Professional Associates v. Polytex Engineering Co Ltd and Another

HCA000434/1984

Architects fees - claim in contract and alternatively in restitution for partially completed work after project terminated by developer - contractual application of HKIA Scale to projects in China - joint liability of developers - whether on termination losses for professional work borne by developer or architects - essentials to give rise to claim in restitution where negotiations do not culminate in contract - whether damages in restitution limited by maximum which could have been claimed under contract or purported contract - where substantial expert evidence desirability of obtaining orders under Order 38 Rule 38 R. S.C. to ensure full pre-trial exchange not only of documents but of experts evidence - Held: 1. Course of dealing established oral contract or alternatively a claim in restitution on a quantum meruit basis; 2. $559,430 awarded to plaintiff plus interest at 13.75% being average prime rate since fees became due on 16th November 1980.

BETWEEN

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Coram:    Deputy High Court Judge Cruden

Date of Hearing: 15th April to 1st May and 20th and 21st May 1985

Date of Delivery of Judgment:  7th June 1985.

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JUDGMENT

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1. The plaintiff, a firm of architects , claims that in June 1980 it was orally instructed by the 1st defendant (hereinafter called 'PTE') or alternatively the 2nd defendant (hereinafter called 'PTI' to provide professional services for a hotel proposed to be built in Zhao Xing Guangdong Province, China. The hotel was to be a joint venture between Hong Kong developers and The China Travel Agency of Zhao Xing District (hereinafter called 'CTA') Basically CTA was to provide the land while the Hong Kong party was going to provide the capital to construct the Hotel.

2. The directors of PTE and PTI were Messrs. C.C., C. M. and C. T. Sze. Their two companies (hereinafter called the 'PT Group') either jointly or severally took the first steps in investigating the hotel proposal in the course of which they invited Goodyear Investors Ltd. (hereinafter called 'Goodyear') to participate in the project. The original joint participation proposal was that the PT Group and Goodyear would form a new Company with equal shareholding in order to discharge the responsibilities of the Hong Kong party.

3. On 23rd September 1980 this joint venutre Company was incorporated under the name of Polytek-Goodyear Enterprises Ltd. with equal shareholding between the PT Group and Goodyear. On 24th October 1980 Goodyear informed PTE that it wished to reduce its participation to 15%. In terms of an earlier agreement with CTA entered into on 6th August 1980 the Hong Kong party was obliged to lodge $300,000 with the Bank of China in Zhao Xing. After delays and negotiations between the PT Group and Goodyear in respect of the hotel project and payment of the $300,000, Goodyear or 19th February 1981 gave notice to PTI that it was relinquishing its interest in the project. After delays on the part of the Hong Kong party, CTA had earlier set a deadline of 28th January 1981 for the Hong Kong party to confirm whether it was still intending to proceed. The withdrawal of Goodyear, the inability of the PT Group to find an alternative partner and the deadlines imposed by CTA, culminated in the hotel project being abandoned.

4. The plaintiff claims that in terms of the oral contract it had rendered professional services to PTE and PTI. That contract it further claimed, continued until it was terminated upon receipt by the plaintiff of a letter from PTE dated 12th November 1980 directing the plaintiff to take no further action. The plaintiff accepts that its services were terminated by that letter. A little earlier it had rendered a bill to PTE and PTI dated 16th October 1980 for professional services to that date in the sum of $646,930. Payment of that sum was not made. The plaintiff subsequently issued the present proceedings claiming $646,930 pursuant to the alleged contract or a reasonable sum to be assessed or alternatively in restitution for payment of those services on a quantum meruit basis.

5. The defence of PTE and PTI is that while discussions took place in June 1980 between the Sze brothers and Mr. K.C. Chow, a partner of the plaintiff, concerning a possible future hotel project in Zhao Xing,  three facts were made clear to the plaintiff. First, that the project was to be a joint venture with Goodyear Enterprises Ltd.; secondly, that it was implied that the proposal could not go ahead until the joint venture company had been incorporated; thirdly, that it was implied that the project could not go ahead until official approval was given by the Guangdong Provincial Authority. The statement of defence also pleaded that approval of the Chinese provincial authority was never in fact forthcoming for the appointment of the plaintiff as architect.

6. The action raises three principal issues. First, was there a contract between the parties for the rendering of professional services by the plaintiff to PTE and PTI either jointly or severally. Secondly, if there was no contract, are PTE and PTI jointly or severally liable under the alternative cause of action in restitution. Thirdly, if PTE and PTI are liable under either of these two alternative causes of action what is the quantum of loss suffered by the plaintiff. I will consider these issues in turn.

The claim in contract:

7. The plaintiff claimed that the oral contract arose from the discussions which it is undisputed occurred in June 1980. Mr. K.C.Chow, a partner of the plaintiff, took part in these discussions on behalf of the plaintiff. Mr. Chow graduated from University College, Dublin, in 1967 as a Bachelor of Architecture with First Class Honours. He then went to the United States and obtained a Master of Architecture degree from the Illinois Institute of Technology. In the United States he was employed by the architectural firm of Skidmore, Owings & Merrill moving to Hong Kong to open a branch office for the firm in 1973. In that capacity he was the authorised person for the Regent Hotel and New World Centre project in Tsimshatsui with a contract price of $800 million. When asked in 1977 to move to open a new branch for Skidmore, Owings & Merrill in the Middle East, he left that firm and elected to remain in Hong Kong forming the plaintiff firm.

8. Mr. Chow stated in evidence that during the June 1980 discussions he asked the Sze brothers from whom the plaintiff was to receive instructions and the reply was that within the PT Group no decision had been made whether the project would proceed in the name of PTE or PTI but one of those companies would be responsible and probably PTI would be used. Mr. Chow at that stage was a social friend of Mr. C.C. Sze; both were members of the same Rotary Club; Mr. Chow had-already carried out architectural or design work for the Szes Wagon Restaurant in Happy Valley; he knew, Mr. C.C. Sze was Chairman of the PT Group companies. Following those discussions the plaintiff on 24th June 1980 wrote to Mr. C.C. Sze as Chairman of PTE in relation to the 200 room tourist class hotel development in Zhao Xing. The letter included two sentences which it is desirable to cite in full - "This letter", will confirm our previous discussions and serve as an agreement between Polytek Investment Ltd. and Professional Associates for comprehensive professional services..."; " It is also our mutual understanding that the captioned project be developed as quickly as possible based on our professional documents and governed by the roles and regulations of the respective professional institutes and be within the building budget of HK$10,000,000."

9. On 6th August 1980 Mr. C. Mr. Sze and a Mr. K. H. Pang of Goodyear travelled to Zhao Xing and on behalf of their companies entered into an agreement for the construction of the hotel. Earlier on 29th June 1980 Mr. Chow had spent 2 days in China visiting Zhao Xing, inspecting the site and with FT Group and Goodyear officials discussed the project with CTA. The parties to the agreement were CTA described as Party A while Party B was described "Polytek Engineering Company Limited or its subsidiaries and the Goodyear Investors Limited or its subsidiaries." The agreement set out that CTA was to provide the land for the construction of a 400 guest room hotel developed in a first phase of 200 guest rooms and a later phase of 200 guest rooms. The cost of each guest room was to be $100,000 approximately. PTE and Goodyear were to design the plan for the hotel and take charge of construction. The plan was to be approved jointly by both parties. After approval there was to be a separate, construction contract. The cost of the first phase was estimated at $20 million and the second phase at $15 million. The agreement also included the provision that :

"In order to make possible the commencement of the hotel construction at an early date party B shall, upon this agreement coming into effect first remit HK$ 300,000 into China Bank, Zhao Xing Branch ..."

10. The plaintiff wrote to Mr. C.C. Sze as Chairman of PTE and PTI on 8th August 1980 confirming that in response to his recent request it had that day mobilised its professional team to commence on working drawings and tender documents for the 200 room tourist hotel with a total development budget of $15 million. The letter also stated that the plaintiff would be reimbursed for its fees in accordance with the rules and regulations established by the professional institutions for the professional disciplines in relation to the different kinds of design work referred to in that letter.

11. According to Mr. Chow following that letter there was a request to him to reduce fees and this led to the plaintiff writing to Mr. C. C. Sze as Chairman of PTE and PTI on 14th August 1980 setting out the estimate of fees "at cost" of $1,350,000 plus expenses. On the same day PTE replied drawing the plaintiff's urgent attention to the fact that permission for the construction of the hotel was still pending final official approval from the Provincial Authority and that  a "joint venture between Polytek and Goodyear for this hotel project is under formation." The letter went on to state that the plaintiff's letter setting out fees would be presented for discussion with Goodyear. The letter concluded by informing the plaintiff that Mr. C.C. Sze and Mr. K.H. Pang of Goodyear would be calling at the plaintiff's office the following Saturday to see the proposed drawings.

12. By 14th August 1980 the plaintiff had also obtained quotations from 3 firms of land surveyors in Hong Kong to go to Zhao Xing to carry out a topographical survey of the site, Mr. Chow alleged that this was at the request of Mr. C.C. Sze but in the event none of the firms were instructed and no site survey was carried out by any Hong Kong firm. No claim for any survey fees is included in the present action.

13. On 18th August 1980 the plaintiff wrote to PTE and PTI referring to the "project review meeting" held with Mr. C.C. Sze and Mr. K.H. Pang confirming that every effort would be made to complete the preliminary working drawings within fourteen days time for a meeting with the Chinese authorities. This was followed by another letter to PTE and PTI dated 29th August 1980 estimating the additional expenses mentioned in its letter of 14th August 1980 at $150,000. I would note that Goodyear at about the same time must have been making its own enquiries in relation to architectural fees for the architectural firm of Ernest W.C. Wong on 1st September 1980 informed Goodyear Estates Ltd. that its lump sum basis fee for a similar hotel would be $1,200,000 on a cost of $30 million plus expenses.

14. Mr. Chow stated that he was requested to review the fees and attempted to reduce them. This led to a letter from the plaintiff dated 2nd September 1980 to Polytek-Goodyear Enterprises Ltd. which adjusted the earlier fees of $1,350,000 plus expenses down to $1,330,000 but inclusive of most of the expenses which earlier were exclusive of the sum. This latter letter was addressed to the joint venture Company yet to be incorporated and it included an endorsement for the joint venture Company to complete in acceptance of the letter's contents. That acceptance was never completed. Mr. Chow states that this letter was sent to the new addressee at the request of Mr. C.C. Sze.

15. Representatives of CTA visited Hong Kong from 1st to 12th September 1980. Mr. Chow stated that he had three meetings with them; in his office when plans were reviewed; on a yacht when plans were viewed and at the Hyatt Hotel where they were staying when alterations to the plans were approved. On 12th September 1980 the plaintiff wrote to Polytek-Goodyear Enterprises Ltd. referring to the revised scheme having been unanimously approved at the Hyatt Hotel meeting and confirming that another meeting had been provisionally arranged with the Chinese construction team at the beginning of October 1980. Reference was also made to the new survey plan which the Chinese were to supply to replace the earlier unsatisfactory plan they had sent and which it was anticipated would arrive in ten days time. A document was produced from the Administrative Department of Zhao Xing District dated 17th September 1980 which records the setting up of the construction preparation leading group for the hotel. Correspondence in relation to the new survey plan and other matters continued being addressed to Polytek-Goodyear Enterprises Ltd. until 16th October 1980.

16. On 16th October 1980 the plaintiff sent a letter to PTI and PTE claiming fees to final design stage of $635,250 plus printing and reproduction expenses of $11,680 making a total of $646,930. The final design stage referred to in the letter would correspond to Stage D of the prior letters and of the Hong Kong Institute of Architects Conditions of Engagement. A similar letter for the same amount was sent on 18th October 1980 to Polytek-Goodyear Enterprises Ltd. I reject the defence allegation that the fee letter of 16th August 1980 was not received. The evidence of PTE's chop in the plaintiff's chit book I accept to the contrary. Neither addressee paid the amount claimed in those letters. On 20th October 1980 the plaintiff wrote to Polytek-Goodyear Enterprises Ltd. that the tender documents and specifications requested for the meeting with the Chinese authorities were ready and that it was their "mutual understanding that ground breaking could commence as soon as final estimates are acceptable originally scheduled for the first part of December 1980."

17. On 24th October 1980 when Goodyear wrote informing PTE that it would like to part participate only on a 15% basis, it was promptly replied to on the same day in a letter signed by Mr. C.T. Sze on behalf of PTE, pointing out that the agreement with the Chinese authority was for Goodyear and the PT Group to participate on a 50/50 basis and that the matter would be referred to the Chinese Authority for comment. Three days later PTE sent to the plaintiff maps and plantation details which it had received from the Chinese authorities in relation to the project. On 10th November 1980 the plaintiff wrote to Polytek-Goodyear Enterprises Ltd. stating that it had received an official telegram from the Zhao Xing authorities requesting its presence in China together with a complete set of the final design documents.

18. The reduced participation by Goodyear from 50% to 15% had obviously placed the PT Group in a very difficult situation. CTA were pressing for progress. The plaintiff had made considerable progress with the plans towards Stage E. A serious situation had clearly arisen and three separate letters which followed reflect that situation. On 12th November 1980 PTE wrote to the plaintiff informing it that problems had arisen in the formation of the joint venture with Goodyear; that "in line with our last letter to you please take no action until official advice from Polytek-Goodyear or from us on its behalf"; that PTE would not be responsible for instructions direct from Zhao Xing; that only first drawings had been viewed; that as the drawings have not been passed on to the Zhao Xing authorites they were not final or approved. The "last letter" was a reference to the letter from PTE to the plaintiff dated 14th August 1980.

19. The plaintiff immediately replied on 13th November 1980 stating that all work done had been carried out in accordance with the client's requests; that while it shared the concern of PTE over formation problems the working drawings and bid documents were ready to be sent to Zhao Xing. PTE took until 21st November 1980 to reply. PTE now expressly referred to the letter of 14th August 1980 and pointed out that the plaintiff was then advised that the joint venture was still under incorporation and informed not to take any further action. I would observe that the prior letter does not expressly inform the plaintiff not to take any further action. The letter went on to state that as the incorporation of the joint venture had been interrupted there was no authority to enter into contractual commitments or give instructions. The letter concluded:

"It has been out of our goodwill that we inform you about its up to date status and progress made so far, in order to avoid any possible misunderstanding or loss on your part."

20. Early in 1981 PTI attempted to obtain capital from other sources and a new Company under the name of Fat Tak Hong Investment Ltd. was proposed. A preliminary meeting was held on 24th January 1984 when proposed shareholdings were PTI 45%; Goodyear 15%; and others 40%. Negotiations for a new loan of $20 million from The Chartered Bank were discussed. Notwithstanding that prior instructions had been terminated on 12th November 1980, Mr. C.M. Sze proposed that invitations be sent to Mr. K.C. Chow and an architectural firm which now represented one of the new investors, for fee estimates before an architect was appointed. On 28th January 1981 Goodyear wrote to PTI emphasising that past negotiations were merely an exchange of ideas and not legally binding. However it indicated that it was willing to continue on the basis of 15% participation. Goodyear was clearly concerned about any current liability to the plaintiff stating in its letters:

"We wish to know whether the status of Professional Associates in the captioned project has been clarified as outstanding obligations, if any, to Professional Associates may jeopardise the future relationship among the proposed participants."

21. That cryptic comment does not expressly state whether Goodyear was concerned whether there was any legal liability by anyone including the joint venture to the plaintiff or whether it was concerned that the PT Group might seek to have the new joint venture take over any existing liability by the PT Group to the plaintiff.

22. The reply by PTI by letter on 30th January 1981 is interesting. The letter opens by referring to "so many months of delay" and the new Chinese deadline of 28th January 1981. The letter goes on to state that the original budget was based "on the assumption that the hotel project would proceed immediately following the signing of the agreement in August 1980"; but that due to delays caused by Goodyear the budget for the first 200 rooms had to be revalued upwards to $25 million. In relation to the status of the plaintiff, PTI stated:

"This is a problem among Goodyear, Polytek and Professional Associates and has nothing to do with Fat Tak Hong Inv. Ltd."

23. An early record of the attitude of the PT Group and Goodyear to the plaintiff is to be found in two other documents. On 10th October 1980 a meeting was held between Messrs. C.C. and C. M. Sze representing the PT Group and Mr. S.K. Wong and Mr. A. K.K. Chung representing Goodyear. The minutes of that meeting contain the following entry:

24. Shortly afterwards the same Mr. A.K.K. Chung of Goodyear prepared a situation report, presumably for the internal purposes of Goodyear, of the hotel project as at 14th October 1980. The situation report is dated 15th October 1980 and includes two references which are relevant for present purposes:

25. Mr. Chow's evidence was that when instructions were first received, that while no decision had been made whether PTE or PTI would be given responsibility within the PT Group for the hotel project, he was aware that Mr. C.C. Sze was chairman of both Companies. From those initial instructions Mr. Chow's evidence was that the plaintiff looked to PTE and PTI for payment. Until 2nd September 1980 all correspondence was sent to either PTE or PTI or both and the first fee letter of 16th October 1980 was sent to PTI and PTE before the same fees were 2 days later sent to Polytek-Goodyear Enterprises Ltd.

26. According to Mr. Chow from the beginning he had emphasised to the Sze brothers, who he knew were experienced in hotel kitchen and other equipment but not with the management of hotels, the desirability of selecting at an early stage the company which would be responsible for the operation of the completed hotel and that the operator's views on final design options would be helpful. Mr. Chow stated that it was only when the plaintiff received the letter from PTE dated 14th August 1980 that he knew that Goodyear was to be involved in a joint venture company. Earlier he knew of Goodyear interest but presumed it was only as operator. Mr. Chow stated that while if the joint venture was formed and took over the project, his firm Would no doubt receive fees from that company until then the plaintiff looked to PTE and PTI for the fees due to the plaintiff. Mr. Chow stated that as time passed and the fee letter was not paid he raised payment on several occasions with Mr. C.C. Sze although due to their social friendship he found these requests embarrassing. In Mr. Chow's evidence he stated that Mr. C.C. Sze repeatedly assured him not to worry and that the fees would be paid.

27. Turning to the stance of PTE and PTI on the claim in contract, he amended statement of defence pleads that the plaintiff knew that the hotel project was subject to the 3 conditions already referred to and that the Chinese provincial authority had not approved the appointment of the plaintiff as architect. I record there is no express pleading that the appointment of the architect as distinct from the hotel project was also subject to those 3 conditions. The evidence called by the defence adopted a quite different approach. Mr. C.C. Sze stated that the plaintiff had not been appointed by PTE or PTI as architect nor requested to carry out any work. What had happened, according to Mr. C.C. Sze, was that as social friends and fellow Rotarians, he had attempted to help Mr. Chow's firm to obtain appointment by the joint venture and approval from CTA.  In his efforts to secure this appointment for the plaintiff he had to face hostility from Goodyear; disapproval by CTA over design details and fee charges; and even criticism from his brothers. Indeed, Mr. C.C. Sze stated that the letter from PTE of 14th August 1980 had originally been drafted in much stronger terms by one of his brothers but he altered and moderated its tone before it was sent.

28. Mr. C.C. Sze stated that he did not convey the adverse attitude of Goodyear or his brothers to Mr. Chow. However, he stated that on several occasions he complained to Mr. Chow about the nature and tone of the letters PTE and PTI were receiving from the plaintiff. Mr. C.C Sze in evidence described these letters as "pushy aggressive, offensive and untrue." Mr. C.C. Sze stated that when he raised these matters Mr. Chow replied that he should ignore these letters as they merely had to be sent for record purposes in accordance with his firm's business practice. Amidst these difficulties Mr. C.C. Sze stated that he had consistently promoted Mr. Chow in the hope that he would obtain appointment as architect. In his opinion any plans produced were prepared voluntarily and gratuitiously by Mr. Chow in the hope that his firm would obtain appointment. Mr. Sze explained that his role was only as an intermediary between the plaintiff and CTA.  He consistently emphasised that the approval of Mr. Chow by CTA was a pre-requisite to the plaintiff's appointment. Further, he rejected the plaintiff's allegation that they were pressed to proceed with urgency. Mr. Sze stated that the joint venture only incorporated on 23rd September 1980 was never paid up; that approval of the Chinese provincial authority was never granted. Until both of those events occurred there was no reason for the Szes or anyone else to press for urgency. The work done by the plaintiff was never requested or authorised by PTE, PTI or the joint venture nor was he ever asked to proceed quickly.

29. In summary, the plaintiff asserted that the work done by the plaintiff had been done at the request of PTE and PTI in terms of the oral contract. PTE and PTI, in denying any requests or contract, claimed that in any event no requests or contract could have been made until the joint venture was formed and approval obtained from China. Any work done by the plaintiff had, in the defendants view, been done gratuitiously for promotional purposes in the hope that in due course appointment as architect would be obtained.

30. The parties have therefore adopted diametrically opposed postures. However the competing factual allegations may be resolved, it is clear that if the hotel proposal had proceeded without the unfortunate problems that did arise, the PP Group-Goodyear joint venture would have taken over and completed the preliminary work carried out by the PT Group and no doubt assumed responsibility for any prior financial liability of the PT Group. This is common practice and if all the parties had agreed could have simply been effected in accordance with the normal principles of novation - 1 'Chitty on Contract' (25th Edn.) 726. Two other matters are equally clear. First, that the PT Group were not a willing party to the frustration of these proposals by Goodyear's withdrawal and were no doubt both surprised and disappointed at that withdrawal. Secondly, that even on the defence evidence a considerable amount of architectural work was done by the plaintiff. The underlying practical issue is whether the loss suffered as a result of that work being done is to be borne by the plaintiff or by the PT Group.

31. In determining whether the work done by the plaintiff was pursuant to the alleged oral contract the documents are, of course, important evidence. I find that generally the documents support the plaintiff's allegations. The defence submissions require findings that the plaintiff's letters were untrue; that the agreement between CTA, the PT Group and Goodyear executed on the 6th day of August 1980 does not accurately reflect the true agreement reached by the parties; and that the letter from PTE to the plaintiff on 14th August 1980 has a meaning beyond its express terms and contrary to the parties subsequent dealings.

32. The documents are, of course, not decisive and it is necessary to consider them in relation to the oral evidence of the various witnesses. The plaintiff's principal witness, Mr. Chow, has professional architectural qualifications and considerable experience in hotel projects although in some it did not extend to structural design. An attempt was made to discredit his involvement as the authorised person in the Regent Hotel and New World Centre project which ended before the project was completed. Mr. Chow explained that nearing completion his United States firm wished him to leave and open a new branch in the Middle East. Counsel for the defendants submitted that the correspondence showed that he was to return to the firm's head office in the United States.

33. I was invited not to accept Mr. Chow's explanation and infer that he was being returned to head office because his work had been unsatisfactory. I reject that submission. The letter from the developer produced as Exhibit P.23 is a testimonial not only to the professional but to the practical skills of Mr. Chow. Clearly the developers were most disappointed at losing his services as the authorised person on a very large double hotel and commercial project 40 times larger in value than the proposed Zhao Xing project. The announced return of Mr. Chow to the United States is entirely consistent with him thereafter being sent to open a new branch in the Middle East.

34. Mr. Chow was subjected to a very vigorous cross-examination during which he consistently rejected the allegations put to him that Mr. C.C. Sze as a fellow Rotarian was merely assisting him to obtain appointment by the joint venture and approval from CTA for the hotel project. In support of his oral evidence that he had held many meetings with the Sze brothers from June to November 1980, when they reviewed plans and gave instructions he referred to two diaries. The first was a desk diary - Exhibit P.3, the other a personal pocket diary - Exhibit P.4. The desk diary supports Mr. Chow's oral evidence and is consistent with the correspondence. The defence attack the diary as being not only inaccurate but that some portions were dishonestly compiled subsequently after the dispute arose. The diary entries therefore have to be considered with considerable care.

35. There are 57 entries in both diaries referable to the present action. Many relate to meetings with Mr. C.C. Sze. The defence attack was in part based on dates relating to Mr. C.C. Sze. Mr. Sze during the period May to November 1980 made 13 trips from Hong Kong to other countries. There are two entries which, prima facie, conflict with those absences. The first is an entry on 29th June 1980 "Pick up by C.C. to airport." This was in relation to the trip to Kwangchow and thence to Zhao Xing where Mr. C.C. Sze, Mr. Chow and others met representatives of CTA and inspected the site. Both Mr. Chow and Mr. C.C. Sze after 5 years had difficulty in recollecting the precise details surrounding some of these dates. The passport of Mr. Sze showed he left Hong Kong on 28th June 1980. Mr. Chow's explanation was that the diary entry only meant that Mr. C.C. Sze had arranged for him to be picked up by car and taken to the airport. It did not state nor mean that Mr. C.C. Sze was present in Hong Kong on 29th June 1980. The other entry was on 29th August 1980 which opens "10 a.m. C.C. C.T." and then on the next line records a discussion on completed documents and materials. Mr. C.C. Sze was overseas from 21st to 31st August 1980. Mr. Chow explained that the diary was compiled on a twofold basis. On the one hand, he entered in advance future proposed appointments and these were not always kept. On the other  hand, during or after an appointment he recorded major matters that arose at a meeting, that was held. The first part of the entry indicated that an appointment was made for Mr. C.C. and Mr. C.T. Sze. However, that did not mean both attended. I was then referred to the plaintiff's letter of the same date to PTE which was to the attention of Mr. C.T. Sze and after being addressed to him refers to "your request today." Mr. Chow accepted that Mr. C.C.Sze was not in Hong Kong on 29th August 1980 and that the meeting must have only been with Mr. C.T. although it had earlier been arranged for both brothers.

36. After Mr. Chow was cross-examined on the reference to Mr. C.C. Sze on 29th June 1980 he at first replied that it only meant that Mr. C.C. Sze had arranged for him to be picked up by car and taken to the airport. Later he pointed out that another entry on the same day was "AD. 495" and would refer to the number given to him by Mr. C.C. Sze of the car which was to take him to the airport. Mr. Chow in my view advanced that possibility hesitantly. Later when Mr. C.C. Sze gave evidence he produced evidence from the Transport Department that the registration of private car AD 495 was cancelled on 30th October 1970 and referred to a 1961 model Vauxhall. 1508 c.c. private motor car - Exhibits D1 and D2. Clearly that car did not take Mr. Chow to the airport in 1980.

37. The plaintiff's allegations that they rendered services only as a consequence and in accordance with instructions from the PT Group directly conflicts with the PT Group's allegations that any work done was rendered gratuitiously by the plaintiff in the hope that they would be appointed architects by the joint venture when it was eventually formed. This conflict can only be resolved by a finding on credibility as the evidence cannot otherwise be reconciled. Mr. Chow's evidence generally corresponded with the documentation. The motor car registration number was entered in his diary in different ink and was only suggested by him later in his evidence as presumably being the number of the car sent to pick him up by the Szes. The entry for 29th August 1980 referring to Mr. C.C. Sze was explained as a pre-entry and the subsequent letter indicated that only Mr. C.M. Sze attended. I do not find that these two incidents detracted from his testimony. There is much merit in the plaintiff's submission that in view of Mr. C.C. Sze's 13 absences from Hong Kong between May and November 1980 if the diaries were forged it is remarkable that there are no real conflicts between the diaries and his presence in Hong Kong. I reject the attack on the diaries.

38. In considering the weight I should give to Mr. C.C. Sze's evidence I am assisted by the fact that it does not stand alone but that Mr. C.M. Sze also gave evidence for the defendants. Mr. C.M. Sze was the elder brother of Mr. C.C. Sze. In fact it was Mr. C.M. Sze who was appointed by the PT Group to have responsibility for the hotel project and at least initially it was he who was principally involved with CTA, Goodyear and made most of the trips to China on behalf of the PT Group. Mr. C.M. Sze gave evidence before Mr. C C. Sze was called. Mr. C.M. Sze stated that he left the PT Group in 1984 when negotiations were completed with Wearne Brothers from Singapore to acquire a 40% share in PTE. Messrs. C.C. and C.T. Sze remained employed by the PT Group. Mr. C.M. Sze now has his own company which is substantially involved in trading with China.

39. In considering whether the course of dealing between the parties established a contractual relationship Mr. C.M. Sze's evidence was helpful particularly in those areas where the evidence of Mr. K.C. Chow and Mr. C.C. Sze was in sharp conflict. One of those areas was whether there was any urgency. Mr. Chow stated that he was asked to proceed quickly and on a number of occasions was pressed for plans to be supplied. The plaintiff's correspondence reflects Mr. Chow's allegations. Mr. C.C. Sze emphatically denied that there was any urgency and equally denied that he ever asked Mr. Chow to speed up his work. To the contrary Mr. C.C. Sze asserted that PTE had only made preliminary enquiries of the plaintiff and Mr. Chow well knew the various conditions yet to be satisfied before an architect could be appointed and thereafter work. Far from there being any element of urgency Mr. C.C. Sze's evidence was that there was no justification for Mr. Chow to commence any work in relation to the project except any he might chose to do to impress CTA and Goodyear in the hope of being appointed.

40. On thequestion of urgency Mr. Chow stated that from the beginning he was told by the FT Group to proceed as quickly as possible as he records in his letter of 24th June 1980. Throughout the following months this position was confirmed. Mr. Chow pointed out that on 8th July 1980 Mr. C.C. Sze asked him to speed up. At the Hyatt Hotel meeting with CTA and Mr. C.C. Sze on 12th September 1980 he stated that he was informed that the CTA construction team about to be formed would like working drawings at the beginning of October 1980. Mr. C.M. Sze stated that the plans handed over by the plaintiff on 5th August 1980 to PTE were only obtained after Mr. C.C. Sze had to repeatedly inform Mr. Chow of their urgency. Mr. C.M. Sze further stated that after CTA returned to China on 12th September 1980 that "very often we urged'' Mr. Chow to supply sketches to show to CTA. So Mr. C.M. Sze's evidence reinforces the tenor of Mr. Chow's evidence and conflicts with Mr. C.C. Sze's evidence.

41. Repeatedly Mr. C.C. Sze alleged that the architects authority, like the construction of the hotel, was also conditional on the formation of the joint venture, and the approval of Goodyear, CTA and the Chinese provincial authority. The construction of the hotel was clearly conditional on those approvals. But the preparation of plans and the construction of the hotel were quite distinct. The reality was that construction of the hotel was a separate and subsequent matter requiring a separate contract as was expressly provided in the agreement of 6th August 1980. However, before the project could proceed to construction, plans had to be prepared. As the final plans had to be approved by CTA it was sensible to involve them at an earlier stage during July and September 1980 before the plans were finally completed. If urgency was important and delays were to be avoided it was even more desirable that CTA be involved in viewing the plans at that earlier   stage. The pre-construction completion of the plans was also necessary for financial reasons. On this point Mr. C.M. Sze, if unwittingly, was more candid than Mr. C.C. Sze. Mr. C.M. Sze stated that architectural plans were necessary for feasibility studies and to produce to banks to satisfy them that the project was economically viable.

42. However as to the evidential urgency conflict, it is not only the plaintiff's documents which support their evidence. There was other documentary evidence emanating from PTE and from elsewhere which reinforces that evidence. On 9th August 1980 Mr. C.C. Sze sent written information supplied to him by C.T.A. relating to water, electricity, telecommunication, road and diesel oil services at Zhaoxing to Mr. Chow. The covering memorandum from Mr. C.C. Sze to Mr. Chow was endorsed with an "Urgent" chop. On 15th October 1980 Goodyear's situation report recorded that sketch designs and drawings were under preparation by Mr. Chow and would be ready later in October 1980. Early in 1981 correspondence, which only became available during the hearing, was exchanged between PTI and Goodyear relating to the withdrawal of Goodyear from the joint venture. Included in this correspondence was a letter dated 30.1.80 from PTI to Goodyear. This letter refers to "so many months of delay" for which it blames Goodyear. More importantly PTI's letter records that the original budget for a 400 bedroom hotel was on the assumption "that the hotel project would proceed immediately following the signing of the agreement in August 1980 ..."

43. Mr. C.M. Sze was a relatively nervous witness who seemed to give his evidence under considerable pressure and outward concern. Unlike Mr. C.C. Sze he had the disadvantage of not having sat in Court for the whole of the preceding evidence. After Mr. C.M. Sze gave evidence Mr. C.C. Sze was called. Mr. C.C. Sze was obviously a highly intelligent person. He not only very confidently and clearly gave evidence in English but on two occasions queried either the interpretation of the evidence or the accuracy of certified translations of Chinese documents. He confidently gave detailed explanations for the different nuances he would have preferred. In considering the evidence I was assisted by the long period the principal witnesses were in the witness box. Mr. Chow gave evidence over 6 days and Mr. C.C. Sze over 3 days. I formed the opinion that Mr. C.C. Sze was not only an articulate but a glib witness. One example of his quick response was when it was pointed out to him that the letter of 14th August 1980 from PTE to the plaintiff was not in express terms a stop letter. His quick reply was that there was no need to send a stop letter to Mr. Chow at this stage for he had never been asked to start work. Mr. C.C. Sze went to considerable lengths to explain how, against the wishes of his brothers, Goodyear and CTA he tried to promote Mr. Chow as a friend and as a fellow Rotarian. Indeed, he even invoked a Rotary creed to explain his self-sacrificing role. The favours and support he showed Mr. Chow included not conveying to him the other parties alleged displeasure.

44. This stance, perhaps impressive initially, soon lost credibility. It was invariably advanced to negate any apparent contractual relationship. For example, Mr. Chow had stated that PTE had requested the two plans supplied on 5th August 1980. Mr. C.M. Sze stated that these plans were urgently wanted in August for showing to the Chinese and were only obtained from the plaintiff after repeated requests made by Mr. C.C. Sze who stressed their urgency to Mr. Chow. Mr. C.C. Sze's predictable explanation was that he told Mr. Chow that a PTE employee was going to China and if Mr. Chow wanted to impress CTA he would as a favour, arrange for the PTE employee to take any sketches Mr. Chow might wish to send through him to CTA. There were other examples of prima facie credible allegations by the plaintiff being met with a response from Mr. C.C. Sze which in addition to being improbable was inconsistent with documentary or other evidence.

45. On one point Mr. C.C. Sze and Mr. C.M., Sze were in agreement. They both asserted that the aggressive behaviour of Mr. Chow not only upset Goodyear but led that Company reduce its proposed share from 50% to 15%. Among the documents there is evidence that Goodyear on 28th January 1981 after having reduced its participation to 15% sought details of any outstanding obligations to the plaintiff as that might jeopardise the future relationship of the proposed participants. It is true from earlier documentary evidence that Goodyear was anxious not to become involved in any existing liability from the PT Group to the plaintiff. However, Goodyear's letter to PTI dated 28th January 1981 was mainly concerned with pointing out that a prior meeting between the joint venture parties on 24th January 1981 was merely to investigate the possibilities of a joint venture and not as the minutes prepared by PTI suggested, a meeting where formal agreement between the parties were reached. The obvious reason for Goodyear's lack of enthusiasm was clearly indicated in its subsequent letter to PTI dated 19th February 1981 in which the principal reason it gave for wholly withdrawing from the joint venture was the urgency of making the overdue payment of $300,000.

46. Indeed at one stage of Mr. C.M. Sze's evidence he agreed that the failure of Goodyear to assist in providing funds for that payment was the event which brought the joint venture to an end. It was undisputed that Goodyear afterwards went into liquidation. I appreciate that the PT Group had carried out the major part of the pre-construction work in relation to the hotel project which was frustrated due to Goodyear first reducing its share and then wholly withdrawing. The PT Group has no doubt suffered substantial unrecoverable losses as a result. However, their attempt to pass as much of the responsibility as possible, including the withdrawal of Goodyear, on to the shoulders of Mr. Chow is neither credible nor supported by the facts. In fact the defendants consistent erroneous strategy has the contrary effect, for it casts serious doubt on the credibility of both Mr. C.M. Sze and Mr. C.C. Sze where their evidence is different to the evidence of Mr. Chow. Where those conflicts do arise I prefer the evidence of Mr. Chow.

47. Against that background I find that in June 1980 Mr. C.C. Sze instructed Mr. Chow's firm to prepare plans for the hotel project. I further find that when Mr. Chow enquired which company was going to be responsible for the project Mr. Sze replied that the project was going to be promoted by the PT Group but that no final decision had been made within the PT Group whether PTE or PTI would be the responsible Company but it would probably be PTI. I am satisfied that the plaintiff then proceeded to work on the hotel project and looked to PTE and PTI jointly for payment.

48. Did that oral agreement constitute a binding contract? The defendants submit that no binding contract can be entered into with two companies in the alternative. The short answer to that is that Mr. C.C. Sze as Chairman of both PTE and PTI when acting on their behalf made, on the facts I have found, a joint promise by both PTE and PTI which created a single obligation incumbent upon both of them. The law is well settled that a contract made by two or more persons creates a joint liability unless express words impose joint and several liability - Granville Williams 'Joint Obligations' 24. These same principles are also set out in 9 'Halsbury's Laws of England' (4th Edn.) 426. I hold that under the oral contract entered into on their behalf by Mr. C.C. Sze both PTE and PTI are jointly liable to the plaintiff.

49. The defendants further attacked the existence of any contractual liability on the ground that no agreement had been reached on the amount of the fees payable. I was referred to Scammell and Nephew Ltd. v. H.C. and J.G. Ouston (1941) AC 251 where the House of Lords held that the words "the balance of the purchase price can be had on hire-purchase terms over a period of two years" were too vague to give rise to an enforceable contract. The House of Lords pointed out that in order for a contract to be binding the terms must be so definite that no further agreement is necessary between the parties to render them certain. In that case the numerous different forms of hire purchase transactions and the multiplicity of terms within each form were fatal to the formation of a contract.

50. As a matter of law the contract price must therefore be certain. But certainty may be achieved by more than one route. The common and simple alternative is for an express fixed contract sum to be stipulated. However, the contract price is equally certain if instead of an express fixed sum, a formula is agreed upon under which the contract price may be ascertained, without further agreement by the parties. Was the amount of fees agreed upon by the parties in this case certain under either of these alternatives?

51. The first letter from the plaintiff to PTE  dated 24th June 1980 confirms the oral discussion on which the plaintiff's contractual claim is founded. The letter expressly commences "This letter will confirm our previous discussions and serve as agreement between Polytek Investment Ltd. and Professional Associates..." The letter goes on to record that the contract would be "governed by the rules and regulations of the respective professional institutes and be within the building budget of HK $10,000,000. On 8th August 1980 the plaintiff sent a letter to PTE and PTI referring to the letter of 24th June 1980; that it was in respect of the 200 room $15,000,000 hotel project; setting out the 8 different disciplines; and that fees would be in accordance with the rules and regulations established by the professional institutions for those disciplines.

52. Mr. Chow stated that after that letter Mr. C.C. Sze asked if he could reduce his fees. The result was the letter from the plaintiff to PTE and PTI of 14th August 1980 which itemises fees "at cost" totalling $1,350,000 plus expenses. This letter was also significant that it went on to provide that payment was to be made by instalments in accordance with 6 works stages set out in a schedule lettered from A to F inclusive. During the hearing the model agreement between client and architect and the Scale of Professional Charges issued by The Hong Kong Institute of Architects (HKIA) was produced. The schedule in the letter corresponds with Table II of the HKIA Scale. The effect of this letter is that the plaintiff was prepared to reduce its fees to below scale but payment was to be made by instalments which corresponded with the HKIA Scale. It is interesting to note that when Mr. C. Haffner, the architect called by the defendants, gave evidence he indicated, that his firm's basis for charging for projects in China was similar. He stated that it was accepted by architects in Hong Kong that the HKIA Scale did not apply in China. The practice was to charge fees slightly lower than the HKIA Scale but to adopt the HKIA Scale for the purpose of fixing the various stages of architectural work for which the architect was responsible and entitled to payment. This is precisely what the plaintiff has done in the letter of 14th August 1980.

53. After this letter was sent Mr. Chow stated that Mr. Sze again asked if he could reduce his fees Mr. Chow stated that he orally replied that the fees were already on a below scale cost basis and that no substantial reductions could be made but he would do his best. Mr. Chow stated that Mr. Sze asked him to consider the matter, and inform Polytek-Goodyear Enterprises Ltd. of any reduction.  The plaintiff wrote to Polytek-Goodyear Enterprises Ltd. on 2nd September 1980. The letter varies the fees for earlier items and recasts   others to produce a new total of $1,330,000 but inclusive of most of the expenses which were exclusive of the prior fees of $1,350,000. So the reduction was more than the difference of $20,000 between the two totals might suggest. This latter letter again includes the Stage A to F schedule. There are two aspects of this letter requiring comment. First, the letter was sent not to the PT Group but to the joint venture Company Mr. Chow's explanation was that he still looked to the PT Group for payment but sent this letter to the joint venture at Mr. C.C. Sze's request. Secondly, the defence point out that the joint venture Company was not incorporated until the 23rd day of September 1980.

54. I have found that the contract was with the PT Group and I accept Mr. Chow's evidence that the plaintiff still looked to the PT Group for payment. I also record that the stop letters of 12th and 21st November 1980 were from PTE to the plaintiff and not from the joint venture which by then had been incorporated.

55. There were never any letters from the PT Group or from the joint venture disputing those fees until the letters from PTE dated 12th and 21st November 1980 which inform the plaintiff "not to take any further action" and which the plaintiff accepted were stop letters.  PTE was a well established company. PTI on its letterhead publishes that it is an associate of PTE. Mr. C.C. Sze stated that for 20 years he worked for his father in a family Company involved in similar business to PTE which was taken over by the Hutchison Group in 1972. PTE was formed in 1975. Mr. C.C. Sze stated that PTE was one of the pioneers developing the China market. I accept that it is a major hotel equipment supplier employing its own engineers and has its own drafting department. Indeed, Mr. Sze confirmed the contents of the plaintiff's first letter of 24th June 1980 that PTE was to act as kitchen and laundry consultants in the layout and equipping of those areas. Well before this hotel project, PTE had wide experience dealing with developers and architects in hotel, hospital and other large projects.

56. Until November 1980 the fees were not disputed. In view of the course of dealing between the parties from June to November 1980 I find that after plaintiff was requested to consider reducing their fees they met that request in stages. The PT Group accepted the reduction set out in the letter of 2nd September 1980 and the plaintiff continued work on the reduced fee basis. I therefore reject the submission that no amount for fees had been agreed. Initially there was a formula for fees in accordance with the scale of the relevant professional institutions. At that stage the fees were certain under that formula and suffered neither from vagueness nor the other inadequacies which arose in Scammell and Nephew Ltd. v. H.C. and J.C. Ouston. However, subsequently, as a consequences of requests by the FT Group, the plaintiff reduced their fees but replaced the former formula by precise lump sums. The sum payable under the contract for fees was therefore certain.

57. The defendants next submitted that if there were a contract it was conditional upon the approval of Goodyear and CTA. I was referred to two cases where it was held that the appointment of an architect and payment of his fees were conditional - Moffatt v. Dickson (1853) 13 C.B. 541; Moffatt v. Laurie (1855) 15 C.B.583. In the exceptional position where appointment is conditional, an architect may have no claim unless the designs are approved and used. The first of those cases involved a public building which required statutory approval before a contract could be let. In the second case land had been surveyed and plotted. There was an express condition in the contract, that unless the land was sold no charges for surveying and plotting would be made. Those are very different facts to the instant case. Even in the exceptional case of conditionally submitting plans for public buildings 'Hudson's building and Engineering Contracts' (10th Edn.) 180 observes, after considering these two cases, that the practice is now less common that formerly.

58. In fact as both Mr. Chow and Mr. Haffner agreed, the HKIA prohibits work being done in Hong Kong gratuitiously or speculatively. Apart from these professional restrictions in Hong Kong - which it is appreciated do not apply in China- there is a fundamental difference between the role of a promoter or developer on the one hand and an architect on the other. A promoter or developer invariably takes risks and incurs costs in investigating and advancing a proposed project. In evaluating the steps he takes he must balance the risk of the project being aborted and suffering the total loss of his expenses up to that date, against the profit and potential capital gain if the project proceeds to completion. The developer makes a business decision on that risk. Architects and other professional fees will usually be included in the developers costs. On the other hand, an architect normally does not professionally participate in that risk which carries with it the hope of substantial profit but also the possibility of loss. The architect has only his professional services representing time and skill to sell within the restrictions of a professional scale or, where that scale does not apply for comparable fees usually based on that scale. That is why if there is no express provision as to fees, the law implies reasonable remuneration. The position is summed up by 'Hudson' (supra) page 179 in these words:

"Even if there is no express reference by the parties to the question of remuneration, the normal inference, except in cases of work done on approval, will be that an architect or engineer, like other professional men, does not intend and cannot be expected to give his services for nothing and the employer will be held, by the fact of employment, to have bound himself to pay a reasonable reward for the services to be rendered."

59. All these general principles reinforce the plaintiff's claim. However, resort does not have to be made to them for a number of reasons. First, I have already found that the plaintiff was employed by the PT Group and I also find that the parties agreed upon a certain sum for fees. As to whether the contract was conditional the defendants are at once in difficulty on their pleadings. The Amended Defence does not plead that the appointment of the architect was conditional. Instead it pleads that the hotel project was to be a joint venture with Goodyear; could not go ahead until the joint venture was incorporated; required the official approval of the Chinese provincial authority. The original pleading in paragraph 6 averred that official approval of the Chinese provincial authority was never in fact forthcoming. When in opening it was pointed out by the plaintiff that the documents now showed that approval was given the defendants amended paragraph 6 to provide that approval of the Chinese provincial authority was never in fact forthcoming for the appointment of the plaintiff firm as architect.

60. The plaintiff submitted that not only was the appointment of the architect, as between the plaintiff and PT Group, unconditional but none of the supporting documentation indicated that approval by the Chinese provincial authority of the architect was necessary. Certainly the agreement between the PT Group, Goodyear and CTA did not require the architect's appointment to be approved by the Chinese provincial authority. I accept the plaintiff's submission that CTA was to provide the land; the PT Group and Goodyear were to finance, design and build the hotel; the plans were to be approved by CTA: the whole project had to be approved by the provincial authority; after all necessary approvals a separate construction contract would be let. I accept that in accordance with practice in China, CTA would have its own design team involved in the approval of plans and during construction. However, the 6th August 1980 agreement does not require the approval of the appointment of the architect; it merely requires the approval of his plans before the construction stage of the project is reached. Mr. C.C. Sze in evidence stated that during negotiations with CTA before the agreement the PT Group and Goodyear insisted on a Hong Kong architect.

61. The defence also called Mr. Brian Cheung, a former executive of Goodyear who had considerable experience of projects in China. He stated that provided the Hong Kong party paid the fees the Chinese party did not object to the employment of a Hong Kong architect. The 6th August 1980 agreement expressly provides that the cost of the hotel other than land was to be borne by the PT Group and Goodyear. The reality is that plans had to be prepared by an architect before they could be approved. I find that the appointment of the architect was unconditional and did not require the approval of CTA. However, even if it had required the approval of CTA the communications direct from CTA to the plaintiff and the request by CTA for Mr. Chow to go to China on a second occasion with plans and drawing is evidence that the plaintiff was working with the approval of CTA. But in view of my other findings that is not a matter into which I need make any further enquiry.

62. Having held an unconditional contract was created by the parties I ,also find that the plaintiff's accepted termination of the contract on receipt of the letter from PTE dated 12th November 1980 subject to their fees being paid for work up to that date. So this is not an action where damages for breach are in issue. No such damages are claimed and in view of Part 6 of the HKIA scale such a claim would have been difficult to maintain. However, was the contract terminated at an earlier date by the letter from PTE on 14th August 1980? That letter is not expressly a letter of termination. Any implication that it was such a letter is complicated by the reference to Mr. Sze and Mr. Pang intending to call to inspect drawings the following Saturday. Nevertheless I find that subject to the parties subsequent course of dealings the letter should have put the plaintiff on enquiry as to the extent to which, if at all, they should proceed.

63. I am satisfied that if the plaintiff had proceeded with any further work after 12th August 1980 without further dealings with the PT Group it would have done so at its own risk. However, the subsequent course of dealings well justified the plaintiff's continuing to proceed with the work. For Messrs. C.C., C.M. Sze and Pang did call at the plaintiff's offices on that subsequent Saturday morning as is confirmed by the plaintiff's letter of 18th August 1980 to PTE and PTI. I accept that the letter accurately confirms what occurred at that meeting when further instructions were given and accented. Those instructions confirmed in that letter were never disputed until several months later. But the subsequent course of dealings goes far beyond that single meeting and that sole letter. Early in September 1980 the PT Group arranged for Mr. Chow to meet the visiting CTA representatives on 3 separate occasions. Moving on to the following month the minutes of the joint venture meeting of 10th October 1980 expressly recognise architectural work having been done and are consistent with liability for fees up to that date. The same minutes are evidence coming from the defendants documents that as at 10th October 1980 instructions were continuing to be given to the plaintiff for more drawings. Even as late as 27th October 1980 PTE by written memorandum under its own name was sending the plaintiff a set of survey maps and plantation details for the hotel project.

64. In addition to this substantial documentary evidence there were several other meetings when oral discussions took place as in part set out in the diaries. After reviewing all this evidence, I reach the conclusion that even if the letter of 12th August 1980 were a stop letter, the subsequent course of dealing between the parties provides overwhelming evidence that the plaintiff was thereafter entitled and did so proceed in accordance with the PT Group's instructions. I therefore find that the work done by the plaintiff after 12th August 1980 until the receipt of the letter of 12th November 1980 was also authorised by the PT Group and carried out in accordance with their instructions.

The claim in restitution:

65. In the alternative the plaintiff claims in restitution on a quantum meruit basis. $646,930 or such reasonable sum to be assessed. The plaintiff founded the second cause of action on requests made by the PT Group from April to November 1980 or alternatively, if the services were supplied not to the PT Group but to the joint venture, the PT Group were liable as promoters or agents of Polytek-Goodyear Enterprises Ltd. The alternative pleading referred to the fact that the latter company was not incorporated until 23rd September but averred the PT Group were liable as "promoters and/or agents". I pointed out at the hearing that the PT Group could not be liable as agents for as a matter of law, a person cannot be an agent for an unborn principal. However, a person may be a trustee for an unborn beneficiary. The inapt reference to agent is therefore not fatal to the plaintiff for the word promoter is wide enough to include a person whose status is that of a trustee.

66. The PT Group denied liability in restitution and on the facts asserted that the PT Group had never requested the plaintiff to do any work which was a necessary pre-condition for a quantum meruit claim. Restitution is the generic term for a relatively new cause of action which has evolved markedly during the past 20 years although its history, if diffused under a variety of differently named remedies, goes back very much further. Quantum meruit is merely one species of restitution. The juridical basis of restitution is quite distinct from contract although quasi-contract is one species of restitution. For a time attempts were made to rationalise restitution on a contractual basis by reference to implied terms and other fictional devices. Fortuantely, the better view that restitution is founded on the doctrine of unjust enrichment rather than implied contract, is now firmly established - Goff and Jones 'The Law of Restitution' (2nd Edn.) 11.

67. Indeed, it is not only misleading but wrong to continue to strive to find contractual indicia before recognising the existence of a separate cause of action in restitution. Certainly there is no need for privity to exist between the parties. In Brook's Wharf and Bull Wharf Ltd. v. Goodman Brothers (1937) 1 KB 534 Lord Wright emphasised.

"These statements of the principle do not put the obligation on any ground of implied contract or of constructive or notional contract. The obligation is imposed by the Court simply under the circumstances of the case and on what the Court decides is just and reasonable, having regard to the relationship of the parties. It is a debt or obligation constituted by the act of the law, apart from any consent or intention of the parties or any privity of contract.''

It is therefore sufficient if there is a factual, even if non-contractual, relationship between the parties. If the relationship were contractual  there would be no need to resort to restitution. Accordingly, the rendering of services giving rise to restitution, may exist in circumstances where the request for those services falls far short of either an offer or acceptance in contract. The present position in quantum meruit is summarised by Goff and Jones (supra) at page 3:

68. No longer does the request have to be express. Mere acceptance of services may give rise, as a matter of law, to the existence of a request being implied.

69. Both counsel referred me to the judgment of Robert Goff J., as he then was, in British Steel Corporation v. Cleveland Bridge and Engineering Co. Ltd. (1984) 1 All E.R. 504 where the plaintiff sued in both contract and quantum meruit for work done. Robert Goff J. held that the parties were still in the process of negotiating a contract and that the claim in contract failed but that as the work had been done for the defendant the plaintiff could recover in quantum meruit. On the legal status of the factual relationship he said:

"Now the question of whether in a case such as the present any contract has come into existence must depend on the true construction of the relevant communications which have passed between the parties and the effect (if any) of their actions pursuant to those communications. There can be no hard and fast answer to the question whether a letter of intent will give rise to a binding agreement everything must depend on the circumstances of the particular case. In most cases, where work is done pursuant to a request contained in a letter of intent, it will not matter whether a contract did or did not come into existence, because, if the party who has acted on the request is simply claiming payment his claim will usually be based on a quantum meruit and it will make no difference whether that claim is contractual or quasi-contractual..."

So too in this case, as general damages for termination are not sought but merely payment for work done, the result in terms of money would be the same under either cause of action. The Court held that the parties were still at a negotiation stage and far from entering into a contract largely because a dispute had broken out whether the plaintiff would agree to a variation of the onerous terms of its standard contract. After holding that in those circumstances the correspondence and other course of dealing did not establish a contract Robert Goff, J., continued:

"In my judgment, the true analysis of the situation is simply this. Both parties confidently expected a formal contract to eventuate. In these circumstances, to expedite performance, under that anticipated contract, one requested the other to commence the contract work, and the other complied with that request. If thereafter, as anticipated, a contract was entered into, the work done as requested will be treated as having been performed under that contract; if, contrary to their expectation, no contract was entered into, then the performance of the work is not referable to any contract the terms of which can be ascertained, and the law simply imposes an obligation on the party who made the request to pay a reasonable sum for such work as has been done pursuant to that request, such an obligation sounding in quasi contract or, as we now  say, in restitution. Consistently with this solution, the party making the request may find himself liable to pay for work which he would not have had to pay for as such if the anticipated contract had come into existence, e.g. preparatory work which will, if the contract is made, be allowed for in the price of the finished work (cf. William Lacey (Hounslow) Ltd. v. Davis (1957) 2 All ER 712)."

70. The language used by Robert Goff, J., and not only the juridical basis of liability echoes the very words used by Lord Wright in Brooks Wharf and Bull Wharf Ltd. v. Goodman Brothers (supra). I was also referred to and have considered the judgment in William Lacey (Hounslow) Ltd. v Davis where on a quantum meruit claim the Court implied a promise for reasonable remuneration for work which in any event was outside that which would have been gratuitiously done if a contract had eventuated. Presumably it was this distinction which led Robert Goff J. to refer to that decision only by way of comparision.

71. I am well satisfied, on my earlier findings of fact, that services were not only rendered by the plaintiff but they were freely accented by the PT Group. It is not necessary for me to consider the less well settled question of benefit. But as the initial promoter the PT group clearly benefited from the plans and other services rendered. The plaintiff's services assisted the initial feasibility studies; supported applications for bank finance; helped the PT Group to negotiate the 6th August 1980 agreement with CTA: were useful in negotiations with Goodyear; were important in dealing with the CTA representatives during their visit to Hong Kong in September 1980 when the PT group required Mr. Chow's attendance on 3 occasions. I confirm that I have already held that the relationship between the parties established contractual liability on the part of the PT Group. If I am wrong in that conclusion then certainly the factual relationship of the parties established liability on the part of the PT Group under the less stringent criteria of restitution and in particular on a quantum meruit basis.

Quantum:

72. I have already found that the architectural contract price for total completion of the hotel project was certain. A difficulty which arises in this case is that the contract was not completed but terminated by the PT Group in November 1980. It may have been arguable which was the relevant date in November 1980 but the plaintiff was prepared to accept the earlier adverse date namely, 12th November 1980. It is interesting that Mr. C.C. Sze in evidence was prepared to qualify the effect of the letter of 12th November 1980 by describing it as "almost a final warning" but the plaintiff certainly accepted it as a stop letter. As to the work done by that date Counsel for the PT Group at one stage submitted that the dates on the plans showed there was a considerable amount of work done after 12th November 1980 and that in any event the dates were unreliable. I find that only one drawing was dated after 12th November 1980 and it was dated 13th November 1980. I accept Mr. Chow's evidence that when work commenced on a drawing it was undated and upon completion it was then endorsed with the date of completion. The single drawing dated after 12th November 1980 was therefore completed 1 day after the stop letter. However, if the stop letter were posted I infer that the earliest time it would have been received by the plaintiff was the day following posting, namely 13th November 1980, I draw the inference and find that all the work for which fees are claimed was completed by the date the plaintiff received notice to stop.

73. Nearly a month earlier, on 16th October 1980, the plaintiff had forwarded to the PT Group a bill for $646,930 being professional fees of $635,250 and printing costs of $11,680. Mr. Chow explained that as at 16th October 1980 more work was done that the amount billed due to internal administrative time lags and that work continued until receipt of the 12th November 1980 stop letter. The claim in respect of the first cause of action in contract was originally limited to $646,930 but when the second cause of action was added the claim was also amended to $646,930 or such reasonable sum to be assessed.

74. The $635,250 is made up of separate sums for work done under the 8 categories referable to the different disciplines itemised in the plaintiff letter of 14th August 1980 and except for a variation in the division of project management, in the letter of 2nd September 1980. The sums represented the amount of work done calculated as percentages in respect of each of those 8 categories. The percentages were calculated on the basis that 100%   represented full completion of Stages A to F (inclusive) set out in both those letters which in turn correspond with the HKIA Scale stages. It may be helpful if those stages were set out in full:

75. The HKIA Scale refers to the third column as "Proportion of fee" but as the plaintiff agreed to accept lower lump sum costs, instead of scale fees, the letters accurately reflect this change. It might also be observed that the mispelling of cumlative in the HKIA Scale as 'cummulative' was continued in the correspondence. While that might be useful internal confirmation that the HKIA Scale fee stages were contractually adopted for the hotel project, it is not a mispelling I propose to further perpetuate in this judgment.

76. Mr. Chow and Mr. Hui were of the opinion that the documents completed, up to the stage when work was stopped, were sufficient for the project to go to tender subject to two qualifications. Mr. Chow stated that because of the accelerated speed of the architectural work, some of the plans were not as detailed as they might otherwise have been but were still adequate for a building contractor to tender. Mr. Hui was of the opinion that while the two principal categories of work under a construction contract, nemely structural engineering and architectural, were ready for tendering the mechanical, electrical and plumbing categories were not ready and a contractor would have had to make further enquiries before he could submit a tender. The necessity for a contractor to make further enquiries of the architect before submitting a tender was, according to both Mr. Chow and Mr. Hui, quite common. Mr. Haffner was of the opinion that while the structural engineering and architectural work had been advanced to near tender stage, the remaining work was far short of tender stage. The competing views of Mr. Chow and Mr. Haffner may be summarised in relation to the 8 categories of work as follows:

77. Mr. Hui considered that the first two categories were each 70% completed and the third category was 331/3% completed. Under the HKIA Scale work up to Stage E has to be completed to enable the work to go out to tender. I was invited by the defence to accept Mr. Haffner's calculations and reject the others. Before going on to examine their calculations in greater detail three factors need to be borne in mind. First, the contractual fees were in respect of the completed hotel  project. In view of the termination of that project it is necessary to ascertain the value of uncompleted work down to the date of termination. The assessment of uncompleted work is an area where   it would not be unusual to find differences between equally reputable experts. The HKIA Scale provides for abandoned works in Part 6. Clause 6.1.3 provides that where a commission is abandoned before completion, fees for partial services shall be charged for all services provided with due authority.

78. Secondly, the defence vigorously attacked the extent of the actual work done in relation to the fees charged. In fact in regard to the first three categories ,directly relevant to going to tender for construction, there is a measure of agreement between Mr. Chow, Mr. Hui   and Mr. Haffner. Their respective estimates for the first category were 70%, 70% and 60%; for the second and in value most important category they were even closer with estimates of 70%, 70% and 65%. For the third category they were lower and wider apart with estimates of 50%, 331/3% 20%. Apart from genuine differences in relation to the actual work done, some of the varying percentages in part flow from a difference of approach. Mr. Haffner as an architect whose primary task is to prepare plans for others required more detail before he was satisfied the various categories were in a position for a contractor to make a reliable tender. Mr. Hui, as a quantity surveyonr experienced in costing other architects plans,  felt that the plans for the first two categories were adequate and that it was possible to tender on the third category after making enquiries. Mr. Chow and Mr. Haffner agreed that there was a substantial difference between British and American practice. British practice is to provide more detail for the tenderer. At least in large projects the developer would employ a quantity surveyor. This was an extra expense for the developer but was professionally desirable as it should produce more realistic and better based tenders which was to the advantage of the developer. In the United States, quantity surveyors are not a separate profession and are not employed by a developer. The onus is cast on the contractor who submits a tender, to carry out detailed costing on his own quantity calculations. Mr. Chow, although qualified initially in Ireland, had spent the first part of his professional life in the United States and came to Hong Kong to open a branch for an American firm. So there was at least a difference in emphasis between Mr. Chow and  Mr. Haffner.

79. Thirdly, Mr. Haffner gave evidence under the considerable disadvantage of not having seen the plans, which totalled more than 200, until the hearing commenced. I recognise the considerable effort he went to during the adjournments to look at as many of the plans as possible. However, the fact that he had not perused or considered the whole of the plans before the trial, at times inhibited him in expressing an opinion. At other times this same disadvantage led him to make criticisms which, on being shown other plans he had not previously considered, he was obliged to withdraw. For example, he referred to the fact that the sample boards referred to bedroom suites but the plans  did not. Later when he was shown other plans, he agreed that they provided for suites. Similarly, initially he criticised the absence of a Schedule of Finishes and the inadequacy of landscape plans but was obliged to qualify this criticism when some details of the former and the latter were shown to him in other plans. These retractions and qualifications from Mr. Haffner's initial critical stance, are significant particularly when the difference between the competing estimates was small. They are also relevant in relation to the wider differences in respect of the latter categories. These difficulties are a real  factor to be borne in mind when I come to determine the weight to be given to the evidence of Mr. Chow, Mr. Hui and Mr. Haffner on quantum.

80. The fact that before trial Mr. Haffner had not inspected all the plans and that there had been other inadequate pre-trial steps taken by both parties was one of the reasons why this trial, set down for 4 days, occupied 15 days. I am satisfied that both parties are responsible for this gross under estimate. The trial could have been very much shorter if proper pre-trial steps had been taken. In respect to discovery the evidence clearly establishes that the defendants were slow in disclosing documents and also failed before trial to make a thorough search for relevant documents. Pre-trial processes were also considerably aggravated by the form of the summons for directions which was limited to discovery. A later summons granted leave simpliciter for each party to call 1 expert witness. No order was made under Order 38 Rule 38 R.S.C. for the pre-trial exchange of the expert witnesses evidence nor plans or other documents on which the expert opinion was based. Under Order 38 Rule 37 the general rule in personal injury actions is that reports are disclosed before trial unless there is an order to the contrary. Under Order 38 Rule 38, which applied in this case, the general rule is to the contrary and reports are only disclosed if the Court is satisfied that it is desirable to do so.

81. This is the very type of action involving a conflict of expert opinion in relation to more than 200 plans and other documents, where  an order should have been made for pre-trial disclosure and exchange of reports and plans. Ideally the trial judge should have been seized of the action at that stage, so that the appropriate directions could have been given. The unnecessary friction which appeared to have developed, perhaps in part from the defendants attitude to discovery, seemed to persist in a suspicion that a party's position might have been prejudiced by a full and free pre-trial exchange of expert evidence. The practical reality is that rarely are there any tactical or other advantages gained   by opposing full exchange of expert evidence before trial. Disclosure  and proper co-operation between the parties in this area usually improves the quality of the experts evidence and assists them to preserve their objective position uninvolved in any heat which may otherwise be generated between the parties. The kind of order that could have been made in this action should have been analogous to the pre-trial procedure under Rule 18 of the Lands Tribunal Rules Cap. 17. As no such order was made the quality and manner of presentation of the expert evidence only occasionally attained a standard which is commonplace in the Lands Tribunal.

82. In the result Mr. Haffner was asked questions both in evidence-in-chief and in cross-examination to which he had to either give qualified answers or risk giving incorrect answers. The limited pre-trial steps was one reason which resulted in the trial taking nearly four times both solicitors estimate. The same failure also affected the standard of examination and cross-examination and the quality of the evidence itself. I would venture the hope that in future actions similar to the present, where there is a substantial body of expert evidence both parties will ensure that appropriate orders are obtained for pre-trial exchange of expert evidence under Order 38 Rule 38. Failure to do so not only adds immeasurably to the length of a trial, detracts from the quality of the expert evidence ultimately adduced but is quite unfair to a party's own expert witness who through no fault of his enters the witness box comparatively uninformed and unprepared.

83. The Plaintiff's submissions on quantum were threefold. In contract it was submitted that the plaintiff was entitled to recover fees in the sum of $635,250 or alternatively a reasonable sum. Finally it was submitted that in restitution the plaintiff was entitled to recover a reasonable sum for the services rendered. It was further submitted that the claim for fees in restitution was not limited to a maximum of $635,250. The plaintiff asserted that even where there was a claim in contract a party had an election whether to proceed in contract or in restitution. When it proceeded in restitution either by election or because there was no claim in contract, damages were not limited by any contractual or purported contractual sum. I was referred to the Privy Council's decision in Lodder v. Slowey (1904) AC 442. In that case the contract was terminated by the defendant's breach. The Privy Council upheld the judgment of the New Zealand Court of Appeal that the plaintiff had an election to treat the contract as discharged and sue on quantum meruit. In that event the measure of damages was the value of the work and labour done. The fact that in Lodder v. Slowey the plaintiff would not have made a profit if the fixed price contract had been completed did not prevent the plaintiff from obtaining damages on a quantum meruit.

84. 1 'Chitty On Contracts' (supra) 1149 although observing that the question has not been authoratively decided in England cites a number of authorities which support the view that a quantum meruit claim is not limited by the damages that would have been recoverable in contract. Plance v. Colburn (1831) 8 Bing 14 favours both this view and the right of election. Goff and Jones (supra) 378 is of the contrary opinion that where an existing contract is terminated the innocent party does not have an election but is left to his contractual right, to damages for breaches although they recognise Lodder v. Slowey as an influential decision to the contrary. Goff and Jones are also of the opinion that a claim in restitution should not exceed a rateable proportion of the contract price. This restricted approach accords with the position in the United States where restitution, apart from having a much longer established independent status paradoxically is otherwise a far wider and more embracing doctrine.

85. However, while both Counsel went into this issue in some depth I do not need because of the present facts to consider this interesting issue any further. For here the contract was terminated shortly after a bill for work to date was rendered by the plaintiff and no general damages for termination are claimed. Because of the termination of the contract, that fee for partial services, must be measured against the actual work done. The test for that purpose is the same test for ascertaining what in contract would have been a reasonable fee for the same work, if the total fee had not, as part of the contract, been initially broken down into stages. The measure of damages in restitution invokes the same test, namely the value of the work done. I hold that the test under all three alternatives is the same. I will therefore proceed to consider quantum on that common basis.

86. I record that in considering Mr. Chow's evidence I recognise his professional qualifications and expertise but as he is a partner of the plaintiff he has an interest in the outcome of these proceedings. Accordingly he does not have the status of an independent expert witness from whom the Court always expects both impartiality and objectivity. Mr. Peter Hui, called by the plaintiff's is a quantity surveyor in private practice being a partner of C.C.S. and Hui. Mr. Hui graduated with a Master of Science in Construction Management from the University of Reading and has a Diploma of Building Economics from the Central London Polytechnic. After working in London from 1976 to 1979 he has practised in Hong Kong since 1981 and is on the Hong Kong Branch Committee of the Royal Institution of Chartered Surveyors. Mr.Hui has had experience of construction projects not only in Hong Kong but also in China.

87. Mr. Hui was an impressive witness who in an objective manner properly approached his task to evaluate the extent of the work done. Mr. Hui was of the opinion that sufficient work had been done to enable tenders to be invited which took the work up to Stage E of the HKIA scale. In respect of all the professional services offered by the plaintiff he said that a typical fee would be in the region of 12% which produced total. fees on a completed $20,000,000 project of $2,400,000 and up to Stage E of $1,680,000. He cautioned that $20,000,000 was a very conservative budget and care would have had to be exercised in order to keep costs within budget. In cross-examination he explained that where a quantity surveyor was not employed by a developer it was the responsibility of the tenderer to make his own calculations. The architect was not obliged to provide the services which otherwise would have been supplied by a quantity surveyor. However, the tenderer would often seek further information from the architect before completing his calculations. This was common practice where no quantity surveyor was employed. In this project no quantity surveyor was to be employed. This view was also shared by Mr. Haffner who explained that where a quantity surveyor was employed his fees had to be met as an additional cost by the developer but the advantage to a developer was that the tenders should be more soundly based. As well as being more soundly based potentially they might also be lower as a tenderer would make smaller allowances for contingencies and other lump sum amounts. Mr. Hui stated that he could have prepared a Bill of Quantities from the partially completed work. Mr. Hui further stated that the plans were sufficiently advanced to go to tender except for mechanical, engineering and plumbing which were one-third completed. The less detailed particulars in the plans relating to air conditioning which the defence criticised were in his view sufficient, for that type of work would be let out to a specialist contractor who in his tender would specify the particular air conditioning system he proposed. The defence attacked Mr. Hui as not being an expert in fees or the HKIA scale. To the contrary, Mr. Hui demonstrated complete familiarity with scale fees while giving evidence which was understandable, as an element in a quantity surveyor's work,costing any project, is the professional fees payable. Mr. Hui also had the advantage over both Mr. Chow and Mr. Haffner that they only normally dealt with their own firm's particular plans and in-house professional approach to the amount of detail to be provided for tender plans and specifications. Mr. Hui on the other hand, in the course of costing different architects and engineers plans, was more experienced in considering the wider range of different approaches followed by other firms.

88. Mr. Haffner called by the defendants was also an impressive witness having graduated with a Bachelor of Architecture with First Class Honours from Liverpool University in 1959. He is a Member of the Royal Institute of British Architects, a Fellow of the Hong Kong Institute of Architects, a Fellow of the Incorporated Association of Architects and Surveyors and a Fellow of the Chartered Institute of Arbitrators. Mr. Haffner has practised in Hong Kong since 1959 and is the senior partner of Spence Robinson, Architects and Engineers. Mr. Haffner's firm, while yet to complete a hotel project in China, had carried out feasibility studies on 3 hotels investigated others and was in the process of designing hotels for construction in China.

89. Mr. Chow, Mr. Hui and Mr. Haffner were all in agreement that the typical contract for architectural and related professional services in relation to buildings in China required the fee to be negotiated. Hong Kong professional scales did not apply. However, the practice was to adopt Hong Kong professional scales in non fee areas such as for the division of work including staging.

90. In determining quantum I have had the assistance of a number of different approaches on fees some less relevant than others but all were helpful and of interest if at times only byway of comparision. The plaintiff's first approach in contract was to apply the HKIA stages to the partially completed work against the contract price to arrive at the particularised sum of $635,250. It was also pointed out that if all 8 categories had been completed up to Stage E the fees on the same basis would have been $784,000. Howver, it is undisputed that all 8 categories were not completed up to Stage E. I was invited by the plaintiff's to deduct 10% from that latter sum for uncompleted work to arrive at a figure of $697,280. The 10% deduction was an arbitrary and not an analysed figure. In view of the considerable amount of evidence eventually adduced on fees, I reject that approach. I equally reject applying the HKIA scale-in accordance with Mr. Hui's calculations and after arriving at $1,680,000 then making a similar arbitrary 10% reduction. For the plaintiff agrees that the original fees on the basis of the HKIA scale were twice reduced to lesser cost calculations.

91. In answer to a query from the Court, Mr. Haffner calculated the fees on the contract basis as to quantum, up to Stage D and arrived at a figure of ;7256,501. In cross-examination he agreed that if the HKIA Scale was strictly applied in accordance with Clauses 3.1.1 and 3.1.4 the architectural category required the 5.25% scale fee to be calculated on the total construction cost of $20,000,000. Further that the interior design fee would in accordance with Clause 4.17.1 be twice the percentage fee based on the value of the design work. At Stage D this would produce an interior design percentage of 10.5% compared with the architectual rate of 5.25%. When these adjustments were made Mr. Haffner agreed the Stage D fee would be increased to $796,250. Again, as at least some of the work went beyond Stage D and as the HKIA quantum fee scale did not apply both these figures are only of background interest. Counsel for the plaintiff submitted they were at least relevant to the reasonableness of the fees claimed.

92. Mr. Haffner on his own initiative also advanced an alternative fee of $301,224 based on his experience of projects in China. Spence Robinson had negotiated fees of 4.2% of which 3.7% goes to the Hong Kong architects and 0.5% to the Chinese architectural authorities. This percentage excludes interior and landscaping fees. After applying those percentages to a project of $20,000,000. Mr. Haffner arrived at a fee of $301,224 for the partial work he considered had been done. This again was an interesting calculation but was not directly relevant for the Spence Robinson negotiated 3.7% fee was not the fee agreed to in this case nor did it include the interior design and landscaping work.

93. Having considered all these approaches I return to the fee which I have found was agreed to by the parties for total completion. I am satisfied that the sum claimed of $635,250 represents on the basis of the work the plaintiff alleges was done, the correct percentages of the total contract fee. The next step is to determine whether that alleged work was actually done. In considering the evidence I note that in the first three categories there is little dispute between Mr. Hui and Mr. Haffner. After reviewing their evidence it is clear that while Mr. Hui had prior access to all the plans, drawings and other materials, Mr. Haffner did not. As I have already pointed out this caused Mr. Haffner at times to withdraw prior criticisms and qualify others. Their opinions are based on their estimates of the degree of completion of uncompleted work. I find that Mr. Hui, although in years junior to Mr. Haffher, is a quantity surveyor dealing with a wider variety of other architects work with a specialised emphasis on costing and I prefer his estimates. Mr. Hui gave estimates for the first three categories but not for the remaining 5 categories.

94. In respect of those latter categories I am left with Mr. Chow's and Mr. Haffner's estimates. I approach Mr. Chow's with suspicion as he is a party to the proceedings while Mr. Haffner is not. On the other hand, in considering Mr. Haffner's evidence I have to take into account the handicap he worked under due to lack of prior inspection of the plans. I also take into account, as highlighted by Mr. Hui's evidence, that not only do different architects have different approaches to detail but where, as here, no quantity surveyor was employed by the developer, the onus is not on the architect to provide additional detail, but the burden rests on the tenderer to make do with documents which may be less than ideal. To some extent I must take a robust approach to these remaining items and one alternative would simply be to split the difference. In my view it would be a disservice to the substantial evidence on quantum which ultimately, if at times fortuitiously, was adduced. I also record that while Mr. Chow was a party to the proceedings I generally have accepted his evidence on the issue of liability. On quantum Mr. Chow's evidence gains some support from Mr. Hui. Mr. Hui arrived on quantum at the same percentage on the first two items and differed with competing estimates of 50% and 331/3% on the third category. Before arriving at the following percentages I have taken all these factors into account. In the result I determine fees for the work done at the request of the defendant at $547,750 made up as follows:

95. I also allow the claim of $11,680 for printing and reproductions which increases the sum allowed to $559,430. The plaintiff also claims interest at such rate and for such period as the Court sees fit. I am satisfied that this is a proper case for interest to be awarded. The bill for $646,930 was first rendered on 16th October 1980 and would in the normal course have been payable within 1 month of the date of issue. I will allow interest from 16th November 1980. The fee reminders stipulated an interest rate of 20%. The plaintiff is only entitled to a reasonable rate and could not unilaterally impose a higher rate. In view of the fact that the fees were disputed no agreement to that rate can be implied. I may take judicial notice of the bank rate throughout the period from 16th November 1980 down to the present time. Counsel for the plaintiff supplied me with particulars of the prime rate commencing a little earlier on 16th October 1980 down to 16th May 1980 which indicates that the average rate on a daily basis was 13.75 per cent per annum. For the period from 16th November 1980 it would be marginally higher. The normal lending rate being 2% above prime, would have been 15.75%. After considering these figures I am prepared to allow interest at the lower rate of 13.75%.

96. There will therefore be judgment for the plaintiff in the sum of $559,430 plus interest from 16th November 1980 to the date of judgment at the rate of 13.75% per annum. Liberty to apply is reserved on costs and any other consequential matters.

DATED this 7th day of June 1985.

Representation: