The claimant in this case was Van Elle Limited (“VEL”) and the defendant was Keynvor Morlift Ltd (“KML”). VEL’s claim related to the enforcement of the adjudication decision of Mr John Riches of 27 June 2023, in which it had been awarded the amount of £335,142.33 as the true valuation of its contract with KML.

VEL had been engaged by KML to replace two mooring piles and two berthing piles at Fowey Harbour in Cornwall by way of a purchase order dated 18 November 2021. The berthing piles serve the purpose of fixing a pontoon used by RNLI to land its lifeboat, while the mooring piles serve to moor said lifeboat in position. All four piles sit below the water line and are not supported by anything other than the ground into which they are driven. Fowey Harbour is located at mouth of the River Fowey, approximately one mile inland from the sea. In 2023, VEL brought an adjudication against KML under the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”) to determine the true valuation of its contract.

KML opposed the enforcement of the adjudicator’s decision on grounds that the adjudicator lacked jurisdiction. In support of this position, it submitted that the works on the piles fell outside of the scope of the HGCRA, as they were not “construction operations” defined in s.105(1) of the HGCRA, as this is limited to construction operations within England by s. 104(6) of the HGCRA. This submission was founded on the fact that, while the HGCRA limits its extent to England, Wales or Scotland, it does not provide a definition for the meaning of “England”. KML submitted that in the absence of a definition within the HGCRA, one should refer to Schedule 1 of the Interpretation Act 1978, which in turn refers to the Local Government Act 1972, which establishes that the Ordinance Survey is to set out the boundaries of local government areas. KML submitted that as on the relevant Ordinance Survey map, the boundary line between Cornwall and the sea lay upstream of the piles, and accordingly, the piles were not located in England for the purpose of the HGCRA. KML also advanced additional arguments on the basis of alleged breaches of natural justice owing to the adjudicator’s purported failure to consider aspects of weather downtime, discrepancies in rates, ground conditions and deductions for equipment. 

VEL’s substantive submission responded to the arguments advanced by KML. Chiefly, it argued that the proper approach to determining whether the HGCRA applied was to view the works to the piles as works to the RNLI pontoon and to ask the question of whether the contract involved "construction operations in England" on this basis. On this construction, VEL argued that the HGCRA applied as the works were "works forming part of the land" within the meaning of s.105(1) of the HGCRA. VEL based this argument on the suggestion that the works related to the pontoon, and works to the pontoon comprised works forming part of the land. Further, VEL argued that the works fell within the meaning of s. 105(1) because the illustrative examples provided in this section include works including and largely relating to structures below the low—water mark such as docks and harbours" and "coast protection or defence”. VEL also submitted the alternative argument that the works were construction operations within the meaning of s. 105(1)(e) of the HGCRA, as the new piles were integral maintenance works to the pontoon, which do not need to form part of the land. Concerning the breaches of natural justice alleged by KML, VEL submitted that the adjudicator was acting within his jurisdiction to determine the true value of VEL’s account, he considered all of the issues before him, and any oversights were minor and purely unintentional.

The judge ruled that the adjudicator’s decision should be enforced. He first turned to the question of what constituted construction works within England. He did not accept VEL’s suggestions that it was appropriate to read references to “land” in s. 104 of the HGCRA as “land within England”, and that the primary requirement to fall within this scope should be the connection between the works and the land. While it was possible to adopt this approach, it had the potential to introduce an undesirable element of uncertainty. Instead, the judge identified as a starting point that this question would only ever arise in relation to construction over, under or adjacent to water. In cases such as this one where the construction works solely involve construction to the base of a body of water, a reading of s. 104(6) and s. 105(1) of the HGCRA alone would not provide the answer. Here, it would be appropriate to refer to the Interpretation Act 1978, which includes land covered in water within the definition of land, unless any contrary intention appears. According to the Judge, no contrary intention appears in the HGCRA. In respect of works in or adjacent to the coast, it is appropriate to refer to the Local Government Act 1972 and the boundaries set out in the Ordinance Survey. However, the judge found that the Ordinance Survey had drawn the boundary line between Cornwall and the sea at Fowey Harbour further upstream than what would accord with Article 2(1) of the Territorial Sea (Baselines) Order 2014 (adopting the position of the Territorial Waters Order in Council 1964 in time when the survey was carried out). The 2014 Order refers to Article 13 of the United Nations Convention on the Law of the Sea as the baseline for the UK’s territorial sea. According to the judge, on a simple application, the pontoon was well upstream of where the boundary line ought to have been drawn in accordance with these Orders and within England. The judge subsequently dispensed with KML’s natural justice challenges, determining that (a) the adjudicator clearly took weather downtime into account, (b) any oversight by the adjudicator regarding rates was modest and immaterial (c) KML’s challenge on the basis of the adjudicator’s purported misunderstanding of KML’s argument on ground conditions was misconceived and took words out of context; and (d) the adjudicator’s purported oversight of a deduction for equipment put forward by KML, instead adopting the deduction of £15,833 that VEL was content for KML to be awarded was unintentional, this did not meet the level of seriousness necessary to be a breach of natural justice.

This case will primarily interest those dealing with marine structures and underwater construction. It confirms a generally inclusive position of the HGCRA, in line with Parliament’s legislative intention at the time. It will apply to all construction operations to buildings, structures or works that form or are to form part of the land, and will by virtue of the Interpretation Act 1978 also cover inland bodies of water as land covered by water. Where works are on or adjacent to the coast, they will generally fall within the scope of the HGCRA if they are within the county borders set out by the Ordinance Survey, provided these boundaries are accurate.