Van Elle Limited v Keynvor Morlift Limited

Part 2 of the Housing Grants, Construction and Regeneration Act 1996 applies to a construction contract relating to operations in England. For this purpose, the relevant territorial boundary for a tidal river entering the sea is the river’s mouth, rather than an Ordnance Survey line drawn at the low-water mark upstream. “Land” in the Act includes land covered by water within inland waters up to that baseline.

Section 104(6)(b) ordinarily operates on the contract as a whole. It does not create a hybrid regime under which Part 2 applies to only the English part of a single contract. An adjudicator’s decision remains enforceable despite an inadvertent failure to address a subsidiary issue unless the failure is deliberate and material enough to deprive the decision of jurisdiction or cause a serious breach of natural justice.

Van Elle Limited sought summary judgment to enforce an adjudicator’s decision requiring Keynvor Morlift Limited to pay £335,142.33 plus interest for the true value of works under their contract.

Keynvor resisted enforcement on jurisdictional and natural-justice grounds. The jurisdiction issue concerned whether piling works at a pontoon in the tidal River Fowey were construction operations in England for the purposes of Part 2 of the Housing Grants, Construction and Regeneration Act 1996. The natural-justice issues concerned the adjudicator’s treatment of weather downtime, rates, ground conditions and an equipment deduction.

1. Summary judgment. The court was satisfied that no factual dispute could realistically affect the result at trial. The adjudicator’s decision should therefore be finally enforced.
2. Territorial scope. Section 104(6)(b) limits Part 2 to contracts relating to construction operations in England, Wales or Scotland. Where one contract covers an integrated body of work, Part 2 applies to the whole contract or not at all; it does not produce a hybrid result.
3. For works in or adjacent to tidal waters, the court treated the Interpretation Act definition of England as the logical starting point, read in context with the statutory and international rules concerning territorial baselines. The relevant boundary for a river entering the sea is the river mouth. The pontoon was plainly upstream of that boundary and therefore in England.
4. The references to land in section 105(1) include land covered by water within inland waters. The piling contract therefore related to construction operations in England. The decision in Staveley Industries plc v Odebrecht Oil & Gas Services Ltd was distinguished: it concerned structures founded in the seabed below low-water mark and was not inconsistent with the present conclusion. Argyll & Bute D.C v Secretary of State for Scotland concerned a different statute and facts and had no direct relevance.
5. Alternatively, if the relevant boundary had been the foreshore, the court would not have treated the separate piles and pontoons as one structure forming part of the land. The alternative argument based on Savoye v Spicers Ltd therefore failed.
6. Natural justice. The adjudicator had addressed the weather and ground-condition issues on their merits. His apparent oversight concerning rates was inadvertent and insufficiently shown to be material. The equipment deduction was within the scope of the valuation referred to him. Applying Pilon Ltd v Breyer Group PLC and the related principles, none of the complaints invalidated the decision.