- February 2, 2016
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
The distinction between ‘fixtures’ and ‘fittings’ is by no means an easy one to draw and that was certainly so in one guideline case in which the High Court pondered on the status of a heavy woodworking machine which was fixed to a factory floor.
After taking delivery of the machine, company A expressed dissatisfaction with its performance and referred the dispute to a contract adjudicator. He directed the supplier of the machine, company B, to pay £125,000 in respect of defects in its operating software but it refused to pay that sum.
Company A launched High Court proceedings to enforce the adjudicator’s award but company B challenged his jurisdiction on the basis that the relevant agreement was not a ‘construction contract’ within the meaning of the Housing Grants, Construction and Regeneration Act 1996. That issue hinged on whether the machine had become a fixture of the factory following its installation or was merely a fitting.
Company A pointed to the substantial weight and size of the machine, which had taken between eight and ten days to install and which was bolted to a factory floor which had been constructed specifically for that purpose. However, company B argued that it was a stand-alone machine that could be removed without being damaged and re-sold on the second-hand market for such equipment.
The Court accepted that the machine fell within the statutory definition of ‘a structure’ and ‘industrial plant’. However, following a site inspection, it concluded that it did not form part of the factory and that it had not been annexed to the land. Its installation was not, therefore, a ‘construction operation’ within the meaning of the Act. In those circumstances, company B’s challenge to the adjudicator’s jurisdiction was arguable and it was entitled to unconditional leave to defend company A’s claim.