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Adjudicator’s decisions unenforceable as they did not relate to “construction operations”

Crystal Electronics Ltd v Digital Mobile Spectrum Ltd [2023] EWHC 2656 (TCC)

In a judgment handed down on Friday 27 October 2023, HHJ Keyser KC dismissed a claim to enforce two “smash and grab” adjudication decisions for a combined sum of more than £750,000.  An application for summary judgment to enforce the first decision had been rejected on 15 August 2023, and an expedited trial was listed to determine the question of whether the works in respect of which the two decisions had been made were “construction operations” for the purposes of s.105 of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”).

The defendant (“DMSL”) was set up in 2012 as a joint venture by the four UK mobile network operators for the purpose of carrying out proactive and remedial intervention services to address the detrimental effect of 4G mobile broadband services on digital terrestrial television.  DMSL engaged the Claimant (“Crystal”) to provide field installer services in connection with providing corrective support to households whose digital terrestrial television was affected.

After about 10 years, DMSL terminated the contract.  Post-termination, Crystal submitted two invoices for payment and, when they were not paid commenced a “smash and grab” adjudication.  The adjudicator failed properly to address DMSL’s jurisdictional challenge, and awarded Crystal the full amount claimed.  Crystal then brought a second adjudication in respect of the second invoice, and the same adjudicator was appointed with the same outcome.

At trial, Crystal claimed that its work always involved accessing the roof of properties and working at height and that its work was all “construction operations” under s.105 of the Act or “surveying work” or “advice on engineering” under s.104(2) of the Act.  DMSL submitted that the only part of the work that could conceivably be construction operations was the fitting of television aerials, which did not satisfy the requirement in s.105 of the Act of “forming part of the land”.  In any event, DMSL argued that it was a hybrid contract and there were more than de minimis elements of the works which were not construction operations.

Following cross-examination of witnesses for both sides, HHJ Keyser KC rejected Crystal’s arguments and held that a substantial proportion of the works to which the adjudication decisions related comprised operations that were not construction operations.  He also concluded that television aerials are not generally part of the land.

A link to the judgment can be found here.

Crispin Winser KC acted for DMSL, instructed by CMS Cameron McKenna Nabarro Olswang LLP.

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