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Manor Mouldings (NI) Ltd v Construction Industry Training Board (Appeal Against Decision) [2004] NIIT 377_04 (30 September 2004)

THE INDUSTRIAL TRIBUNALS

CASE REF: 377/04

APPELLANT: Manor Mouldings (NI) Limited

RESPONDENT: Construction Industry Training Board

DECISION ON APPEAL AGAINST ASSESSMENT OF THE CONSTRUCTION INDUSTRY TRAINING BOARD

The unanimous decision of the tribunal is that the appeal be dismissed.

Appearances:

The applicants were represented by Mr Crothers, Solicitor of Brangam Bagnall & Co, Solicitors.

The respondent was represented by Mr Coyle, Barrister-at-Law, instructed by Babington & Croasdaile, Solicitors.

Preliminary Point

1. It was agreed between the parties that the proper appellant in these proceedings was not Mr Gerard Doherty himself, the Managing Director of the company, but the company, Manor Mouldings (NI) Limited, the first-named appellant is dismissed.

Summary Reasons

2. Mr Gerard Doherty the Managing Director of the appellant company explained that the company made plaster mouldings for attachment to buildings both inside and outside. Forty five per cent of production was for internal mouldings and fifty five per cent were external concrete mouldings. The mouldings are purely decorative additions to houses and buildings and are not structural. He described the mouldings as embellishments to buildings. There is also a small element of fibre glass work carried out by the business but this is not of a structural nature. The output of the factory is taken up in Northern Ireland and Republic of Ireland markets. Mr Doherty explained that of his workforce, half would be manufacturing the mouldings and the other half would be fitting them on premises. The company was also becoming increasingly involved in the manufacture of mouldings and the sale of them to other building companies who themselves installed them.
3. Mr Doherty went on to explain that the reinforcement of the mouldings was sometimes with fibre glass, as for plaster mouldings for the inside of buildings, whilst the concrete mouldings had no fibre glass reinforcement.
4. The tribunal was asked to look at a substantial bundle of invoices of the respondents showing the type of mouldings supplied to both the building trade and to individual customers. These showed that quite a few of the mouldings were supplied to other trade customers but there were many invoices showing installation as well as supply.
5. In connection with the installation contract, the mouldings would be manufactured by the respondent, who would then transport them to the site where their employees would fit them to the inside and the outside of the properties. Sometimes a moulding would have to be replaced, then repair work would be carried out by the respondent before the building was completed.
6. The issue for the tribunal was whether the company's activities were such as to render the company liable to pay the levy imposed by the Construction Industry Training Board. That board was set up under a statutory scheme to provide training in the construction industry. The 'scope' definition is contained in Schedule 1 of the Industrial Training Act (NI) 1964. The provision for payment of the actual levy is dealt with on an annual basis by a Levy Order. The relevant Order provides for a levy to be imposed on an employer in respect of a construction establishment at a particular percentage of the relevant earnings paid to the employer's employees. The levy order defines a construction establishment as 'an establishment in Northern Ireland engaged wholly or mainly in the construction industry…'. It goes on to define 'construction industry' as any one or more of the activities mentioned in the Schedule to the Construction Board Order, which ultimately relates back to the Schedule to the Industrial Training Act (NI) 1964 as previously mentioned.
7. Paragraph 1 of the Schedule is drawn in very wide terms. The relevant portions include "all operations in

(i) The construction ... of a building.

(vi) The provision or continued provision for any building or other construction … of water, gas, lighting, heating or ventilation, being operations undertaken in, upon, above, or under the building or the close, curtilage or precincts thereof, or such construction or work, or any site above mentioned".

They are also stated to include "operations in connection with sale, packing, warehousing, distribution or transport" when those activities are carried out in association with or in conjunction with any of the construction activities which have been named above.

7. On behalf of the applicant it was submitted by Mr Crothers that the activities of the applicants were decorating and embellishing the buildings by attaching plaster mouldings internally, or concrete mouldings externally. These could be removed from the building without causing any structural damage. These were therefore not operations of a type referred to in Schedule 1 of the Act which stated:

1(a)(i) All operations in the construction, alteration, repair or demolition of a building.

8. The first named applicant had stated that it was only on an occasional basis that the applicants would have to visit a building to repair one of the mouldings.

9. The respondent argued that the activities of the applicants were clearly part of the building trade and fell both within Schedule 1 clause 1(a)(i) and (c) which stated that building activities included "all operations in the manufacture of:-

(i) a prefabricated building or section of a building, not being constructed wholly or mainly from metal or plastics material or from a combination of metal and plastics material".

In clause 3 of Schedule 1 building is defined as "including any structure or erection (other than a tent or caravan) and any part of a building so defined".

10. The respondent also relied on the judgment of Lord Chief Justice Hutton in FM Windows Limited v Construction Industry Training Board an unreported case in the Northern Ireland Court of Appeal where the Lord Chief Justice had to decide whether the replacement of ordinary windows with double glazed windows was an alteration of any part of a building. In that case the Court considered that a window was part of a building. The respondent argued that in this case the ceilings and other parts of the buildings that were worked on by the applicants were part of the building and therefore any mouldings or external concrete embellishments were alterations to a part of a building.

11. The tribunal decided that the activities of the applicant did indeed fall into the definition of construction, alteration or repair of a building. The materials attached to the buildings of customers by the applicants were more than merely a decorative embellishment. They could for instance, consist of concrete items forming parts of the exterior of a house that would, if they were removed, leave the house looking totally different to what it was with the items attached. This was not like a mere decoration of a house but did alter the character and appearance of a house or property that was subjected to this treatment.

12. Clearly the operations carried out by the appellant was altering parts of a building. The tribunal noted in Mr Justice Pringle's judgment in the above mentioned case of FM Windows Limited –v- Construction Industry Training Board that Mr Justice Pringle referred to the judgment of Mr Justice MacPhearson in another unreported case in [1988] Construction Industry Training Board -v- New View Aluminium Products Limited, where he said, "one need only imagine a reasonable man observing such an operation to conclude that to the question 'are these men altering part of your building' the answer must be yes, otherwise what are they doing? They are not constructing or repairing part of a building, they are altering or changing it from what it was to what it is to be".

13. The tribunal are therefore of the unanimous view that the operations conducted by the appellant does fall within Schedule 1 1(a)(i) the construction, alteration, repair or demolition of a building. This means that the activities also carried on by the applicants, listed in sub paragraph (g), also fall within the ambit of the levy. These are:-

(1) Research development design or drawing.

(2) Operations in connection with sale, packing, warehousing, distribution or

transport.

(3) Work done at any office or laboratory at any store, warehouse or similar place

or at a garage.

Chairman:

Date and place of hearing: 30 September 2004, Belfast.

Date decision recorded in register and issued to parties: