This was a case about the construction of a house by the claimant contractor (RBH) on a site owned by one of the defendants (Mrs James) and which the defendants (Mr and Mrs James) claimed they intended to occupy on its completion. There were two applications before the court: one by RBH for summary judgment to enforce the decision of an adjudicator, and Mr and Mrs James’ application for declarations under Part 8 of the Civil Procedure Rules (CPR). Mr and Mrs James resisted summary judgment on the footing that the contract was a construction contract with a residential occupier, such that, pursuant to s106 of the Act, the statutory scheme of adjudication was inapplicable – meaning the adjudicator had no jurisdiction to determine the dispute between the parties. Mr and Mrs James sought declarations pursuant to CPR Part 8 to the effect that their payless notice was valid (contrary to the finding of the adjudicator). If successful, Mr and Mrs James would ask the court to reverse the adjudicator's order as to payment of fees. By agreement, the court ordered the applications should be heard together. The court noted that, in 2019, Mr and Mrs James purchased a property in North Devon with the intention of demolishing and reconstructing it. In January 2022, RBH, whose Managing Director was known to and had worked with them before, was engaged by Mr and Mrs James to provide site and project management services in relation to the construction of a large luxury house on the site. RBH was to be paid a fee to cover costs and overheads and profit for supervision and project management. It was also to engage subcontractors to carry out the works. The agreement was made orally and was one to which the Scheme would have applied (subject to the point about residential occupation). Work began in January 2022 and ceased around April 2024 after the parties fell out, by which time RBH had been paid just over £1.3 million. In November 2024, a claims consultant acting for RBH served Mr and Mrs James an application for payment of £663,016.16 with a detailed breakdown of costs. On 27 November 2024, Mr and Mrs James responded with what they said was a valid payless notice (PLN). It too gave a breakdown, valuing various claims for invoices and costs and arriving at a figure of ‘Nil’ as the sum due.
The adjudication
RBH started a ‘smash and grab’ adjudication. Mr and Mrs James objected to the adjudicator's jurisdiction on the basis that they were residential occupiers. They said that at the time of the contract, they intended to occupy the property on completion but subsequently changed their minds and decided to rent it out. Then later, they decided to sell it. RBH argued that Mr and Mrs James were property developers who had never occupied nor ever intended to occupy the house. The adjudicator rejected the jurisdictional objection and decided he had jurisdiction. The facts appeared to have
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