Nottingham Community Housing Assoc v Powerminster Ltd [2000] BLR 309

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The Court found that the maintenance and repair of gas appliances within buildings were "construction operations" within the meaning of section 105(a) of the Act. Hence, parties to such contracts should have a right to adjudication of disputes.

Dyson J, Technology & Construction Court

30 June 2000

N owned community housing tenanted properties. It engaged P on a one year contract to carry out an annual service on each gas appliance in N's properties, and supply a repair and breakdown service. The gas appliances comprised central heating systems, fires and cookers.

P rendered invoices to N for work done. N refused to pay, stating it had a substantial counterclaim. P purported to give notice of adjudication in relation to the non-payment. N commenced court proceedings seeking a declaration that the contract was not a "construction contract" within the meaning of section 105 of the Act.

P argued that the operations mentioned in section 105(1)(a) were the construction, alteration etc. to buildings or structures forming part of the land. Heating systems once installed would become part of a building and hence part of the land. Paragraph (c) was redundant since installation of fittings forming part of the land is part of "construction" under (a).

N argued that domestic gas appliances are not part of "buildings" or "structures." Paragraph (c) only applies to installation of such items; it could have included their maintenance and repair but purposely did not do so.

The Judge had no doubt that maintenance and repair of heating systems installed in a building were "construction operations" within the meaning of section 105(a) of the Act. Paragraph (a) applied to operation on the part as well as the whole of a building. There was no basis for distinguishing between heating systems and other installations that became part of the land. Such systems are often very complex and are usually integrated into the structure. In the light of the mischief the Act was intended to remedy, it was difficult to see a rational basis upon which Parliament would have excluded maintenance of heating systems, but not of the walls or a roof.

The Judge also commented that caution should be exercised when arguing that clauses were redundant. Often clauses that seem unnecessary may be included because the draftsman wishes to cover every conceivable point. The Judge could not see the reason for paragraph (c), but stated that whatever the reason, its inclusion should not affect what he considered to be the clear and true meaning of paragraph (a).

The Court found that the maintenance and repair of gas appliances within buildings were "construction operations" within the meaning of section 105(a) of the Act. Hence, parties to such contracts should have a right to adjudication of disputes.

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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