In RBH Building Contractors Ltd v James [2025] EWHC 2005 (TCC), the Court considered whether to enforce a ‘smash and grab’ adjudication decision obtained by the claimant contractor or whether the defendant employers were able to rely on the little-used ‘residential occupier’ exception in order to resist the claim for summary judgment.

What happened?

RBH contracted with Mr. and Mrs. James to demolish and rebuild a luxury house. After a breakdown in the relationship, RBH applied for payment of £663k. Mr and Mrs James’s response was to reduce this sum to zero, citing their reasons in an informal letter.

RBH sought a smash and grab adjudication decision, arguing the pay less notice was invalid. In response, Mr and Mrs James argued the Adjudicator lacked jurisdiction as they were residential occupiers within the meaning of s.106 of the Construction Act. Alternatively, that the pay less notice was valid in any event.

The Adjudicator rejected both arguments and found in RBH’s favour. RBH applied for summary judgment; Mr and Mrs James responded with a Part 8 Claim for declarations on jurisdiction and the validity of the pay less notice; and by agreement the respective applications were heard together by the TCC.

What did the Court decide?

• The Judge refused to enforce the adjudicator’s decision.
• For the residential occupier exception to apply, Mr and Mrs James must have intended to occupy the property at the time the contract was made. The available evidence supported this intention.
• While there was a suggestion of an underlying commercial purpose, this did not displace a clear personal intention to use the property as a home. A full trial of the issues was appropriate, and the court declined to give summary judgment.
• In any event, on an objective, commonsense view the pay less notice provided sufficient clarity. A reasonable recipient, armed with knowledge of the contract and the application for payment, would have understood it and could readily identify what sums were being withheld, and why.
• Mr and Mrs James were still liable to pay the Adjudicator’s fees as the Judge had no authority to reverse the Adjudicator’s decision on this point.

What can we learn from this?

This unusual case provides a rare insight into how the Court will apply the residential occupier exception, and how fact-dependent it can be. The surest way for contractors to avoid any uncertainty in this respect is to see that the contract contains an express adjudication clause – otherwise, there is a risk that statutory payment and adjudication rights might not be available against private individuals potentially able to engage the relevant exception.

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This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.

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