Colin Facey Boats Limited v A. Pank & Sons Limited & Anor

Whether a contract arose is judged objectively from the parties’ words and conduct, not from their unexpressed intentions. A contractor’s indication that its employees are busy, coupled with an offer to put the customer in touch with someone who may be available, does not by itself establish an offer by the contractor to perform the work or a binding subcontracting arrangement. A person who accepts a duty to recommend a contractor must take reasonable care to establish that the recommended person has the knowledge and skill needed to perform the particular work competently and safely. That duty is fact-specific. It does not, without an express contractual term, make the recommender a guarantor or insurer of the recommended contractor’s performance.

The boat-yard owners claimed damages after a fire followed electrical installation work. They sued the electrical contractors who had inspected the installation and recommended the second defendant, and the electrician who carried out the work.

The trial judge held the first defendants contractually liable, treating the second defendant as their subcontractor, but rejected the alternative claim that they had negligently recommended him. He held the second defendant negligent. The first defendants appealed the contractual finding. By respondent’s notice, the plaintiffs challenged rejection of the recommendation claim.

The central questions were whether the first defendants had contracted to perform the work and whether their admitted duty to take reasonable care in recommending the second defendant had been breached.

1. Appeal dismissed. The first defendants had not agreed to carry out the electrical work. The judge’s primary findings showed only that their contracts manager advised on the necessary works, knew that his employees were busy, identified someone who might be available, and agreed to contact that person. Those facts could not be converted into an offer, provisional or conditional, by the first defendants to perform the work. Nor did they establish that the second defendant was their subcontractor.
2. The existence of agreement had to be determined objectively from what the parties said and did. Their unexpressed intentions and the absence of a subjective meeting of minds were not decisive. On the primary findings, no offer and acceptance capable of creating a binding contract could be inferred.
3. The first defendants had admitted a duty to take reasonable care in recommending the second defendant. That duty carried an implication that the plaintiffs would rely on the recommendation. In the circumstances, reasonable care required the recommender to establish that the person recommended possessed the knowledge and skill necessary to perform the particular electrical work competently and without danger.
4. The work involved a three-phase industrial boat-yard supply, complex rewiring, identification and labelling of circuits, and testing before reconnection. Regulation 28 of the Electricity Regulations of 1908 provided relevant background concerning competence for electrical work requiring technical knowledge or experience to avoid danger. The contracts manager had no adequate basis for assessing the second defendant’s competence for that task. He had not investigated his qualifications, experience, or understanding of industrial electrical installations. The second defendant’s subsequent negligence and the resulting foreseeable fire demonstrated the breach.
5. Lord Justice Otton added that the decision did not make a person who recommends an independent contractor a guarantor or insurer of that contractor’s performance. Without a contractual term imposing such liability, the scope of the duty remains a matter of the particular facts. Sir Christopher Slade agreed with both judgments.

The plaintiffs were entitled to judgment against both defendants for damages to be assessed. The respondents received one half of their costs of the appeal.

• Court of Appeal (Civil Division): Colin Facey Boats Limited v A. Pank & Sons Limited & Anor, [1997] EWCA Civ 1299. The appeal against contractual liability was dismissed. The respondent’s notice succeeded on the negligent recommendation issue.
• High Court of Justice, Queen’s Bench Division, Norwich District Registry: His Honour Judge Mellor held the first defendants contractually liable, treated the second defendant as their subcontractor, rejected the alternative negligent recommendation claim, and found the second defendant negligent. Damages were to be assessed.