Savoye And Savoye Ltd v Spicers Ltd

For the purposes of the Housing Grants, Construction and Regeneration Act 1996, substantial plant or machinery installed in a building may constitute construction operations. The question whether an installation forms, or is to form, part of the land is one of fact and degree. Fixtures law informs that assessment but does not impose a mandatory legal test. The court should consider the installation as a whole, including its annexation, objective purpose, permanence, removability and integration with the building and other equipment. Mechanical fixing is a strong indication, but is not conclusive. Equipment which rests on its own weight may still form part of the land. The installation of an extensive integrated conveyor system therefore fell within section 105, giving the adjudicator jurisdiction.

Savoye contracted with Spicers to design, supply, install, supervise and commission an automated conveyor system at Spicers’ warehouse. The system included extensive conveyors, racking, computer controls and associated carton-handling equipment.

Savoye obtained an adjudicator’s decision requiring payment. Spicers resisted enforcement, arguing that the Agreement was not a construction contract because the works were not “construction operations” under section 105 of the Housing Grants, Construction and Regeneration Act 1996. The central issue was whether the conveyor installation formed, or was to form, part of the land.

1. The adjudicator had jurisdiction and the adjudicator’s decision was enforced. The installation represented “construction operations” within section 105 of the Housing Grants, Construction and Regeneration Act 1996.

2. Sections 105(1)(a) to (c) cover construction, works including industrial plant, and fittings installed in a building or structure. The statutory scheme is engaged by a contract for carrying out construction operations even if the operations are incomplete, defective or not completed at all.

3. Whether an item forms, or is to form, part of the land is ultimately a question of fact and degree. The principles of real property and fixtures law provide useful guidance, but the statutory test is not confined to whether the item satisfies the full common-law test for a fixture.

4. The assessment should consider the objective purpose of the installation, the degree and character of annexation, permanence, removability and the extent to which the installation enhances the utility of the premises. Where machinery or equipment forms part of an integrated system, the system should generally be considered as a whole rather than by examining each component in isolation.

5. Although some associated equipment rested on its own weight and some parts could be removed, the conveyor system was extensive, substantially and permanently integrated with the warehouse, fixed by thousands of industrial bolts to the floors and mezzanine, and designed to enhance the warehouse’s utility. Those factors established that it formed part of the land.

6. The presence of moving parts, or the theoretical possibility of removal, did not prevent the system from being a structure or from forming part of the land. There was no other challenge to the adjudicator’s decision, so judgment was entered for Savoye by way of enforcement. Costs were left for submissions.

The judgment records that Savoye obtained an adjudicator’s decision on 11 August 2014 and then commenced enforcement proceedings in the High Court. The High Court enforced that decision.