Westfields Construction Ltd v Lewis

[2013] EWHC 376 (TCC)

Lewis resisted the enforcement of an adjudicator’s decision on the grounds that the construction contract was in respect of a house which, at the time of the contract, Lewis contended he occupied as his residence and intended to occupy in the future. In other words, Lewis relied on the exception at section 106 of the HGCRA. Westfields said that Lewis did not occupy the property at the time the contract was made and/or that his intention was always that the property would be refurbished so that it could be let for commercial purposes. Therefore the residential occupier exception did not apply.

One issue for Mr. Justice Coulson was at what point should the court assess whether or not the employer occupies the property as his residence? Is it the date of the formation of the contract? Or is it, as was suggested, important to regard occupation as a continuing operation, and not to over-emphasise the snapshot position at the date of the contract? The Judge was of the view that “occupation” was an ongoing process which could not be tested by reference to a single snapshot in time. “Occupies” must carry with it some reflection of the future: it indicates that the employer occupies and will remain at (or intends to return to) the property. Therefore the evidence about the position at the date that the contract was made had to be considered in the context of all of the evidence of occupation and intention, both before and after the agreement of the contract.

Above all, section 106 needed to be approached with common-sense: it ought to be plain, on a brief consideration of the facts, whether the employer is or is not a residential occupier within the terms of the exception. Here, on the facts, the Judge considered that Lewis intended to rent out the property, which meant that he could show that he intended to occupy the property as his residence.

The case was interesting for the comments made by the Judge about the residential occupier exclusion. The Judge noted that section 106 was intended to protect ordinary householders, who were not otherwise concerned with property or construction work, and were without the resources of even relatively small contractors, from what was, in 1996, a new and untried system of dispute resolution. It was felt that what might be the swift and occasionally arbitrary process of construction adjudication should not apply to a domestic householder. Indeed, the Judge concluded his judgment by asking whether or not it was time for section 106 and indeed the other exceptions to statutory adjudication, to be done away with, so that all parties to a construction contract “can enjoy the benefits of adjudication”.

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