Adjudication and Non Construction Activities
A word of caution to those contractors engaged in construction projects and where elements of their contracted works comprise non-construction operations.
Adjudication of disputes under the Scheme for Construction Contracts refers only to construction operations. Section 105, in particular, gives guidance on what constitutes construction operations:-
"Construction operations" includes the construction, alteration, repair, maintenance, extension, demolition, or dismantling of:
Buildings or structures "forming, or to form, part of the land", whether permanent or not (section 105(1)(a)).
Any works "forming, or to form, part of the land", including walls, roadworks, power lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence (section 105(1)(b)).
"Construction operations" includes the installation in any building or structure of fittings "forming part of the land", including systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or security or communications systems (section 105(1)(c)).
"Construction operations" includes the includes the external or internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration (section 105(1)(d)).
"Construction operations" includes operations that form an integral part of, or are preparatory to, or are for rendering complete, the operations described in section 105(1), including site clearance, earth moving, excavation, tunneling and boring, laying of foundations, erection, maintenance or dismantling of scaffolding, site restoration, landscaping and the provision of roadways and other access works (section 105(1)(e)).
"Construction operations" includes the painting or decorating of the internal or external surfaces of any building or structure (section 105(1)(f)).
Suppose your contract consists of a mix of construction and non-construction operations. In that case, you can only adjudicate under the statutory scheme disputes, which are on the construction operations element only. For most contractors, this will not be an issue as their works will only comprise construction activities; however, some contractors who carry out industrial processing activities/installation, for example, may find that only some of their works are covered.
A recent case, ‘C Spencer Limited V MW High Tech Projects Ltd’, is an excellent example of the difference in interpretation between construction and non-construction operations. Additionally, a case from 2010, ‘Cleveland Bridge (UK) Ltd v Whessoe-Volker’, also highlights the perils of assessing what are and are not ‘construction operations’
It's therefore essential that if you carry out operations under a 'Construction Contract', which includes both construction and non-construction operations, you ensure that the adjudication provisions within the contract are amended appropriately to your needs.