Key Facts
- •DMSL, a joint venture of UK mobile network operators, terminated its contract with Crystal Electronics Limited (Crystal) on 15 February 2023.
- •Crystal invoiced DMSL for £553,336 plus VAT for outstanding works.
- •Crystal initiated two adjudications; the first adjudicator awarded Crystal £553,336 plus VAT and interest, and the second awarded a further £219,738 plus VAT and interest.
- •DMSL challenged the adjudicator's jurisdiction, arguing the contract wasn't a construction contract.
- •The court heard the case to determine if the works were 'construction operations' under the Housing Grants, Construction and Regeneration Act 1996.
- •Crystal's work involved attending households to mitigate 4G and 700MHz interference with digital terrestrial television, including filter installation, aerial realignment/replacement, and television retuning.
Legal Principles
A party to a construction contract has the right to refer a dispute for adjudication.
Housing Grants, Construction and Regeneration Act 1996 (1996 Act), section 108(1)
A 'construction contract' includes agreements for carrying out construction operations, arranging for their carrying out, or providing labour for them; it also includes agreements for architectural, design, or surveying work related to construction operations.
1996 Act, section 104
'Construction operations' are defined to include various building and structure works, installation of fittings, preparatory operations, and painting/decorating.
1996 Act, section 105(1)
For a hybrid contract (relating to construction and other matters), the 1996 Act applies only to the construction aspects. A decision including non-construction aspects is unenforceable unless the parts can be severed.
1996 Act, section 104(5); C Spencer Ltd v M W High Tech Projects UK Ltd [2020] EWCA Civ 331
Determining whether something 'forms part of the land' is a question of fact and degree, considering factors like annexation, purpose, and ease of removability.
Savoye v Spicers Ltd [2014] EWHC 4195 (TCC)
Outcomes
Crystal's claim to enforce both adjudication decisions was dismissed.
A substantial portion of the works were not 'construction operations' under the 1996 Act. Specifically, filter installation and TV retuning were not construction operations, and aerial work, while sometimes involving construction-like activities, generally did not involve structures that formed part of the land. Further, the alleged surveying and engineering advice did not meet the statutory definition. The Bilsdale work was outside the contract.