Interior designer wins court battle over spiralling costs of flat refurb

An award-winning interior designer working in the “ultra-prime residential” market has won a court battle over spiralling fees charged to a client who engaged her to refurbish a mansion flat in Marylebone, NW1. Binkie Moorhead’s company, BMD, was hired in 2017 by Mashael Alebrahim. According to court documents, Alebrahim bought the property on Marylebone Road in 2016. She planned to live there for six months of the year and lend it to close family members and the Saudi royals when she was away. BMD estimated that the refurbishment would cost £200,000, but the project went more than £500,000 over budget, the relationship soured, and ended in a professional negligence court case at the High Court in November 2020. BMD won the case but Alebrahim appealed. The appeal, which was heard earlier this month, became a dispute about the nature of the contract between BMD and Alebrahim. Specifically, the dispute was about the meaning of the term “total cost of works”. According to the contract, BMD was entitled to charge a design fee based on 20% of the “total cost of works”, which included items bought as part of the refurbishment. Lawyers for Alebrahim argued that “total cost of works” referred to the total cost incurred by BMD, including any trade discount that BMD received. However, lawyers for BMD argued that it referred to the total cost to Alebrahim, and that BMD was entitled to quote the retail price of items, not the price it had paid for them. In a ruling handed down today, the Court of Appeal backed BMD’s argument. Although the contract didn’t define “total cost of works”, BMD gave Alebrahim a weekly breakdown of costs for her to sign off. Therefore, the Court of Appeal agreed with the High Court ruling that the weekly estimate was “an estimate accepted by the client”. “It is also important to point out that [Alebrahim] was not obliged to accept each or any figure in the estimates,” today’s Court of Appeal judgment, written by Lord Justice Coulson, said. A clause in the contract “expressly provided that, if [Alebrahim] liked the particular fitting or item of furniture, but thought that the quoted figure in the weekly estimate was too high, she could make her own enquiries and endeavour to obtain it more cheaply elsewhere”. In his ruling, Coulson LJ said: “I have concluded that the judge was right to say that, on the particular terms of this contract, and the way in which it operated, the respondent was entitled to the sums it invoiced to [Alebrahim]. “It may be that [Alebrahim] wrongly assumed that the weekly estimates from the respondent would be based on trade prices without a mark-up, and it appears that, without such an entitlement, [she] now believes she made a bad bargain with the respondent. But that is because she made an assumption which was not founded upon (and was, on analysis, contrary to) the terms of the contract itself.” Even so, he said the contract could have been more transparent. “I should, however, sound this warning,” he said. “Although I have concluded that the judge was right in his construction of the terms of this contract, it is not difficult to see how the misapprehension on [Alebrahim’s] part might have arisen. “Although the respondent did not at any stage conceal anything, I would accept the suggestion that this aspect of the contract may not have been as immediately transparent as it should have been. “If interior designers are providing estimates of the cost of furniture and fittings to clients, they would be well advised, either to say in terms that the individual cost figure provided will not be broken down further (so the client knows that no further information will be given) or, if they are happy to provide further information, to show how their estimate is made up,” he said. Mashael Alebrahim v BM Design London Ltd Court of Appeal (King LJ, Coulson LJ, Snowdon LJ] 17 Feb 2022