The following case is of general interest to those involved in construction adjudication. It discusses the meaning of the “residential occupier” exemption to Part II of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act).
Shaw & Anor v Massey Foundation & Pilings  EWHC 495 (TCC)
The employers were owners of a large country house named Great Moreton Hall and had engaged the contractor to carry out works on East Lodge. East Lodge formed part of the property described as Great Moreton Hall in the Land Registry documents but was a separate building situated down the drive of the house.
The contract did not contain any express adjudication provisions. This was important since it meant that the adjudication provisions were implied by virtue of the Construction Act.
The employers sought to resist the enforcement of an adjudicator’s decision in favour of the contractors on the basis that:
- the adjudication provisions in the Construction Act did not apply because they were residential occupiers; and
- the adjudicator therefore had no jurisdiction.
Section 106 of the Construction Act: residential occupier exception
One of the questions before the court was whether the employers were residential occupiers within the meaning of section 106 of the Construction Act because the Construction Act does not apply to construction contracts with a residential occupier.
A construction contract with a residential occupier is defined in section 106 (2) as a contract “which principally relates to operations on a dwelling which one of the parties to the contract occupies, or intends to occupy, as his residence.”
The definition of “dwelling” in section 106 (2) meant a “dwelling house or flat, and for this purpose ‘dwelling house’ did not include a building containing a flat”.
East Lodge was not occupied by the employers and was not intended to be occupied by the employers at the time the contract was made with the contractors.
Section 106 of the Construction Act: the court’s approach
The court took the view that section 106 should be interpreted narrowly and that on the evidence there was no real prospect that the exception applied. The natural construction of section 106 meant that the work on East Lodge was not work on the dwelling house which the employers occupied as their residence.
The parties’ intentions at the time of the contract were crucial to determining whether the employers were residential occupiers. It did not matter that at a date sometime after the contract one of the parties may have intended to live in East Lodge; nor that in times gone by East Lodge had probably been occupied by a gatekeeper. Mr Justice Coulson also commented that if someone decided to convert their house into three small flats with the intention of living in one of those flats, the section 106 exemption would not apply because of the commercial element of the works.