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[2009] EWCA Civ 170, [2009] All ER (D) 97
The claimant cable installation firm was a subcontractor to the defendant electrical supplier. The claimant was initially remunerated on a 'meterage installed' basis but, from about July 2004, the defendant began to employ the claimant on the basis of a daily rate for some jobs. The rate included a sum in respect of accommodation if the site was far away. The claimant's daily rate was based on a nine hour day. The claimant also charged half the daily rate if the men only worked half a day. None of the invoices sent by the claimant to the defendant in respect of the work done set out the number of hours worked or the hours being charged. For the period February to October 2007, almost all the invoices were checked by the defendant's site supervisors and, until September 2007, the defendant paid the claimant's invoices without question. In September 2007, however, there was a sum outstanding on the claimant's invoices. Also at that time, the claimant notified the defendant that it was intending to increase its daily rate. The defendant protested by fax (the September fax), stating, inter alia, that the claimant's men were working a nine-hour day, not an 11-12 hour day as, the defendant alleged, had originally been agreed. In the September fax, the defendant set out the amount by which it claimed it was being overcharged as a result. In October 2007, the defendant paid the claimant a sum in excess of £26,000 but refused to pay further invoices for the period August to October 2007. The claimant issued proceedings, claiming £23,203.31 in respect of invoices in that period. The defendants counterclaimed, asserting that the claimant was 'in breach of the verbal agreement that the daily rate would be based on its men working an 11 or 12 hour day . . .' The claimant contended that it worked for the defendant 'on agreed and established daily rates' but did not identify the basis, in terms of working hours, of those daily rates. The judge found that nothing had been agreed about the number of hours on which a daily rate should have been based, and that as a result, the claimant's claim was on a quantum meruit basis. In assessing the sum which fell to be awarded under that claim, the judge did not distinguish between paid and unpaid invoices. He found that the September fax was a good 'guestimate' of the amounts by which the defendant had been and was being overcharged, and accordingly took £15,252 away from the £23,203.31 being claimed and gave judgment for £7,751.31. The effect of that judgment was to order repayment of sums already paid. The claimants appealed.
They submitted, inter alia, that by a course of conduct, nine hours had been agreed as the number of hours on which the daily rate would be based. A further issue also arose upon the hearing of the appeal as to whether, if no express agreement or representation as to hours was established, there was still a basis on which the paid invoices could be re-opened.
Held – The appeal would be allowed. On the pleadings the claim alleged that services had been provided and the claim was for sums set out in the unpaid invoices. Prima facie the claim was based on a contract or a series of contracts to supply services and materials as identified in the invoices. That was not strictly a quantum meruit claim; a quantum meruit claim was a restitutionary claim which could be made when there was no contract. A court would be reluctant to find no contract. Simply because no price had been agreed expressly did not lead to the conclusion that there was no contract; the contract could simply be one for a reasonable price. In the instant case, a daily rate had been agreed for both the day when the work was reasonably local and the rate when accommodation should be supplied. The judge had found no express agreement as to the number of hours on which those daily rates had been based, nor an agreement by course of conduct. There was no difficulty in finding a contract, or series of individual contracts, under which the claimant agreed to supply services and materials for the defendant at a daily rate, assessed on the basis of a reasonable number of hours. However, the judge had erred in failing to distinguish between the paid and unpaid invoices. As to the paid invoices, there was no agreement to which the payments could be said to have been contrary. Any complaints about those invoices had been known to the claimant before it had paid them. Accordingly, they had waived any right to object and there was no basis upon which the paid invoices could be reopened. The question which should have been addressed concerned the reasonable sum that the respondents were entitled to receive on their unpaid invoices. The parties would be entitled to further written submissions to establish that sum.
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