were prominent expatriate Iraqis. However, Mr. Auchi eventually accepted that the two had in fact met previously in relation to the proposed development of two Nursing Homes in London. It transpired that Mr. Auchi had actually visited the sites with Mr. Latchin before deciding that he did not wish to invest. Whatever the precise background, I am left in no doubt that Mr. Auchi in fact knew perfectly well who Mr. Latchin was and that he was an architect of some distinction who was nevertheless keen on finding work. It does not require a great stretch of the imagination to suppose that Mr. Auchi must also have been aware that Mr. Latchin made his principal living through working as an architect and would ultimately be interested in working for fees. As regards the initiation of the meeting, I do not accept that either party unilaterally contacted the other, but rather that the proposal grew out of their previous social and business contacts. It follows that the meeting itself cannot be regarded as a request for services by Mr. Auchi.
9. At the time of the meeting in April 1994 the General Manager of Rentistica was Mr. Al Juma, who was also Mr. Auchi’s brother-in-law. He was also an Iraqi expatriate who had worked as a University Professor in Iraq until about 1990. His specialism was management, on which he had written books. He was therefore by no means an amateur when he joined the GMH Group in 1991, initially as Assistant Director General at Rentistica and subsequently as its General Manager. It was under his guidance that initial attempts had been made to obtain permission to redevelop the Hotel site. After refusal by the Aesthetics Committee in Tangiers in 1992, it does not appear that any further step had been taken in relation to the site prior to the meeting in London in April 1994. Mr. Auchi’s position, as he was keen to stress in his oral evidence, was that he wanted to pass Mr. Latchin over to Rentistica who would deal with the project locally. Mr. Auchi was also keen to stress that there was no agreement to pay for anything at this stage, a contention which Mr. Latchin accepts, at least as regards the outline scheme. Mr. Auchi emphasised that the scheme would require obtaining a licence to build. While this was a condition of the scheme going ahead, it would not follow even then that Rentistica would award the project to Mr. Latchin who, it seems, would have to compete with other local architects. Thus, at first sight, Mr. Auchi seemed to be more than somewhat remote from any possibility that he personally might have entered into any contractual arrangement with Mr. Latchin.
10. However, as with other aspects of Mr. Auchi’s evidence, his position was not in truth as remote as may first appear, for Mr. Auchi was in fact also the Chairman of Rentistica, a position which caused him to make occasional visits to Tangiers and in which capacity he plainly had a most direct interest in the future plans for the Hotel Villa France. GMH or Rentistica themselves had no firm plans in mind for the site and Mr. Latchin had not, as I find, been informed that GMH, as a matter of policy, were interested only in a five star hotel. This was a development that was to come about only in February of the following year. In relation to the initial meeting, it is relevant to note that Mr. Latchin, in cross-examination, accepted that he had never heard of GMH until long after the present events. The Defendants rely on this as evidence of the general unreliability of Mr. Latchin’s evidence. In my view, that is to put the matter much too high: a man who was as unconcerned as Mr. Latchin to make notes of meetings or to confirm understandings in writing would hardly be likely to take careful note of the particular corporate entity he was dealing with at a particular time. In my view, while Mr. Latchin must have understood the difference between Mr. Auchi and his companies, and the difference between companies based in London and those based in Tangiers, I do not think that he was concerned any further with the precise identity of those with whom he was dealing, given the high business and social standing of Mr. Auchi. This is entirely consistent with Mr. Latchin’s acceptance that, following the meeting of April 1994 (which all parties now accept occurred and resulted in Mr. Latchin carrying out his initial design work) no notes were produced nor was any confirming letter written by either party. Mr. Latchin accepted that he did not then know which company operated in Morocco. But he was soon to become aware of Mr. Auchi’s brother-in-law who, like Mr. Auchi in London, was or appeared to be the alter ego of the company in Morocco. As to the results of the meeting, Mr. Latchin accepted that payment for the initial feasibility study was contingent on whether the project proceeded and, given that it has not done so, Mr. Latchin concedes that no fees are payable in respect of the initial tranche of work.
11. Although no note or confirmation of the meeting was prepared, Mr. Latchin contended that it was there agreed that he would be paid in US Dollars rather than Moroccan currency and that he would be entitled to fees in accordance with the RIBA scale. Irrespective of the Defendants’ contentions that the latter was unlikely, given that Mr. Latchin was no longer a registered UK Architect at the time, it would seem somewhat incongruous that such an agreement should have been made without anything at all being recorded in writing. Given the relative informality and contingent nature of the initial meeting, I am not satisfied that any such agreement was made expressly, whether in April 1994 or at any later time. Furthermore, while the general question of remuneration may be the subject of implication, I do not consider that any terms as to the currency of payment or application of a fee-scale fall to be implied.
12. After the April meeting with Mr. Auchi, Mr. Latchin made a visit to Tangiers between 18th and 26th April 1994. Given that as I find, Mr. Latchin had other interests in Tangiers, it by no means follows that he was engaged in working on the Hotel Villa France project during the whole or even the major part of this period. However, Mr. Al Juma agreed that he met with Mr. Latchin during this visit and I accept Mr. Latchin’s recollection that Mr. Auchi had given Mr. Latchin contact details, including Mr. Al Juma’s telephone number. Plainly Mr. Latchin was expected to go to Tangiers and there he met Mr. Al Juma at the company’s offices and was given further information and plans concerning the Hotel. Following the events in Tangiers, Mr. Al Juma travelled to London in May 1994 where he stayed with Mr. Auchi in his house at Kingston on Thames. The London visit had been arranged in a telephone call from Mr. Auchi and I accept that, at this stage, both Mr. Auchi and Mr. Al Juma were beginning to take an interest in the possibility that Mr. Latchin’s work might lead to some positive development on the Hotel site.
13. It is in these circumstances that the next disputed event needs to be considered. Mr. Latchin’s evidence is that a meeting took place between Mr. Auchi and himself at which Mr. Al Juma may have been present, in May 1994, which on behalf of the Defendants is denied. No documentary or other proof of the meeting has been produced and there is no reference to it in the Pleadings. The Defendants choose to characterise this as a meeting of great significance to Mr. Latchin’s case. Mr. Latchin contends that it was one in a series of meetings and was significant in that the feasibility study was shown to and approved by Mr Auchi, who then gave instructions to proceed with the Hotel project and with the next project. Mr. Latchin contends that it was from this meeting that the work carried out was to be chargeable.
14. Apart from producing no note or record of any meeting with Mr. Auchi in May 1994, Mr. Latchin was also unable to produce a copy of the feasibility study which had been produced as a result of work up to that point. Mr. Latchin says that in addition to Mr. Auchi he gave copies to his assistant Mr. Ciric, who has also lost his copies of the drawings. While it was suggested for the Defendant that such “missing documents” cast doubt on Mr. Latchin’s credibility, it does not provide a complete answer to the conundrum with which the Court is faced. It was not suggested that Mr. Latchin had produced no drawings or work up to this point, and it was accepted that he had visited Tangiers for the purpose of doing work in relation to the Hotel Villa France. Thus, the absence of any drawings is more an indicator of the nature of these missing drawings, which must indeed have been of a preliminary kind, rather than throwing doubt on Mr. Latchin’s credibility. On balance, it seems to me that the absence of drawings in Mr. Latchin’s possession supports rather than casts doubt on his recollection that such drawings were handed over to Mr. Auchi.
15. At all events, it seems very likely that contact must have occurred while Mr. Latchin was back in London, because it is common ground that he went to Tangiers again on about 31st May for some 2 1/2 weeks. During this visit a meeting is alleged to have taken place which, for the first time, was recorded in a two page manuscript note dated 3rd June, written in English but with some Arabic additions. The note records discussion about the Hotel Villa France including reference to a number of particular features. One of these the “Matisse Room” was specifically recalled by Mr. Latchin as a feature which Mr. Auchi had liked when shown the feasibility study in May. The June meeting was recorded as being attended by Mr. Al Juma (Hisham) and Mr. Towfik (Issam), Rentistica’s Head of Technical Department. The note shows that the meeting discussed different aspects of the Hotel including facilities to be provided and then went on to discuss Project 3. Also at the meeting, according to Mr. Latchin, he was given a copy of an Architect’s Contract, in Arabic translated from the French. This was said to reflect the fact that the Hotel development had reached the point where a Moroccan Architect was needed, for which the Contract made provision.
16. No further meeting with Mr. Auchi is said to have taken place at this time, but after the visit to Tangiers, Mr. Latchin proceeded with the work, now with the assistance of Mr. Ciric who physically prepared the drawings which have been produced. Mr. Latchin made payments to Mr. Ciric, who said that he had received a total of approximately $15,000 - $20,000. Mr. Ciric, who gave evidence and was cross-examined, was an experienced Architect with specific experience in hotel design work. Mr. Ciric’s evidence was that he worked with Mr. Latchin on the present projects from May 1994 through to August 1996. He dealt exclusively with Mr. Latchin and not Mr. Auchi.
17. As noted above, the meeting on 3rd June also discussed Project 3, the old English Tennis Club (referred to as “Tennis Courts”) which was another historical site in Tangiers considered to be ripe for development. The notes indicate that the discussion included consideration of a number of facilities including an exhibition hall, shopping centre and office block. Whether or not this project had been discussed before the meeting in Tangiers, Mr. Latchin then commenced work and continued up to 1996. The land on which the Old English Tennis Club was situated was also owned by Rentistica and, like the Hotel Villa France, there was anticipated to be considerable difficulty in obtaining permission to redevelop from the Authorities. In relation to Mr. Latchin’s visits to Tangiers it is relevant to note, as part of the general background, that Mr. Al Juma accepted in his statement that he did meet Mr. Latchin at social events in Tangiers, where the Iraqi community was relatively small and had indeed visited him at his house for dinner on at least one occasion.
18. As regards the Old English Tennis Club, Mr. Latchin’s contention is that this had been first raised by Mr. Auchi at the disputed meeting in May 1994. After the meeting in Tangiers in June, Mr. Latchin together with Mr. Ciric drew up three separate sets of plans for the project, which were produced in about December 1994, May 1995 and finally in January 1996. These different projects showed the tower block in different locations. Ultimately this project, like the others, did not proceed.
19. Meanwhile work on the Hotel Villa France continued during the second half of 1994. In order to comply with Planning Regulations, and as anticipated at the June meeting, a local Architect, Mr. Dhimni Mohamad was engaged by Rentistica to annotate the drawings in Arabic, as required for submission to the Authorities. Mr. Latchin spent a further period of time in Tangiers in October 1994 supervising this work and continuing to work on the Hotel design. The work had then reached the stage where it was necessary for a Structural Engineer and a Services Engineer to be appointed and, according to Mr. Latchin, discussion proceeded to the stage of considering possible developers.
20. In February 1995 a further development occurred when Mr. Latchin was again in Tangiers. According to Mr. Latchin, Mr. Al Juma informed him that the Hotel Villa France project was being upgraded to a five star hotel. Mr. Latchin says that he had a further meeting with Mr. Auchi when back in London and was instructed to continue with the re-design to five star standard. At this stage, according to Mr. Latchin, he requested payment for his services on the four star hotel design from Mr. Al Juma. According to Mr. Latchin, Mr. Al Juma referred him to Mr. Auchi in London and Mr. Auchi told him that it was a matter for Mr. Al Juma. Mr. Al Juma denies any knowledge of this. Mr. Latchin did not receive any payment, but work went ahead on the five star hotel project and continued until March 1996. The new project was substantially different and involved considerable additional work beyond that which had been carried out for the original four star project.
21. According to Mr. Latchin, there was a meeting in Tangiers in October 1995 at which fees for the initial hotel project (Project 2) were specifically discussed. Mr. Latchin says that Mr. Al Juma presented him with a calculation based on the value of the project which showed that a total of U$40,000 was due in respect of his fees. Mr. Latchin was unhappy with this and, following his return to London had a meeting with Mr. Auchi at which he complained that U$40,000 was totally inadequate for the work that had been done. Mr. Latchin’s recollection is that Mr. Auchi then telephoned Mr. Al Juma in his presence and told Mr. Al Juma to sort out the fees. Nothing, however, came of it and Mr. Auchi denies all knowledge of these events. Mr. Al Juma at least recalls that Mr. Latchin did ask for money, although he has no recollection of when this occurred. The position of the Defendants and Mr. Al Juma remained that all the work being done by Mr. Latchin was speculative and that any question of payment remained conditional upon the projects proceeding.
22. The foregoing brief summary forms the unpromising background to the fourth and final project relating to the design of a private villa for Mr. Auchi on a plot of land that Mr. Latchin understood Mr. Auchi or Rentistica had purchased on a hill overlooking Old Tangiers and the sea. The site was divided into plots and the project was to design a villa on the prime part of the site. Here again Mr. Latchin has produced a handwritten note of a meeting in London with Mr. Auchi. The note, on its face, indicates a brief outline specification for what is evidently to be a grand villa on two floors including dining room for 24 persons, guest suite, master bedroom with 6 other bedrooms, garaging for 3 to 4 cars and other facilities. As with other projects, Mr. Latchin produced plans which he says were shown to Mr. Auchi on various occasions in Tangiers. Mr. Ciric was again involved and, according to Mr. Latchin, a series of meetings took place in London. The final designs were completed in August 1996, at which stage, according to Mr. Latchin, Mr. Auchi was trying to get permission to proceed with the project. As in earlier cases, Mr. Auchi denies that any instructions were given to Mr. Latchin, who volunteered to produce plans on a speculative basis. Mr. Auchi personally was not the owner of the site although it is not disputed that it was owned initially by Rentistica. It was suggested on behalf of the Defendants that Mr. Latchin was really interested in gaining commissions from other clients who might purchase plots on the site. Mr. Al Juma denied that Mr. Latchin was instructed to do any paid work in relation to the site. While accepting that Mr. Latchin had been shown around the site in January 1996, Mr. Al Juma explained that the land was then on the market. In fact it was not sold and planning permission to build villas was obtained in 2002.
23. Mr. Auchi denies that he ever had any interest in owning a villa in Tangiers, notwithstanding his temporary inability to use his villa in the South of France. Mr. Auchi points out that, when in Tangiers, he can stay in a five star hotel owned by Rentistica and therefore has no need of a villa. Mr. Latchin specifically recalled a meeting with Mr. Auchi concerning the private villa project when the two gentlemen, together with Mr. Al Juma and Mr. Towfiq visited the site. The visit was followed by lunch with Mr. Auchi and Mr. Al Juma at the Minza Hotel. The meeting was thought to be in January 1996. It was following this visit that Mr. Latchin returned to London and instructed Mr. Ciric to produce initial sketch plans. Mr, Auchi specifically denies that any such meeting or lunch ever took place. There was a subsidiary argument as to whether Mr. Latchin had ever been given plans of the site and the Defendants sought to cast doubt on whether some of the drawings produced by Mr. Auchi related to the subject site at all. In cross-examination Mr. Auchi accepted that he had visited the site two or three times. He continued to deny that he had ever gone to the site with Mr. Latchin and indeed denied that he had met Mr. Latchin in Tangiers in relation to the villa project.
24. Rentistica as original owner subsequently transferred the Villa site to Famarex, effectively bringing the site directly under the GMH umbrella. It was Famarex which had decided to install infrastructure works on the site. As regards the Defendants’ challenge to the relationship between the plans produced and the villa site, it is clear that Mr. Latchin was familiar with the site and I am satisfied that he did, as claimed, carry out design work in relation to a high quality villa on the site. If some of the work related to other sites, that would be a matter relevant to quantum, should this need to be determined.
25. Unless Mr. Latchin was to go quietly away at the end of the four projects, there had to come a moment when Mr. Latchin took some action to attempt to recover payment. One can understand that as long as existing projects were proceeding, perhaps with the hope of a more secure fee basis if one of the projects were to be built, Mr. Latchin might refrain from pressing for payment. But by about August 1996, all the work in hand had come to an end. According to Mr. Latchin, the drawings for all four projects were given to Rentistica. Mr. Latchin says that he asked for a meeting with Mr. Auchi towards the end of 1996 in London and was given assurances but no payment. A meeting with Mr. Al Juma in January 1997 in Tangiers was to the same effect. Some time after this Mr. Latchin decided to relocate in Dubai, from where he sent what appears to be his first explicit request for payment dated 2nd October 1998 referring to the “Hotel Project Tangiers”. The letter is addressed to Mr. Auchi at Italgrade, apparently a company name which appeared on the Kensington Offices, but otherwise having no direct connection with the project.
26. The letter, which did not include any invoice, points out that a considerable amount of work has been done over a number of years without receiving any payment so far and asks Mr. Auchi to settle the account at his earliest convenience. No reply was received to the letter nor to a chaser addressed personally to Mr. Auchi on 2nd March 1999. This letter refers to a conversation with Mr. Al Juma in January 1999 at which it is said Mr. Al Juma had promised to discuss the fees with Mr. Auchi and return with a proposal. In the absence of a reply to this, Mr. Latchin sent an invoice on 26th March in the following sums:
|
£
|
||
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Project No. 1
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Hotel Villa France Tangiers
completed March 1996
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148,077
|
|
Project No. 2
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Hotel Villa France Tangiers
completed March 1997
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59,230
|
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Project No. 3
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Commercial Office and Leisure
Complex Tangiers
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16,500
|
|
Project No. 4
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Private Villa Tangiers completed
August 1996
|
17,905
|
|
Total Fees:
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£241,713
|
The account is accompanied by Appendices containing relatively simple calculations based on rates per square metre and time spent, applying the stages set out in the RIBA fee scales. A similar set of invoices was prepared bearing the same date but with the sums calculated in US Dollars.
27. The invoices at least brought forth a response, which was sent to Mr. Latchin in Dubai, by fax from Dr. Charles L Panayides, He was subsequently identified as Mr. Auchi’s personal assistant. The text of the fax is as follows:
Dear Mr. Latchin,
Please be so kind as to address the above-captioned to the requisite individual/company.
Please also be so kind as to desist from communicating with us on the same subject in the future.
We do not have any agreement/arrangement with you to the effect that you may so address to us such correspondence and suggest that you discuss the same with the party/ies that may have entered into any as such with you.
Best regards
Such a response might well be described as unhelpful. Significantly, however, it did not seek to raise any defence other than to deny the personal involvement of Mr. Auchi. According to Mr. Latchin, despite the rebuff, he met Mr. Auchi at a social function in London in July 1999 and, at Mr. Auchi’s request subsequently called on him, but again without receiving payment. Mr. Latchin says that he also met Mr. Al Juma at the London Offices in July and in August 1999 when Mr. Al Juma offered first US$8,000 and then US$10,000, each of which Mr. Latchin rejected.
28. While the events with which this case is concerned are detailed and extensive, there is one central point which is likely to be indicative as to the outcome: whether the evidence of Mr. Auchi is to be preferred to that of Mr. Latchin. This is an unavoidable question, which is not to be resolved by characterising their evidence as representing different views of the same event. For in many cases, as already set out, Mr. Latchin has given detailed evidence of events, which according to Mr. Auchi, did not happen. The detailed and helpful written submissions of Counsel have sought to analyse many of the disputed events in terms of consistency and probability. For the Defendants, attention was drawn to many instances in which Mr. Latchin’s four witness statements and the multiple-amended pleadings differed such that Mr. Latchin appeared to be telling different stories at different times. A particular point made on behalf of the Defendants was that Mr. Latchin appeared to have changed his story about the source of instructions in order to defeat a challenge to the jurisdiction of the English court. There were many other detailed points on which it was said Mr. Latchin had changed his evidence. As noted at the outset, each party, through its Counsel, sought to challenge the general credibility of the opposing evidence. Nothing would be gained by setting out further the grounds on which I was invited to reject the evidence of either Mr. Latchin or of Mr. Auchi.
29. I heard and saw both gentlemen give their evidence, during which they were subjected to often hostile cross-examination. Their responses in the witness box clearly have a bearing on the judgment I have to make. However, it seems to me that there are some overriding considerations that must be taken into account. Thus, it seems obvious that Mr. Auchi, who was an extremely successful and very busy man, must have had a large number of events, issues, considerations and potential decisions in his mind at any one time. He struck me as a man who can rarely have had the luxury of fully relaxing. The list of companies in which Mr. Auchi had an involvement was indeed awesome and there was no question of him being a mere figurehead in the companies in which he held executive positions. In addition to his formal business roles, Mr. Auchi was a prominent member of the expatriate Iraqi community and moved in the highest social circles, rubbing shoulders with the great and the good in more than one country. As regards approaches from people like Mr. Latchin, Mr. Auchi made clear in his oral evidence that this was in no way unusual. He said that he received many such proposals, either personally or as Chairman of GMH Such proposals came to him in a variety of ways, sometimes through intermediaries, and he often met the person making the approach as a matter of courtesy. If the proposal seemed acceptable he would agree to see the person again.
30. This is in sharp contrast to the position of Mr. Latchin. It was not put to him that he was desperate to obtain work, but I was left in no doubt that Mr. Latchin did not have many other projects on his books. It does not require any great powers of analysis to see that a meeting between these two gentlemen would be highly significant to Mr. Latchin, while to Mr. Auchi it would be but one of many events occupying his mind on the day in question. Thus, it would be of no surprise that Mr. Auchi would have little or no recollection of the details of a meeting, and might indeed have forgotten that it occurred at all, while it might remain fresh in Mr. Latchin’s memory.
31. It is also relevant to consider the general nature of the evidence put forward by these two gentlemen. Mr. Latchin, despite many inconsistencies in his evidence, gave relatively detailed accounts of events, largely from memory. Mr. Auchi, on the other hand, in many cases simply denied that the event in question had happened. A prime example of this is the alleged meeting in May 1994, after Mr. Latchin’s first visit to Tangiers, when Mr. Latchin is said to have presented his initial outline proposals, which he now accepts were prepared without obligation on the Defendants’ part. On behalf of the Defendants, attention was drawn to the fact that no reference to the alleged meeting appears in the Claimant’s pleaded case and Mr. Latchin’s evidence was equivocal on the seemingly important point as to whether Mr. Al Juma was also present at the alleged meeting. This led to the submission on behalf of the Defendants that Mr. Latchin’s evidence was “concocted” and that he was making things up as he went along. Mr. Auchi’s written evidence on this point in fact states as follows:
I cannot confirm from memory whether the alleged meeting of May 1994 took place. I did not instruct Mr. Latchin to ‘produce an initial study and re-designs’ for the Old English Tennis Club Site. Even if I had wished Mr. Latchin to be involved in a redevelopment of the Site, which I deny, I would have referred him to Rentistica.
32. This is a long way from suggesting that Mr. Latchin’s evidence was untrue or “concocted”. In fact, there can be little doubt that a further meeting with Mr. Auchi must have taken place some time in about May 1994 because there is no dispute that Mr. Latchin, following the first meeting in April 1994, did in fact go to Tangiers, nor is there any dispute that he went back in June. It would seem remiss of Mr. Latchin, at the very least, not to have contacted Mr. Auchi during the period that he was back in London. In the result I have no doubt that a meeting did take place in May 1994 as Mr. Latchin recalled.
33. The next event on which there was a clash between the parties was the follow-up meeting in Tangiers in respect of which, significantly, Mr. Latchin produced the two-page handwritten note already referred to. The Defendants’ response submissions, answering the Claimant’s assertion that it had not been put to Mr. Latchin that these documents were forged, drew attention to a passage in Mr. Latchin’s cross-examination in which it was suggested that the notes were not contemporaneous and that (by inference) if the note had been genuine it would have been referred to in the first statement. In my judgment, this attack on the authenticity of Mr. Latchin’s note entirely failed. It remains a curiosity that Mr. Latchin has been unable to produce other notes, which must surely have existed given the large quantity of drawings he has produced. Had Mr. Latchin been a forger, he would surely have produced a document more helpful than the notes of the meeting of 3rd June 1994. The note authenticates Mr. Latchin’s evidence that there was an antecedent discussion, whether or not amounting to an instruction, in relation to the Tennis Court Project. Logically, that would have come from Mr. Auchi, given that at the April meeting Mr. Auchi had already referred Mr. Latchin to Mr. Al Juma in Tangiers in relation to the Hotel Project. It is entirely consistent that Mr. Auchi should have done the same thing in relation to the Tennis Court Project a month later, as I find he did at a meeting in May 1994. It must also follow from this that Mr. Auchi’s reaction to the outline scheme for the Villa France Hotel, which I find Mr. Latchin did produce in May 1994, met with Mr. Auchi’s approval. How otherwise would Mr. Auchi have allowed Mr. Latchin to continue with his work and how otherwise would Mr. Latchin have been put in a position of starting his work on the Tennis Court Project?
34. It would be possible to continue to examine each instance where the evidence of Mr. Latchin and Mr. Auchi clashed, but little would be added to what I have said so far and there are other overriding considerations that need to be brought into account. The Defendants, rightly, draw attention to the fact that, despite the existence of two sets of notes, the second relating to Project No.4, Mr. Latchin at no time attempted to record the terms on which he considered he was being engaged, nor did he at any time during the currency of the work submit an invoice or other request for payment. This is a formidable obstacle. I accept, however, as contended by the Defendants, that Mr. Latchin’s real interest was in being appointed architect when and if any of the projects proceeded. This would represent the fulfilment of the real objective of an architect, which is to oversee the construction of buildings not the mere production of plans. It would also have led to substantial fees, greatly in excess of the fees now being claimed, as well as professional advancement in a country in which Mr. Latchin had considerable interest. Such an explanation accounts also for what would otherwise seem an unreasonable degree of patience and forbearance on the part of Mr. Latchin. The alternative explanation is that Mr. Latchin knew perfectly well that he was entitled to no payment in respect of the work he had done between 1994 and 1996 and, perhaps to take advantage of the lapse of memory with time, deliberately refrained from taking any action to seek recovery until late 1998. Of these two possible explanations I unhesitatingly prefer the first and do not regard the absence of earlier invoices or demands for payment as being indicative of a false claim
35. As regards the volume of plans and drawings produced by Mr. Latchin, these are superficially impressive in suggesting that a large amount of work must have been done. On behalf of the Defendants, it was pointed out that much of the work was in fact computer generated which would create the impression of more work being carried out than was the fact. The Defendants also relied on the fact that Mr. Latchin had been unable to produce the initial outline scheme, which seems to have disappeared. Bearing in mind that the objective of Mr. Latchin’s work was to produce drawings and schemes for the Defendants, it is perhaps unsurprising that he should not have retained all the relevant drawings himself. However, I recognise the danger of any conclusion being drawn from the mere appearance of the drawings produced, at least as regards the amount of work that must have gone into the Projects. That would properly be the subject of expert evidence and I guard against any conclusion without it.
36. Having reviewed the evidence and surrounding circumstances, which to me seem relevant, I have come to the conclusion that, as regards whether or not meetings and other events took place, the evidence given by Mr. Latchin, is broadly to be accepted. To a large extent, the conflicting evidence of Mr. Auchi and Mr. Al Juma was to the effect that the meeting or event had not taken place rather than putting forward alternative evidence. For the avoidance of doubt, I do not find that the evidence of Mr. Auchi or Mr. Al Juma contained deliberate untruths, but rather that they should not have disbelieved Mr. Latchin when he approached them seeking payment.
37. Turning to the exchanges, principally between Mr. Auchi and Mr. Latchin at the meetings they held, the Claimant’s case was that it had been made clear at the initial meeting in April 1994 that, after acceptance of the initial sketch design study, continuing work would be paid for in pounds sterling or US dollars and on the basis of the RIBA scales. This is denied by Mr. Auchi as part of his general denial that there was any agreement to pay fees. I have already found that nothing was said expressly as to the basis of payment. While it was understood between Mr. Latchin and Mr. Auchi that the initial sketch design study would be done without charge, I find further that nothing was said expressly as to the basis of work thereafter. I find that both Mr. Latchin and Mr. Auchi understood that there would be a significant speculative element in the work that Mr. Latchin was to carry out. I do not accept that it was agreed or understood at the next meeting in May 1994 that Mr. Latchin would then be paid for work to be carried out thereafter. Both parties, as I find, were operating under a code of social conduct, well understood by them, by which it would have been regarded as impolite to have insisted on reducing their arrangement to writing or to have expressed the same in words. I find that both parties were content to leave the situation in a state of relative uncertainty. Nevertheless, I find that Mr. Auchi was fully aware that Mr. Latchin was a professional architect whose livelihood depended on earning fees. While I do not consider that the initial arrangement entered into by Mr. Latchin and Mr. Auchi gave rise to an implication that the work to be carried out would be remunerated, I do not find that anything which passed between them was indicative of an intention that this situation would continue indefinitely and irrespective of the amount of work that Mr. Latchin carried out. The implication from this situation is a matter of law to which I now turn.
38. The Claimant puts forward the claim on the basis that, if the initial meeting in April 1994 was initiated by Mr. Auchi, this forms a sufficient request to found an obligation to pay for the services provided: see Goff & Jones, The Law of Restitution, 6th Ed, 2002, para 1-019. The Claimant also relies on William Lacey v. Davies [1957] 1 WLR 932, followed in British Steel Corp v. Cleveland Bridge [1984] 1 AER 504 and a general review of the authorities by Nicholas Strauss QC in Countrywide Communications v. ICL Pathway [2000] CLC 324. I take the William Lacey case as illustrating an important underlying principle, that work that is normally carried out gratuitously as a matter of agreement or custom may, in particular circumstances, be the subject of an implied obligation to pay a reasonable price. In Countryside Communications it was found that the existence of an obligation to pay for services rendered in the absence of a contractual obligation to do so depended, inter alia, on (1) whether the services were of a kind which would normally be given free of charge (2) the terms of the request and the extent of the risk that the service would be unrecompensed (3) the nature of the benefit resulting to the Defendants (4) the circumstances in which the anticipated contract did not materialise.
39. For the Defendants it is contended that, on the evidence there was no intention to create legal relations, no agreed workscope, no agreement to pay and no other agreed terms and for these reasons no contract was to be implied. In my view, this approach essentially re-states the same questions as those addressed above, save that I do not regard the absence of an agreed workscope and agreed terms as being of any materiality, nor is the absence of an agreement to pay fatal given the ability of the law to imply an obligation of reasonable payment. As regards the intention to create legal relations, the Defendants submit that Mr. Auchi and Mr. Latchin were dealing with each other, in effect on a “subject to contract” basis. Again, this approach is helpful only in that it re-states the original question of whether the intention of the parties was that the whole of Mr. Latchin’s services, without limit, were to be gratuitous.
40. The Defendants cite Blackpool and Fylde v. Blackpool BC [1990] 1 WLR 1195 emphasising that contracts are not lightly to be implied; and The Aramis [1989] 1 Lloyds Rep 213 indicating that conduct unequivocally referable for the existence of a contract had to be established. As regards the Blackpool case, this was concerned with tendering costs in circumstances where, as pointed out in William Lacey, there would normally be no implication of payment. As regards The Aramis the Claimant points out that the question considered by the Court of Appeal was whether a further contract was to be implied, in addition to an existing Bill of Lading and that the case was of no relevance. The Defendants also cited The Gudermes [1993] 1 Lloyds Rep 311 in which the Court of Appeal approved the Judgment of Hirst J. which stated that no implied contract can be inferred “unless it is necessary to give reality to the transaction “ and that no contract should be implied if the parties would or might have acted exactly as they did in the absence of a contract.
41. In my view, both William Lacey and the Blackpool and Fylde are illustrative of the underlying principle, that in circumstances where work is generally rendered on a gratuitous basis, an implied promise to pay may arise in particular circumstances, including those reviewed in Countryside Communications. While I accept that, in the field of architecture, and perhaps in other professions, it is a matter of common practice that work should be carried out on a speculative basis, I do not accept that an arrangement that commences on this basis must necessarily continue indefinitely. In the present case, it must be recalled that Mr. Latchin was engaged in preparing outline schemes and plans showing alternative proposals for the four projects in question over a total period of more than 2 years. During this period he engaged the services of Mr. Ciric for which it was not disputed that Mr. Latchin had paid out a sum of at least $15,000. Furthermore, as pointed out by the Defendants, even if the projects were to go ahead, there was no guarantee that Mr. Latchin would be appointed as the architect. He would or might have to compete against other local architects. Thus the work was not speculative in the usual sense of being contingent on the project proceeding; it was dependent also on the good will of the Defendants. Mr. Latchin might find that his work brought no advantage at all even if all the projects proceeded.
42. In my judgment, while it was understood between the parties in April 1994 that Mr. Latchin’s work would not be remunerated, and I am not persuaded that this changed in May 1994, there must have come a point in the relationship between Mr. Auchi and Mr. Latchin when each, had they addressed the question, would have recognised that there was no longer an intention that further work would be unremunerated. At this point, further work carried out at the Defendants’ request or with their consent would carry a right to reasonable payment. This could be negatived by express stipulation on behalf of the Defendants that the work was still regarded as speculative. It was in this context that questions were put to Mr. Auchi at the end of his evidence as to whether he had ever said to Mr. Latchin face to face that he would not be paid unless the building licence was obtained. In response Mr. Auchi accepted that, while it was his understanding that Mr. Latchin would not get paid he (Mr. Auchi) had never said this to Mr. Latchin. Mr. Al Juma in cross-examination similarly agreed that he had not said explicitly to Mr. Latchin that he would not get paid if no licence was obtained. Given this evidence I am satisfied that there did arrive a point at which further work would be remunerated and it falls to determine what that point was.
43. Reviewing the facts and circumstances set out above, I am confident that, by January 1995, when Mr. Auchi or Mr. Al Juma instructed Mr. Latchin to switch his work on the Hotel Villa France to a five star design, they would, if asked, have recognised that both future work and the work currently being carried out by Mr. Latchin would be remunerated in the absence of a clear statement to the contrary. I have already found that there was no intention in May 1994 that Mr. Latchin was then to be paid. At some time between these dates the conduct of the parties was such as to give rise to an intention that any further work would be remunerated. Doing the best I can on the evidence presented, I assess this as 1st September 1994. This finding applies to all work carried out by Mr. Latchin thereafter, on Projects 2, 1, 3 and 4.
44. It is then necessary to consider, if an implied right of remuneration arose, against whom it was enforceable. It may be recalled that the claim against Rentistica was struck out. The Defendants, in the course of written final submissions, now suggest that the only relevant company with whom there could be a contract was in fact Rentistica. Objection is taken on behalf of the Claimant on the ground that such a contention is not open to the Defendants on their pleadings and evidence. In my view, while this objection is well founded, the only questions that need to be considered are whether a claim is made out against the first or second named Defendants.
45. The Defendants contend on the evidence and pleadings there can be no finding of a contract with Mr. Auchi personally, at least in respect of Projects 2, 1 and 3. Mr. Latchin had been refused leave to allege that the contract or contracts were made by Mr. Auchi in a personal capacity and this left only the possibility of a finding against Mr. Auchi as an agent of an undisclosed or unidentified principal. It is pointed out that Mr. Latchin’s evidence was that the contract, when drawn up, would be with one of Mr. Auchi’s companies. This was not, therefore, a case of acting for an undisclosed principal: Mr. Latchin believed he was contracting with a company. It could not be said that Mr. Auchi acted as agent for an unidentified principal since Mr. Auchi had made it clear that the contract was to be with Rentistica. Mr. Auchi had never offered his personal credit or to act as surety for an unidentified principal. The Defendants referred to The Santa Carina [1977] 1 Lloyds Rep 478 and Tehran-Europe v. ST Belton [1977] 2 QB 545.
46. It was contended for the Claimant that both parties thought that there would be a formalisation or novation with one of Mr. Auchi’s companies. Mr. Auchi was thus acting personally or at least acting for an undisclosed principal who was to be nominated later. Alternatively, Mr. Auchi was acting for an undisclosed principal, on the basis that he never identified to Mr. Latchin the company on whose behalf he was dealing: Bowstead & Reynolds (at para. 1-037) points out that the law does not draw a sharp distinction between undisclosed and unidentified principals. In The Santa Carina Lord Denning refers to the case where an agent “does not disclose the name or standing of his principal” but it is known that he has one. Thus, it is open to the Court to infer that Mr. Auchi is personally liable as he entered the contracts as agents for an undisclosed (or unidentified) principal. If Mr. Auchi did nothing to suggest that there was another party to the transaction, he is liable as agent for an undisclosed principal. In the further alternative, Mr. Auchi was at all times acting as agent for the First Defendant of which he was Chairman and CEO. While the Defendants relied on the fact that GMH were a Luxembourg company, the reality was that Mr. Auchi lived and worked in London where he was domiciled. Projects 2, 1 and 3 were all connected with GMH through its indirect shareholding in Rentistica. It was GMH that could decide whether or not to finance these developments.
47. As regards the company or companies Mr. Latchin dealt with, the Defendants emphasised that Mr. Latchin did not know of the existence of General Mediterranean Holdings SA until 1999. It may be noted that, when Mr. Latchin finally decided to write to demand payment, his letter of 2 October 1998 was addressed to Italgrade, a name he had apparently noted on the office door. Thereafter, the correspondence was addressed to Mr. Auchi personally, not to any other company. It is also notable that the reply from Dr. Panayides stated unhelpfully that the letter should be written to “the requisite individual/company” without naming him or them. As regards Rentistica, no doubt Mr. Latchin would have been content to be given a contract by them but, in the absence of such a contract, Mr. Latchin was requested by Mr. Auchi to contact Mr. Al Juma as the local representative in Tangiers, with no further explanation as to his role or authority. Mr. Latchin, as I find, had no reason to believe that Rentistica or indeed Mr. Al Juma were being put forward in substitution for those with whom he had initially dealt. This remained the position and it is significant that when, as I find, Mr. Latchin raised the question of payment with Mr. Al Juma in Tangiers, he was referred back to Mr. Auchi in London.
48. In the result, I find that Mr. Latchin dealt with Mr. Auchi on Projects 2, 1 and 3 knowing or believing that he represented some company but with no knowledge as to which. This situation continued during all four projects, despite the work in Tangiers being done through Rentistica. I find that Mr. Auchi was in fact acting in his capacity as CEO of General Mediterranean Holdings S.A., the company with which he was most closely and intimately connected. It is relevant that at the commencement of Mr. Latchin’s work, as I find, it was uncertain which of the companies within the GMH group might ultimately take on the work of development and therefore which might be expected to take over Mr. Latchin’s work by novation or assignment had the arrangements continued to this point. GMH were the overall controlling company and I am satisfied that Mr. Auchi, as Chairman and CEO, was in fact and in law acting on their behalf or purporting to do so. They were, however, undisclosed or at least unidentified. Mr. Latchin, as I find, was content to deal with any company for whom Mr. Auchi was authorised to act and accordingly both principal and agent may be sued: see Tehran-Europe v. ST Belton [1968] 2 QB 545. As regards Project 4, it was not made clear whether any company would be involved, and I find that Mr Auchi was acting in a personal capacity.