The client was a design and construction company. The client had been engaged by a developer to design a commercial building. The contract documents were poor and broadly contemplated that the owner would only pay for the design work if the owner did not subsequently enter into a construction contract with the builder.
The contract did not specify how the design work would be valued, if necessary.
The client carried out substantial design and redesign work at the developer’s request, however, the developer did not engage the builder to construct the building and instead indicated that it intended to contract with a third party to build the commercial premises designed by the client.
The client issued a tax invoice for the design work in the sum of approximately $65,000 plus a copyright licence fee of $20,000. The developer disputed the design fee and asserted that it was entitled to engage a third party to construct the building without paying any copyright licence fee.