Hortimax Limited v Hedon Salads Limited
Friday, 15 October 2004
Key terms: Jurisdiction - The Scheme - Section 105 (2) - primary activity - production - food - Section 105 (1), Section 105 (2) - “Plant” - submission - waiver - Construction Umbrella Bodies Adjudication Task Group Guidance for Adjudicators - reservation of positio
The Claimant, Hortimax, referred 6 disputes arising under 6 different contracts to adjudication by way of serving 6 separate adjudication notices. The 6 decisions were delivered in August 2004 by the adjudicator. Hedon, the Defendant, was a commercial grower of cucumbers and other vegetables and carries out its operations in greenhouses at Burstwick. In order to increase production they decided to improve the watering system, and introduce artificial lighting and screens to the warehouses. The disputes related to this work.
Hedon resisted summary judgment on the basis that the work was excluded by Section 105 (2) of the Act. Hortimax argued that the work was not excluded, and in any event Hedon had conferred jurisdiction on the Adjudicator by their letter of 1 July 2004.
HHJ Gilliand QC held that the question as to whether the contracts fell within the definition of construction operations depended on the meaning of the word “plant” in Section 105 (2) (c) of the Act. Hedon submitted that the term “plant” should be given its ordinary meaning whilst Hortimax argued that the interpretation should be a narrow one. His Honour referred to Hinton (Inspector of Taxes) v Maden and Ireland [1959] 1 WLR 875, and in particular the judgment of Lord Reid where he considered that the term “plant” should be used in its ordinary sense and without limitation.
HHJ Gilliand QC followed that rationale, noting that some limitation would in any event be placed upon the potential wide ambit of the term “plant” by virtue of the limited scope of the Act. The term “plant” was taken to mean the apparatus required for the carrying out of the business. However, he distinguished this from the “place or setting in which the business is carried on” and if it is to fall within Section 105 (2) (c) then the plant must also form a part of the land within Section 105 (1) of the Act.
In this respect His Honour noted that pipework conveying chemicals would be included within Section 105 (2) (Homer Burgess Limited v Chirex [2000] BLR 124), while the installation of lighting that did not connect the items of plant together would be excluded as a distinct element within the building (Comsite Projects Limited v Andritz AG (2004) 10 Const LR 24).
His Honour came to the conclusion that lighting, water storage, pipework, pumping facilities and filtering apparatus was an integral part of the system used by Hedon for the purposes of growing cucumbers. The lighting system and the screens was also an integral part of the system. They were therefore “plant” and were within Section 105 (2) (c) of the Act.
Hortimax’s argument that the “production” of food was different from the “growing” of food was rejected. His Honour considered that the reference to “food and drink”, despite the use of the conjunctive “and” was a reference to either or both of the constituent elements and should not be read conjunctively.
Further, the 4 activities excluded by Section 105 (2) (c) (ii), “production, transmission, processing or bulk storage” included the growing of, or production of the “food”. As a result, the growing of cucumbers was within the exception in Section 105 (2) (c) and the Adjudicator did not have jurisdiction under the Act to deal with any of the disputes referred to under the 6 contracts.
The last question was whether Hedon had submitted to the Adjudicator’s decision or waived its jurisdictional objection. Hedon had raised its jurisdictional objection immediately and maintained it during the proceedings. The Adjudicator had asked the parties to address him on jurisdiction in order that he could consider the point. He had effectively followed the Guidance for Adjudicators published by the Construction Umbrella Bodies Adjudication Task Force (July 2002).
However, on 1 July solicitors wrote to the Adjudicator stating that “Hedon is prepared to vest in you the power to decide upon your own jurisdiction…”. His Honour considered that this was a plain submission allowing the Adjudicator to determine the jurisdictional issues. Unfortunately, the Adjudicator had considered the submissions but did not come to a clear decision either way. Nonetheless, the Adjudicator did then go on to make a decision and any previous reservation by Hedon had been waived as a result of its letter of 1 July. Summary judgment was therefore ordered in respect of all six decisions, together with interest.
The transcript of Hortimax was kindly provided by Delia Dumaresq of Atkin Chambers.
Hedon resisted summary judgment on the basis that the work was excluded by Section 105 (2) of the Act. Hortimax argued that the work was not excluded, and in any event Hedon had conferred jurisdiction on the Adjudicator by their letter of 1 July 2004.
HHJ Gilliand QC held that the question as to whether the contracts fell within the definition of construction operations depended on the meaning of the word “plant” in Section 105 (2) (c) of the Act. Hedon submitted that the term “plant” should be given its ordinary meaning whilst Hortimax argued that the interpretation should be a narrow one. His Honour referred to Hinton (Inspector of Taxes) v Maden and Ireland [1959] 1 WLR 875, and in particular the judgment of Lord Reid where he considered that the term “plant” should be used in its ordinary sense and without limitation.
HHJ Gilliand QC followed that rationale, noting that some limitation would in any event be placed upon the potential wide ambit of the term “plant” by virtue of the limited scope of the Act. The term “plant” was taken to mean the apparatus required for the carrying out of the business. However, he distinguished this from the “place or setting in which the business is carried on” and if it is to fall within Section 105 (2) (c) then the plant must also form a part of the land within Section 105 (1) of the Act.
In this respect His Honour noted that pipework conveying chemicals would be included within Section 105 (2) (Homer Burgess Limited v Chirex [2000] BLR 124), while the installation of lighting that did not connect the items of plant together would be excluded as a distinct element within the building (Comsite Projects Limited v Andritz AG (2004) 10 Const LR 24).
His Honour came to the conclusion that lighting, water storage, pipework, pumping facilities and filtering apparatus was an integral part of the system used by Hedon for the purposes of growing cucumbers. The lighting system and the screens was also an integral part of the system. They were therefore “plant” and were within Section 105 (2) (c) of the Act.
Hortimax’s argument that the “production” of food was different from the “growing” of food was rejected. His Honour considered that the reference to “food and drink”, despite the use of the conjunctive “and” was a reference to either or both of the constituent elements and should not be read conjunctively.
Further, the 4 activities excluded by Section 105 (2) (c) (ii), “production, transmission, processing or bulk storage” included the growing of, or production of the “food”. As a result, the growing of cucumbers was within the exception in Section 105 (2) (c) and the Adjudicator did not have jurisdiction under the Act to deal with any of the disputes referred to under the 6 contracts.
The last question was whether Hedon had submitted to the Adjudicator’s decision or waived its jurisdictional objection. Hedon had raised its jurisdictional objection immediately and maintained it during the proceedings. The Adjudicator had asked the parties to address him on jurisdiction in order that he could consider the point. He had effectively followed the Guidance for Adjudicators published by the Construction Umbrella Bodies Adjudication Task Force (July 2002).
However, on 1 July solicitors wrote to the Adjudicator stating that “Hedon is prepared to vest in you the power to decide upon your own jurisdiction…”. His Honour considered that this was a plain submission allowing the Adjudicator to determine the jurisdictional issues. Unfortunately, the Adjudicator had considered the submissions but did not come to a clear decision either way. Nonetheless, the Adjudicator did then go on to make a decision and any previous reservation by Hedon had been waived as a result of its letter of 1 July. Summary judgment was therefore ordered in respect of all six decisions, together with interest.
The transcript of Hortimax was kindly provided by Delia Dumaresq of Atkin Chambers.