Scottish Court of Session Decisions

LORD JUSTICE-CLERK (Thomson).—The defenders asked the pursuer, who is a chartered surveyor, to perform certain professional services on their behalf. It is common ground that the pursuer is entitled to be remunerated for these services. However, nothing was said at the time by either party as to the basis of remuneration. After the services had been performed, the pursuer rendered an account based on a schedule of professional charges issued by the Royal Institution of Chartered Surveyors, which purports to lay down the charges which surveyors are entitled to make for work done by them.

In my view, where one party employs another to perform certain services for him, he is liable to pay for these services, and, if nothing is said as to the remuneration, it becomes a question of circumstances on what basis that remuneration falls to be calculated. In some cases the basis may be that of quantum meruit, calculated according to what a reasonable employer might be expected to pay and a reasonable employee expected to accept, and into that computation many elements may enter. In that class of case it is therefore an implied term of the contract that reasonable remuneration should be paid.

The defenders say that this is the situation in the present case, and that, as the schedule was not brought to their notice and was not made part of the contract, they are not bound by it, and that the pursuer's account, therefore, ought to be made upon a quantum meruitbasis.

There is, however, another class of case which is summarised in a passage in Fraser on Master and Servant at p. 134, which was repeated with approval by Lord President Normand in the case of Eunson v. Johnson & Greig, 1940 S. C. 49, at p. 53. That passage is:

"In most trades and professions there is a customary and general rate of wages, to which, in the absence of special agreement, persons are held to have tacitly agreed."

The pursuer's case is that he falls into this second category and that it is an implied term of this contract that the basis on which the defenders must remunerate the pursuer is the schedule, even although the schedule was never mentioned. The pursuer says that this implication rests on custom and that where a person employs a chartered surveyor he must be taken tacitly to have agreed to remunerate him on the basis of the schedule. This contention seems to me to raise points of interest and importance, not only to chartered surveyors and their employers, but to other professional relationships. Both sides presented arguments to the relevancy, but I do not think it would be safe to proceed without hearing evidence. The less said at this stage about the arguments for and against, the better; and I will, accordingly, allow a proof before answer.

The defenders reclaimed, and the case was heard before the First Division (without Lord Sorn) on 9th February 1956, when the pursuer obtained leave to amend. After amendment the case was further heard on 24th February 1956.

LORD PRESIDENT (Clyde).—The pursuer in this case is a chartered surveyor. He was employed by the defenders as an expert valuer, adviser and witness in arbitration proceedings regarding the valuation of Prestwick Airport and buildings. These subjects belonged to the defenders and were being compulsorily acquired by the Minister of Civil Aviation. The compensation ultimately awarded to the defenders was £343,835.

No specific arrangement had been made as to the remuneration to be paid to the pursuer for his services in this connexion. After his work was completed the pursuer prepared and rendered an account to the defenders for his services. The account was made up in accordance with the Schedule of Professional Charges prepared by the Royal Institution of Chartered Surveyors. Under that Schedule the scale fee is based on the sum awarded in the arbitration. In the present case the award was an unusually large one and the scale fee is proportionately large. In addition to the actual scale fee the pursuer also included certain items in the account for outlays and fees for attendance at the hearing. The total sum brought out in the account was £3009, 10s. 9d. The defenders have paid to the pursuer £1000, which he has accepted as to account of his charges. But the defenders refused to pay more. The present action is accordingly brought by the pursuer for the outstanding balance of £2009, 10s. 9d. In their defences the defenders have tendered a further sum of £196, 17s. to cover outlays and attendance at the hearing in the arbitration. The case was argued on relevancy before the Lord Justice-Clerk, sitting in the Outer House, and he pronounced an interlocutor allowing a proof before answer. The defenders, however, have brought a reclaiming motion against this interlocutor and maintained to us that the case should now be dismissed.

The main issue argued before us was in regard to the validity and binding nature of the Schedule of Professional Charges prepared by the Royal Institution of Chartered Surveyors. This question is of obvious interest to both parties, since the Schedule, if completely binding, would be conclusive in the pursuer's favour on the main item in his claim, whereas, if it cannot be invoked by him at all, the basis for the pursuer's case is gone. The pursuer explained to us that, where the Schedule applies, it is not his practice nor is it the general practice in the profession to keep a detailed record of work done, and, since he regarded the Schedule as applicable in this case, he did not keep such a record and cannot now vouch details of the actual services which he performed in connexion with the arbitration.

It is, of course, clear that, where an express agreement is made as to the basis of the surveyor's remuneration, that agreement must rule. The Courts will enforce the agreement even though it does not conform to the Schedule laid down by the Institution. The question only arises where no such express agreement is made. It is well settled that in the absence of such express agreement there is no presumption that the professional man is doing the work for nothing—Landless v. Wilson . In that case, which was concerned with an architect's fees, Lord President Inglis said (at p. 292):

"On the whole matter, I have no doubt that the defender has entirely failed to prove that this work was intended to be done gratuitously, and I think the pursuer is entitled to receive the usual remuneration."

This view is supported by a passage in Fraser on Master and Servant, (3rd ed.) p. 134, which was cited to us, to this effect:

"In most trades and professions there is a customary and general rate of wages to which, in the absence of special agreement, persons are held to have tacitly agreed. But if parties have gone on at a certain rate of payment, though without any distinct understanding having been come to that this is to be a permanent arrangement, this usage of payment will be held the rule and will overcome the usage of trade."

It is to be observed that this quotation covers not merely trades, but professions as well. The passage was quoted with approval in Eunson v. Johnson & Greig by Lord President Normand, who (at p. 53) said:

"I am satisfied that that is a correct statement of the law."

It is true that the second sentence in this quotation was the one truly relevant to the decision in Eunson, but the whole passage was approved by the Lord President, and the first sentence in the quotation is in point in the present case. In Gloag on Contract, (2nd ed.) p. 294, it is stated:

"When services are rendered under circumstances which satisfy the Court that there was no intention on either side that they should be rendered gratuitously, the amount to be paid may be fixed by custom of trade if any custom can be shown to exist; if not, it is for the Court, acting as a jury, to fix a reasonable remuneration."

No Scots cases dealing specifically with the Chartered Surveyors' Schedule of Professional Charges were quoted to us, but we were referred to a series of English decisions which were concerned with what is called "Ryde's Scale," which was replaced in 1948 by the present Schedule. It is not altogether easy to reconcile these cases with one another, and the dicta in some which criticise the scale cannot be wholly reconciled with the decision in others. In Attorney-General v. Drapers' Co. the Master of the Rolls refused to interfere with the fixing by a taxing master of a surveyor's charges on the basis of the Ryde scale. He refused to do so, as this was a matter for the discretion of the taxing master. But he went on to say:

"Besides, even if it were a question of principle I should not be inclined to interfere. The charges of brokers on the transfer of stocks and shares are paid by a commission, and if a similar practice prevails with respect to surveyors' charges I shall not disturb it; it prevents disputes as to amount; and the charges fixed by the scale do not seem too high."

In Brocklebank v. Lancashire and Yorkshire Railway Co. a similar custom seems to have been established in the evidence and was given effect to, although the Court expressed some disapproval of this method of fixing the proper remuneration. The Ryde scale was also applied by the Court in Buckland & Garrard v. Pawson & Co., it being there established that the persons entrusted with the employment of the plaintiff were well aware of the custom.

On the other hand the scale has been rejected as the proper method of assessing the surveyor's remuneration where there was no evidence of the custom of adopting it such as would bind the outside public in their dealings with surveyors—Debenham v. King's College, Cambridge; compare also Drew v. Josolyne . It is quite true that in this latter case Lord Coleridge, C.J., said in reference to Ryde's scale that he had never sanctioned and would never sanction the supposed rule that surveyors in such cases were to be paid for their evidence not with reference to the work done but by a percentage on the sum in dispute, and a similar view was expressed by Younger, J., in Faraday v. Tamworth Union, at p. 439. In modern times, however, it is not by any means uncommon in several professions to fix the fee by the value of the sum obtained for the service rendered, and I am not prepared to accept these observations as necessarily conclusive in a case where a custom so to assess the fees can be established.

To establish a custom, however, of this kind the evidence must show that it is reasonable, certain and notorious. As Lord Alverstone, C.J., said in Devonald v. Rosser & Sons, at p. 741, "With regard to the question of the alleged custom, I may say that I have always understood that a custom cannot be read into a written contract unless, to use the language of Lord Denman, C.J., in Reg. v. Stoke-upon-Trent, it is ‘so universal that no workman could be supposed to have entered into’ the ‘service without looking to it as part of the contract.’" To establish the custom it is not essential to prove that the defenders actually knew of it. It is enough if it was so well recognised that it ought to have been known to both parties—Lord Forres v. Scottish Flax Co., per Scott, L.J., at p. 368. There is, after all, nothing inequitable in such a requirement. If a person employs a professional man to perform some service and makes no inquiry as to the basis upon which the professional man is to be remunerated for this service, it is not unreasonable that he should pay for the service on the usual and customary basis. It is not open to him to complain that he is unaware of it, if he has never even taken the trouble to ascertain it before engaging another to do work for him without specifying a precise fee.

There is one further matter to which I should refer. There is no statutory or other authoritative justification for the Institution's Schedule of Professional Charges. Merely because surveyors have agreed among themselves what they would like to be paid does not give them a legal right so to be paid. Accordingly, even if the practice of operating the Schedule were proved to be notorious within the meaning of the decisions, that does not require the Court necessarily to adopt it. As was pointed out in more than one of the cases, the Court must always consider whether the application of the Schedule to the award in question produces a reasonable result. In Hudson on Building Contracts, (7th ed.) p. 54, it is stated:

"Where no special agreement [as to remuneration] has been made, the question in all cases is what is reasonable…It is a question of fact to be decided by the jury, if there is one."

The author then goes on to say in reference to certain of the older English authorities on the matter:

"The Courts are not disposed to recognise the scale of the Royal Institute as binding the employer in the absence of knowledge or special agreement…But on the other hand it is right to take into consideration the practice of the profession, or of a large part thereof, in arriving at what is in fact reasonable remuneration."

The Lord Ordinary therefore, in my opinion, could in any event take into account in fixing a proper figure the Schedule of Professional Charges if that Schedule were established to be the basis in practice upon which the profession operates, but he would not necessarily be bound rigidly to apply it to the circumstances of the present case unless he were satisfied that the resulting fee were reasonable.

As regards the case as pled by the pursuer, the pursuer's averments barely gave proper notice when the case was argued to us. But we have afforded the pursuer an opportunity of amending to cure this defect and adequate averments in support of custom are now incorporated in the pleadings. In the circumstances, therefore, in my opinion, a proof before answer should be allowed. But no relevant case on quantum meruit has been averred, and that issue is accordingly excluded from probation.

I have expressed my views on the issue at greater length than I should normally have done where a proof before answer is being allowed, partly in answer to the request to that effect made to us at the bar, and partly in the hope that it may help to focus the issue for the purposes of the subsequent stages of this litigation.

LORD CARMONT .—I agree.

LORD RUSSELL .—I also agree.