The case of Nottingham Community Housing Association Ltd vs Powerminster Ltd alerted me to the fact that I am officially a crumbly. It reminded me of Flanders & Swann, a musical comedy duo from the 1960s, whose greatest hits included The Gas-man Cometh:
- “ ’Twas on a Monday morning that the gas-man came to call The gas tap wouldn’t turn, I wasn’t getting gas at all.He tore out all the skirting boards to try to find the main And I had to call a carpenter to put it back again.”
Powerminster is a reputable company whose business includes the servicing and maintenance of gas appliances, heating, plumbing and electrical work. My guess is these gasmen have had a tiff with Nottingham Housing Association about their maintenance contract on tenanted homes in the East Midlands. According to Powerminster, its bill of £59 000 hasn’t been paid. Nottingham admits to this but claims the job hasn’t been carried out properly.
- “ ’Twas on the Tuesday morning the electrician came He called me Mr Latham, which isn’t quite my name, He couldn’t reach the fuse box without standing on the bin, And his foot went through a window so I called the glazier in.”
Peeved, Powerminster gave Notice of Adjudication. But Nottingham refused to co-operate, saying you can’t call for an adjudicator under the Construction Act because a maintenance contract for annual servicing and fixing leaks isn’t a construction contract within the meaning of the act. So convinced was Nottingham, that it went to the court for a declaration that this type of contract gave no right to either side to call for a referee.
The Construction Act only applies to something called a construction contract, as defined in the act. It can be for architect contracts or roofer contracts, but it doesn’t mention annual service contracts and fixing leaking radiator valves.
Nottingham explained to Mr Justice Dyson that the words “maintenance, repair, extension, demolition of buildings” applied to the whole of the building, but not the gas cupboard. Furthermore, said Nottingham, where the act talks of the installation in any building of systems of heating, there is no mention of maintenance and repair, just installation.
The act’s intention was to remedy late payment and avoid contras being raised to postpone payment
Powerminster’s barrister said that when interpreting the act, it should be given a liberal interpretation in order to promote its objective in the Sir Michael Latham report of July 1994. Its intention was to remedy late payment problems and avoid spurious set-offs – or contras – being raised to postpone payment. That meant the gasman was subject to the referee.
The judge said the act was about buildings as a whole and also about building parts. It applies, he said, as much to the subcontractor who constructs the roof joists as it does to the main contractor who builds the entire house. It applies as much to the installation of a demountable wall partition as it does to the installation of a central heating system.
Maintenance of buildings is no different to demolition of buildings, and includes substantial operations to the heating and ventilation on an office block. “In the light of the plain mischief at which the act was aimed,” said the judge, “it is very difficult to see what rational basis parliament could have intended [as author of the act] to include the installation of such systems, but exclude their alteration or demolition.
“The work of altering or dismantling heating and other systems that have been installed in a building is every bit as much a ‘construction’ activity as the work of altering the walls or roof of a building.
“Why should parliament have intended to exclude the former but include the latter? The same question arises in relation to the repair and maintenance of heating and other systems that have been installed in a building.”
So Powerminster can call for the referee.
- “ ’Twas on a Wednesday morning the painter made a start With undercoats and overcoats the painted every part Every nook and cranny but I found when he was gone He’d painted over the gas tap and I couldn’t turn it on.”
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or e-mail him on email@example.com