Staveley Industries Plc v Odebrecht Oil & Gas HT01/052

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Structures which are, or are to be, founded on the sea bed below low water mark are not structures forming, or to form, part of the land for the purposes of s105(1) of the Housing Grants Construction and Regeneration Act 1996

HHJ Richard Havery QC, Technology & Construction Court

28 February 2001

The defendant O, sub-contracted certain works to the claimant, S for the supply and installation of fittings into steel modules which were being constructed in England. The modules were intended for use as living quarters for operatives of an oil platform in the Gulf of Mexico. They were to be towed to the location and welded onto platforms which were to be supported by legs founded in the sea bed.

A dispute arose between the parties and S applied under CPR Part 8 for a declaration that the sub-contracts were construction contracts for the purposes of the HGCRA and thus subject to adjudication. S submitted that the modules were "to form part of the land" for the purposes of s105(1)(c) of the 1996 Act, on the basis that the Interpretation Act 1978 defined land as including land covered by water and the platforms' feet were founded in the sea bed.

O submitted that the platforms upon which the modules were to be welded were not land and that the reference to "the land" referred to the land on which the relevant construction operation was carried out. It argued that as the modules were to be moved they could not form part of the land in England. The Act only applied to construction operations in England, Wales or Scotland s(104)(6)(b). O cited Scottish authority to the effect that the definition in the 1978 Act confined land covered by water to tidal land and referred to s567(2) of the Income and Corporation Taxes Act 1988 from which s105 of the 1996 Act derived. Section 567(2) expressly included offshore platforms and O argued that the failure to make such an express inclusion in the 1996 Act demonstrated an intention that such platforms should be outside the scope of that Act.

The Court said that structures which were, or were to be, founded in the sea bed below low water mark were not structures forming, or to form, part of the land for the purposes of s105(1) of the 1996 Act. The absence of an express inclusion of offshore platforms as in the 1988 Act suggested an intention to exclude them from the ambit of the 1996 Act. Furthermore, on its true construction the expression "the land" in s105(1) referred only to the land where the building or structure forming part of the land was situated when built, and that land, by s104(6)(b), had to be in England, Wales or Scotland. On the evidence, the modules could not form part of the land in England and thus the HGCRA did not apply to the subcontracts.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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