Cases - ABB Power Construction Ltd v Norwest Holst Engineering Ltd (2000)
Record details
- Name
- ABB Power Construction Ltd v Norwest Holst Engineering Ltd
- Date
- (2000)
- Citation
- (TCC) 77ConLR20
- Legislation
- Keywords
- Construction contracts - adjudication - adjudicator's jurisdiction - construction operations - power stations - installation of insulation - boilers - sites - whether a contract for the installation of insulation and cladding to pipework and boilers was an excepted contract - whether the clamant had a right to refer the dispute to adjudication - whether the adjudicator had jurisdiction - Housing Grants, Construction and Regeneration Act 1996, section 105(2)(c)(ii)
- Summary
-
ABB were building three heat recovery steam generators as part of a project to extend an existing power station at Peterhead in Aberdeen . The location where the work was being carried out was separated from the existing power station by 'the Construction Site Fence' and was known for the purposes of the contract as 'the Construction Site', as opposed to 'the Power Station Site'.
Norwest Holst were a subcontractor to ABB for the installation of insulation to clad pipework, drums and various parts of the equipment. The insulation material was provided by ABB.
In considering the interpretation of section 105(2) of the Act, the judge concluded that section 105(2), when compared with section 105(1), showed that it was the intention of parliament that the exemption should be given by applying an additional and different test: was the object of the 'construction operation' to further the activities described in section 105(2)(c) (and in paragraphs (a) and (b)), since in those industries or commercial activities it was not thought necessary that at any level there need to be a right to adjudicate or to payment as provided by the Act.
The judge also said that in his judgment it was clear from the language used in section 105(2) that it was intended that, if the regimes were not to apply, it would be invidious if they applied to some but not all construction contracts on a site or for a project.
The judge concluded that the erection of a fence for operational reasons was irrelevant. He concluded that the fence denotes no more than the customary separation of the 'live' side. He concluded that for the purposes of section 105(2)(c) there is here only one site.
In considering whether the installation of insulation came within the definition of 'plant' for the purposes of the Act, the judge had regard to and adopted the decision in Homer Burgess Ltd v Chirex (Annan) Ltd (1999). The judge went on to say that in his judgment any work that would be a 'construction operation' within section 105(1) of the Act and that is necessary for the full and proper assembly or erection of plant so that it will fulfil the purpose or purposes for which it is intended, is exempt by reason of section 105(2)(c) of the Act (assuming that the conditions relating to the site are also satisfied).
One further point raised by ABB but dismissed by the judge was that section 105(2) refers to sites where the primary activity is ... etc. ABB therefore asserted that the exceptions in section 105(2)(c) could only apply to sites that were then actually operating according to the primary activity and not to sites that were being constructed with the intention or objective of being operated according to the primary activity. The judge concluded that such an interpretation would lead to an absurdity and that cannot have been the intention of parliament.