RBH Building Contractors Ltd v James & Anor

[2026] EWCA Civ 511

We reported on this case in Dispatch, Issue 302 [1]. RBH sought the summary enforcement of a “smash and grab” adjudicator’s decision in its favour for £665k. Mr and Mrs James said that the contract in question was a construction contract with a residential occupier, so the adjudicator lacked jurisdiction to determine the dispute. They also sought a Part 8 declaration that their pay less notice was valid. At first instance, the judge found in favour of Mr and Mrs James. RBH appealed.

Under section 106 of the HGCRA, the adjudication legislation does not apply to a construction contract with a residential occupier, namely: “a construction 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 …”.

Section 106 was intended to protect ordinary householders, not otherwise concerned with property or construction work and without the resources of even relatively small contractors, from what was, back in 1996 when the adjudication legislation was introduced under the HGCRA, a new, untried, and swift system of dispute resolution.

Mr and Mrs James had never occupied the house, but their case was that, from 2019 until about November 2022, it was their intention to occupy the house when it was completed. The contract was dated January 2022. When Mr and Mrs James’ financial position changed, they were compelled to alter their plans and decided that, on completion, the property would have to be sold.

Coulson LJ, having reviewed the relevant authorities and legislation, set out seven principles to be applied when determining whether a person “intends to occupy” the property as their residence for the purposes of s.106 of the HGCRA.

1. The burden of proof must always be on the party seeking to trigger the residential occupier exception.
2. Determining the necessary intention to occupy is a matter of fact. It may be capable of being determined on a summary basis because the threshold is not high; but if there is credible evidence both ways, it may not be.
3. The determination must be made as to the existence (or otherwise) of the intention to occupy at the time that the contract was made.
4. There are two elements to the test. The first is whether there is a bona fideintention to occupy in the future. This is largely a matter of subjective intent, but any evidence of subjective intention can be accompanied by evidence which, viewed objectively, supports the existence of that subjective intention. Coulson LJ noted that contemporaneous material expressing or acknowledging the intention to occupy when the works are complete may be of particular value.
5. The second element is whether the person who wishes to occupy has a realistic, rather than fanciful, prospect of bringing that occupation about.
6. There must be an intention to occupy within a reasonable time after the completion of the works.

Applying those principles, Coulson agreed with the judge at first instance. The question for the court was whether there was a realistic prospect that, on the evidence, Mr and Mrs James could show that they intended to occupy the property on completion. This was a summary enforcement application, not a final determination.

Here, there was subjective evidence from Mr and Mrs James as to what they intended to do at the time that the contract was made. Their statements were clear and unequivocal: at the time the contract was entered into, they intended to live at the property upon completion of the works. This evidence was supported by their architect. There was other evidence as well; for example, the fact that they lived in a caravan on site during the works because they had no other home and were on the electoral register. Further, there were specific elements of the house which were designed to provide particular facilities, like the lap pool and the kite space, which Mr James wanted for personal use.

Further, the plan to rent out the property for part of the year was not fatal to their claim. The judge noted that: “Plenty of people occupy their homes as residential occupiers, but rent them out for some of the year as AirBnBs. Others swap homes for the whole of the summer with people in other countries for holiday purposes. They do not forfeit their right to be called residential occupiers”.

Finally, whilst following the approval of a development loan, both Mr and Mrs James had signed undertakings saying that the charged property would not be used as a dwelling. However, this was not fatal to the residential occupier claim. Mr James had explained that the development loan was taken out because conventional consumer mortgages were not available for the construction of a new home. His intention was to repay those loans once the build was complete and to replace them with a conventional consumer mortgage. As Mr James understood the position, the language in the undertakings simply meant that he could not live in the house until the loan was paid off.

Whilst this was a point which favoured RBH’s position, and suggested that there was no intention to occupy, it was simply one element of the overall evidence. The explanations provided by Mr and Mrs James were “at least plausible” but whether or not they would be made out was a question for a final determination of the issue.

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