Hong Kong – When Does A Professional Providing Gratuitous Services Owe A Duty Of Care?

14 September, 2017

 

In June 2016, we reported on the first instance decision of England’s Technology and Construction Court in  Lejonvarn v Burgess, [2016] EWHC 40 (TCC), [2017] EWCA Civ 254, where the court decided that a professional consultant (designer) owed a duty of care  in tort when performing gratuitous services for friends, despite a lack of contract between the parties. On 7 April 2017, England’s Court of Appeal affirmed that decision (dismissing the Defendant’s appeal), holding that where there is a relationship “akin to contract”, and an “assumption of responsibility”, a duty of care may arise. This will be a mixed question of fact and law, to be answered by having regard to the detailed circumstances of the particular case and the particular relationship between the parties in the context of their legal and factual situation as a whole. 

 

Background 

 

The Claimant Respondents (the Burgesses) and Defendant Appellant (Lejonvarn) were friends and former neighbours. The Burgesses asked Lejonvarn, an American qualified architect, for professional assistance in relation to a landscaping project in their garden. 

 

Lejonvarn secured a contractor to carry out the earthworks and hard landscaping; at this stage she provided her services gratuitously.  Lejonvarn’s intention was to provide subsequent design input in respect of the “soft” elements of the project, such as lighting and planting, for which she intended to charge a fee. 

 

Disputes arose when the Burgesses alleged that the work carried out by the contractors, during the period of Lejonvarn’s involvement in the project, was defective and that Lejonvarn was legally responsible for it. The Burgesses also criticised the procurement, project management, budgeting and cost control of the project, but Lejonvarn denied being responsible for such. She also denied being responsible for the quality of the contractor’s works. 

 

First Instance Decision 

 

While the trial judge did not find a contract between the parties, he held that Lejonvarn owed a duty of care in tort to the Burgesses, based on the principles of assumption of responsibility. The Court said that in the provision of supervision services in respect of construction work, a professional usually deploys a special skill and, in circumstances where there is an assumption of responsibility, a duty of care arises. Here, the Court held that Lejonvarn had assumed responsibility to the Burgesses for performing professional services in respect of the garden project and that they specifically relied on her for that purpose. Full details of the first instance decision can be found in our June 2016 article. 

 

Lejonvarn appealed. 

 

Issues on Appeal 

 

The issues on appeal where whether Lejonvarn owed a duty of care to the Burgesses and if so, the nature and extent of her duty. 

 

Court of Appeal Decision 

 

Lejonvarn argued that the trial judge had erred in applying the assumption of responsibility test, and should instead (or in addition to) have applied the threefold test in Caparo Industies Plc v Dickman [1990] A.C. 605, namely whether the loss was reasonably foreseeable; whether there was a sufficient relationship of proximity, and whether in the circumstances it was fair, just and reasonable to impose a duty of care. The Court of Appeal rejected this submission, holding that assumption of responsibility was the appropriate test in cases involving a relationship akin to a contractual relationship because the question of whether it would be fair, just and reasonable to impose liability was subsumed in the assumption of responsibility test. 

 

The Court of Appeal held that the trial judge was entitled to conclude that there had been an assumption of responsibility in light of his findings. On the judge’s findings this was a case in which Lejonvarn said that she would provide professional services acting as an architect and project manager on the garden project; in which she did in fact provide such services; in which she confirmed that she had provided such services and in which the Burgesses relied on her to properly perform those services.  She therefore owed a duty to exercise reasonable skill and care in the provision of those services. 

 

The Court of Appeal held that no definitive statement of the nature and extent of the duty owed could be made until the detailed facts had been considered.  Here, the Court of Appeal summarised the scope of Lejonvarn’s duty as follows: 

 

“In providing the professional service acting as an architect and project manager of:

 

• project managing the Garden Project and directing, inspecting and supervising the contractors’ work, its timing and progress;
• preparing designs to enable the Garden Project to be priced sufficiently for a fairly firm budget estimate to be prepared;
• preparing designs to enable the Garden Project to be constructed;
• receiving applications for payment from the contractor, and advising and directing the Claimants in respect of their payment; and
• exercising cost control by preparing a budget for the works, and overseeing actual expenditure against it;

 

Mrs Lejonvarn owed a duty to exercise reasonable skill and care.” 

 

Conclusion 

 

Professionals providing gratuitous services may owe a duty of care if there has been an assumption of responsibility. In cases involving a relationship akin to a contractual relationship, the assumption of responsibility test is the correct test to determine whether a duty of care exists. Whether there has been an assumption of responsibility, and the scope of the resulting duty of care, can only be determined by considering the detailed circumstances of the particular case and the particular relationship between the parties in question. Although this is a mixed question of fact and law, the importance of the detailed circumstances means that the findings of fact by the trial judge will be of considerable significance.