Section 104(6) of the Housing, Grants, Construction and Regeneration Act 1996 (the "Act") states that the Act "applies only to construction contracts which…relate to the carrying out of construction operations in England, Wales or Scotland" and goes on to define what those construction operations are. But what is meant by "England" and do offshore construction works fall within the remit of section 104(6) of the Act?
This was the interesting but complex question posed by the defendant in a recent TCC decision in Van Elle Ltd v Keynvor Morlift Ltd [2023] EWHC 3137 (TCC).
Background
The parties entered into a contract ("the Contract") in respect of pile replacement works at a pontoon at Fowey Harbour in the river Fowey in Cornwall. A dispute arose under that contract which was referred to adjudication. Van Elle Ltd ("VEL") then sought summary judgment to enforce the decision of the adjudicator. Keynvor Morlift Ltd ("KML") defended the enforcement action on the grounds of jurisdiction and breach of natural justice.
Where does England end?
KML's jurisdiction challenge was broadly concerned with where England ends for the purposes of whether the Act applied to the works to the pontoon carried out under the Contract – given that those works largely took place on an offshore pontoon, rather than on dry land.
The Act, however, does not provide a definition of what "England" actually is. The defendant thus pointed to Schedule 1 of the Interpretation Act 1978 and the Local Government Act 1972 which together broadly stated that "England" means a collection of counties to be delineated by the Ordnance Survey ("OS"). The OS shows the pictorial representation of the "extent of the realm" ("EOR") on the OS election map, which took the seawards extent of the EOR as the low tide level, except where that was already included within a local government and parliamentary area - in which case it is also shown as included.
In its deliberations, the court considered various international conventions, the Territorial Waters Order in Council 1964 (the "1964 Order") and the Territorial Sea (Baselines) Order 2014, which give effect to provisions from the United Nations Convention on the Law of the Sea ("UNCLOS"). The court was ultimately persuaded that "England" extends to the "low-water line" used to measure the "territorial sea" by the 1964 Order which states "…the baseline from which the breadth of the territorial sea adjacent to the United Kingdom, the Channel Islands and the Isle of Man is measured shall be low-water line along the coast, including the coast of all islands comprised in those territories". The court held that section 104(6) of the Act applies to construction works taking place on the seaward extent of the baseline as shown on the OS election map. In terms of mouth of rivers, the court clarified that section 105(1) of the Act included land covered by bodies of water, such as river Fowey.
The court's decision was then in favour of VEL - the contract for piling works fell within the scope of construction operations in England, Part 2 of the Act applied, and the adjudicator's decision was enforceable.
What does this mean for the industry?
This is of significance for the construction industry because the scope of territorial application has been clarified for the first time since the Act was introduced. The territorial application may have significant implications for parties wishing to adjudicate on disputes involving construction works in river mouths, the sea, or other open water which may or may not be covered by the terms of the Act. Therefore, this judgment is helpful in providing guidance for parties entering into construction contracts, particularly in relation to offshore operations as to the application of the Act.
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