Fahstone Ltd v Biesse Group UK Ltd (TCC - 18.12.2015)
The contract was for the supply and installation of a woodworking machine used to manufacture windows and similar items. A dispute arose as to the machine’s performance which the purchaser referred to adjudication. The supplier submitted to the adjudicator (and to the court) that the adjudicator had no jurisdiction because the contract was not a “construction contract” within the meaning of section 105(1) the Construction Act. The adjudicator nevertheless awarded the purchaser a specified sum and the purchaser brought enforcement proceedings.
Edwards-Stuart J declined to enforce the adjudicator’s award by way of summary judgment on the basis that the purchaser failed to establish on the balance of probability that the machine’s installation was a “construction operation”. The machine could properly be described as a “structure” and “industrial plant” within the meaning of section 105 of the Construction Act. However, the supplier should have unconditional leave to defend with regard to the issue as to the nature, extent and effect of the fixings by which the machine was fixed to the floor of the purchaser’s workshop. This issue was very much a question of fact and degree and therefore of impression.
The factors of most weight in support of the purchaser’s case that the machine could properly be said to form part of the land were (i) The considerable size and weight of the machine (ii) The fact that it was bolted to the floor of the workshop (iii) The large number of fixings to the floor (iv) The probable requirement of cutting of many of the threaded rods to remove the machine efficiently and (iv) The fact that it was probably not intended that the machine would be moved during its working life.
The factors of most significance in support of the supplier’s case that the machine could not properly be said to form part of the land were the facts that (i) The machine was “stand-alone” and did not form part of any larger configuration of plant at the purchaser’s premises (ii) The fixings consisted of threaded rods which, although fixed to the floor, could be freed from the machine simply by removing their nuts (iii) There was a ready second hand market for such machines (iv) Such a machine could be the subject of hire purchase agreements under which the property in it remained with the finance company and (v) It was clear that the machine could be removed without causing any damage to it.