Westfields Construction Ltd v Lewis

Factual and Procedural Background

This opinion concerns an application by the Plaintiff to enforce the decision of an adjudicator dated 2 October 2012, relating to a sum of £17,393.91 plus interest. The Defendant contested the enforcement, primarily on jurisdictional grounds, asserting that the adjudicator lacked jurisdiction due to an exception under section 106 of the Housing Grants (Construction and Regeneration) Act 1996 ("the 1996 Act"). The dispute arose from a construction contract for refurbishment works on a residential property ("the property") which the Defendant claimed to occupy as a residence at the time of contracting and intended to continue to occupy. The Plaintiff contended that the Defendant did not occupy the property at contract formation and intended to let it commercially, thus excluding the section 106 exception.

The enforcement proceedings involved extensive evidence, including seven witness statements and oral testimony, with cross-examination and a reserved judgment. The Defendant's jurisdictional challenge was unusual because the construction contract did not contain express adjudication provisions, raising the question of whether the statutory adjudication provisions applied or were excluded by the section 106 exception.

The court examined the relevant law, the chronology of events, factual findings on contract formation and occupation, and ultimately made conclusions on the applicability of the section 106 exception.

Legal Issues Presented

1. Whether the adjudicator had jurisdiction to decide the dispute under the construction contract given the section 106 exception of the 1996 Act.
2. Whether the Defendant occupied the property as his residence or intended to occupy it as a residence at the time the contract was made.
3. At what point in time occupation or intention to occupy should be assessed for the purposes of section 106.
4. Whether the Defendant’s challenge to enforcement based on section 106 was valid.

Arguments of the Parties

Defendant's Arguments

• The Defendant asserted that the adjudicator lacked jurisdiction because the contract related to a property he occupied as his residence and intended to continue occupying, invoking the residential occupier exception under section 106 of the 1996 Act.
• The Defendant argued that occupation should be assessed as a continuing state, not merely a snapshot at the contract formation date.
• He contended that he occupied the property as his residence at the time of the contract and intended to do so thereafter.
• The Defendant disputed the timing of his move out of the property, claiming it occurred on 24 February 2012.
• He suggested that some of his own emails referring to letting the property were untrue and merely tactical to pressure the Plaintiff.

Plaintiff's Arguments

• The Plaintiff contended that the Defendant did not occupy the property at the time the contract was made and intended to let the property commercially after refurbishment.
• The Plaintiff relied on contemporaneous evidence including witness statements, emails, and conduct showing the Defendant’s intention to let the property.
• The Plaintiff argued the contract was formed on 21 February 2012, by which time the Defendant had already moved out or was in the process of moving out.
• The Plaintiff maintained that the Defendant’s claim under section 106 was unsupported by evidence and should be rejected.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by analyzing section 106 of the 1996 Act, which excludes contracts with residential occupiers from the statutory adjudication regime. The court recognized that the exception applies only where the contract principally relates to operations on a dwelling occupied or intended to be occupied as a residence by one of the parties.

The court observed that cases applying s.106 are rare and noted the limited scope of the exception, intended to protect ordinary householders from the adjudication process.

The court considered the timing of occupation and intention, concluding that occupation is an ongoing state and not to be judged solely by a snapshot at the contract date. The Defendant’s intention to let the property commercially was central to the analysis.

In assessing the facts, the court found the Defendant’s evidence lacking credibility, noting evasiveness and inconsistencies, and preferred the Plaintiff’s witnesses.

The court determined that the contract was formed on 21 February 2012, after extensive negotiation and a site meeting. Regarding occupation, the court found on the balance of probabilities that the Defendant had moved out before or by that date and did not occupy the property as a residence at contract formation.

The Defendant’s consistent intention, demonstrated by emails and conduct, was to let the property after refurbishment. The Defendant’s argument that some emails were untrue was rejected as implausible.

Even if occupation were assessed by a snapshot at contract formation, the evidence did not support that the Defendant occupied the property as a residence at that time.

Therefore, the court concluded that the s.106 exception did not apply, and the adjudicator had jurisdiction. The Defendant’s challenge to enforcement on this ground failed.

Holding and Implications

The court held that the section 106 exception to statutory adjudication did not apply to the Defendant. The Defendant was not occupying the property as his residence at the time of contract formation, nor did he intend to do so thereafter, as he intended to let the property commercially.

As a result, the adjudicator’s decision was enforceable, and the Defendant was liable to pay the Plaintiff the sum of £17,393.91 plus interest.

The court noted that this decision did not establish new precedent but reaffirmed the narrow and limited scope of the s.106 exception. It also suggested that the exception may be outdated and that its abolition could be commercially sensible to extend the benefits of adjudication to all construction contracts.