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JUDGMENT
LORD DENNING M.R. This case raises a point of very considerable interest to architects. Mr. Underwood and Mr. Norris were two neighbours at Sherwood Avenue, near St. Albans. Each has a big garden. By each giving up a piece, they could together get a building plot for two houses. They hoped to get planning permission, and then either put up houses themselves or sell the plot with planning permission. They employed an architect, Mr. Blair, to prepare drawings so as to get outline planning permission. He accepted the engagement and told them that his terms would be in accordance with the R.I.B.A. scale. He gave them the little booklet. That was in February 1966. But after a little while, he told them that it would be better to submit a full planning application. They agreed that that should be done. So he prepared a detailed plan for planning permission for two semi-detached houses. The detailed plan had considerable architectural merit. No doubt the copyright in it belonged to Mr. Blair. He submitted it to the local authority. He gave Mr. Underwood and Mr. Norris copies of the drawings on April 6, 1966. He wrote:
"I have now submitted the scheme you favoured for full planning approval. Enclosed are two copies of the drawing for your use. I confirm you understand the fee basis is to be in accordance with the R.I.B.A. scale of charges, and at this stage amounts to 1/6 of minimum full fees."
That is a reference to R.I.B.A. scale of charges [1962 revision] which says in clause 3 (ii):
"For taking client's instructions, preparing sketch designs sufficient to indicate the architect's interpretation of the client's instructions (but not in detail adequate to enable bills of quantities to be prepared), making approximate estimate of cost and making application for outline town planning approval the charge is on quantum meruit and shall not exceed one-sixth of the percentage due under clause 1 or 2 (as the case may be) on the architect's estimated cost of such works."
The application was approved. On August 3 Mr. Blair sent the certificate for full planning approval to Mr. Underwood and Mr. Norris. He enclosed his account, which came to some £70, and added significantly: "Wishing you all the very best in this venture." His account stated:
"To: Taking instructions, making survey, preparing scheme, obtaining full planning consent: ... ... £70 0s. 0d."
Mr. Underwood and Mr. Norris paid the £70. They kept the copies of the plans which he had sent them. But they did not employ Mr. Blair to do the work. They sold the site to a building firm, P. W. Byrne Ltd., and they handed over Mr. Blair's drawings to this firm. P. W. Byrne Ltd. wanted to start work quickly before the Land Commission Act 1967 came into operation. They got hold of their own surveyors - Osborne & Tomkins - and handed them the plans. These surveyors had to get approval under the building regulations. For this they used Mr. Blair's drawings and put in a lot more detail. They got building approval. And the houses were built by P. W. Byrne Ltd., with the assistance of Osborne & Tomkins.
Mr. Blair saw the houses. He believed that his plans had been used. He went to the local council and found out that he was right. His plans had been used. Thereupon he claimed damages for infringement of his copyright. He claimed against Osborne & Tomkins, the surveyors, who had used his drawings; and against P. W. Byrne Ltd., who built the houses from them. The county court judge decided against Mr. Blair on the main point. He appeals to this court.
It is quite plain that Mr. Blair was entitled to the copyright in his drawings. He drew them himself, and that makes him prima facie the owner of the copyright in them. Furthermore, it is one of the R.I.B.A. conditions: "Copyright in all drawings and in the work executed from them will remain the property of the architect." As owner of the copyright, Mr. Blair was certainly entitled to stop people in general from copying his drawings, or building a house from them; but that is subject to this qualification: he could not complain of anything for which he had given licence or permission. The question in this case is whether he had given a licence.
The R.I.B.A. conditions do not give any guidance on this question of licence. But they do contain a condition [Condition of Engagement I] which is of some relevance:
"An engagement entered into between the architect and the client may be terminated at any time by either party upon reasonable notice being given."
Suppose now that after the architect has made the plans, a contract is made by the owner with a builder whereby the builder is to build the house in accordance with the plans: and then the architect says he will go on no longer as architect for the work, and gives one month's notice. Can the architect refuse to let the owner and the builder use the plans and make the house from them? Surely not. At that stage, at any rate, when the owner has placed a contract for the work, the architect must be taken to have impliedly licensed the work to be done in accordance with the plans. Now take it back to an earlier stage, when the architect has drawn plans and obtained planning permission on the faith of them, and been paid for them. Can the architect then withdraw from the work and refuse to let the owner use the plans? Surely not. That shows that, at that stage also, the architect must be taken to have impliedly licensed the building to proceed in accordance with the plans.
Those illustrations show, to my mind, that when the owner of a building plot employs an architect to prepare plans for a house on that site, the architect impliedly promises that, in return for his fee, he will give a licence to the owner to use the plans for the building on that site. The copyright remains in the architect, so that he can stop anyone else copying his plans, or making a house from them; but he cannot stop the owner, who employed him, from doing work on that very site in accordance with the plans. If the owner employs a builder or another architect, the implied licence extends so as to enable them to make copies of the plans and to use them for that very building on that site: but for no other purpose. If the owner should sell the site, the implied licence extends so as to avail the purchaser also.
There is no authority in this country on this subject. But I am glad to find that there is a case in the Supreme Court of New South Wales. It is Beck v. Montana Constructions Pty. Ltd. [1964-5] N.S.W.R., 229. I find the reasoning of Jacobs J. very convincing. He said, at p. 235:
". . . the payment for sketch plans includes a permission or consent to use those sketch plans for the purpose for which they were brought into existence, namely, for the purpose of building a building in substantial accordance with them and for the purpose of preparing any necessary drawings as part of the task of building the building."
I entirely agree.
Applying this principle, it seems to me that the payment of £70 to Mr. Blair covered the use of the drawings, not only by Mr. Underwood and Mr. Norris themselves, but also by the people to whom they sold the plot, and by the surveyors and workmen of the purchasers, so that they might make copies of them and otherwise use them in the accustomed way for building a house on this site. I think that the claim for infringement of copyright fails.
But there is one small point I should mention. When Osborne & Tomkins put in their detail plan to the local council, they put their own name on it as though it were all their own work; whereas, it was not all their own work. Part of it was Mr. Blair's original drawings. It is conceded that the implied licence did not enable them to put forward part of his work as their own. To that extent, therefore, it was not licensed. But no damage flowed from that misdescription. The local authority said that the name on the document did not influence them. For that technical infringement the judge awarded nominal damages of 40s. Subject to that small nominal award, the judge dismissed the claim and gave no further damages. I think that was quite right. The appeal should be dismissed.
WIDGERY L.J. I agree. The R.I.B.A. terms of employment which were incorporated in this contract provided expressly that the engagement entered into between the architect and the client might be terminated at any time by either party upon reasonable notice being given. Consequent upon the possibility that the contract would thus not run its full normal course but would be terminated prematurely, one finds in paragraph 3 precise conditions as to the fees to which the architect will be entitled in the event of partial services only being performed. The scheme of the paragraph is to divide the total work into stages and to indicate what portion of the total fee is to be paid to the architect on the reaching of any one of those stages. So one finds that the first stage deals with preliminary sketches; progressing in the second stage to sufficient plans for outline planning permission; and in the next stage to sufficient plans for detailed submission for planning approval.
Mr. Stanley contends that if an engagement of an architect does not run its full course and fees are payable under the partial services provision to which I have referred, then, despite the fact that the architect has been fully compensated for all the work he has done, the client nevertheless cannot use the product of that work if it infringes the architect's copyright. That the architect retains the copyright is beyond dispute. He needs it for many good reasons. He needs it to protect himself against the possibility of his plans being used by others who have paid him no fee, or being used for purposes other than the specific building which was contemplated. However, it is common ground between counsel that though the architect retains the copyright, and though the use of the plans would prima facie be a breach of copyright, yet there was in this agreement an implied licence enabling the client to use the plans to some extent. The issue between the parties before us is: what is the extent of that licence, or what is the extent to which the client is impliedly authorised to use the plans? Mr. Stanley in his full argument developed this point in great detail; but I think for my part that his argument can be summarised in a single sentence. He contends that the licence to the client to use the plans is conditional on the architect continuing to be employed. Accordingly he says that if the engagement breaks off at the planning permission stage, if I may so describe it, and the architect is not to be employed thereafter, there is no further licence to use the plans.
Mr. Wilson-Smith on behalf of the defendant puts the matter more simply and says that the implied licence is to use whatever plans have been prepared for all purposes for which those plans would normally be used, that is to say, all purposes connected with the erection of the building to which the plans relate. I have no hesitation in saying that Mr. Wilson-Smith's approach is right. If it be right that the architect can hold the client to ransom, as Mr. Stanley's argument really implies, this would be quite inconsistent with the clear term in the engagement that that engagement could be put an end to at any time. If Mr. Stanley were right, an architect would have very powerful means of preventing his client from dismissing him; and that would be inconsistent with the spirit of the terms of employment if not inconsistent with their letter. I am indebted to Jacobs J. for the guidance given in Beck v. Montana Constructions Pty. Ltd., to which Lord Denning M.R. has referred. That judgment seems to me to suit the circumstances of this case precisely, and, if I may say so, to be entirely correct in every way. I will repeat - because I think it valuable - the general principle which Jacobs J. lays down. He says, at p. 235:
"it seems to me that the principle involved is this; that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement."
It was contemplated by the parties in this case that the plans would be used in furtherance of the erection on this site of houses of the type to which the plans relate. Mr. Stanley, however, further submits that on the facts of the present case the only engagement by the architect was to prepare plans to lead to the grant of planning permission, and so he argued that that being the only purpose for which the plans were prepared, it was the only purpose for which the parties contemplated that they should be used. I am quite unable to agree with this. The preparation of plans is a progressive process which begins with the most elementary sketches and works on through the details of outline planning permission and detailed planning permission, to working drawings and completion of the work. The observation that the plans in question were only plans to lead to planning permission simply means that they were plans which at that point had only been developed to the extent necessary for that purpose. It is quite wrong and unreal to suggest that the only function of the plans was to obtain planning permission. Their function was to enable that application to be made, and thereafter, if the application was successful, to form the basis for more detailed drawings which would lead to the final plans for the erection of the building. I agree with Lord Denning M.R.'s judgment and that this appeal must be dismissed.
MEGAW L.J.
I agree that the appeal should be dismissed for the reasons which have been given by my Lords. I would add only one thing as to the terms of the contract with which we are concerned on which the whole of the argument has revolved. The terms of the contract include the "Conditions of Engagement and Scale of Professional Charges" set out in a pamphlet issued by the R.I.B.A., as revised on January 1, 1962. Those are the relevant terms here because those were the conditions which were in operation at the relevant date. We have been told that since that date a new document described as "Conditions of Engagement" has been issued on October 1, 1966. Whether or not the new conditions of engagement contain alterations which would be material in respect of an issue of this nature I do not know. But we have to deal with this case on the conditions which were then prevailing, incorporated into this contract. Having regard to those conditions, I agree with the dismissal of this appeal for the reasons given by my Lords.
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Date: 19 August 2002