ABB Zantingh Ltd -v- Zedal Building Services Ltd
The supply and installation of field wiring for the diesel powered electricity standby generators was not an exception to what constituted "construction operations" under section 105(2)(c) of the Housing Grants, Construction and Regeneration Act 1996
12 December, 2000
The employer printed magazines and decided to build two diesel powered electricity generation stations to provide standby power in the event of the main supply of electricity failing. The sub-contractor was to design, and built and maintain the stations. The sub-contractor entered into a sub-sub-contract for the sub-sub-contractor to supply, install, label, terminate and test all field wiring, including the supply an installation of certain containment systems and secondary steel support. The sub-sub-contractor referred a dispute to adjudication. The sub-contractor applied for a court order that the sub-sub-contract was not a "construction contract" as defined by the Housing Grants, Construction and Regeneration Act 1996. The sub-sub-contractor contended that the adjudicator did have jurisdiction on the ground that the primary activity of the site was a printing works which did not fall within the exemption in section 105(2)(c)(i) as to what constitutes a ?construction operation.? Section 105(2)(c)(i) provides that the assembly or installation of plant on a site where the primary activity is power generation is not a ?construction operation?. Judge Bowsher held that the sub-sub-contract was a construction contract on the basis that the work did not fall within the exemption in section 105(2)(c)(i). The sub-sub-contract work was the installation of ?plant.? However, notwithstanding that if the "site" was defined as the areas on which the generators stood which were surrounded by security fences, then almost any such secondary power source could be regarded as a "site", the primary purpose of the site occupied by the employer as a whole was that of printing magazines. When Parliament referred to "a site where the primary activity is ?", that reference must have been to a place broader than a generator surrounded by security fences insofar as to make sense of the Act, it was necessary to look at the nature of the whole site and to ask what was its primary purpose. The employer's primary activity was the printing of magazines and not the sale of any electricity generated by the standby generators. Advice Note The courts have taken a common sense view of what the primary purpose of a site is. That primary purpose is generally what the site owner intends to achieve by what happens on the site rather than what could technically be achieved.