Quarmby Electrical Ltd. v Trant (t/a Trant Construction )

An oral agreement may novate a construction sub-contract where the evidence shows an intention to substitute a new contracting party. The court may determine that issue from the parties’ communications, subsequent documents and conduct. Technical certification in the former contractor’s name does not necessarily prevent novation where the contractual work was undertaken by the new company and the relevant work was competently performed.

In lower-value construction litigation requiring expert evidence, a single joint expert will ordinarily be a proportionate and cost-effective procedure. The judge remains the decision-maker and is not bound by every part of the expert’s evidence.

Quarmby Electrical Ltd. claimed the unpaid balance for electrical works carried out on four building projects for John Trant trading as Trant Construction. The defendant disputed the claimant’s contractual entitlement, contending that the original quotations and sub-contracts had been made by Quarmby and Son Ltd., which had ceased trading and entered liquidation.

The claimant relied on an oral agreement by which Quarmby Electrical Ltd. replaced Quarmby and Son Ltd. The parties also disputed variations, defects, delay and the valuation of the works. A single joint expert reported on the technical and valuation issues. The central questions were whether novation had occurred and what sum was payable.

1. Novation. The claimant was entitled to payment for all the electrical work. On the evidence, a telephone conversation between the claimant’s principal and the defendant’s representative resulted in Quarmby Electrical Ltd. being substituted for Quarmby and Son Ltd. on all four sub-contracts.
2. The court inferred the agreement from the surrounding circumstances, including the claimant’s need to secure the work for the new company, the fresh quotations issued in its name, the parties’ differing reasons to remember the conversation, and the defendant’s subsequent references to the electrical sub-contractor as Quarmby Electrical Ltd. The fact that installation certificates were signed on forms bearing the former company’s name did not prevent novation. The installations had been approved by a competent electrician, and there was no evidence that fresh certificates were required.
3. The court found as a fact that the electrical work at all four sites was carried out after 14 April 2003. The claimant therefore had contractual entitlement to the whole of the work, subject to the agreed or assessed adjustments.
4. The court accepted the single joint expert’s findings on variations and defects, subject to the specific assessments made for each project. The total value of the work, after deductions and additions, was £63,415.70. After crediting £51,475 already paid, the balance was £11,939.95, subject to VAT, interest and other tax adjustments.
5. Obiter guidance. In lower-value construction cases, where expert assistance is required, a single joint expert is generally the proportionate course for technical issues. The judge remains the ultimate decision-maker. The judge may call the expert for oral examination, permit both parties to cross-examine with restraint, or, where appropriate, permit only one party to cross-examine. Case management should address the expert’s selection, the possibility of oral evidence and payment of fees in advance.