Edenbooth Limited v Cre8 Developments Limited

Case reference: 
[2008] EWHC 570 (TCC)
Thursday, 13 March 2008

Key terms: 
Residential Occupier - Construction Operations - s015- s106 - Natural Justice - Unfairness - Summary Judgment

Cre8 Developments were a development company. They engaged Edenbooth to carry out groundworks, including foundation works, and drainage works at two adjoining properties. A director of Cre8 owned one of these properties. Edenbooth carried out the works and claimed that it was owed further sums than Cre8 had paid. Edenbooth commenced adjudication proceedings and was successful.

Cre8 did not pay the amount awarded to Edenbooth under adjudicator's decision. Edenbooth began enforcement proceedings. Cre8 did not comply with the Court's orders or directions during the enforcement proceedings.

Judge Coulson, at paragraph 5, stated that the appropriate procedure for the court to adopt in these circumstances is:
"[F]irst to look at any points that have been taken as to the Adjudicator's jurisdiction. If the Adjudicator did not have the necessary jurisdiction then the decision is a nullity. If, on the other hand, the Adjudicator did have the necessary jurisdiction, then the court should go on to consider - if it is raised - any suggestion that the Adjudicator acted unfairly. If the court concludes that the Adjudicator did have jurisdiction and had not acted unfairly then the court is obliged to enforce the decision of the Adjudicator."

Cre8 had taken two jurisdiction points in the adjudication: first that the work being carried out by Edenbooth was not a construction operation in accordance with Section 105(2)(d) and the second that Cre8 was a residential occupier and therefore the contract was exempt by operation of s106(1)(a).

Edenbooth was engaged to carry out groundwork and drainage works and were plainly construction operations under s105(1)(a). The s105(2)(d) relates to offsite manufacture or delivery of building components or plant. Any landscaping carried out by Edenbooth pursuant to the contract was expressly included within the meaning of construction operations in s 105(1)(e).

Regarding the residential occupier exception argument, Cre8 was a company and therefore it was difficult to see how it could ever be a residential occupier. The use of the word “residential” conveyed a requirement that, for the exemption to bit, a real person must be living and residing in the house/flat in question. Further, Cre8 was engaged in property development and was not the registered owner of the properties, although one was owned by Cre8's director. Therefore the residential occupier exception did not apply.

Cre8 had also complained that, Mr Mercer had been required to submit submissions in a short space of time (before he had been able to take advice from everyone from whom he would have wanted to seek assistance) and there were communication problems.

The adjudicator had dealt with the communication problems in his decision and some of them were self-inflicted by Cre8. The adjudicator had granted Cre8 further time were able to put in submissions dealing with the points in issue. Therefore the Adjudicator had properly taken on board the communication problems.

Cre8's complaint regarding speed is common in adjudication. It is an inherent feature of adjudication that the adjudicator is obliged to produce his decision quickly and it does not work if the parties take too long to provide information to the adjudicator. Therefore the adjudicator's decision was enforced.

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