Building contract – Breach – Damages – Adjudicator making award in favour of claimant – Whether adjudicator having jurisdiction – Whether company having status of residential occupier – Whether short time-frame for providing adjudicator with information leading to unfairness or breach of natural justice – Claim allowed
The defendant was a development company, two of whose directors, J and his father, occupied two adjoining properties. In July 2007, the defendant engaged the claimant to carry out groundworks at the properties, including foundation and drainage works. The defendant maintained that it had paid the claimant all its fees. However, the claimant believed that it was entitled to further sums and commenced adjudication proceedings.
In a written decision of November 2007, the adjudicator concluded that an additional sum was due to the claimant and found that the defendant was obliged to pay his fees plus VAT. The defendant failed to pay the sum awarded and the claimant commenced enforcement proceedings. The court provided a timetable by which the parties would exchange any evidence and submissions leading up to a hearing. The defendant did not respond to the directions and made no attempt to comply with the court’s orders. The claimant therefore commenced enforcement proceedings.
The defendant resisted the claim contending, inter alia, that: (i) the adjudicator did not have jurisdiction to deal with the matter since the defendant should be deemed to be a residential occupier within the meaning of section 106(1)(a) of the Housing Grants, Construction and Regeneration Act 1998, so that its contract with the claimant was exempt from the statutory adjudication provisions that would otherwise apply; and (ii) the fact that the adjudicator had required to produce information in a short time-frame had led to unfairness or a breach of the rules of natural justice.
Held: The claim was allowed.
(1) The residential occupier exemption under the 1998 Act did not apply to the defendant and the adjudicator had therefore had the necessary jurisdiction to reach the decision he did.
The defendant was a company and it could not be a residential occupier. A company might occupy premises for commercial purposes but the use of the word “residential” conveyed a requirement that, for the exemption to bite, a real person had to be living in the house or flat in question. The exemption therefore did not apply in any event.
The defendant’s stated purpose was property development, which negated the suggestion that the work was being carried out for or on behalf of a residential occupier. As a matter of fact, the defendant was not the registered owner of the properties and J had pointed out that at no time had he contracted with the claimant directly. Therefore, he could not now argue that his possible status as a residential occupier should or could affect the dispute resolution provisions of the contract to which he was not a party, and in respect of which he had no formal status or role.
(2) Furthermore, there was no question of unfairness or breach of the rules of natural justice.
It was an inherent feature of adjudication that the adjudicator had been obliged to produce his decision quickly. He therefore had to put pressure on the parties to ensure that they provided him with the necessary information just as promptly. Adjudication did not work if the parties took too long to provide information. That was an inevitable consequence of the adjudication process.
James Thompson (instructed by IBB Solicitors, of Uxbridge) appeared for the claimant; Jason Mencer appeared in person for the defendant.
Eileen O’Grady, barrister
