construction operations

24/02/2016

The definition of a construction operation under the Construction 1996 Act has reignited a debate due to a High Court case which concerned the supply and installation of a woodworking machine. A dispute arose and was referred to adjudication under the 1996 Act as there was no provision for adjudication in the contract. The losing party refused to pay up and the matter was brought before the High Court to decide whether to compel payment.

The losing party contended that the supply and installation contract did not fall within the definition of a construction operation under the 1996 Act which meant that the Adjudicator did not have any jurisdiction to make his decision.

The basis for their contention was that the woodworking machine “did not form part of the land” as required by the 1996 Act. This particular woodworking machine was a hefty piece of equipment and was bolted to the floor. Previous case law in this area suggested that if something is bolted to the floor then that is a pretty good indicator that it forms part of the land.

The Court took a different view and found in favour of the party that lost at the earlier adjudication;

  • It looked at why the bolts were necessary. The Court concluded that the bolts were necessary, not to fix it to the floor, but to stop it from vibrating and moving out of level.       In fact all 50 threaded rods could be quite easily removed.
  • The Court reasoned that commercially there was a decent second hand market for this type of woodworking machine meaning it could ultimately be removed.

The decision of the Court provides yet another example of a case that turned on the interpretation of an already heavily litigated section of the 1996 Act.

The lesson to be learnt is that any grey area of the law should not be left to interpretation by the Courts; it is simply too big a risk as the winning party experienced here. Why not eliminate the risk by simply ensuring there is a contractual provision to adjudicate.

The perfect solution without the nuts and bolts!

If you require any assistance with this or any aspects of construction law, please call Karen Elder on 01782 205000 or karen.elder@beswicks.com