DMH Electrical (UK) Ltd v MK City Group Ltd

[2023] EWHC 2960 (KB)

This was an appeal before Ritchie J from a county court decision which related to unpaid invoices for electrical work. DMH had been awarded £63k with interest and costs.  The judge introduced the case in this way:

“This is a tale of two old school friends, one became a plumber and the other an electrician, who worked together in harmony on many building projects … Whilst they were working together at the Site, the main contractor went bust, money was left unpaid for works done and the school friends fell out over where the loss should fall.”

As the judge also noted, unusually, the parties agreed that MK asked DMH to quote for items of electrical installation work within the many properties being built on the site. These quotes were used to form the bases of a series of contracts made between them. Both parties agreed, there were contracts made between them. Further, MK accepted that the quality of DMH’s electrical work was good and done on time. The parties also agreed that DMH should be entitled to be paid for the work. 

Some of DMH’s work went unpaid after the main contractor went bust. There was no point in MK taking action against the contractor. Two of the individual contracts were relevant to the appeal. The first contract (“C1”) was made around June 2017 on the basis of the figures provided by DMH in a quote dated 21 June 2017 for electrical installations at houses based on a set of specifications provided by MK. In its defence, MK asserted that the installation of MVHR units was not covered by the pleaded contract and could not be awarded. 

The second contract (“C2”) was agreed in February 2018 and was made in a similar way. The defence here was not that the work was not contracted to be done, nor that it was not done, nor that the price was wrong, nor that the work was bad. DMH said that there was no contract arising from acceptance of the pleaded quote because it was expressly stated to include provisional figures to which MK would not hold DMH. Alternatively, the contract based on the quote was void for uncertainty. 

Ritchie J noted that appeals against findings of fact have to pass a high threshold test. A trial judge has the benefit of hearing and seeing the witnesses which the appellate court does not. The appellant needs to show the judge was plainly wrong in the sense that there was no sufficient evidence upon which the decision could have been reached or that no reasonable Judge could have reached that decision. 

As to the scope of C1, Ritchie J noted that this was an agreement made between two commercial tradesmen who knew each other well and who were, or were to be, working on the site together. In the event, DMH was the only electrical sub-sub-subcontractor on site doing this work. One tradesman asked for a quote for items A, B and C. The other provided a quote for items A and B but said that the price for C would come soon afterwards. Then they spoke, after the price for C was provided, and reached an agreement on the prices set out in the quotation and the additional information and agreed those would be the prices in the contract. To that extent, the quote was "accepted". 

At first instance, the judge had ruled that, as an interpretation of the words used in the quote, taking into account the circumstances of the contract and from the evidence of the contracting parties, the contract included for DMH to install MVHRs (or item C), as requested by MK in the undisclosed request to quote, at a price which was known to both parties when the agreement was reached. Ritchie J said that this was an interpretation wholly open to the judge to make in the circumstances of the case. It flowed from the behaviour of the parties before the contract and the words used in the emails and was not undermined by their behaviour straight after the contract was made but instead supported by that. The quote did not say, “we will not install the MVHRs”. It impliedly assumed that they would be installed by DMH, as requested by MK, subject to finding out the wholesaler's price. It was not conditional upon availability of the units because it did not say so. The parties then performed C1 and that performance included installing MVHRs. 

As to whether C2 should have been held void for uncertainty, Ritchie J referred to the case of Openwork v Forte [2018] EWCA Civ 783, where Simon LJ gave the following guidance: 

"The Court should strive to give some meaning to contractual clauses agreed by the parties if it is at all possible to do so.”

Here, there was certainty over the electrical fitting work to be done on each size of house, certainty about the products to be installed, certainty about the price for each piece of work, certainty over the Site and certainty over the process by which the specification would come about – the property buyer's choice. The only uncertainty in the provisional quote (not the contract) was whether DMH would need to up its prices when the director had the discussion with MK’s director in the next few days to firm matters up. In the event, the quoted prices became firm and were incorporated into the contract and hence accepted. Performance then followed in line with the terms of C2. Neither party considered the terms too uncertain whilst they performed them.

The appeal was dismissed. 

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