Fahstone Ltd v Biesse Group UK Ltd [2015] EWHC 3650 (TCC)

Case No HT-2105-000368[2015] EWHC 3650 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 18/12/2015
Before
MR JUSTICE EDWARDS-STUART
Between
FAHSTONE LIMITEDClaimantBIESSE GROUP UK LIMITEDDefendant
Mr William Webb (instructed by Wright Hassall) for ClaimantMr Robert Evans (instructed by Shakespeare Martineau) for DefendantsHearing Hearing date: 8 th December 2015
JudgmentMr Justice Edwards-Stuart :
[1]This is an application by the Claimant to enforce a decision of an adjudicator made on 21 September 2015. The dispute concerns the supply and installation of a computer numerically controlled (“CNC”) woodworking machine known as a Uniwin. The machine is used to manufacture windows and similar items.[2]The Claimant (“Fahstone”) purchased the Uniwin from the Defendant (“Biesse”) by a contract dated 19 March 2012. The Uniwin was a replacement for a smaller machine, the “Rover C”, which had previously been supplied by Biesse through a finance agreement with ING. Fahstone asserted that the Rover C was not satisfactory, and so Biesse agreed to supply the Uniwin in its place in part exchange. In addition, Biesse agreed to pay Fahstone £50,000 in settlement of Fahstone’s claims in respect of the Rover C.[3]The Uniwin was installed between about 27 August and 7 September 2012. Under the terms of the contract, it was required, within 10 weeks of installation, to produce certain test frames that could be compared with an identical set of test frames manufactured on the same machine in Italy prior to delivery. Within a further 12 weeks the Uniwin was to be capable of manufacturing more complicated frames to Fahstone’s satisfaction.[4]Unfortunately the Uniwin did not meet Fahstone’s expectations. Not only were there delays in commissioning the machine, but also Fahstone alleged that there were numerous defects both with the machine and in its software.[5]The adjudicator decided that Fahstone was entitled to £125,000 in respect of the defects in the software, together with £14,000 by way of damages for delay. Biesse has paid the £14,000 but has refused to pay the balance. It submitted to the adjudicator, and it submits now, that the adjudicator had no jurisdiction for two reasons. First, this was not a “construction contract” within the meaning of the Housing Grants Construction and Regeneration Act 1996 (as amended) (“the Act”). Second, Fahstone was not a party to the contract for the purchase of the Uniwin. The adjudicator reached a non-binding decision in Fahstone’s favour on both issues and so continued with the Referral.[6]Fahstone was represented by Mr William Webb, instructed by Wright Hassall LLP, and Biesse was represented by Mr Robert Evans, instructed by Shakespeare Martineau. I am grateful to them both for their helpful and succinct submissions.

The Uniwin and its installation - my conclusions following the view

[7]In this section of the judgment I set out the conclusions that I reached following the view on 7 November 2015 and the hearing which was held on the following day. The view was held in the presence of representatives from each party, together with their solicitors and counsel. There had been conflicting evidence in the witness statements about the method of fixing: the evidence from Fahstone being that the main structure of the Uniwin was bolted to the floor by approximately 54 bolts which had been resin grouted into the floor, whereas the evidence from Biesse was to the effect that the machine could be removed by removing nuts from the fixing bolts and that there was, therefore, no need to cut the bolts. Given this state of affairs, I was naturally concerned to see how the Uniwin had been fixed to the floor and the procedure to be adopted if it had to be removed. It must been evident to all present from the interest that I showed in the fixings and the questions that I asked the procedure for removing the machine, that these were matters that I regarded as relevant to the application.[8]The Uniwin is installed in a workshop which was purpose built for the Rover C. As I have said, it is a larger machine. It is about 6 m wide and 13.5 m long. There has been a sterile debate about the extent to which it occupies the floor area of the workshop: Estimates have varied between about 30% and over 50%. The debate is, in my view, sterile because when considering the space occupied by the machine one has to consider not only its actual footprint, but also the area around it that cannot be used for anything else (for example, the gap between the machine and the two closest walls) or which is required in order to gain access to and to use the machine. On this basis an estimate of over 50% looks much more realistic, although I very much doubt whether the precise figure matters.[9]Above the centrepiece of the machine which, for lack of a better term I will call the electrospindle station, there is a steel framework which supports a number of flexible hoses forming the machine’s dust extraction system. These hoses are linked to two large extract ducts which are in turn connected by two further large diameter flexible hoses to the main extract duct. This duct is fixed to the building and passes to its outside through the gable end wall at high level. In order to disconnect the machine from the fixed ducting the two large diameter flexible hoses have to be removed. This is not difficult (apart from the need to have a suitable ladder or scaffold) because it simply involves unscrewing the jubilee clips that keep the two flexible hoses in place.[10]Once the two large diameter flexible hoses have been removed, the electric power cable to the machine has to be unplugged and the compressed air system disconnected. Once these operations have been carried out the machine becomes freestanding apart from the fixings holding it to the floor.[11]These fixings, as I then understood them to be, consisted of 54 threaded rods (they are like bolts which have no heads), each of which is 300 mm long and, I would estimate, about 12 mm in diameter. These rods are resin grouted into holes drilled in the reinforced concrete floor so that about 150 mm or so of each rod projects above the surface of the floor.[12]The base of the machine has a number of adjustable feet which rest on the surface of the floor. At the base of each leg above the adjustable foot is a horizontal steel flange with one or two holes in it. These holes are aligned with the threaded rods so that the rod passes through the hole in the flange and is then secured with two nuts (the second of which is a locking nut). I understand that the threaded rods are there to stabilise the machine – in particular, to prevent it from vibrating and potentially moving across the floor and becoming out of level.[13]This, at least, is what I saw on the view: there are probably other places where the configuration is slightly different, but I understood that the essential feature of the threaded rod passing through a hole in the steelwork of the machine is common throughout.[14]Where the legs are exposed and access is easy, it would be the work of a moment to unscrew the two nuts so that the machine could be lifted off the threaded rods. Contrary to what has been suggested in some documents, and what the adjudicator found, I saw no bolt heads that have to be cut in order to free the machine. The understanding that I reached on the view was that it is not necessary to cut the threaded rods in order to release the machine. Indeed, I was told that in some places there would not be sufficient access to get a cutter close enough to the bolt in any event. However, as I shall explain in the next section of this judgment there is no consensus about the precise procedure that has to be adopted in order to remove the Uniwin.[15]The machine comes in about five sections, the heaviest being the long section which incorporates the electrospindle station. The understanding that I reached on the view that this section would be removed by carrying out the following essential steps:(1) Disconnect the flexible hoses above the electrospindle station.(2) Unbolt the steel frame above the electrospindle station in order to disconnect it from the body of the electrospindle station.(3) With the aid of a fork lift, truck lift up the steel frame and remove it.(4) Place at least four toe jacks under the frame of the long section, which is then jacked up a few inches so that the holes in the flange plates or steelwork are clear of the top of the threaded rods.(5) Whilst the frame is jacked up “skates” or “dollies” are inserted below the base of the frame which is then lowered onto the skates. (I have not seen these skates but I imagine that they have rotating castors so that they can be moved in any direction).(6) The part of the machine that is now supported on the skates is manoeuvred out of the workshop and onto the hard standing outside. This is done by 8-10 men.(7) Once this part of the machine is clear of the building it is lifted by a crane onto a tilt trailer or low loader. A similar process is then repeated for each of the other component parts of the Uniwin (although I suspect that in terms of sequence, the main component including the electrospindle station is probably the last to be moved).[16]I have described this process in some detail because, if correct, it shows that the machine can, and probably would, be moved without damaging or cutting the threaded rods. Of course, once the machine has been moved the rods would have to be cut flush with the surface of the floor before the space could be used for any other activity.[17]I was told at the view, and I have no reason to doubt it, that in fact the redundant ends of the threaded rods would not simply be cut off level with the floor, but would be cut (presumably with an angle grinder or similar machine) at a level slightly below the surface of the floor and the resulting damage to the surface repaired with a suitable filler. I was not told the reason for this, but I suspect that it is a result of the practical difficulty of cutting a vertical metal bar horizontally so as to leave a cut which is flush with floor level. With a standard angle grinder, that is almost impossible to do and so I anticipate that a better finish is achieved if the cut is made below the level of the floor surface thereby leaving a small crater which can subsequently be filled.[18]I note that in Biesse’s Order Acknowledgement it is said that the machine is “installed as a stand-alone machine” (see page 13). This seems to me to be an accurate description: apart from its connection to the dust extraction ducting, it is not in any way linked to any other machinery, plant or equipment.[19]The only other equipment in the workshop consists of three workbenches, which are used in connection with the Uniwin, and a vertical clamping board which is used for assembling the components manufactured by the Uniwin. Thus the workshop is a building dedicated to housing the Uniwin, or the Rover C that preceded it, or indeed any other woodworking machine that Fahstone may buy hereafter in place of the Uniwin.

The procedure for removing the Uniwin

[20]During the hearing I indicated my understanding formed at the view about the method of removal of the Uniwin (as set out above) and asked the parties to confirm that it was correct. Biesse agreed that my understanding was correct, but since Mr Aldersley was not in court Mr Webb was not able to take instructions from Fahstone. I allowed him to do so and on the following morning Wright Hassall wrote to the court setting out Fahstone’s position. In short, Fahstone submitted that the threaded rods projected up to 170 mm above the level of the floor and that the “dollies” (or skates, as I have called them) are only 110 mm high. This would mean that the dollies would have to be packed with timber blocks if the required clearance was to be achieved. Fahstone submitted that this would probably make the machine unstable and that the better approach was to cut the bolts once there was room in which to do so. Apparently, this was what was done when the Rover C was removed.[21]This struck me as plausible. Indeed, I was slightly surprised to have been told at the view that the machine could be removed by being raised to a height such that it was clear of the threaded rods. Nevertheless, Shakespeare Martineau wrote in response to the letter from Wright Hassall to point out that the machine was, in effect, already about 50-75 mm off the floor and that a toe jack would be able to raise it about 150 mm – well clear of the tops of the rods. Further, the skates came in various sizes so that there should not be an issue with stability of the machine during the move. Shakespeare Martineau also made the point that the machine would in fact be removed by professional machine movers, and that neither they nor Mr Aldersley were experts in this area. This point was accepted by Wright Hassall.[22]In spite of this conflict of views, one thing remained quite clear - which is that the Uniwin could be removed without causing any damage to the machine itself. True it is that the threaded rods would have to be cut, if Fahstone’s version of the removal procedure is correct, but then they would have had to be cut in any event in order to restore the floor to its previous position irrespective of whether or not they had been cut in order to move the machine.[23]However, it still appeared to be the position that it was incorrect to say, as is asserted at paragraph 28.10 of the Particulars of Claim, that “the Uniwin cannot be removed without cutting and removing the bolt heads”. Cutting bolt heads, as envisaged by this pleading, would involve damaging the steelwork of the machine but, as I have already pointed out, from what I was told and saw at the view there were no bolt heads to cut.

The contract point

[24]Biesse submits that Fahstone was not a proper party to the Uniwin Agreement because at the relevant time ING owned the Uniwin machine. Fahstone emphatically rejects this argument: it submits that it is a named party to the contract and that is the end of it.[25]It is reasonably clear from the documents that in December 2010 ING acquired title to the Rover C machine and thereafter hired it to Fahstone. As is usual, the hire agreement contained a clause prohibiting Fahstone from selling or otherwise disposing of the machine.[26]The contract by which Fahstone acquired the Uniwin (“the Uniwin Agreement”) contained three separate components: the purchase of the Uniwin by Fahstone for £275,000; the resale to Biesse of the Rover C, also for £275,000; and the payment by Biesse to Fahstone of £50,000 in settlement of Fahstone’s claims in respect of the Rover C. There was nothing in the agreement for the hire of the Rover C that imposed any constraint on Fahstone in respect of the first and third components of the Uniwin Agreement.[27]However, as Mr Evans rightly pointed out, Fahstone was not entitled to sell the Rover C to Biesse without ING’s consent. What happened is not entirely clear, but it is clear that from May 2011 onwards ING was aware of the proposal to sell the Rover C back to Biesse and for Fahstone to purchase the Uniwin in its place: see Biesse’s letter to ING’s agent, AF Commercial Limited, of 23 May 2011. In this letter Biesse made a request on behalf of Fahstone for a “payment holiday” of the monthly payments due under the hire agreement for about six months and explained that it would be in ING’s interests to do this because it would acquire enhanced security for its loan in the form of the Uniwin, which was said to be worth twice the value of the Rover C.[28]An invoice dated 24 September 2012 issued by Biesse recorded the sale of the Uniwin to ING: the Rover C was said to have been taken in part payment. Two days later, by a credit note dated 26 September 2012, ING reversed the transaction by which it had been sold the Rover C. In my view, these transactions did not in any way affect Fahstone’s rights acquired under the Uniwin Agreement which had been entered into six months earlier. Under that agreement Biesse assumed a number of obligations over and above that of simply transferring title in the machine to Fahstone.[29]In my judgment Biesse’s obligations to Fahstone under the Uniwin Agreement were unaffected by any transfer of title in the Uniwin to ING. Irrespective of whether or not Fahstone had the right to transfer the Rover C to ING at the time of entering into the Uniwin Agreement, and the contemporaneous documents suggest that ING was aware of the proposed transaction, Biesse ratified the arrangements by the issue of the invoice and credit note in September 2012.[30]The transfer of title in the Uniwin to ING in September 2012 might have affected the measure of damages recoverable by Fahstone in any claim against Biesse in respect of defects in the machine, but any such difficulty has been removed by the fact that the liability to ING was discharged in February 2014 when Fahstone entered into a finance agreement with another company, Aldermore Bank plc. That agreement, and the release of any liability to ING, preceded the referral of this dispute to adjudication.[31]But for the fact that Mr Evans was able to deploy a seemingly plausible argument to the effect that Fahstone was not a party to the Uniwin Agreement by reason of the involvement of ING, I would have regarded the point is unarguable. But in spite of Mr Evans’s valiant argument, in my view the submission is and always has been hopeless for the reasons that I have given.[32]Mr Evans submitted that the court should not give summary judgment at this stage because there has not been full disclosure of the relevant contractual documents by Fahstone. As a matter of fact, that may be so, but in my judgment there is no prospect whatever that any further disclosure will affect my reasons for rejecting Biesse’s contractual argument.

The Housing Grants, Construction and Regeneration Act 1996 (“the Act”)

[33]Part II of the Act applies to construction contracts entered into after the relevant commencement date, and construction contracts are those concerned with the carrying out of construction operations.[34]Section 105(1) defines construction operations as follows:
"(1) In this Part "construction operations" means, subject as follows, operations of any of the following descriptions— (a) construction, alteration, repair, maintenance, extension, demolition or dismantling of buildings, or structures forming, or to form, part of the land (whether permanent or not); (b) construction, alteration, repair, maintenance, extension, demolition or dismantling of any works forming, or to form, part of the land, including (without prejudice to the foregoing) walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, reservoirs, water-mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence; (c) installation in any building or structure of fittings forming part of the land, including (without prejudice to the foregoing) systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or security or communications systems; . . ."
[35]Section 105(2) provides that:
"(2) The following operations are not construction operations within the meaning of this Part — (a) drilling for, or extraction of, oil or natural gas; (b) extraction (whether by underground or surface working) of minerals; tunnelling or boring, or construction of underground works, for this purpose; (c) assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is— (i) nuclear processing, power generation, water or effluent treatment, or (ii) the production, transmission, processing or bulk storage (other than warehousing) of chemicals, pharmaceuticals, oil, gas, steel or food and drink; (d) manufacture or delivery to site of— (i) building or engineering components or equipment, (ii) materials, plant or machinery, or (iii) components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or for security or communication systems, except under a contract which also provides for their installation; . . ."
[36]The issue on this application is whether the installation of the Uniwin was or was not a construction operation.

The authorities

[37]The leading case on this topic is Savoye and Savoye Ltd v Spicers Ltd [2015] BLR 151, a comprehensive and authoritative decision of Mr Justice Akenhead. That case concerned a contract for the design, supply, installation and commissioning of a new conveyor system at the defendant’s factory. The new conveyor system was to run through an existing warehouse, which included a mezzanine floor, and an extension to that warehouse. The conveyor system ran in three very long loops and was almost 1 km in length. The conveyor received cardboard cartons, marked with a specific bar code which would then be read at different points along the line, directing the carton to those parts of the conveyor system where the particular goods which were to go into the carton were located. The carton would then be automatically directed towards the end of the conveyor system where a lid would be put on it and labels attached, from which point it would be directed out onto loading bays for onward transmission by lorry. Thus the conveyor was one part, albeit a crucial part, of an integrated process within the factory.[38]At paragraphs 15-18 of his judgment, Akenhead J said this: “15. One can thus break down these definitions into what are (Section 105(1)) and are not (Section 105(2)) to be considered as "construction operations". Thus, it can be seen that construction and engineering works are generally covered by the definition but certain types (for instance nuclear processing, power generation and water or effluent treatment works) are excluded. The reasons for the exclusions from the ambit of the HGCRA are historical and, as appears from the Parliamentary debates on the Bill, the arguments of various interest groups persuaded Parliament that they should be excluded from its ambit. There is no particular logic in their exclusions other than that the industries in question were considered to be sufficiently important and (possibly) strategic to justify exclusion.16. The concentration in this case has been on Sections 105(1) (a) to (c), it being argued by Counsel for Spicers that machinery of the sort to be provided by Savoye was not covered by any of the expressions used there. I can start with the word "construction"; this obviously covers building but the word "construction", with its Latin origin in the verb "construere", goes wider than building and, broadly, means "putting together"; "struere" means in Latin to build, prepare, place or arrange and with the addition of the prefix "con" it involves a bringing together of different elements to create for instance a building. So far as the meaning of the word "building" as a noun is concerned, it clearly covers houses, offices, commercial premises, factories and warehouses, it being one of those words in respect of which it is fairly easy to say what is or is not a building; for instance, a tent is, not usually, a building, although a large tented structure such as the O² arena (formerly the Millennium Dome) would be classified as a building.17. The word "structure" also has as its Latin origin the verb "struere" and means something which has been placed, built, arranged or prepared; in common parlance, it has a connotation as having a function of supporting or servicing something else; thus, steelwork for a building is structural and a structure. A house or office building is a structure; Nelson's Column is a structure. Things within a building may be a separate structure such as a mezzanine floor or steelwork to support heavy machinery. Lord Denning LJ as he then was, said in a rating case, Cardiff Rating Authority and Cardiff Assessment Committee v Guest Keen Baldwin's Iron and Steel Company Ltd [1949] 1 KB 385, when considering whether heavy but movable tilting furnaces were in the nature of a structure, at page 395-6: "The tilting furnaces come within "furnaces" and the mains come within "flues" and "flumes and conduits" [as referred to in a statutory instrument]; but nevertheless, in order to be rateable each must be "a building or a structure" or "in the nature of a building structure". The learned recorder has held that they are not structures, or in the nature of structures, and [counsel] says that his finding is a finding of fact with which an appellate court should not interfere… In this case the learned recorder seems to have thought that these were not structures or in the nature of structures because they were movable. In my opinion, that was a misdirection. A structure is something which is constructed, but not everything which is constructed is a structure. A ship, for instance, is constructed, but it is not a structure. A structure is something of substantial size which is built up from component parts and intended to remain permanently on a permanent foundation; but it is still a structure even though some of the parts may be movable, as, instance, about a pivot. Thus, a windmill or a turntable is a structure. A thing which is not permanently in one place is not a structure, but it may be "in the nature of a structure" if it has a permanent site and has all the qualities of the structure, say that it is on occasion moved on or from its site. Thus, a floating pontoon, which is permanently in position as a landing stage beside a pier, is "in the nature of a structure," even though it moves up and down with the tide and is occasionally removed for repairs or cleaning. It has, in substance, all the qualities of a landing stage built on piles so, also a transporter gantry is "in the nature of a structure," even though it is moved along its site. It has the same qualities as a fixed gantry, save that it moves on its site."18. Jenkins J as he then was said in the same case: "It would be undesirable to attempt, and indeed, I think impossible to achieve, any exhaustive definition of what is meant by the word "is or is in the nature of a building or structure". They do, however, indicate certain main characteristics. The general range of things in view consists of things built or constructed. I think, in addition to coming within this general range, the things in question must, in relation to the hereditament, answer the description of buildings or structures, or, at all events, be in the nature of buildings or structures. That suggests built or constructed things of substantial size: I think of such size that they either have been in fact, or would normally be, built or constructed on the hereditament as opposed to being brought onto the hereditament ready-made. It further suggests some degree of permanence in relation to hereditament, i.e., things which once installed on the hereditament would normally remain in situ and only be removed by a process amounting to pulling down or taking to pieces. I do not, however, mean to suggest that size is necessarily a conclusive test in all cases, or that a thing is necessarily removed from the category of buildings or structures or things in the nature of buildings or structures, because by some feat of engineering or navigation it is brought to the hereditament in one piece…" "The tilting furnaces come within "furnaces" and the mains come within "flues" and "flumes and conduits" [as referred to in a statutory instrument]; but nevertheless, in order to be rateable each must be "a building or a structure" or "in the nature of a building structure". The learned recorder has held that they are not structures, or in the nature of structures, and [counsel] says that his finding is a finding of fact with which an appellate court should not interfere… In this case the learned recorder seems to have thought that these were not structures or in the nature of structures because they were movable. In my opinion, that was a misdirection. A structure is something which is constructed, but not everything which is constructed is a structure. A ship, for instance, is constructed, but it is not a structure. A structure is something of substantial size which is built up from component parts and intended to remain permanently on a permanent foundation; but it is still a structure even though some of the parts may be movable, as, instance, about a pivot. Thus, a windmill or a turntable is a structure. A thing which is not permanently in one place is not a structure, but it may be "in the nature of a structure" if it has a permanent site and has all the qualities of the structure, say that it is on occasion moved on or from its site. Thus, a floating pontoon, which is permanently in position as a landing stage beside a pier, is "in the nature of a structure," even though it moves up and down with the tide and is occasionally removed for repairs or cleaning. It has, in substance, all the qualities of a landing stage built on piles so, also a transporter gantry is "in the nature of a structure," even though it is moved along its site. It has the same qualities as a fixed gantry, save that it moves on its site." "It would be undesirable to attempt, and indeed, I think impossible to achieve, any exhaustive definition of what is meant by the word "is or is in the nature of a building or structure". They do, however, indicate certain main characteristics. The general range of things in view consists of things built or constructed. I think, in addition to coming within this general range, the things in question must, in relation to the hereditament, answer the description of buildings or structures, or, at all events, be in the nature of buildings or structures. That suggests built or constructed things of substantial size: I think of such size that they either have been in fact, or would normally be, built or constructed on the hereditament as opposed to being brought onto the hereditament ready-made. It further suggests some degree of permanence in relation to hereditament, i.e., things which once installed on the hereditament would normally remain in situ and only be removed by a process amounting to pulling down or taking to pieces. I do not, however, mean to suggest that size is necessarily a conclusive test in all cases, or that a thing is necessarily removed from the category of buildings or structures or things in the nature of buildings or structures, because by some feat of engineering or navigation it is brought to the hereditament in one piece…"[39]Akenhead J went on to review a number of other pre-Act authorities and then set out his conclusions in the following terms:
“36. Drawing all these threads together, and in the context of Sections 105(1) and (2) of the HGCRA, the law and practice can be said to be as follows (the following not intending necessarily to be an exhaustive definition of all requirements): (a) "Construction operations" under Section 105(1)(a) to (c) of the HGCRA involve the various types of work set out in those paragraphs (construction, alterations, repair, maintenance, extension, demolition or dismantling or installation in any building or structure of fittings) forming or to form part of the land. Other provisions such as Section 105(1)(d) to (f) provide that other ancillary operations (cleaning during construction, scaffolding and decoration) also fall within the definition, whether or not it can be said that such work was or was to be "part of the land". (b) One must remember that HGCRA is engaged by a construction contract for the carrying out of "construction operations"; therefore the Act is engaged even if the construction operations are not completed, properly or at all. (c) Whether something forms or is to form part of land is ultimately a question of fact and this involves fact and degree. (d) The factual test of whether something forms or is to form part of the land is informed by but not circumscribed by principles to be found in the law of real property and fixtures. Something which is or is to become a "fixture" will, almost invariably, "form part of the land" for the purposes of the HGCRA. (e) There is some distinction to be drawn between fixtures, that is, things which are attached to buildings or land, and the land itself. In Elitestone, Lords Lloyd and Clyde recognised that distinction between the land and the building itself on the one hand (effectively the same thing) and fixtures fixed to or within a building on the other. (f) To be a fixture or to be part of the land, an object must be annexed or affixed to the land, actually or in effect. An object which rests on the land under its own weight without mechanical or similar fixings can still be a fixture or form part of the land. It is primarily a question of fact and degree. (g) In relation to objects or installations forming part of the land, one can and should have regard to the purpose of the object or installation in question being in or on the land or building. Purpose is to be determined objectively and not by reference simply to what one or other party to the contract, by which the object was brought to or installation brought about at the site, thought or thinks. Primarily, one looks at the nature and type of object or installation and considers how it would be or would be intended to be installed and used. One needs to consider the context, objectively established. If the object or system in question was installed to enhance the value and utility of the premises to and in which it was annexed, that is a strong pointer to it forming part of the land. (h) Where machinery or equipment is placed or installed on land or within buildings, particularly if it is all part of one system, one should have regard to the installation as a whole, rather than each individual element on its own. The fact that even some substantial and heavy pieces are more readily removable than others is not in itself determinative that the installation as a whole does not form part of the land. Machinery and plant can be structures, works (including industrial plant) and fittings within the context of Sections 105(1)(a) to (c) of the HGCRA. (i) Simply because something is installed in a building or structure does not mean that it necessarily becomes a fixture or part of the land. Mr Justice Dyson in the Nottingham Community Housing case was not saying otherwise. A standing refrigerator or washing machine can be installed in a building but nobody, thinking rationally, would suggest that they had become fixtures or part of the land. (j) The fixing with screws and bolts of an object to or within a building or structure is a strong pointer to the object becoming a fixture and part of the land but it is not absolutely determinative. Many of the old cases referred to above demonstrate that such fixings did point towards the object so affixed being part of the land. However, the Gibson Lea case produced a different answer, even though some items were affixed by nails and screws. (k) Ease of removability of the object or installation in question is a factor which is a pointer to whether it is to be treated as not forming part of the land. One can have regard however to the purpose which the object or installation is serving, that purpose being determined objectively. The fact that the fixing can not be removed save by destroying or seriously damaging it or the attachment is a pointer to what it is attaching being part of the land. A significant degree of permanence of the object or installation can point to it being considered as part of the land.” (a) "Construction operations" under Section 105(1)(a) to (c) of the HGCRA involve the various types of work set out in those paragraphs (construction, alterations, repair, maintenance, extension, demolition or dismantling or installation in any building or structure of fittings) forming or to form part of the land. Other provisions such as Section 105(1)(d) to (f) provide that other ancillary operations (cleaning during construction, scaffolding and decoration) also fall within the definition, whether or not it can be said that such work was or was to be "part of the land". (b) One must remember that HGCRA is engaged by a construction contract for the carrying out of "construction operations"; therefore the Act is engaged even if the construction operations are not completed, properly or at all. (c) Whether something forms or is to form part of land is ultimately a question of fact and this involves fact and degree. (d) The factual test of whether something forms or is to form part of the land is informed by but not circumscribed by principles to be found in the law of real property and fixtures. Something which is or is to become a "fixture" will, almost invariably, "form part of the land" for the purposes of the HGCRA. (e) There is some distinction to be drawn between fixtures, that is, things which are attached to buildings or land, and the land itself. In Elitestone, Lords Lloyd and Clyde recognised that distinction between the land and the building itself on the one hand (effectively the same thing) and fixtures fixed to or within a building on the other. (f) To be a fixture or to be part of the land, an object must be annexed or affixed to the land, actually or in effect. An object which rests on the land under its own weight without mechanical or similar fixings can still be a fixture or form part of the land. It is primarily a question of fact and degree. (g) In relation to objects or installations forming part of the land, one can and should have regard to the purpose of the object or installation in question being in or on the land or building. Purpose is to be determined objectively and not by reference simply to what one or other party to the contract, by which the object was brought to or installation brought about at the site, thought or thinks. Primarily, one looks at the nature and type of object or installation and considers how it would be or would be intended to be installed and used. One needs to consider the context, objectively established. If the object or system in question was installed to enhance the value and utility of the premises to and in which it was annexed, that is a strong pointer to it forming part of the land. (h) Where machinery or equipment is placed or installed on land or within buildings, particularly if it is all part of one system, one should have regard to the installation as a whole, rather than each individual element on its own. The fact that even some substantial and heavy pieces are more readily removable than others is not in itself determinative that the installation as a whole does not form part of the land. Machinery and plant can be structures, works (including industrial plant) and fittings within the context of Sections 105(1)(a) to (c) of the HGCRA. (i) Simply because something is installed in a building or structure does not mean that it necessarily becomes a fixture or part of the land. Mr Justice Dyson in the Nottingham Community Housing case was not saying otherwise. A standing refrigerator or washing machine can be installed in a building but nobody, thinking rationally, would suggest that they had become fixtures or part of the land. (j) The fixing with screws and bolts of an object to or within a building or structure is a strong pointer to the object becoming a fixture and part of the land but it is not absolutely determinative. Many of the old cases referred to above demonstrate that such fixings did point towards the object so affixed being part of the land. However, the Gibson Lea case produced a different answer, even though some items were affixed by nails and screws. (k) Ease of removability of the object or installation in question is a factor which is a pointer to whether it is to be treated as not forming part of the land. One can have regard however to the purpose which the object or installation is serving, that purpose being determined objectively. The fact that the fixing can not be removed save by destroying or seriously damaging it or the attachment is a pointer to what it is attaching being part of the land. A significant degree of permanence of the object or installation can point to it being considered as part of the land.”
[40]I respectfully agree with this comprehensive and helpful summary and I propose to adopt it and apply it.[41]The only other authority that I consider it is necessary to mention is the decision of His Honour Judge Seymour QC in Gibson Lea Retail Interiors Ltd v Makro Service Wholesalers Ltd [2001] BLR 407, where the contract in question concerned shop-fitting work in supermarkets. The evidence in that case was that much of the equipment, such as gondolas and book and food display units, did not form part of the land as their central and important characteristic was that they were movable equipment the layout of which was altered “as goods come and go and the seasons change”. Some of the gondolas and display units were screwed to the walls or floor in order to stabilise them. Judge Seymour referred to a decision of the Court of Appeal in Horwich v Symond (1915) 84 LJKB 1083, in which Buckley LJ, giving the leading judgment, said at page 1087:
“The mere fact of some annexation to the freehold is not enough to convert a chattel into realty.”
[42]The judge also mentioned a submission of counsel in which it was submitted that “if the purpose of any annexation was the better use or enjoyment of the chattel as a chattel it was not normally to be considered a fixture”. I consider that there is some force in that submission: if the purpose of, say, screwing a cupboard to a wall is to prevent it from falling over, rather than to make it part of the fabric of the building, that points quite strongly against it becoming a fixture.

The submissions of the parties

[43]Biesse raised as a threshold point a submission that the Uniwin did not fall within any of the relevant definitions in section 105 of the Act. Mr Evans submitted that the nearest definitions were those of “structure” and “industrial plant” but neither, he said, was apt to describe the Uniwin. Mr Evans submitted that the Uniwin could not properly be considered to be a structure, any more than could a table or a chair. It was simply not an appropriate description of the machine.[44]The parts of the judgment of Akenhead J that I have quoted above, and in particular the passages cited by him from the Cardiff Rating case, suggest that for something to be a structure within the meaning of section 105 it must have, at least, the following characteristics: it must be built or constructed as part of the relevant work - as opposed to being delivered ready-made; it must be intended to remain permanently in one place, although it does not matter if it has movable parts (such as a turntable or a windmill); it must be reasonably substantial (which I take to mean something not easily moved).[45]It seems to me that the Uniwin satisfies all these criteria, even though one would not, perhaps, as a matter of ordinary language refer to it as a structure. It has to be assembled on site, once erected it is to remain in the same place and it is substantial in size. Whilst I agree with Akenhead J that, in common parlance, the word structure has a connotation as having a function of supporting or servicing something else, it seems to me that it is sufficient for something to be a structure that it has components that are there to support other parts - as, for instance, in a house. In my judgment, therefore, the Uniwin is a structure within the meaning of section 105.[46]This makes it unnecessary for me to consider whether or not it is also “industrial plant”. However, I note that the New Shorter Oxford English Dictionary defines plant as:
“Machinery, fixtures, and apparatus used in an industrial or engineering process; a single machine or large piece of apparatus.”
Larousse’s Dictionary of Science and Technology defines plant as follows:
“The machines, tools and other appliances required to carry on a mechanical or constructional business.”
[47]On the basis of these definitions, it seems to me that the Uniwin can also properly be described as industrial plant.[48]In support of its contention that the Uniwin formed part of the land Fahstone relied on the following factors:(1) The substantial size and weight of the machine.(2) The machine was bolted to the floor and that the bolts would need to be cut in order to remove the machine.(3) It took 8-10 days to install the machine (although this period was not agreed, it was clearly a period measured in days and not hours).(4) The machine was installed on a specially constructed floor.(5) There was a 10 m conveyor belt incorporated into the machine and the machine was connected to a fixed air extraction system.[49]Biesse made the following further submissions on the issue of whether the installation of the machine was a construction operation.(1) The Uniwin was very much smaller than the conveyor system in Savoye.(2) It was a stand-alone machine that was removable and re-saleable, and that there was a second-hand market for such machines.(3) The Uniwin could be removed without damage (or little and not serious damage) to the building or to itself. It accepted that the threaded rods bonded into the floor would remain, although they can be removed without causing any significant damage to the floor. The compressed air, power and extract facilities to the Uniwin can readily be disconnected.(4) Whilst there was a degree of permanence in relation to the conveyor system in Savoye, the Uniwin could be removed if Fahstone wish to sell the property or to give up making windows.(5) Biesse relied also on the terms of the hire purchase agreement, which required the machine to be re-delivered to ING at the expiry of the hire period if any option to buy it had not been exercised. The fact that such an agreement could be made was, submitted Mr Evans, inconsistent with treating the machine as part of the building.[50]Overall, Biesse submitted that the characteristics of the machine were such that the Act could not have been intended to apply to its installation.

The relevant characteristics of the Uniwin

[51]In support of Fahstone’s case, and as matters then stood, I regarded the following as being the criteria of most weight:(1) The size and weight of the machine: although considerably smaller than the conveyor in Savoye, it is clearly quite different from a supermarket gondola.(2) The number of fixings to the floor, although, again, many, many times fewer than those used in the Savoye conveyor.(3) The fact that efficient removal of the machine will probably require the cutting of many of the threaded rods, even though the machine could probably be moved (albeit with more difficulty) without having to do this.(4) The fact that it was probably not intended that the machine would be moved during its working life.[52]Against these, the factors that seemed to me to be of most significance in support of Biesse’s case were:(1) The fact that the machine is a stand-alone machine that does not form part of any larger configuration of plant at Fahstone’s premises.(2) That the fixings consist of threaded rods which, although fixed to the floor, can be freed from the machine simply by removing the nuts.(3) The existence of a second hand market for machines of this type.(4) The existence of hire purchase agreements for machines of this type which contained provisions for their return to the hirer if not purchased at the end of the term.

My initial conclusions on the “construction operations” point

[53]I agree with Akenhead J that this is very much a question of fact and degree and, therefore, of impression. I have to confess that my initial view was that the installation of this substantial piece of machinery probably was a construction operation. However, having seen the machine in situ and after consideration of the submissions of the parties, I came to the clear conclusion that the Uniwin does not form part of the workshop, and therefore of Fahstone’s land, and so its installation at Fahstone’s premises was not a construction operation within the meaning of the Act.[54]The fact that it is bolted to the floor of the workshop is clearly a strong pointer in support of the submission that the Uniwin forms part of the land. However, as I have mentioned, the threaded rods are there to stabilise the machine and to prevent it from vibrating. If it was not restrained, the vibration could cause the machine to move across the floor and become out of level. However, it is clear that the nuts on the threaded rods can fairly readily be removed so as to free the machine. If this is correct, removal of the machine should not damage it in any way.[55]But against this is what seems to me to be the very powerful factor that not only is there a ready second hand market for machines such as the Uniwin, but also that these machines can be the subject of hire purchase agreements under which the property in the machine remains with the finance company so that it cannot be treated as forming part of the land on which it sits. This is possible because the machine is a stand-alone machine and is not integrated with other equipment, plant or machinery on the site (apart from the dust extract system).[56]I regarded it as important the fact that the fixings, namely the threaded rods, are not bonded to the machine in any way, such as by welding, for example. Had that been the case, then there would have been, in effect, a “bridge” linking the machine to the floor so that the machine could not be removed without breaking that bridge. Had it been the case that the machine was fixed to the floor by bolts which had been resin grouted into the floor, then it would not have been possible to free the machine without grinding off the heads of the bolts and damaging the machine, albeit perhaps cosmetically only, in the process. Had this been the situation in the case of the Uniwin, I would have found the “construction operations” point much more difficult. Indeed, as I have mentioned, the first thing for which I looked when I arrived at the workshop was the presence of the so-called bolts. As I have said, all I found were the threaded rods to which the base plate was secured with standard nuts.[57]It seemed to me that in this case, and on the basis of what I saw at the view and was told at the hearing, the Uniwin was bolted to the floor in order to prevent it from vibrating and therefore moving out of level. In other words, it was necessary to bolt it to the floor so that it would work properly.[58]I considered it most unlikely that if Fahstone, or Mr Aldersley, had decided to sell their property to a buyer who was not interested in carrying on the business of woodworking, that the Uniwin would have been left in situ as part of the land. I considered it far more likely that it would have been removed and sold separately as a second hand woodworking machine.

Further evidence submitted following circulation of the draft judgment

[59]Having circulated the draft judgment - which was very substantially in the terms set out above - I received a note from Fahstone’s counsel which asserted that there were other types of fixings in addition to the threaded bars and that this was recorded in some of the photographs in the hearing bundle. These were said to show fixings through the feet of the machine and fixings through flat metal plates which secured the barrier screens. I was told that a further witness statement would be served on behalf of Fahstone in order to clarify the number and nature of the fixings of this type.[60]I then received a witness statement of Mr Harris, of Wright Hassall, who said that he had been told by Mr Damian Green, the Production Director of Fahstone, that there were about 25 bolts which were directly fixed into the concrete floor, and that these bolts were resin grouted to the floor. He said that on 15 December 2015 Mr Green had tried to remove two of the bolt heads using a wrench and in one case the head of the bolt had sheared off.[61]The photographs attached to that witness statement do indeed show examples of bolts securing the feet of the machine to the floor and in other cases bolts which appear to secure the flange plates at the base of the barrier screens to the floor. In relation to the former the photographs appear to show also that the feet are connected to the machine by a threaded bar which looks as if it can turn independently of the foot and which has a nut which enables the height of the base of the machine to be adjusted. This suggests, although I do not know for certain, that the threaded bar connecting the foot to the machine may pass through a smooth bored hole in the base of the machine so that, once any relevant nuts have been undone, the machine could be lifted off the foot. Alternatively, it may be the case that the machine cannot be removed without unscrewing or cutting the bolt that secures the foot to the floor. However, although I suspect that the former is the case, I must emphasise that this is speculation based on what the photographs appear to show. I do not regard the position as established clearly one way or the other on the balance of probability.[62]So far as the bolts securing the barrier screens are concerned, it certainly appears from the witness statement of Mr Harris that these are resin grouted to the floor so that they cannot be removed by simply unscrewing the bolt.[63]But matters have not stopped there. Shakespeare Martineau have told the court, in a letter dated 17 December 2015, that Mr Bulmer, the managing director of Biesse, does not agree with the contents of the witness statement of Mr Harris. According to the letter, Mr Bulmer says that the bolts referred to by Mr Harris have been screwed into expanding fastenings in the floor (similar to Rawlplugs). He points out, self-evidently, that if the bolts had been resin bonded it would not have been possible to tighten them either before the resin set (there being nothing to tighten them against) or after the resin had set (because the bolt would then be firmly fixed). Mr Bulmer says that, in any event, these bolts are not sufficient to secure the machine to the floor, because they appear to be standard 50 mm or 70 mm M8 bolts and would not be strong enough. Mr Bulmer’s reported opinion is that the sole purpose of the bolts through the feet is to prevent movement of the feet across the floor, and the bolts securing the barrier screens in place are there to do no more than that.[64]This evidence, such as it is and taken as a whole, throws some doubt on the conclusions that I reached following the view and the hearing about the nature and extent of the fixings by which the Uniwin is secured to the floor and which I have set out in the earlier sections of this judgment. However, the new evidence falls far short of persuading me that the conclusion I reached about the extent to which the machine was permanently secured to the floor was wrong.

The disposal of the application

[65]This is Fahstone’s application for summary judgment and the burden is on Fahstone to establish its case, so far as it turns on questions of fact, on the balance of probability. My conclusion remains that it has not done so because I consider now that there is at least a triable issue about the nature and extent of the fixings by which the Uniwin is fixed to the floor of the workshop. On this basis, therefore, I consider that on the “construction operations” point Biesse is entitled to unconditional leave to defend.[66]The parties have now agreed on an appropriate form of order for the disposal of this application.

Cited in 1 later judgment