| Date | 2 August 2000 |
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| Judgment | Nottingham Community Housing Association Ltd -v- Powerminster Ltd TCC 30 June 2000. |
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| The Issue | Whether the maintenance and repair of heating installations and the like are caught by the Construction Act. |
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| Implication |
The definition of construction operations within Section 105 of the Act will be given a liberal interpretation by the Courts. |
printThe construction industry covers an extraordinarily wide range of activities from the repair and maintenance of domestic heating appliances to the construction of the Channel Tunnel. The drafters of the Construction Act had to take this into account and find words which would clearly articulate the activities to which the radical provisions of the Act would be applied. This was not easy. In drafting Section 105 of the Act, which deals with the definition of construction operations, parts of the Income and Corporation Taxes Act 1998 were used. That Act was concerned with the problem of tax evasion by labour only sub-contractors in the construction industry. Despite these precedents difficulties will occur, as shown in the case of Nottingham Community Housing Association v Powerminster Limited. Nottingham owns a large number of tenanted properties in the East Midlands. Powerminster is a company whose business includes the servicing and maintenance of gas appliances, heating, plumbing and electrical work. The contract between the parties provided that for a period of one year Powerminster would carry out an annual service on each gas appliance in Nottingham's properties and supply a responsive repair and breakdown service. The gas appliances to be serviced and maintained comprised gas central heating systems, gas fires and gas cookers. Disputes arose and Powerminster sought to obtain an adjudication of the amounts due to it under the provisions of the Construction Act. Nottingham defended this action by saying that the contract could not be a construction contract within the meaning of Section 105 of the Construction Act. It applied to the Court for declaration to that effect. Section 105 of the Act so far as material to the dispute between the parties provides as follows: 105 (1) In this part "Construction Operations" means, subject as follows, operations of any of the following descriptions: construction, alteration, repair, maintenance, extension, demolition or dismantling of buildings, or structures forming, or to form, part of the land (whether permanent or not); installation in any building or structure of fittings forming part of the land, including (without prejudice to the foregoing) systems of heating, lighting, air conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or security or communications systems. Powerminster argued that the operations undertaken by it were for the repair and maintenance of buildings or structures forming part of the land within the meaning of part (a). They argued that heating systems, like any other part of a building, once installed became part of the building and part of the land. What then was the purpose of paragraph (c) which seemed to suggest that only the installation of heating systems would be caught by the Act? Simple said Powerminster, paragraph (c) is unnecessary and redundant since the installation of such fittings is already part of "construction" within the meaning of paragraph (a). Nottingham argued the contrary position. Whilst paragraph (a) applied to construction, alteration, repair, maintenance etc of the whole or part of a building or structure, that could not include domestic gas appliances since these were not parts of buildings or structures. Moreover paragraph (c) makes clear that activities concerning heating, air conditioning and ventilation systems are covered to the extent of installation only. Paragraph (c) could easily have included for installation repair and maintenance, but it did not. The Honourable Mr Justice Dyson, who has done much to promote the effectiveness of the Construction Act, considered that the answer was clear. He held that there was nothing to be gained by seeking to distinguish between different types of operations carried out in relation to a building or structure. In his view paragraph (a) applied as much to the installation of a de-mountable wall partition as it did to the installation of a central heating or air conditioning system. Once installed such components all became part of the land. He added that heating systems are often complex. They are usually integrated into the structure of the building. They may be very difficult to disconnect and remove from the building. It may be far easier, he considered, to remove and replace a de-mountable wall partition or cladding panel that had been fixed to the exterior of the building, than to remove one of the systems described in paragraph (c). In Mr Dyson's view, heating, air conditioning, lighting, power supply, drainage, sanitation and water supply systems are all vital parts of a building whose proper functioning is required if a building is to be fit for habitation. He concluded therefore that the maintenance and repair of heating systems which have been installed in a building are operations within paragraph (a). The fact that this conclusion might render paragraph (c) unnecessary did not trouble Mr Dyson. Such an argument did not assist with the interpretation of paragraph (a). Quoting from the Court of Appeal in Beaufort Developments -v- Gilbert-Ash he recalled "the fact is that even in legal documents (or some might say especially in legal documents) people use superfluous words. Sometimes the drafting is clumsy, more often the clause is a lawyer's desire to be certain that every conceivable point has been covered." Powerminster were accordingly entitled to the declaration that its works were caught by the Construction Act.
CJ-0030
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