In Universal Sealants (UK) Ltd (t/a USL Bridgecare) v Sanders Plant and Waste Management Ltd, the TCC predictably held that the supply of concrete on a construction project was not caught by the HGCRA and fell within the exclusion in s 105(2)(d).
The facts
The claimants, USL, were engaged to carry out works on the A1 in Gateshead. The scope of works included the removal of existing expansion joints and installation of new ones. Sanders (the defendants) were in turn engaged by USL to supply concrete for these works. Sanders supplied the wrong grade of concrete, leading to it being broken out and reinstalled. The subsequent dispute was referred to adjudication and the adjudicator decided that Sanders should pay £52,259 to USL for breach of contract and damages.
One of the two issues presented to the judge was whether or not the delivery of concrete is caught by the HGCRA, as the exclusion under s 105(2)(d) states that “delivery to site of...materials” are not “construction operations”.
Judgment
Jefford J deliberated whether the delivery of concrete was either included within “construction operations” (under s 105(1)(e) which specifically lists “roadworks”) or whether it was excluded by virtue of simply being delivered materials. She noted that s 105(2)(d) also contains an exception where, if materials are to be installed, that work then falls back within “construction operations”.
The judge said concrete was an “unusual material” which once mixed, started to set and therefore could not be brought to site and stored like bricks or blocks, and this meant that delivery and installation were indivisible. Both sides sought to rely on this in support of their respective arguments.
Jefford J concluded that “pouring (concrete) is, in these circumstances, part of the delivery and not an additional act of installation involving some work on, or related to, the materials”, and therefore declined to grant summary judgment in favour of the adjudication decision.
Comment
Whilst the decision in USL v Sanders is not surprising, it raises an interesting point of discussion. The HGCRA was enacted to encourage cash-flow (what Lord Denning called the “lifeblood” of the industry), and yet the exclusion for material supply places a barrier between subcontractors and the suppliers who support them – arguably those most in need of assistance with cash-flow. It is notable that since the inception of the HGCRA, many jurisdictions (Malaysia, Singapore, New South Wales) have introduced adjudication legislation which catches “supply only” contracts. Is it time for a re-think in the U.K.?