Do you remember the play about a football manager that sparked (in England) a feelgood factor and who boosted the sales of waistcoats sold by a particular chain of high street (and online) stores? Well, if you don't there is still time to catch a showing of the play at your local, artisan community cinema - the ones that sell avocado flavoured cashew nuts at £5 a bag. Anyway, it's worth a watch and in the meantime, why not read how His Honour Judge Stephen Davies answered the question, “Dear England, where is your boundary?” (well sort of).

Van Elle Limited v. Keynor Morlift Limited [2023] EWHC 3137 (TCC)

In this case from December 2023, the judge was asked to grant summary judgment of an adjudicator's decision in favour of VEL because the losing party, KML, hadn't paid VEL the £335,142.33 plus interest. That is ungentlemanly conduct and usually results in an immediate judicial yellow card because the policy is to enforce adjudicators' decisions save only in increasingly limited circumstances.

In the Van Elle case, we had the usual breach of natural justice argument which is akin to the aged striker in a Sunday league pub team taking a slow dive in the penalty box. This usually receives a judicial shake of the head and we all move on. Indeed, the judge rejected each alleged breach of natural justice.

But KML had a better argument (or so it thought) to avoid having to pay. It claimed:

1. the adjudicator had no jurisdiction because the parties' contract was not in ‘Dear England’ and, therefore, by virtue of section 104(6)(b) of Part II of the Housing Grants Construction and Regeneration Act 1996 (as amended), the Act did not apply at all;
2. if Part II of the 1996 Act did not apply, the adjudicator (waistcoated or not) had no jurisdiction and his decision (it was a he) was of no effect; and
3. accordingly, KML did not have to pay the £335,142.33 plus interest to VEL or lots of fees to the adjudicator.

So, what is Dear England?

This is not your everyday construction law question but it is an important one because:

1. the 1996 Act only applies to ‘construction contracts’ for the carrying out of ‘construction operations’ in England, Wales or Scotland (sections 104(1) & (6)(b) and105(1)); and
2. section 105(1) in defining ‘construction operations’ refers also to ‘land’.

What were the works in Van Elle?

The contract was for the replacement of the existing pontoon berthing and mooring piles associated with the RNLI's pontoon located at Fowey Harbour on the River Fowey, Cornwall. Like most, if not all, pontoon structures the one at Fowey comprised many moving parts: some (the pontoons) floating; some (the piles) banged into the river bed; and some (the gangways and walkways) moving freely up and down with the tides. In this case, the contract between VEL and KML concerned the mooring piles.

What was the question?

Were the works located in ‘Dear England’ or not for the purpose of section 104(6)(b) of the 1996 Act? If they were not, the 1996 Act would not apply and there was no room for a so-called hybrid contract.

What was the judicial VAR outcome?

Helpfully, the 1996 Act does not, the judge noted, contain a definition of England or, for that matter, Wales or Scotland. As such, the hypothetical ordinary lawyer on the top of the Clapham omnibus might well grab a copy of the Interpretation Act 1978 and, in turn, a copy of the relevant Ordnance Survey (OS) map for the River Fowey. Together these should establish the low water line of the river Fowey and the ‘boundary’ of England for the purpose of the 1996 Act. This would mean the foreshore exposed at low tide, i.e. the area to the landward side of this ‘boundary’, would be part of Dear England whereas the area to the seaward side would not.

Accordingly, depending on which side (landward or seaward) of this ‘boundary’ line the works in question were located would determine if they were being carried out in Dear England and, in turn, if the 1996 Act applied.

In the Van Elle case the works were on the seaward side of this boundary or low water line and, on the face of it, outside of Dear England. Therefore, KML must have been confident that the judicial VAR of an adjudicator's decision would find in its favour. Unfortunately for KML, after much investigation and cogitation, the decision was against it. This is because the judge decided that for the purposes of the 1996 Act, the boundary of Dear England did not start and end at the low water mark but extended to the mouth of the River Fowey, which was some way downstream from the where the works were. In addition, the reference to ‘land’ in section 105(1) included land covered by water.

This meant that the works in question were within ‘England’ and the adjudicator had jurisdiction to reach his decision.  Accordingly, Van Elle was granted summary judgment.

The Post Match Analysis

While it may always be a game of two halves, the section 104(6)(b) issue of whether your contract is within or without Dear England (or Wales or Scotland) is, as the judge pointed out, only likely to arise where the works are over, under or adjacent to water. As such, while the Van Elle decision makes for an excellent coffee time read, it will be of limited relevance to the everyday adjudication battles that take place, primarily, on dry land.

That all being said, one consequence of the Van Elle case is that the geographical area over which the 1996 Act applies is now larger than one might originally understood when standing atop the Clapham omnibus. By example only, the ‘internal waters’ from where the River Severn meets the sea will be within ‘England’ for the purpose of section 104(6)(b).

In 1996 we  (well, all the England fans) were singing, “football's coming home” and when Gazza popped that ball into the top-right corner of the Scottish goal, even the author was singing. Sadly, it didn't come home and neither did KML's claim that it did not have to honour the adjudicator's decision.

They think it's all over; it is now.