Shaw & Anor v Massey Foundation & Pilings Ltd.

Factual and Procedural Background

These are two linked applications for permission to appeal arising from decisions made in the Liverpool County Court concerning enforcement of an adjudicator's decision relating to building works carried out at a property in Cheshire. The appellants engaged the respondents in 2007 to perform works on a separate building known as East Lodge, part of their estate. Disputes arose and were referred to adjudication, where the adjudicator awarded the respondents a sum exceeding £80,000. The appellants did not pay, prompting the respondents to seek enforcement of the adjudicator’s decision.

On 28 November 2008, HHJ MacKay dismissed the appellants’ application to stay enforcement proceedings under section 9 of the Arbitration Act 1996 and gave judgment in favour of the respondents. The appellants sought permission to appeal this decision.

Separately, HHJ Platts refused to set aside the judgment on the basis that the appellants were residential occupiers, arguing that the adjudicator lacked jurisdiction under section 106 of the Housing Grants (Construction and Regeneration) Act 1996 ("the 1996 Act"). The appellants sought permission to appeal this decision as well.

The court also considered an application by the appellants to amend their notice of appeal to raise a new issue related to natural justice and consumer status, which was declined.

Legal Issues Presented

1. Whether the court should grant a stay of enforcement proceedings pending arbitration under section 9 of the Arbitration Act 1996, given the appellants’ failure to apply for summary judgment or abridgement of time.
2. Whether the appellants qualify as residential occupiers under section 106 of the 1996 Act, thereby depriving the adjudicator of jurisdiction to make a binding decision.
3. Whether permission should be granted to amend the notice of appeal to raise a new issue concerning natural justice and consumer status.

Arguments of the Parties

Appellants' Arguments

• The appellants argued that they were residential occupiers within the meaning of section 106 of the 1996 Act, excluding the adjudicator’s jurisdiction.
• They contended that the failure of the respondents to apply for summary judgment or to abridge time under the TCC procedures was fatal to the enforcement claim and warranted a stay under section 9 of the Arbitration Act 1996.
• They sought to amend their appeal to raise a new issue relating to natural justice and consumer protections under the Unfair Terms in Consumer Contracts Regulations, asserting that they were consumers under the contract.
• They argued that the entire property, including East Lodge, was registered under a single Land Registry title and that the definition of "dwelling" in section 101 of the 1996 Act was broad enough to include East Lodge as an appurtenance.

Respondents' Arguments

• The respondents maintained that the adjudicator’s decision was valid and enforceable, as the appellants were not residential occupiers under section 106 and thus the adjudicator had jurisdiction.
• They argued that the failure to apply for summary judgment or abridgement of time did not affect the entitlement to enforce the adjudicator’s decision and that the appellants were in breach of contract by failing to pay.
• They contended that the new issue proposed in the amendment was irrelevant and should not be permitted.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Carillion Construction Ltd v Devonport Royal Dockyard Limited [2005] EWCA Civ 1358	Enforcement of adjudicator's decisions unless clear lack of jurisdiction or breach of natural justice; emphasis on interim nature and prompt payment ("pay now, argue later").	The court relied on this authority to affirm that the adjudicator’s decision must be enforced absent jurisdictional or procedural unfairness, rejecting the appellants' argument for a stay.
Harlow and Milner v Teasdale (No.2) [2006] EWHC 535 (TCC)	Ongoing arbitration does not usually affect enforcement of adjudicator’s decision.	Supported the court’s view that substantive arbitration proceedings do not prevent enforcement of the adjudicator’s award.
Kier Regional Ltd v City and General (Holborn) Ltd [2008] EWHC 2454 (TCC)	Exceptional circumstances may justify stay of execution pending arbitration where enforcement judgment exists but has not been executed.	The court distinguished this case as exceptional and did not find similar circumstances here to justify a stay.
Samuel Thomas Construction v Anon (Unreported, 28 January 2000)	Interpretation of "residential occupier" under section 106 of the 1996 Act; burden on employer to prove exclusion applies.	Used to illustrate the narrow interpretation of residential occupier and to support the finding that appellants did not qualify for the exclusion.
Lovell Projects Ltd v Legg & Carver [2003] BLR 452	Consumer status does not afford grounds to challenge adjudication process under Unfair Terms in Consumer Contracts Regulations.	Supported refusal to allow amendment raising consumer status as a ground of appeal.
Steve Domsalla (t/a Domsalla Building Services) v Kenneth Dyason [2007] EWHC 1174 (TCC)	Similar to Lovell Projects regarding consumer protections and adjudication.	Reinforced the court’s position on the irrelevance of consumer status to adjudication jurisdiction.
Herschel Engineering Ltd v Breen Property Ltd (No 2) (28 July 2000)	Factors relevant to stay of execution, including financial position of parties.	Referenced in rejecting the appellants’ late attempt to stay execution based on respondents’ financial position.

Court's Reasoning and Analysis

The court first addressed the application to amend the notice of appeal, declining permission as the new issue was both entirely new and irrelevant to the core issue of jurisdiction under section 106. The court emphasized that the concept of "consumer" is not recognized in the 1996 Act adjudication context and that the appellants’ arguments on this point were misplaced.

Regarding the first application for permission to appeal, the court considered the law governing enforcement of adjudicators’ decisions. It relied heavily on the principles established by Chadwick LJ in Carillion, affirming that adjudicators’ decisions are to be enforced unless there is a clear lack of jurisdiction or breach of natural justice. The appellants’ argument that procedural failings by the respondents (failure to apply for summary judgment or abridgement of time) justified a stay was rejected as untenable and unfair, as it would encourage procedural gamesmanship and undermine the statutory scheme requiring prompt payment ("pay now, argue later").

On the second application, the court analyzed the statutory definition of "residential occupier" under section 106 of the 1996 Act. It accepted the factual findings of the lower court that East Lodge was a separate building, not occupied or intended to be occupied by the appellants at the time of contract. The court distinguished the definition of "dwelling" in section 101, which applies only to Part I of the Act, as irrelevant to the adjudication provisions in Part II. The court concluded that the appellants were not residential occupiers within the meaning of section 106, and therefore the adjudicator had jurisdiction.

The court also rejected the appellants’ argument based on Land Registry title and the size of the property, finding these irrelevant to the statutory definition and purpose of the exclusion.

Finally, the court declined the appellants’ late request for a stay of execution based on the respondents’ financial position, as this was not part of the grounds of appeal and no exceptional circumstances were demonstrated.

Holding and Implications

The court DISMISSED both applications for permission to appeal.

The direct effect is that the judgment enforcing the adjudicator’s decision stands, and the appellants remain liable to pay the sums awarded. The court’s ruling reaffirms the strict and narrow interpretation of the residential occupier exclusion under section 106 of the 1996 Act and the principle that adjudicators’ decisions are to be promptly enforced absent jurisdictional defects or procedural unfairness. No new precedent was established beyond the application of existing principles to the facts of this case.