Comsite Projects Ltd. v Andritz AG

Building services installed in a building housing specialist plant are not excluded from the statutory definition of construction operations merely because the plant cannot lawfully be operated without them. The relevant question is whether the services are part of, or have a sufficient operational or engineering connection with, the plant so that it could not physically function without them. Physical integration and connection are important. Services serving the building generally, including lighting, alarms, heating and ventilation, remain construction operations where they are not connected to or needed for the physical operation of the plant.

Comsite sought declarations under CPR Part 8 concerning a sub-contract with Andritz AG for installing building services in a dryer building forming part of a waste-water treatment works. The services included lighting, power sockets, alarms, heating and ventilation. Andritz contended that the work was excluded from the statutory scheme because it amounted to installation of plant on a site whose primary activity was water or effluent treatment. It also challenged jurisdiction, relying on an Austrian jurisdiction clause and Article 23 of EC Council Regulation No 44/2001, and argued that Part 8 was inappropriate.

The court therefore had to determine the jurisdictional and procedural objections and whether the work fell within section 105(2)(c)(i), with the consequence that the sub-contract was a construction contract under section 104.

1. The court had jurisdiction to determine the Part 8 claim. Clause 20 of the sub-contract concerned disputes about interpretation or execution of the contract and related documents. The claim instead concerned the statutory application of the Housing Grants, Construction and Regeneration Act 1996 and did not fall within the clause or Article 23.

2. Part 8 was appropriate. The evidence adequately described the plant, building and work. The factual issues were straightforward, and no further factual or expert evidence was needed. The declarations would assist the parties and any adjudicator and avoid unnecessary expenditure.

3. Section 105(2)(c)(i) excludes assembly or installation of plant or machinery on a site where the primary activity is water or effluent treatment. The relevant plant must be distinguished from the building in which it is housed. The fact that a building’s services are necessary for lawful operation does not make them part of the plant.

4. The court found the approach in Homer Burgess Ltd v Chirex (Annan) Ltd [2000] BLR 124 helpful. The decisive consideration was physical and operational integration: the services had to be connected with, or necessary to enable, the plant physically to function. The Building Services sub-contract concerned services for the building, not the dryer plant, and none was connected to the plant.

5. The broader purposive approach discussed in ABB Power Construction Ltd v Norwest Holst Engineering Ltd (2001) 17 Const LJ 246 did not assist Andritz. The court rejected an approach treating all work within or related to a water-treatment building as installation of plant. The approach in ABB Zantingh Ltd v Zedal Building Services Ltd [2001] BLR 66, requiring a broad view of the nature of the work, was helpful.

6. The work was construction operations under section 105. The Building Services sub-contract was a construction contract under section 104. Part II applied, and both parties had the right to refer disputes to adjudication under section 108.