Crystal Electronics Limited v Digital Mobile Spectrum Limited

For an adjudication under the Housing Grants, Construction and Regeneration Act 1996, the enforcing party must show that all matters included in the adjudicator’s decision concerned construction operations or qualifying related work, subject only to genuinely de minimis matters. A hybrid contract does not support enforcement of an award covering a substantial amount of non-construction work unless the relevant part can be severed. Whether apparatus forms part of the land is a question of fact and degree, assessed objectively by reference to attachment, permanence, removability, purpose and the installation as a whole. Television sets, recording devices, amplifiers and, ordinarily, external television aerials do not form part of the land. Routine visual inspections, signal readings, retuning and filter fitting are not surveying work or engineering advice in relation to construction operations.

Digital Mobile Spectrum Limited engaged Crystal Electronics Limited to provide services addressing disruption to digital terrestrial television caused by mobile broadband and spectrum-clearance programmes. Following termination of the relationship, Crystal obtained two adjudication decisions requiring DMSL to make substantial payments.

DMSL resisted enforcement on the ground that the underlying agreement was not a construction contract, or that the adjudicated works included a substantial amount of work outside the statutory definition of construction operations. The court tried whether the works fell within section 105 of the Housing Grants, Construction and Regeneration Act 1996, and whether non-qualifying work was more than de minimis so as to make the decisions unenforceable.

1. Both adjudication decisions were unenforceable. Crystal’s claim to enforce them was dismissed.
2. Under sections 104 and 105 of the Housing Grants, Construction and Regeneration Act 1996, enforcement required Crystal to establish that all matters included in each decision were construction operations, qualifying architectural, design or surveying work, or qualifying engineering advice. A substantial inclusion of other work was fatal unless the decision could be severed.
3. The court applied the fact-and-degree approach to whether apparatus formed part of the land. The assessment was objective and included the nature of the apparatus, its attachment, permanence, ease of removal, purpose and the installation viewed as a whole.
4. A substantial proportion of the work involved retuning televisions, fitting set-back filters, inspecting equipment and taking signal readings. Those activities did not concern structures or works forming part of the land. Television sets, recording devices and amplifiers were not part of the land, although sockets and face plates might be.
5. External aerials were generally replaceable items attached by lashings or removable brackets. Their secure attachment served functional and safety purposes rather than incorporation into the building. They therefore did not generally form part of the land. Masthead amplifiers and filters likewise did not form part of the land on the evidence.
6. Section 104(2) did not assist Crystal. Surveying work meant construction-industry land or building surveying, not looking at a property, its aerials or domestic equipment. Feedback about signal readings was not engineering advice in relation to construction operations.
7. Because at least a substantial proportion of the works covered by each decision was non-qualifying, the decisions could not be enforced. The court made no determination on the separate Bilsdale work because it could not affect the outcome and was raised unsatisfactorily at trial.