ABB Zantingh v Zedal [2001] BLR 66

This summary was provided by CMS Cameron McKenna LLP.

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

When considering whether works fall within the exemption in section 105(2) of HGCRA, the Court should consider the nature of the whole site, and ask what is its primary purpose. Here, works involved in the installation of power generators at a printing works did not fall within the exception and were construction operations.

HHJ Bowsher QC, Technology & Construction Court

12 December 2000

Scottish and Southern Energy (SSE) agreed to construct diesel powered electricity generation stations for Mirror Group Publishing who were concerned about loss of power due to the "Millennium bug." SSE sub-contracted the design, build and maintenance of the power generation sites to ABB, who sub-sub-contracted with Z for supply, installation, labelling, termination and testing of all field wiring. ABB intended to issue an official order incorporating the standard sub-contract MF/1, but this did not happen. Therefore, there was no express agreement for adjudication.

A dispute arose between the parties, which Z referred to an adjudicator appointed by the IEE. ABB said that the adjudicator had no jurisdiction, as the works were not "construction operations" since they were excluded from HGCRA by section 105(2)(c). Z disagreed, saying that the primary activity at the site was a printing works, therefore, no exemption applied. ABB applied to the Court for a declaration that there was no right to adjudicate. The adjudicator adjourned all proceedings pending resolution of the application, an action that the Court expressly approved in the circumstances of the case.

Z adduced evidence to show that the generators were intended to be a temporary measure, and therefore that power generation was not the primary activity on site. ABB argued that the "site" meant the fenced off area where the generators would be situated, and that here the primary purpose was power generation.

The Judge found that the items installed by Z would become plant when installed, and that therefore, they should be considered as plant. Therefore, the issue between the parties concerned definition of "site". If ABB's definition of site was correct, then the primary activity was power generation, even though it was ancillary to the printing works and purely a temporary measure. However, following that argument through, almost every fenced off generator could be a site with a primary purpose of power generation. The Judge believed that this interpretation was contrary to Parliament's intention; the Act was only to be excluded in relation to sites where the primary purpose was power generation, and not those where it was a secondary or tertiary activity.

The Judge concluded that the definition in section 105(2) and the reference to a "site where the primary purpose is …" meant a place broader than a generator surrounded by a security fence. To make sense of the Act, the Court should look at the nature of the whole site and ask what is the primary purpose of the whole site. In this case, that purpose was printing. Therefore, Z's works did not fall within the exception at section 105(2), and the declaration was refused.

When considering whether works fall within the exception in section 105(2) of HGCRA, the Court should consider the nature of the whole site, and ask what is its primary purpose. Here, works involved in the installation of power generators at a printing works did not fall within the exception and were construction operations. 

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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