Ruttle Plant Hire Limited v Secretary of State for the Environment, Food and Rural Affairs 2
A preliminary issue in this case concerned the definition of a construction contract under the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”). On the facts, the court held that the contract in question, which was for the provision of foot and mouth cleansing and disinfecting services on farm premises was, as a whole, a construction contract as defined under the HGCRA.
Judge Anthony Thornton QC, Technology and Construction Court
29 September 2004
Following the outbreak of foot and mouth in 2001, Ruttle was employed by the Secretary of State to carry out cleansing and disinfecting works at affected farms to enable them to return to business. On most sites, in addition to cleaning with high-pressure hoses, Ruttle’s work involved the construction of temporary roads, hard standings, buildings and disinfecting facilities. Ruttle also provided secure barriers and other means of precluding movement on and off site and the construction of a fresh source of water and an isolated water disposal system. In addition, the high-pressure jets had to access every potential area where infected materials might have penetrated and this often required the demolition or breaking down of parts or the whole of buildings. The demolition or damaging processes involved roofs, structures, foundations and the permanently installed fittings in buildings including pens, metalwork and plant. Any significant damage had to be repaired or reconstructed.
Ruttle claimed that its contract with the Secretary of State contained a number of mandatory implied terms, imposed by the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”). The HGCRA implies into “construction contracts” certain terms relating to interim payments where the contractual payment provisions do not comply with the statutory requirements of the HGCRA.
The issue was, therefore, whether the contract was a Construction Contract as defined by sections 104 and 105 of the Housing Grants, Construction and Regeneration Act 1996.
On the facts, the court held that the contract as a whole was a construction contract as defined in sections 105 of the HGCRA, being essentially a contract for the provision of foot and mouth cleansing and disinfecting services on farm premises.
The work involved a process referred to in the contract generically as “cleansing” and was defined as “cleaning surfaces to provide a grease-free, clean surface followed by the application of an approved disinfectant”. The court held that this process fitted the description “restoration” since the purpose of the exercise was to put the farm and its associated buildings and structures into a state in which it would be restocked and the farm, farm buildings and associated structures such as hard standings, yards and pens brought back to working life. The process was held to be similar in concept and execution to the wholesale washing of the external façade of a large building, a well-known process that also falls within the definition of construction operations at S105 of the HGCRA:
“(d) external or internal cleaning of buildings and structures, so far as carried out in the course of their….restoration”; and
“(e) operations which form an integral part of, or are preparatory to, or are for rendering complete, such operations…including site clearance, earth-moving, excavation…erection, maintenance or dismantling of scaffolding, site restoration, landscaping and the provision of roadways and other access works.”
Additionally, some works related to the provision of temporary and permanent offices which were a “construction operation” by virtue of S105 (a) of the HGCRA.
In addition, the court held that since: (i) the work and the working area was self-contained; (ii) the sole objective and purpose of the contract and of the work at each farm was to restore the relevant farm area sealed off back to working life; (iii) the work was carried out by a defined group of operatives using a defined set of plant (largely heavy engineering and construction plant) determined by the employer; and (iv) the work at any one farm was only concluded when the process was certified as being complete, the contract as a whole fell within the definition of a “construction contract “ in S105 of the HGCRA ; the works were either restoration by cleaning or works which were integral or preparatory to, or for rendering complete, the overall cleaning restoration process.
Accordingly, there was no need to apply the “blue pencil test” which would otherwise require the courts to treat the contract as severable between those parts that relate to “construction operations” and those that relate to other activities so that Part II of the HGCRA would only apply as far as the contract relates to construction operations.
On the facts, however, the parties had agreed terms in relation to all matters covered by the payment provisions of Part II of the HGCRA so no terms were to be implied covering those issues.
Please also see a summary of this decision in the adjudication update in the Spring 2006 Cameron McKenna Construction and development Legal Update.
For full judgment, please click here
