SAMUEL THOMAS CONSTRUCTION LTD v BICK AND BICK

The High Court at Exeter

His Honour Judge Overend

28 January 2000

MR. DOOLEY: I appear in this case for the claimant and the applicant. My learned friend Mr. Watson appears for the defendants, Mr. and Mrs.

It is an application for summary judgment in respect of the whole of the claim. The claim itself started life in Bridgwater County Court and is a claim based upon an adjudication award made on 6th September last year. That award was to the effect that the defendants pay to the claimant a sum in respect of building works carried out by the claimant for the defendants, together with VAT, retention moneys and costs. The total in question was £46,826.84. The detail of that claim appears at pages 4 and 5 of the bundle, which your Lordship has, I trust. fA bundle was given to his Lordship). There you see the details of the adjudicator's award. That award was made under the 1996 Housing Grants Construction and Regeneration Act, a piece of legislation with which your Lordship has no doubt become familiar.

JUDGE OVEREND: No, I do not know anything about it, other than reading this case.

MR. DOOLEY: Indeed. I will start from the beginning.

First of all, as a matter of housekeeping, apart from the trial bundle your Lordship should have a skeleton argument from myself, faxed to you yesterday afternoon, and one from Mr. Watson. With my skeleton there are - - o r should be - - a small bundle of authorities, including the statute, and the statutory instrument promulgated under the statute, which is the Scheme for Construction Contracts Regulations.

JUDGE OVEREND: Yes, I seem to have that.

MR. DOOLEY: Also in that bundle - I hope it is of assistance - is a copy of the chapter from Emden on Adjudication. JUDGE OVEREND: Chapter 1? B MR. DOOLEY: Chapter 1. JUDGE OVEREND: Yes.

MR. DOOLEY: I do not wish to be trite, but if your Lordship wishes to go into it in depth, that provides a much better synopsis of what the Act scheme is all about than I am about to give you, I am sure; but, essentially, what the Act did was to provide a system and scheme for those involved in

construction contracts for the binding, but temporary, resolution of disputes.

May I confine my comments to disputes involving payment. The Act provides, at section 111, that payment "shall not be withheld beyond the proper period" - which in this case is 17 days - "other than in circumstances where a notice of withholding is served by the withholding party". In the event of things going wrong, either party can apply to an adjudicator for a decision, which must be provided within 28 days of the reference - I think the precise terms of the notice of adjudication being served.

Paraphrasing it, it is a scheme which is intended to ease the cash-flow problems of the construction industry, and provides a temporary solution to many of the more minor disputes that arise and, in many cases, no doubt a permanent solution; but the Act does provide that the decision of the adjudicator is binding until arbitration or litigation has resolved the issue.

Can I take you to page 21 of the extract ---------------------------

JUDGE OVEREND: So it is temporarily binding?

MR. DOOLEY: Yes.

JUDGE OVEREND: So you have to pay up?

MR. DOOLEY: Yes.

JUDGE OVEREND: Although you may have to pay it back?

MR. DOOLEY: Only if in subsequent litigation it is found that that should be done, yes.

At page 21 of the extract from Emden there is a chapter, or section, on the enforcement of adjudicators' D

decisions - V21 is what I have at the bottom. JUDGE OVEREND: I see; they go from left to right. MR. DOOLEY: Could you go to the bottom, please, ray Lord. The E "V" - this is section 5 of the main volume, so paragraph No. 151 to 152 on page V21, "Enforcement of Adjudicator's Decision". May I invite your Lordship to scan that page. JUDGE OVEREND: I think I am sitting in the TCC court - oh, gosh - are we called "Lord" now? MR. DOOLEY: Yes, you are. JUDGE OVEREND: But that is in London. MR. DOOLEY: I thought it was everywhere, my Lord. JUDGE OVEREND: Oh, I am not so sure about that. Those London boys, you know - they like their Lordships! You can call me

"your Honour"; I am quite happy. II

MR. DOOLEY: I am grateful. It is going to be difficult to change, having got the

JUDGE OVEREND: Well, you call me whatever you like; I don't mind.

B MR. DOOLEY: If you would be kind enough to read the first three paragraphs

JUDGE OVEREND: ( After a pause? 154: "There will be few circumstances in which a losing party, faced with the adjudicator's decision (inaudible) will be able successfully to contest an application". MR. DOOLEY: I do rely very strongly on that, yes.

JUDGE OVEREND: Well, you would, would you not?

MR. DOOLEY: And also on the fact that the proper course, having had an adjudication in favour of the claimant, is to enforce it summarily if at all possible. My learned friend E will argue that in fact there is a want of jurisdiction on the part of this adjudicator because of one exception that appears in the 1996 Act.

JUDGE OVEREND: So he is going to take a technical point on jurisdiction? MR. DOOLEY: Yes.

JUDGE OVEREND: That is what we are here for? MR. DOOLEY: That is what it is all about. JUDGE OVEREND: Yes.

MR. DOOLEY: Can I just take you back to the adjudicator's decision, which is page 59 - top right- This is the basis of the action. The adjudicator set out the background of the dispute. He dealt with jurisdiction, and validity of the adjudication notice, at the second page, page 60, at paragraph 12.

JUDGE OVEREND: 12 o'clock?

MR. DOOLEY: Yes - architects' numbering.

JUDGE OVEREND: Architects' numbering, is it? Oh, right. Well, 12,00.

MR. DOOLEY: And at 1 o'clock in the afternoon, on the following page, he dealt with his response. At paragraph A

JUDGE OVEREND: Just a minute. Was it a construction contract with a residential occupier? D

MR. DOOLEY: That is going to be the issue at this stage. JUDGE OVEREND: Yes.

MR. DOOLEY: Despite the adjudicator's decision on that point, and his decision that you see at the summary - which is page 62 - that the claimant is entitled to the net sura of £37,261 odd, and interest, and VAT, and so on, no part of those sums has ever been paid.

That is the basis of the claim. It is based entirely upon the adjudicator's decision. I do not know whether your Honour has had an opportunity to read the evidence. JUDGE OVEREND: No.

MR. DOOLEY: The evidence in support of the claimant's caseconsists of two statements, one from Mr. Kelly, and the other,more important, statement from Mr. Boobyer,. who is the soledirector of the ----------------

JUDGE OVEREND: How do you spell that?

MR. DOOLEY: "B-O-O-B-Y-E-R" . He is at page 63, and the statement of Mr. Kelly is at page 23.

JUDGE OVEREND: Is it intended that that they should be called B live, or is this a documentary point?

MR. DOOLEY I had assumed that you would wish to read the documents. Mr. Boobyer is here. As far as the defendant is concerned, I am not sure there is any live evidence available anyway.

JUDGE OVEREND: It is a documentary case, is it?

MR. WATSON: It is an application on written evidence, your Honour. D

JUDGE OVEREND: Yes, summary judgment. Away we go. I had better read it then, had I not?

MR. DOOLEY: Yes, your Honour. (After a pause) Can I deal briefly with the works in question, and contract. The contract, in its written form, is at page 150. It is a JCT agreement for minor building works. I just say about that that that was produced by the claimant, and handed to the architect for the development, Mr. Robin Jones. According io the defence, one of the copies of the contract was signed by or on behalf of the defendants; we have not seen that; this copy is signed by the claimant; but I understand from my learned friend that no issue is taken on a possible exception that arises under the Act where a contract is not in writing.

I think your Lordship can regard that as being a decided issue. This, for the purpose of the Act, was an agreement in writing.

The work in question was to be done to a site of derelict barns. There are some drawings in the bundle. B JUDGE OVEREND: Ah, that is more fun. There we go.

ME. DOOLEY: I think you will find these enlightening.

JUDGE OVEREND: Is this all this stuff in polybags?

MR. DOOLEY: Of that I am not sure. If I may say so, your Honour is lucky; I did not have the advantage of bags.

JUDGE OVEREND: This sort of stuff - is this what you want?

MR. DOOLEY: 183 is the page number 1 have.

JUDGE OVEREND: I do not know about page numbers. D

MR. DOOLEY: Drawing number - and it is at the bottom of the notation, bottom right-hand corner - 498-10. You will see a proposal for a barn development - barn A, barn B, barn C, and a garage block.

JUDGE OVEREND: I thought there were four.

MR. DOOLEY: There were four barns on the site. One of them was to be demolished.

JUDGE OVEREND: A, B and C. Where is the garage block?

MR. DOOLEY: Bottom, to the right slightly.

JUDGE OVEREND: Oh, down there. Right, yes.

MR. DOOLEY: That is the layout drawing. Can I take you to the next one, which shows elevations, and that is 398-23.

That is the conversion of the garage block, and shows the detail of the building, H

JUDGE OVEREND: What is the bit - the sort of tenement bit -"ridges to be level", on the thing that sticks out towards you? What is that?

MR. DOOLEY: Looking at the layout plan, that is an access B road. The access road as proposed in the application for planning permission went through the garage block. JUDGE OVEREND: Oh, it went through? MR. DOOLEY: Yes, it goes through it. JUDGE OVEREND: As a hole?

MR. DOOLEY: There is a hole. The elevation of the barns, drawing 498-21A - that is what they ought to look like

sections and elevations. There is another hole through the middle of the barn in the upper part of the drawing. North and south elevations are shown at barns A and B, and there is a hole through the middle. E JUDGE OVEREND: Yes.

MR. DOOLEY: The final drawing I will take your Honour to is 498-20.

JUDGE OVEREND: It has a "C" after it.

MR, DOOLEY: Yes, that is right, yes. The only point in taking you to this drawing is to show the detail that was produced, and which was to be built. This shows the layout for barns A and B.

JUDGE OVEREND: Which is which? Does it matter, or are they all the same?

MR. DOOLEY: The bigger one is barn B, and that must be the one on the left. You will see in the middle drawing that there are dotted lines joining the bedrooms of barn A and barn B. In fact, they are all under the same roof construction, with a hole through the middle; and you see that on the survey drawing, which shows the north and south elevations -B 4 9 8 - 1 0 .

JUDGE OVEREND: Sorry, what am I seeing again?

MR. DOOLEY: On 498-10, at the top of the drawing, you see the north elevation and the south elevation for barns A and B. The bigger of the two is barn B - indeed, they are labelled "barn A" and "barn B"; and there is an access -driveway between them, but covered by the same piece of roof.

JUDGE OVEREND: Yes,- and they were all derelict before we start?

MR. DOOLEY: Yes. The point I would make very briefly about that - because I will have to come back to this - they were E not dwellings at the time this contract was made. JUDGE OVEREND: Is that the material time? MR. DOOLEY: Yes, I say it is.

The bill of quantities is at page 187. I refer to it simply for this reason, that it is a bill for the full development of barns A, B and C and the garage block. The total is £188,590 - that is at page 224. That figure includes painting - so, effectively, finished buildings. It also includes works to the courtyard between the barns, and the access.

I had better explain to you about the access; it means referring you, again, to 498-10 -- that is the survey drawing. I regret the only way I can do it is by pointing. The access to the barns came in here. One can see a driveway an embryonic driveway - here, driving into the main courtyard.

JUDGE OVEREND: Is that where it says "gate"?

MR. DOOLEY: Yes; but it was proposed that, when developed, the access would be through the garage block, coming up from the bottom.

JUDGE OVEREND: Oh, I see, .yes.

MR. DOOLEY: That is why there is a hole in the garage block.

JUDGE OVEREND: Yes,

MR. DOOLEY: For the briefest of histories of the contract, my skeleton has a chronology which might assist. It is page 3. As so often is the case, the claimant company - which is, in fact, an one-man company, for all practical purposes -- Mr. Boobyer ran it himself, and worked on the ground. He had done some work in December 1998 for this customer, Mr. and Mrs. , who traded, incidentally, as J & B Developments - a partnership; but work on this part of the development took place, or started, on 4th January last year. The quotation is, effectively, the figure in the bill of quantities. The bill of quantities having been produced by the architect, Mr. Jones, it was completed by the claimant, and that quotation was accepted, we say on 18th February 1999. At the same time, an invoice for £34,000 odd was submitted for work already carried out. On 2nd March there was a site" meeting. For your H note, the minute of that site meeting is at page 70.

JUDGE OVEREND: Yes,

M.R. DOOLEY: That is the occasion when the JCT form of contract was handed over to the architect, and at that stage only the site programme was left to be finalised.

Just running through the chronology, 5th March 1999, the contract programme and cash-flow forecast was submitted by the claimant to the architect. They were never finalised, in the sense that there was never a final decision reached; but what had become apparent by that time was that the defendants wished to have the work on barn B accelerated in front of the rest of the work, and it was around then, or somewhat later, that the claimant company became aware that there was an intention - or just possibly an intention - on the part of the defendants to occupy barn B as their residence when complete.

By 31st March further work had been done, and a second invoice for the balance due, of £25,144, was submitted. The numbers in square brackets are the numbers in the trial bundle of the documents in question.

On 13th April 1999 both parties were dissatisfied with the situation. Mr. Boobyer, for his company, was dissatisfied with the lack of payment - he had received £17,000, and no more. Mr. and Mrs. were dissatisfied with the progress on the site. They agreed to go their separate ways, and the contract was

terminated. The adjudication followed because no further payment was received.

During the course of the adjudication the defendants declined to accept the jurisdiction of the adjudicator. The adjudicator himself decided that he had adjudication. That stance has been kept up by the defendants throughout these proceedings. There are two basic arguments that were advanced at the time of the defence, and the defence is at page 13. I do not take your Honour to it in detail - ju-st to this extent. The two points raised are that first there was no contract in writing, and therefore there was not a contractual situation upon which the 1996 Act was effective, . or bit, JUDGE OVEREND: That is not pursued today? MR. DOOLEY: It is not pursued. JUDGE OVEREND: Is that right?

MR. WATSON: That is right, D

JUDGE OVEREND: Thank you. I will strike it.

MR. DOOLEY: The other point, which is.pursued today, is that this was a contract with a residential occupier, and therefore excluded from the provisions of the HGCRA, Can I turn to that, because that is what today's hearing is all about. It is at page 5 of my skeleton. You will need, as well, the Act itself, and in particular section 106. If your Honour is not familiar with the Act, may I perhaps start at section 104, just for a brief resume of its contents. This is an Act of Parliament which covers a multitude of matters; fortunately only a few sections are relevant to adjudications. That particular section starts at 104, and that is an introductory provision only dealing with construction contracts. They, in turn, are contracts for the carrying-out of construction operations. I do not think I need take you further into that section.

Section 105 deals with what a construction operation is. We are not concerned with any of the definitions there today.

Section 106 deals with exclusions, and reads: "This part does not apply to a construction contract with a residential occupier, or to any other description of construction contract excluded from the operation of this part by order of the Secretary of State." The only order that has been made under that section was made in 1998, and does not affect the circumstances of this case.

There is then a definition of the expression "construction contract with a residential occupier", and I quote: "The construction contract with a residential occupier means 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." The words that I ask your Honour to underline are "principally" and "on a dwelling".

The subsection goes on: "In this subsection 'dwelling1 means a dwelling house or a flat", and then proceeds - and although this may not appear to be directly relevant, I would seek to put it before you - "'dwellinghouse1 does not include a building containing a flat, and 'flat1 means separate and self-contained premises" - and I emphasise these | words - "constructed or adapted for use for residential purposes" - and then it continues - "and forming part of a building from some other part of which the premises is divided horizontally,"

JUDGE OVEREND: I do not at the moment see what the significance of that reference is.

MR. DQOLEY: May I come back to it? Essentially, it is this. It is a suggestion that in the case of a flat it must be constructed - not in the course of construction, -but anticipated as being about to be constructed - or it faust be adapted for use for residential purposes; so in the case of a flat, it must exist already for residential purposes. I say that is material when considering the meaning of a dwelling house

JUDGE OVEREND: No, it does no't. I do not think it does - "which principally relates to operations on a dwelling"; and the dwelling is a flat - a flat on which it is(?) constructed or adapted, rather than being constructed or adapted.

MR. DOOLEY: Yes. I pray that provision in relation to flats in aid. It is rather starting at the back end of the point, if I may put it like that.

JUDGE OVEREND: I am sorry. Well, you flagged it, and I thought I would nip your flag!

MR. DOOLEY: I think it belongs at the end rather than the; beginning.

JUDGE OVEREND: All right.

MR. DOOLEY: I will take you to the skeleton, if I can, at page 5. There are a number of submissions which form the kernel of ray answer to Mr. Watson's case, and those are set out at paragraph 19 in the skeleton. Essentially, my case is that the term "dwelling" refers to an existing dwelling, not a dwelling in the course of construction - that is not a dwelling at all - and not a derelict agricultural building which it is proposed should be turned into a dwelling.

The scheme of the Act is perhaps of some importance in relation to the definition. The Act is designed to assist the construction trade and resolve those numerous disputes that arise, but it is easy to understand how Parliament would wish to exclude from the effect of the Act the multitude of contracts between residential occupers and small builders, perhaps, for small building and maintenance works, all of which are covered by the scope of the Act otherwise. To introduce it in those circumstances would produce a multitude of adjudications which would probably not benefit the trade a great deal.

JUDGE OVEREND: You mean when the plumber comes along and puts in central heating?

MR. DOOLEY: Yes, or mends the washing machine pipe, or something of that kind. JUDGE OVEREND: Yes.

MR. DOOLEY: Then the full panoply of adjudication decisions, if the contract was in writing, could be brought to bear upon the payments" to be made. At paragraph (iv) on page 6 in my submissions I deal with the definition of the flat point; I take that no further. I also mention that at section 21 of the County Courts Act

JUDGE OVEREND: Where is that? MR. DOOLEY: Page 6 of the skeleton.

B JUDGE OVEREND: Where is the "flat" reference? Yes, I have that, yes.

MR. DOOLEY: If a flat is going to be in existence, surely the same definition must apply to the dwellinghouse. JUDGE OVEREND: If so, why not spell it out?

MR. DOOLEY: It does, I would submit. The words "on a dwelling" do spell it out - "operations on a dwelling". I bear in mind that the particular exception relates to a "residential occupier". Mr. and Mrs. . were clearly not residential occupiers

at the time of this contract. JUDGE OVEREND: So, "intends to occupy as his residence". E MR. DOOLEY: Yes, but it still must be a dwellinghouse.

JUDGE OVEREND: Hold on. That certainly goes to whether he is in occupation or not. It makes it perfectly plain that if he merely intends to occupy it, then that is sufficient; but

MR. DOOLEY: That would cover the situation, if I may provide an illustration, where somebody buys a house and wants work done on it before he or she moves in, and the builder is instructed, and the work goes ahead; but it is a purchase of a house - it is a habitation and a dwelling - from the start, In this contract the subject matter of the construction process were some agricultural barns.

JUDGE OVEREND: It could not be simpler, you say - "an agricultural barn, derelict or otherwise, ain't no dwelling".

MR. DOOLEY: Exactly.

JUDGE OVEREND: Simple as that?

MR, DOOLEY: Yes, absolutely.

The next point relates to the word "principally", This is at (v) on the same page of the skeleton. JUDGE OVEREND: This is a question of (inaudible) and degree, and you say it ain't "principally".

MR. DOOLEY: It certainly is not principally in the circumstances of this case, and that is also sufficiently clear to enable you to deal with the {inaudible as someone coughed) summarily. The fact that barn B was to be occupied by Mr. and Mrs. was a matter which may or may not have been within the knowledge of my client at the material time -probably not important - but Mr. Boobyer's evidence is he did not know until later in the contract.

JUDGE OVEREND: Does that matter?

MR. DOOLEY: It may do, and I would like to reserve my position on that; but I find it difficult to understand how knowledge of a director of the claimant company can make a difference to the scheme laid down by the Act; and, as Mr. Watson points out in his skeleton, the Act does not mention knowledge at any point, and it is not a matter I am placing before you with any great weight today. JUDGE OVEREND: Or at all.

MR. DOOLEY: I cannot raise - I mean, I say the situation is absolutely clear anyway, regardless of that point. JUDGE OVEREND: Yes.

MR. DOOLEY: But I may have to deal with it if Mr. Watson i wishes to deal with it.

JUDGE OVEREND: He will give me his best, I expect. MR. DOOLEY: This contract related to three barns and a garage block. This was, on any view, even if one of them was to be used for the private occupation of the developers, a commercial development- In fact, at the meeting in March 1999, the programme was amended so that barns A and B were to progress ahead of the remainder of the development, and in particular barn B was to be accelerated; and of course it is easy to understand that if the defendants were going to occupy it, they wanted it completed as soon as possible, and in advance of rest of the conversions.

JUDGE OVEREND: But the contract related to three barns.

MR. DOOLEY: Yes it did, and the garage block.

JUDGE OVEREND: And the contract was not amended to exclude barns - or was it?

MR. DOOLEY: No.

JUDGE OVEREND: A and B to go ahead, and B ahead of A.

MR. DOOLEY: That is right.

JUDGE OVEREND: But still A, B and C.

MR. DOOLEY: Yes.

JUDGE OVEREND: Why do you say at (v)(i) "at least one other barn conversion"? It sounds to me as though it is at least two.

MR. DOOLEY: Because the way - it is, and that is the case I put to you; but really this was intended to answer what I anticipated was the defendant's case. The defendant's case is that the development was in fact barn A and barn B, and they produce evidence from the architect of the split of value of work between barns A and B to show that barn B was in fact the higher proportion of the value, therefore

suggesting that principally this was a contract for residential occupation. I say that is not to the point, but the reason I am dealing with this in this way is because of the way Mr. Watson puts his case. You will see at (ii) I say the value of the work is not material to the decision as to whether this was principally

JUDGE OVEKEND: So these are preemptive points? MR. DOOLEY: Yes, I hope so. There is no doubt at all that Mr. and Mrs. intended to develop barn A and barn C for profit. That also suggests that this was not principally a contract which related to operations on a dwelling for the occupation of the

Your Honour, I could go to the architect's evidence and deal with the apportionment that he sets out, but frankly it is probably better to deal with it after Mr,. Watson has addressed you on his points, because I do not know quite how he puts that issue; but I would flag up one point, really for your Honour's note. In the architect's evidence, at paragraph 4 on page 173, he sets out the split of the value of work between barn A and barn B, and he reaches the view, towards the bottom of the page, that the barn B works amount to 64 per cent. Then he goes on: "I should point out, however, that I have treated all of the works to the courtyard and garage block as relating to barn B, because all of this was necessary ancillary work to the conversion of barn B. It should be noted that virtually all of the works to the garage block needed to be carried out as part of the conversion of barn B in order to keep the structural integrity, as this formed the only access to the development,"

JUDGE OVEREND: To which you say "rubbish",

MR. DOOLET: To which I say, first, that the amount of work on the garage block included in the bill of quantities was about £30,000. My difficulty is there is no evidence of that in the papers you have before you, but I do have Mr, Boobyer here to deal with it, if required; and therefore it amounted to a significant proportion of the total value. Also the real reason for the work being done was in fact a condition attached to the planning consent, which I quote: "The converted barns hereby approved shall not be occupied until the garages, parking and turning areas shown on the approved plan have been surfaced and completed to the satisfaction of the local- planning authority"; so the garages had to be completed as a condition of planning consent, not to keep structural integrity. Again, there is no copy of this in the bundle. May a hand this copy of the planning consent

JUDGE OVEREND: Yes. I do not suppose you to object to that, do you?

MR. WATSON: I reserve my permission on that, I do not wish to be obstructive, but your Honour I think laid down a timetable for exchange of evidence - and I have just seen this this afternoon - and if there is something ray client wants to tell me about it he is not here to do that. I am not going to stop your Honour seeing it, but I do reserve my position on it. From what my learned friend has said, however, if it was a condition of occupying the property that the property should not be occupied until the garage is built, it sounds as if that condition rather helps my clients rather than hinders them. E JUDGE OVEREND: Well, if that is the case, you do not want to reserve your position at all; you want to have your cake and eat it

MR. WATSON: I think that is probably right.

JUDGE OVEREND: Do you want me to see it or not?

MR. WATSON: Your Honour, yes. I think it completes the picture on this point that the architect made.

JUDGE OVEREND: He is playing both ends of the field,

MR. WATSON: I do not think it helps at all, no.

JUDGE OVEREND: Well, do you want me to see it or not?

MR. WATSON; Yes, please.

JUDGE OVEREND: Where is it?

R. DOOLEY: It is the first page, no. 4.

JUDGE OVEREND: (After a pause while his Honour read it to himself) It does not go either way really, does it? it refers to each barn, B MR. DOOLEY On one view none of the barns can be occupied until the garages as a whole are complete, and at least two-thirds of the garage development, as it were, attached to the other plots other than barn B.

JUDGE OVEREND: I forget. There are four garages, or ----------------------------

MR. DOOLEY: There are three garages.

JUDGE OVEREND: I am just trying to remember. I did look at how many garages there were, and I have forgotten. You say there are three, do you?

MR. DOOLEY: Three garages - one for each barn.

JUDGE OVEREND: Three and a hole.

MR. DOOLEY: Three, and a hole in the middle.

JUDGE OVEREND: All right. Yes; so that is your preemptive point.

MR. DOOLEY: Essentially it comes to this. The scheme of the Act - and this is my conclusion - is clear. There is an outstanding debt found by the adjudicator to be due and, I should add, found by him to be proper for peremptory enforcement; that is part of the adjudication.

JUDGE OVEREND; Yes, but the sole issue is the point taken whether it is a contract with a residential occupier.

MR. DOOLEY: Yes, whether section 106 applies or not. Of course, my learned friend has to satisfy you on that point that it is proper to review the decision of the adjudicator on that matter.

JUDGE OVEREND: "Should he have decided it at all?"

MR. DOOLEY: That is a matter with which Mr. Watson will no doubt deal.

JUDGE OVEREND: What do you say?

MR, DOOLEY: I say about the adjudicator that he can decide upon his own jurisdiction.

JUDGE OVEREND: So he can bootstrap it?

MR. DOOLEY: Yes; but I have to accept that it is a matter which can oe reviewed by the court, and indeed one of the authorities that my learned friend produces, and that I have in my bundle, says exactly that.

We are in the early days of this legislation. There is no guidance from the Court of Appeal as yet, except, I think, in the case of Maycock. which you have in the bundle; but there is nothing that comes out of it which really affects this primary issue for your decision. My position is that the definition of "residential occupier" is absolutely clear - it does not cover the contract in this case -- Mr.

and Mrs. ' were not residential occupiers - and the claimant should be entitled to judgment. I also say there is no other reason -and, indeed, none is advanced - for this matter to proceed to trial. In that I am referring to the test of part 24, rule 2. Unless I can assist further?

JUDGE OVEREND: No, thank you very much. Mr. Watson?

MR, WATSON: May i t p lease your Honour, the issue is whether sect ion 106 of the Act appl ies - specif ical ly , was this a const ruc t ion cont ract w i th a res ident ia l occup ie r as def ined in that sect ion?

I f t h a t s e c t i o n a p p l i e d , t h e n t h i s c o n t r a c t w a s e x c l u d e d f r o m p a r t 2 o f t h a t A c t - t h e a d j u d i c a t o r d i d n o t h a ve ju r i sd i c t i on , h i s a wa rd wo u ld be o f n o e f f e c t , a nd th e "claim would fai l , because the claim is a c laim on the award.

There are two quest ions to cons ider in re lat ion to t h a t i s s u e . F i r s t , w e re t h e s e o p e r a t i o n s o n a d w e l l i n g ? S e c o n d , w a s t h i s a c o n t r a c t w h i c h p r i n c i p a l l y r e l a t e s t o operat ions on a dwel l ing? I sha l l come to my submiss ions , which are fair ly short , on both of those in a moment.

May I deal with one or two matters before I reach that, though. Maybe this can be described as a technical E point, and one sometimes

JUDGE OVEREND: Gets a reverse answer?

MR. WATSON: Well, one sometimes gets the feeling the courts do not like parties to take technical points; but what I want to submit on that is that it is a point which Etnden anticipates as a point that could be proper to take. Secondly, it is a point which Mr. Justice Dyson accepted – in a case that I will show your Honour in a moment - would defeat the application for summary judgment if correctly taken; so it is a point which it is proper for ray clients to take, and important and significant.. because it would defeat the application, and indeed the claim, if it were a good point.

Can I just take your Honour, please, to that decision of Mr. Justice Dyson in Project Consultancy Group v. Trustee? of the Grey Trust. It is one of the cases in my learned friend's bundle. I did include it with my own materials, but that was a transcript of the judge, and this report that my learned friend

JUDGE OVEREND: Macob?

MR. WATSON: No, it is the Project Consultancy Group - there are three photocopies by my learned friend - reported in [1999] Building Law Reports 377, Just to to short-circuit things, can I take your Honour straightaway to page 379, and just read the first of the four issues that his Lordship had to determine. Paragraph No. 2 of the judgment:

"The following issues arise (1): is it open to a defendant in proceedings to enforce the decision of an adjudicator to challenge the decision on the grounds that the adjudicator had no jurisdiction to determine the dispute? This involves the true construction of section 108(3) of the Act, and I shall refer to it as 'the construction issue'."

If your Honour goes to the bottom of that page, from paragraph 4 through on to the next page to paragraph 9 is his Lordship's consideration of that construction issue, and it concludes, in paragraph 9, in this way:

"I conclude therefore that it is open to a defendant in enforcement proceedings to challenge the decision of an adjudicator on the grounds that he was not empowered by the Act to make the decision'1.

II

J U D G E O V E R E N D : I a m n o t q u i t e s u r e w h e t h e r t h a t p o i n t i s taken against you.

MR. WATSON: No , I do not th ink i t i s , but ------------------------

JUDGE OVEREND: I f so , i t i s taken so fa int l y as to d isappear down the cor r idors.

M R . W A T S O N : T h a t w a s a c a s e o f a n a t t e m p t t o e n f o r c e ju r i sd ic t ion by an app l icant fo r summary judgment , and i t was a n a p p l i c a t i o n t h a t f a i l e d . T h e i s s u e i n t h a t c a s e w a s whether the cont rac t had been made befo re or a f te r the

JUD GE O VER END: We l l , l e t u s no t was te t ime on t h i s po in t ; i t is not be ing taken against you.

M R , W A T S O N : S ec o n d l y b y w a y o f p r e f a c e , c a n I t a k e y o u r Honour to the reasons the ad judica tor gave for f ind ing aga inst t he de fendant s . Tha t can b e foun d on page 2 35 , t h e ve ry l as t p a g e o f t h e b u n d l e . T h a t i s p a r t o f a l e t t e r s e n t b y t h e a d ju d i c a t o r da t ed 2 0 th Au g us t 19 9 9 t o b o t h p a r t i es f o l l ow in g the i r le t te rs to h im abovt that issue. Perhaps I should s tar t on pa ge 234 , because i t i s r e l evan t no w to a po in t my l ea rn ed f r i e nd w as s u bm i t t i ng j us t a m o m en t ag o . D o e s y o u r Lo rd s h i p s e e , a t t h e f o o t o f t h a t l e t t e r , t h e s u b h e a d i n g "Jur isd ic t ion"? "The par t ies are agreed tha t the cont rac t was f o r t h e c o n v e r s i o n o f t w o b a r n s i n t o t w o d w e l l i n g s " . C a n I j us t s top there . My learned f r iend submi t ted to you a moment a g o t h a t t h i s w a s a c o n t r a c t f o r t h e c o n v e r s i o n o f t h r e e barns. Tha t i s no t co r rec t ; i t i s no t what h is c l ien ts sa id in the i r case to the ad jud icato r . Page 31 re la tes; i f I need to take your Honour to that, I will do so. There is only one paragraph on page 31.

JUDGE OVEREND: I am surprised that an error of this sort, if it be an error, is being made.

MR. WATSON: Yes.

JUDGE OVEREND: I mean, if these are not contractual drawings

MR. WATSONi These were drawings for planning permission, and formed the basis of the works, but the bills of quantity relate to the two barns, barn A and barn B. There were not any

MR. DOOLEY: Can I interrupt to make it shorter. I am wrong.

JUDGE OVEREND: There you go.

MR. DOOLEY: It is barns A and B and the garage block, and somehow I have transposed that into barns A, B and C; so barns A and B are included in the bill of quantities and the contract. The contract itself does not specify a number of barns.

MR. WATSON: I am grateful to my learned friend for that.

I was just inviting your Honour to read the reasons given by the adjudicator for rejecting

JUDGE OVEREND: Well, I think I have read those. He said there were two, and that is it.

MR. WATSON: Yes, and they are set out in my own skeleton argument. I quoted from that.

J U D G E O V E R E N D : Y o u w i l l h a v e t o s h o w m e y o u r s k e l e t o n a r g u m e n t . W h e r e i s t h a t ? I s t h e r e a t o p c o p y ? ( A c o p y w a ^ handed to his Honour) .

M R . W A T S O N : P a r a g r a p h 1 6 o f t h e b a c k g r o u n d t h a t I s e t o u t - B t h e s e c o n d p a g e o f m y s k e l e t o n - q u o t e s f r o m t h a t l e t t e r . I s e t i t up t he re be c a u s e t ha t wa s a t a t im e w he n I d i d n o t rea l i se i t was in the bundle , but ce r ta in ly i t has no t been exhib i ted to anybody's wi tness statement . J UD G E O V E REN D : (A f te r a p au s e ! Ye s .

M R . W A T S O N : T h e t h i r d m a t t e r b y w a y o f p r e f a c e t o r a y t e c h n i c a l a r g u m e n t s o n t h e l a n g u a g e o f t h e s e c t i o n i s t o inv i te your Honour , p lease, to look at our ev idence. I do not need to take your Honour through the exh ib i ts , but i f I m ight ask your Honour , p lease , to re ad the th ree a f f i dav i t s - they a r e q u i t e s h o r t ; t h e f i r s t o n e f r o m M r . i s t h e l o n g e s t o f t h e t h r e e . H i s s t a te m e n t b e g i n s o n p a g e 8 8 . I t h i n k t h e more impor tan t pa ragraph s o f h i s ev id ence a re 9 , 10 and 1 1 , bu t o f cou rs e I wou ld ask yo u r Ho no ur , p l ea s e , t o r ead t he •whole lot of it.

J U D G E O V E R E N D : ( A f t e r a p a u s e ) .................. w i t h h o l d i n g p a y m e n t ?

Well, i t is not raised before roe, anyhow.

MR. WATSON: I do no t know. I canno t ra i se tha t be fo re your Honour , anyway; I cannot go beh ind the substant ive i ssues de te rmin ed by the ad jud i ca to r - on l y h i s j u r i sd i c t i on . ' I t h i n k , i n f a i r ness to Mr . B i ck , t ha t i s t he m a in r eas on w hy h i s r e s i s t a n c e t o t h e a p p l i c a t i o n f a i l s . A l t h o u g h h i s a rch i tec t ra ised var ious mat te rs i n response to the invo ices, they were not raised in the correct form as required by the Act.

JUDGE OVEREND: (After a pause) Yes.

MR. WATSON: 72(?) is Mr. James's short affidavit. He was the architect. (After a pause! Mr, Cox's twelve-paragraph affidavit. Mr. Cox was the friend of Mr. and Mrs. Who introduced them to these builders and this architect.

JUDGE OVEREND: (After a pause! Yes.

MR. WATSON: Against that background, I go straight to the two questions- The first one is: was this operations work on a dwelling - "on a dwelling"? - and my learned friend's submission that there should be a pre-existing dwelling.

I make seven points in response to that. First of all, if ray learned friend's submission were correct, it would mean that if the contract begins with a derelict barn to convert into a house, it is outside the Act, but if it is a derelict ho^se which has to be knocked down and reconstructed, it is within section 106, and therefore excluded; and one wonders what is the significance between the demolition and rebuilding from a derelict barn starting point and the demolition and rebuilding from a derelict dwelling starting point; and one must query whether the point taken is a sensible one.

My second point is the - - - -

JUDGE OVEREND: So your first point is "why?"

MR. WATSON: ''Why?" The second point is, as a matter of language, the preposition "on" can mean, amongst other things,

"concern ing" or " re lat ing to" - Ch i t tv on Cont rac t . Perhaps that is not a very good example, but i t is an example of the use of the English language.

JUDGE OVEREND: I hope your points are going to get bet ter. B MR. WATSON: The third point , use of language. "What are you work ing on?" The answer may wel l be the end product , and not w h a t o n e i s s t a r t i n g w i t h . T h a t i s a l e g i t i m a t e u s e o f language.

The four th point is that the def in i t ion in the statute, in fact, looks to the end product. That is why the statute goes on to say, in the very same subsection - 106, subsec t ion 2 - " re la tes to an operat ion on a dwel l ing which one of the par t ies to the contract occupies , or in tends to occupy, as his residence" - looks towards the end product, in my submission.

E My f i f th point is that the draftsman did not use the

word " to " ; i t i s no t "opera t ions to a dwe l l ing " . I f i t had be en " to a dw e l l i ng " , t hen my lea rn ed f r i end ' s sub miss ion m igh t ha ve had a b e t t e r recep t io n ; b u t i t i s no t t he word "to".

My s ixth point is: "Wel l , yes, the draftsman", I suppose my learned friend might say, "could have used, instead of the word 'on 1 , ' to ' or ' in connection with' i f he wanted to be broad"; but in my submission the choice of one word - the single word "on" - serves that purpose adequately -- means in fac t " to" o r ' ' in connect ion wi th " , and the draf tsman should be congratulated for using a single word instead of half a dozen.

My seventh point is that this was not something the adjudicator thought of; it was not part of his reasoning. I B respectfully suggest that the reason why was because it was not a good point, and is simply a matter of impression.

If one puts all those seven points together, ray submission is. that "operations on a dwelling" can mean "operations concerning or relating to a dwelling". It does not have to start out life as a dwelling; it can start with a bare - a vacant plot; and if the builders are engaged to build a house on a vacant plot, that is "work on a dwelling". If it is a derelict building, they are knocking down and rebuilding it, that is work on a building. Yes, of course it does also include building an extension, or gutting a building and

E JUDGE OVEREND: Sorry, just hold on. A derelict building, knocking it down and rebuilding it is "work on a dwelling" -from the beginning?

MR. WATSON: Well, imagine if it is a derelict cottage in the country.

JUDGE OVEREND: Yes. On any view, derelict or otherwise, it has the soubriquet "dwelling".

MR. WATSON: Yes,

JUDGE OVEREND: "Disused dwelling", but .nevertheless "dwelling"; but say it is a disused agricultural barn which you knock down and rebuild. Is the

MR. WATSON: Rebuild into a dwelling?

JUDGE OVEREND: No, rebuilding ------

MR. WATSON: Rebuild into a dwelling - oh, yes, it has to be rebuilt into a dwelling. That is why I emphasise in those submissions that one looks to the end product. Yes, if one B was rebuilding it into a brand-new agricultural barn, then section 106 would not apply; I accept that, of course. JUDGE OVEREND: I, for my part, would not think that knocking down an agricultural barn would amount to "an operation on a dwelling", even if it later is then translated into - is converted into -- is then replaced by a dwelling. I would not have thought that knocking it down prior to rebuilding it as a dwelling - I would

not have thought that the knocking it down was "an operation on a dwelling" at all.

MR. WATSON: If one looks - I may be misunderstanding your Honour - if one is looking at • just knocking it down, full stop, and then walking away from the site, and that is the end of the contract, then I accept that would not be "work on a dwelling"; but if the totality of the contract involved the creation of a dwelling, from whatever it be - be it a bare site, be it a derelict barn, be it a derelict cottage - then I would submit, viewed as a whole, using ordinary language, looking at the end product, looking at the nature - the purpose - of the contract, then one would say: "Well, one was working on a dwelling" - "What are you working on here?" "Building a house".

JUDGE OVEREND: What you are really, I think, submitting is that you should not be myopic on the word "dwelling", because

t he ex c l us io n re la t es to t he ph ras e , o r t h e co l l ec t i o n o f words, "pr incipal ly re lates to operat ions on a dwel l ing". is that not what you are ef fect ive ly saying?

M R . W A T S O N : T h a t i s a n o t h e r w a y , a n d p e r h a p s a b e t t e r w a y , B o f e n c a p s u l a t i n g m y s u b m i s s i o n . I b e g a n , i n f a c t , b y submi t t ing , in e f fec t , that one should not be myopic on the word "on", because in ef fect ray learned fr iend is submitt ing that th is real ly reads "relates to operat ions to a dwel l ing" - to an exist ing dwel l ing, is what he is inv i t ing your Honour to const rue th is as , in e f fec t , say ing. I am inv i t ing the cour t t o s a y t h a t r e a l l y w h a t t h i s m e a n s i s " t o o p e r a t i o n s t o o r conce rn ing or re la t i ng to " the p rov is ion o f a dwel l ing , o r a dwel l ing . Then go ing on: "Which one o f the par t ies to the cont rac t occup iss , or in tends to occupy?" Real l y , those submissions, shor t as they be, I do not think can be enlarged upon. They ei ther appeal or they do not, and i f they do not appeal, that is the end of ray case, in effect, because it does not mat ter what the cont ract pr incipal ly re lates to. I f these are not operat ions on a dwel l ing , then we are not w i th in the sect ion. I f we are, then I s t i l l have to establ ish that the contract "pr incipal ly" relates to such operat ions; and I move to that point , i f I may.

"Principally" must mean "mainly",, or some such synonym. The use o f the word "p r inc ipal l y " , I wou ld submi t , mus t e nv i sa ge , o r p e rmi t t he p os s ib i l i t y , t ha t some th ing e l se i s be ing cons t ruc ted as we l l . There is one exc lus ion, and tha t is i f i t is a block of f lats , even i f the employer is going to live in one of the flats, then he cannot argue the exclusion; but that is where premises are divided horizontally - that is the last word in subsection 2. If the premises are divided vertically, though, then

the court can look at the question: B "Does the contract relate principally to operations on a dwelling?".

There are, I think, two ways that I can think of of looking at that question and attempting to answer it. One is to look at the issue broadly - perhaps on a subjective basis; the other is to look at the question technically, perhaps on an objective basis. Looking at the question, broadly one might pose the question: "What were the parties' main objectives? What was their main concern?" The answer in this case, on the evidence, I would submit, is to complete a dwelling house so that Mr. and Mrs. * could move into it. True, there was to be a development of a further property so that that could be sold in order to pay for the work, but the principal purpose, looking at the contract broadly, was to provide Mrs. and Mrs. with a home. That is my submission there, looking at the matter on a broad way.

The evidence relating to that - some of it is in issue, some of it is not in issue. There is no doubt that Mr.

and Mrs. ~ did intend to occupy barn B, and have done so, and have completed that property, and are living there. It is not in issue either, I think, that at the meeting - at the very least at the meeting - on 2nd March - - the minute my lea rned f r i end re fe r red y our Honour to - I do no t t h ink you r Honour looked at i t .

JUDGE OVEREND: I d id not look a t i t . Do you want me to look at i t?

M R . W A T S O N : Y e s . I t i s o n p a g e 7 0 . I f y o u r H o n o u r l o o k s a t i t , your Honour w i l l see that the main focus o f concern was ba rn B . I t i s a page and -a -ha l f l ong , pa ge s 70 a nd 71 . You w i l l s e e w h o w a s p r e s e n t a t t h a t m e e t i n g - M r . M r , B o o b y e r , M r . C o x , w h o s e s t a t e m e n t w e h a v e , a n d M r . J o n e s , w h o s e s t a t e m e n t w e h a v e . ( A f t e r a p a u s e ) a r e t h e conversat ions which Mr . contends he had wi th Mr . Boobyer much ear l i e r on in the proceedings, and wh ich a re dea l t w i th in paragraphs 9 and 10 of h is wi tness s tatement , which your H o n o u r h a s j u s t r e a d . W h a t i s a l s o i n i s s u e a r e t h e conversat ions which Mr. Cox said he had with Mr. Boobyer, and which are dea l t w i th in paragraphs - I th ink i t i s - 6 and 9 of his statement, which your Honour has read.

Both conversat ions, in which the in tent ion of Mr. and M r s . t o m o v e i n t o b a r n B , a n d t h e d e s i r e t h a t t h a t proper ty be comple ted f i rs t - those conversa t ions are

material, I would submit, to the issue ,.of whether the p r i n c i p a l p u r p o s e o f t h i s c o n t r a c t w a s " o p e r a t i o n s o n a dwel l ing" - operat ions on a dwel l ing which Mr . and Mrs . • , in tended to occupy. I t i s not so much that they are re levant to an issue of knowledge on the part of Mr. Boobyer; they are r e l e v a n t t o t h e b r o a d q u e s t i o n o f w h a t w a s t h e p r i n c i p a l purpose of the contract.

Insofar as those conversat ions are mater ia l to ass is t t h e a n s w e r i n g o f t h a t i s s u e , y o u r H o n o u r p e r h a p s c a n n o t r e s o l v e t h o s e i s s u e s t o d a y o n p a p e r . T h o s e a r e i s s u e s o n which ev idence would be needed.

Moving on to the ob ject i ve, or the technical , approach to the ques t ion : ' 'Was th is con t rac t p r inc ipa l l y re la t i ng to o p e r a t i o n s o n a d w e l l i n g ? " , I t u r n t h e n t o M r . J o n e s ' s ev idence . There a re the two barns , no t the th ree - yes - and there a re the garages , and yes, there is t he p lann ing pe rm is s i on wh i c h r equ i r es t he ga rage s to be bu i l t be fo re Mr . a n d M r s . . c a n m o v e i n t o b a r n B . B a r n B i s t h e b i g g e r p rop e r t y . Ye s , my l ea rne d f r i e nd m igh t sa y : "We l l , t ha t i s a l l very wel l , but the contract might requi re more work on the s m a l l e r o f t h e t w o b a r n e . - y o u c a n n o t j u s t a n s w e r t h i s q u e s t i o n o f ' p r i n c i p a l l y ' b y r e f e r e n c e t o s i z e " ; s o i f o n e n e e d s t o l o o k a t t h e c o s t i n g o f t h e w o r k , t h a t i s s o m e t h i n g Mr. Jones has done.

JUDGE OVEREND: He says 65 per cent .

M R. W A T S O N : H e s a y s 6 5 p e r c e n t . M y l e a r n e d f r i e n d c a n s a y a l l he wants to p ick away at tha t . I do not th ink he has - I have no t seen any ev idence to con t rad ic t t ha t . I t i s no t a matter on which Mr. Jones is so obvious ly wrong that the court shou ld re jec t h is ev idence ou t o f hand; i t i s a mat ter which ei ther the court accepts, or the court says: Wel l , should be dea l t w i th a t a hear ing when Mr, Jones can be cross-examined . T h a t i s n o t a m a t t e r t o d e a l w i t h o n a n a p p l i c a t i o n f o r summary judgment.

Which o f those two approaches does the cour t adopt A the broad approach - - the sub jec t i ve one - - or the ob ject i ve o ne , t he more t echn ic a l o ne ? In my su bmiss io n , you r Honour does not need to answer that quest ion, because on both tests the answers emerge in favour of the defendants.

Those are my submiss ions on the two quest ions. Let me j u s t f i n i s h w i t h s o m e o th e r sh o r t i s h po in t s . M y l ea r ne d fr iend's skeleton argument, I th ink, suggests that th is was a commercial contract, or there was a measure of prof i t involved i n i t . Wh e the r co m merc ia l o r no t , wh e the r p ro f i t i s t o be m a d e

t o p a y f o r t h e w o r k i n t h e f i r s t p l a c e o r n o t , i s n o t rea l ly the issue. The issue is whether sec t ion 106 app l ies ; but - I make this observat ion - the contrac t was not hand led in a very commercia l manner. I t was star ted before the terms we re d i sc u ss e d , o r t h e p r i ce wa s ag re e d . T h e c l a i m an t s t h e m s e l v e s s p e a k o f t h e s e m i - i n f o r m a l n a tu r e o f i t s admin is t ra t ion , and that is language they used in the i r submissions to the adjudicator.

Secondly, ray learned friend's skeleton argument des cr ib es th e de fen da nts , Mr . an d Mrs . , as "bu i l d in g con t ra c to rs " . Whe the r o r no t t h ey a re bu i l d ing con t rac to r s is, again, also an irrelevant issue - thank you, "property developers". * They were inexperienced, they say, in bui ld ing matters, hence they went to Mr. Cox, hence, no doubt, their complete ignorance of the 1996 Act, and the requirements in re lat ion to not ices wi thholding payment on invoices that are challenged.

Finally, though, I make this point. The decision that your Honour reaches is of considerable importance to Mr. and Mrs. . The evidence at the very end of the exhibit to Mr, statement - let me just take your Honour through it at page 68 of that exhibit, top right-hand corner, page 166. This is a letter, August of last year, written by Mr. Boobyer. The penultimate paragraph says: "We confirm that the company has no assets to speak of, and ceased trading some time ago, that our bank account has effectively been frozen for the purposes of paying out," The next page, 167, are the most recently filed accounts which have been obtained for the period to March 1998, and one can see, on page 169, the material figures there - that there is a negative balance sheet, and that the profit and loss account for that trading period - presumably the last trading period - was a loss. JUDGE OVEREND: So your point, I anticipate, is that if you have to pay out, you will never see it back again. MR. WATSON: That is right. Those are my submissions. That may be tough, but that is why the matter is of particular importance to Mr. and Mrs. , and why I am taking this particular point, and urging it. My learned friend is right to say that this is a new area - a relatively new Act, decisions coming out quite frequently and currently, and there is no decision, as far as I am aware, or my learned friend is aware, on the question of what is a dwelling, and _ it is obviously an important exclusion from this Act. The Act - I accept my learned friend's summary - is intended to assist the

cash-flow of builders, but really intended to protect them from those who delay paying bills .that are justly due, and the playing field is tilted in their direction; but when it is a householder on the other side - to just use a word that is not B in the Act - then the playing field is made more level. Your Honour's decision is whether this is such a case.

Those are ray submissions, unless I can help your Honour.

MR, DOOLEY: I am mindful of the time, and I will be as short as I possibly can. As far as the financial position of the company is concerned, it is a classic illustration of the problem that the Act tries to resolve to some extent. This company is in a difficult financial position, and it was put there by this particular contract, and by the fact that it had done a great deal of work and not been paid for it. Bearing in mind what I said about it being effectively a one-man company, it is not really surprising. It is that which adjudication was designed to solve, in that it produced quick payment; not in the present case, however.

As far as the commercial nature of, the development that I have emphasised is concerned, can I just point to the fact that Mr. and Mrs. registered for VAT purposes, and have traded under the style of J & B Developments during the course of this particular barn conversion operation.

My learned friend's points in connection with the word "principally" adopted two approaches - first the subjective approach, as he put i t - that of Mr. and Mrs. , and thei r in tent ions. May I encourage your Honour to look fur ther than that ; i t real ly is a case of looking at the purpose of the cont ract . I have to accept ent i re ly that I was no t cor rec t in B t h e w a y I a n a l y s e d t h e c o n t r a c t t o y o u t o s t a r t o f f w i t h . I f I could take you to page 65, paragraph 6 of Mr, Boobyer ' s statement, one can see the extent of i t there, and that is the way I shou ld have descr ibed i t - the second sentence: "The quote was for . . . " , and then he deals with the extent of the work included in the quotat ion . . . "Al l works on barns A and B , g a r a g e b l o c k " a n d , a s h e p u t i t , " f o r a l l f o u r b a rn s " - wh ich inc ludes some demol i t ion - " the cour tyard and the d ra inage for a l l fou r ba rns" . I t does no t go qu i te as fa r as I sugges ted to your Honour , bu t i t goes a long way. I f one looks at that, and i f one accepts that ev idence - and i t does not appear to be disputed - then this was a contract which was not pr inc ipal ly for the prov is ion of a res idence for Mr . and Mrs.

Mr. Jones's evidence is relied upon by ray learned fr iend to show that when one carr ies out a valuat ion exercise, some 64 per cent of the value is at t r ibutable to the bui ld ing o f M r . a n d M r s . . e v e n t u a l h o m e . C a n I p r a y t h a t f a c t i n a i d , i f i t b e co r r e c t a t a l l , i n t h i s s en s e - t h a t t h a t suggests very s t rongly that the object of th is operat ion was no t p r inc i pa l l y t he p rov i s i on o f a

res idence , bu t i t was a two- fo ld ob jec t - the prov is ion o f two houses - - A and B, as H i t w e r e . I f o n e t a k e s i n t o a c c o u n t t h e g a r a g e , a l t h o u g h I a m accused of picking away at it - and I suggest it is an important point - at least two thirds of that part of the development was not attributable to barn B,

Can I turn to the points made in relation to the definition of "dwelling". First of all, the question of knowledge was touched upon. Your Honour may think that the question of somebody's knowledge does go to the intention of the parties. If that be material in the present case, it is important that the parties understood that they were contracting, in a manner which would not have been covered by the Act, for the provision, principally, of a residence. Therefore the lack of knowledge, as it is put, on the part of Mr. Boobyer is material. I have to accept that there is countervailing evidence, both from Mr. Cox and Mr. , and that is an issue of fact which cannot, I suggest, properly be decided summarily at this stage.

You had an example put before you of demolition and reconstruction. Can I take the point your Honour has made and, I hope, amplify it. I would say that the demolition of a derelict property cannot be within the definition of "operations on a dwelling". Presumably if it is a derelict property it has ceased to be a dwelling; but applying the definition to the facts of the present case, it is suggested that you should extend the wording of the statute by adding words such as "in relation to" or "in connection with".

May I say, first of all, that I do not accept that the addition of such words would necessarily extend the meaning of the statute as it presently stands; but if you did adopt that interpretation, can I point to an anomaly that would result. A dwellinghouse contract would encompass a contract for the clearance and preparation of land for the purpose of building a new house, and all preparatory works that went with it, and the construction work upon that new house. However, in relation to a flat, and bearing in mind the definition of ''a dwelling" means "a dwelling house or a flat", and continues "and for this purpose 'flat' means separate and self-contained premises constructed or adapted for use for residential purposes", taking the literal meaning of the statute in relation to the definition of "flat", one has the anomaly that a contract for the construction of a flat would not be covered because of the use of the word "constructed" in the past tense, and the use of the word "adapted" in the past tense, whereas the contract for the construction of a dwelling house would be covered by the exclusion.

It was suggested that the points now put before you were not part of the adjudicator's reasoning. I am not quite sure what Mr. Watson draws from that, but I would suggest that I am not bound for one moment by

what the adjudicator thought were his powers at the time, or by the particular decision he made - or the wording of that decision - in relation to his jurisdiction. That is the way he saw it at the time. The way my learned friend puts it is that there was a residential occupier involved in this case, and therefore there was a want of jurisdiction. That is the question for this court.

Finally, can I just point to that expression "residential occupier". It is the vary in which the exception or exclusion was phrased, and I point to the cominonsense - I think - argument that Mr. and Mrs. could in no circumstances, at the time of the contract, qualify as a "residential occupier" of barn B. You would have to extend what I suggest is the obvious interpretation of the statute quite considerably

JUDGE OVEREND: There is a technical use of the words "residential occupier". It is not what you and I understand by "residential occupier" - namely, someone who is sitting there; and that is perfectly apparent, is it not, from the words "or intends to occupy as his residence"?

MR. DOOLET: I would cay that that is a logical extension, and obviously applies to somebody who owns a property and intends to occupy it; but that property must be a dwelling, I say the words "intends to occupy" go to the identity of the contracting party encompassed in this exclusion, but do not go to the question of whether a dwelling is or is not a dwelling.

Unless I can assist further? JUDGE OVEREND: No; thank you very much indeed.

J U D G M E N T

JUDGE OVEREND: This is an application for summary judgment brought by the claimant based upon an adjudicator's award that was reached on 6th September 1999 under the procedure of that well-known Act, the Housing Grants Construction and Regeneration Act 1996, and in particular with the procedure of section 108 of it.

The background to the claim is relatively straightforward. Mr. and Mrs. decided that they wanted to move to East Budleigh. They had sold their property, and they bought a temporary accommodation at 2 All Saint Close in East Budleigh, They did that because they were interested in buying a barn, and they had heard about the barn at Hill Farm through Mr. Cox. They tried to buy the barn in which they were interested, which was part of a number of buildings being offered for sale by the vendor. They were unable to buy the one, and so they decided to buy all that was on offer, and in stages, certainly so far as the first stage was concerned, they were going to convert two of the barns - one for their own purposes, and the other for sale - as well as

converting a garage block, courtyard and access for all of the buildings which they had purchased.

The contract that was entered into with Samuel Construction was as a result of a quotation on 18th February 1999, and the quotation was for the full works at Barns A and B - B being the one in which they wanted live, the bigger barn - the garage block for all four barns, the courtyard and the drainage for all four barns. It was not their intention to be property developers, but they were, in effect, forced down that route because they were determined to buy barn B, and it had other buildings which they had to buy with it., and they had to dispose of them as part of their plans.

The works had commenced in January 1999, and an invoice was submitted. There was a site meeting on 2nd March in which there was a certain concentration on the progress of barn B which, on one view, was said to have been accelerated. B There is an issue between the parties as to whether 2nd March was the first time at which Samuel Construction were told that barn B was the principal barn that was to be developed for the JCT contract was, in due course, drawn up and signed. No issue is taken as to whether or not it was a written contract for the purposes of this application. A second invoice was raised on 31st March. By then, or shortly after then, both parties were dissatisfied with each other, and, not to put too fine a point on it, the matter came to a head on 13th April when the agreement was terminated. The contractors, for their part, had not received, they said, sufficient moneys following the raising of the invoices. The -- , for their part, were dissatisfied with the progress of the works.

Thus the matter came before the adjudicator, who made his award on 6th September.

The defendants, the , took the point before the adjudicator that he did not have jurisdiction, and the point that they took was a relatively straightforward one, for under section 106{1)(a), the Act relating to construction contracts is said not to apply to "(a), a construction contract with a 11 residential occupier (see below)". One follows the brackets to see below to subsection (2), and one reads the following: "A construction contract with a residential occupisr means 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".

The point was taken before the adjudicator that he did not have jurisdiction because this was a construction contract with a residential occupier.

The adjudicator considered that matter, and concluded that he had, and did so in the following terms. He said:

"The contract in question relates to more than one dwelling. One dwelling only is intended for the occupancy of one of the parties. I therefore conclude that a construction contract for two dwellings, one of which is to be occupied by one of the parties to the contract, is not a construction contract which principally relates to operations on a dwelling which one of the parties to the contract intends to occupy as a residence. I have therefore concluded that I have jurisdiction in this matter, and intend to continue with the adjudication."

That is the same point, effectively, that is taken before this court in opposition to the claim for summary judgment.

It is said by Mr. Watson that this is a contract with a residental occupier in the sense that the contract was principally in relation to the conversion of barn B, which was to be a residence, once converted, for the , which they did intend to occupy as their residence. The remaining components of the contract were entirely secondary to the objective, which was to provide a converted residence for the , and that in those circumstances the Act did not apply.

there was no jurisdiction in the adjudicator, and accordingly no possibility of summary judgment on his award.

It has been argued that a dwelling needs to be considered in relation to whether or not it is already in existence. It seems to me, however, that the following approach is correct in considering the construction of this statute in the context of this case. Firstly, a residential occupier does not have to be in occupation. That is perfectly obvious from the words "intends to occupy as his residence". Secondly, it seems to me that the fact that, when the operations commence, a property is not properly described as "a dwelling" is neither here nor there, provided that the operations on the item as a whole can properly be described as principally operations on a dwelling - in other words, you start off with a derelict barn, and you intend to convert it into a dwelling. At some stage it ceases to be a derelict barn and it becomes the beginning of a partly-constructed dwelling; and so the question is not: "Was it a dwelling at the commencement of the operations?", but: "Did the operations as a whole principally relate to operations on a dwelling?"

In this case there are operations on barn B, which was an agricultural barn which, shortly after the works commenced, was transformed into a partially-constructe'd dwelling, or partly-converted dwelling,- and if the

matter related to barn B alone, there would be absolutely no difficulty at all, in my judgment, in deciding that it principally related to operations on a dwelling. Furthermore, barn B, perfectly clearly, was a barn which was to become a dwelling which was to be occupied as the residence o*: the ; so every component of subsection (2) would apply to barn B.

That is not true, however, in relation to barn A. Barn A would fail the test, because it was never intended to be occupied as the ' residence, but it was, however, and it became in the course of conversion, a dwelling.

The third component of the contract was a garage block for all four barns. It seems to me that insofar as the contract related to creating a garage block for the other three barns other than barn A, none of those would have been ancillary to operations on a dwelling. The courtyard and the drainage is probably mostly relevant to barn B.

Tilers is evidence, which is uncontested, that the valuation of the works relevant to barn B amounted to about E 64/65 per cent of the total contract sum.

I have, for my part, no difficulty in construing this statute in the context of these facts. It is not possible to say, in my judgment, on these facts that the contract principally related to an operation on barn B. It did not. It related to barn A, barn B, the garage block for all four barns, as well the courtyard and the drainage. This was a case which was not excluded under section 106(1) (a), and, for what it is worth, I would approve - not in the same terms, but I would approve - the resul t o f the adjudicator 's determination of his own jurisdiction, H

In those circumstances, and for those reasons, there being no other reason why an order for summary judgment should not be made, having regard to the scheme of the Act, which is to provide temporary cash-flow for builders - and I include in those remarks a reference to what is apparently the impecuniosity of the company - there will be summary judgment as prayed.

MR. DOOLEY: In those circumstances I seek judgment in the sum of £46,826.84, together with interest up to the date of proceedings of £174.42; and I regret I will have to work out the remaining interest, which I have not done so far. JUDGE OVEREND:: Well, it is now 26 minutes past 4. How long will that take you?

MR. DOQLEY: About three or four minutes.

JUDGE OVERENT}: Yes. Well, you can pass the figure in, I think is the best way of dealing with the matter. Yes. MR. DOOLEY The other question is costs. I seek the costs of the action.

JUDGE OVEREND: Are you asking for them to be summarily assessed?

MR. DOOLEY: I think the parties are in a position to do that. Given the extent of the action, it may be that a detailed assessment is more appropriate. I am in your Honour's hands from that point of view. I have not seen the summary assessment. I have not seen the

JUDGE OVEREND: Have you seen them, Mr. Watson?

MR. WATSON: To answer your Honour's question, ves, I have seen them.

JUDGE OVEREND: Before we get there, I want --------------------

MR. WATSON: There are issues on them to be taken if ----------------------------

JUDGE OVEREND: Forgive me; I do not want to cross-examine you on summary assessment. Is there anything you want to say about the amount of the judgment which is sought, or the implicit order for costs?

MR. WATSON: I assume my learned friend has taken faithfully the precise of the amount of the arbitrator's award, plus interest - £46,826.84 was, I think, the adjudicator's award and fees - and I cannot dispute his application for interest, I do not think. Your Honour, there is one other matter which I can flag at this point. I have instructions to ask for leave to appeal.

JUDGE OVEREND: Can we deal with that after the question of costs has been dealt with?

MR. WATSON: If your Honour wishes.

JUDGE OVEREND: Yes. Well, hold on - let us just deal with this, while you have raised it. Yes, go ahead.

MR. WATSON: Al l I say in support of that appl icat ion are the obv ious po in ts - t ha t th i s i s a nove l a rea , and an impor tan t one, not only to my c l ients , but in general , and the quest ion o f s ta tu to ry in terpre ta t ion i s open to a rgument . O f course , your Honour has found one way, qui te c lear ly , and

I do not go behind that ; bu t the issue i tse l f , I submit , is an in teres t ing and impor tan t one, as I say , not on ly to Mr . and Mrs. , but on a broader level. The practice direction encourages me to make this application.

JUDGE OVEEEND: I appreciate that- I am just thinking whether I should grant it or not.

MR. WATSON: Of course, that is not to say that we will automatically take an appeal. It will be considered, obviously, in the light of your Honour's reasoning; but I am bound to make this application now.

JUDGE OVEREND: I do not think you have a jurisdiction to answer that, do you?

MR. DOOLET: I do not. It is a matter for your Honour.

JUDGE OVEREND: Yes; in which case you can sit down! I am going to grant you leave to appeal on the basis that it is a novel area, and it is a question of construction upon which the Court of Appeal may wish to form their own views. Whether you take it to the Court of Appeal, at great expense, is a matter for you. Yes, now on to ....

MR. DOOLEY: I am told the interest figure, in addition to those figures that I have given you, is £1,313.28.

JUDGE OVEREND: Is that in addition to the E174.42?

MR. DOOLEY: It is indeed, yes.

JUDGE OVEREND: And the total figure?

MR. DOOLEY: Allow me one moment - £48,314.54.

JUDGE OVEREND: Yes. Now then, costs?

MR. WATSON: Can I just ask what rate of interest my learned friend took to calculate that?

MR. DOOLEY: The figure that is in the particulars of claim.

JUDGE OVEREND: Costs? You do not get 140 an hour down here!

Who is Mr. Adams? How many years' post-qualification experience does he have?

MR. DOOLEY: May I take instructions?

JUDGE OVEREND: Yes - lots. 120 top whack down here. Yes.

MR, DOOLEY: Has it, I wonder, been be taken into consideration that his practice is in fact elsewhere, and the going rates in different places (?) do vary in the course of asummary assessment of costs that

JUDGE OVEREND: You have chosen to bring the claim in the Exeter County Court.

MR. DOOLEY: No, your Honour, no. It was brought in the Bridgwater County Court, and transferred here because of your Honour's particular expertise.

JUDGE OVEREND: Which you discovered I did not know anything about! Well, you are not going to say that they let you get

away with 140 in Bridgwater, are you?

MR. DOOLEY: I do not know the answer to that, but I do know that

JUDGE OVEREND: He is shaking his head.

MR. DOOLEY: ---------that the guidance on summary.-'assessment does depend upon the area of practice, not the area in which the court is situated. It is the blue booklet that everyone since has received.

MR. WATSON: Can I just indicate, I have some points I will make in due course, including on VAT. I do not know how your Honour intends to deal with it - whether it would assist if highlighted the areas that are in issue rather than have my learned friend trying to guess which ones I was going to

JUDGE OVEREND: Well, I am going to tell you what - I ara going to take my points, because I believe this is the way it should be done, and then you can take such other points as are left.

MR, WATSON: Thank you; that is helpful.

JUDGE OVEREND: Samuel Thomas Construction are registered for VAT, are they not?

MR. DOOLEY: I am sure that must be so.

JUDGE OVEREND: Yes?

MR. DOOLEY: No , t hey a re no t reg is te red fo r VAT purp oses .

J U D G E O V E R E N D : Th e y a r e n o t r e g i s t e re d ? W e r e t h e y ?

M R , D O O L E Y : I t h i n k i t i s n o w t h a t m a t t e r s , y o u r H o n o u r , Yes, i t must be the p resen t s i tua t i on tha t mat te rs .

JUDGE OVEREND: R igh t , in wh ich case you can c la im VAT in i t .

M R , D O O L E Y : Y e s . W e c a n n o t r e c l a i m i t . T h a t i s t h e d i f f i cu l t y .

J U D G E O V E R E N D : I u n d e r s t a n d . W h y w a s i t n e c e s s a ry f o r b o t h so l i c i to r and counse l to a t tend on th is hear ing?

MR . DO O LE Y: Spe a k i ng p e rso na l l y , i t ha s bee n o f co ns id e ra b l e ass is tance to me to have the a t tendance o f a sol i c i t o r .

J U D G E O V E R E N D ; I t i s a pe r f e c t l y s t r a i g h t f o r w a r d c a s e w h i c h y o u h a v e - h a v e y o u a d v i s e d o n b e f o r e ? Y e s . Y o u h a v e h a d a con fe rence . What do you want a so l i c i t o r fo r?

MR. DOOLEY: I am in your Honour 's hands on tha t .

J UD G E OVE RE N D: Oh , I t h ink y ou a re , ye s . H e i s ch a rg i n g f o r h i s a t t e nda nc e t o day . Whe re i s t ha t? A t t he he a r i ng , pag e 3 - estimated hearing - he is charging nearly £800, £900. i think that should all go. (There, was a noise of crossing ou-M Who is charging parking? Counsel? MR. DOOLEY: If only, 3 JUDGE OVEREND: Well, there is a disbursement for parking. That has to go.

MR. DOOLEY: Oh, I see, yes. The actually parking fee is £1.50, I am told.

JUDGE OVEREND: Well, it says £5.

MR. DOOLEY: Yes, the figure was estimated, I am told. JUDGE OVEREND: Yes, Well, I am not going to permit parking.

(Counsel took instructions) Preparation and perusal of documents - in the main action there is nearly three and-a-half hours -- item 4, page 1 -- and for this application, item 4, 8 hours and 12 minutes. That seems to be rather high.

MR. DOOLEY: Can I take instructions?

JUDGE OVEREND: Yes. (Counsel took instructions) That relates to papers for the purpose of preparation of witness statements for the purpose, in turn, of this hearing, and the preparation of documents for counsel, and it does not overlap or duplicate the initial preparation and perusal for the main action - that is page 1, paragraph 4.

JUDGE OVEREND: Well, I will hear what- Mr. Watson has to say

about that, but why was it necessary to have two conferences

or advices - an advice and a conference - with counsel?

MR. DOOLEY: Could I have one moment?

JUDGE OVEREND: Yes. (Counsel took instructions againl. MR. DOOLEY: It is all a conference fee, and it is split between the main action and the summary judgment application; that is the reason it appears twice. I think it is fair to B say that the amount of time involved in preparing for this application - and no doubt my learned friend has found the same - has been considerable, and one of the difficulties is the fact that this is in new territory. There is no doubt that that creates difficulties in timing. JUDGE OVEREND: Mr. Watson? MR. WATSON: Can I just hand up our schedule of costs so that your Honour can see it by comparison. That only relates to this application. (The schedule was handed to the court).

JUDGE OVEREND: Is that just this application?

MR. WATSON: That is jus t th is app l i ca t ion. I am ins t ruc ted to take the point on counsel 's br ie f fee, and just invi te your Honour to compare the two . I t i s t rue I had to p repare th i s case in th is unfamil iar terr i tory myself , as my learned fr iend d id , and I d id no t have the bene f i t o f hav ing a l ready looked a t i t i n c o n n e c t i o n w i t h a c o n f e r e n c e e a r l i e r , o r w i t h a n advice, which is part o f the c laimant 's costs schedule. There i s , a s y o u w i l l s e e , a d i s b u r s e m e n t f o r a c o u n s e l ' s a d v i c e earl ier in the matter as wel l as today - a br ief. JUDGE OVEREND: There is in fact a TCC - what is i t cal led? --Techbar , o r someth ing , have rec en t l y d is t r i bu ted some h igh ly content ious document in which they say: "These are the f igures that should be granted to counsel". Have you seen that?

MR. WATSON: I have seen it.

JUDGE OVEREND: It came round the other day.

MR. WATSON: I regret I do not have it with me. I do not think the fees that appear on ray schedule are out of line with that proposal, but I do not know - apart from knowing its provenance, I do not what response it has had from the Bench, I believe that it had Bench involvement when it was first promulgated.

JUDGE OVEREND Yes. Well, it is the difference, is it not, between Techbar in London and the occasional TCC trip down to the West Country.

MR. WATSON: The issues will, of course, be the same; but I make that observation, comparing briefly with that of the defendants, especially in the light that the claimant's counsel has had the benefit of earlier preparation in connection with earlier advice given. I am instructed to take the point in relation to parking which your Honour has already identified. I have a trainee solicitor sitting behind me, it having been considered that that was sufficient in the light o f t h e f a c t t h a t m y s k e l e t o n a r g u m e n t w a s s e n t t o m y i n s t r u c t i n g s o l i c i t o r , a n d c o n s i d e r e d a n d d i s c u s s e d w i t h h i m over the te lephone.

J U D G E O V E R E N D : I h a v e a l r e a d y d e l e t e d t h e a t t e n d a n c e o f a sol ici tor.

M R , W A T S O N : I h a v e s o m e p o i n t s o n t h e s u m m a r y j u d g m e n t a p p l i c a t i o n f e e s , p a g e 2 , i n p a r t i c u l a r t h e n u mb e r o f l e t t e r s a n d t e l e p h o n e c a l l s . I t i s s i m p l y a c a s e w i t h a s u m m a r y judgment application,- that is simply not understood why there shouJd have been so many, or - and your Honour has observed this - the length of time on preparation and perusal of documents, given (a) that the claimants only put in two statements, both with very easy and straightforward and quite short exhibited material, and (b) that counsel, in fact, will have had the task of perusing the defendant's witness statements in the main; they were not responsed to by any further evidence, so there was no need, really, for the solicitor to read them or study them in any detail, as counsel do that for the purpose of this hearing. Travelling under "Summary Judgment", item 5 - 1 query that,

I will just check whether there are any other points I was asked to take. (After a pause) I am told that item 5 is the travelling, presumably at partners' rate, it would appear, to a conference with counsel - query whether that is a fair rate for travelling -- £140 an hour the defendants will have to pay.

I think those are the main items, and I think the largest items. As far as the interest calculations are concerned, I can just say that that appears to be agreed -£1,313.28. Thank you.

JUDGE OVEREND: Do you want to reply to what Mr. Watson has just been submitting?

MR. DOOLEY: I do not think that I can add anything more. Your Honour has already raised most of the points that he had covered. As far as the travelling time is concerned, I would suggest it is a matter of rate rather than time. JUDGE OVEREND: I will make the following alterations to the schedule of costs. Firstly, the rate of Mr. Adams of £140 will be reduced to £120 an hour, and so there will have to be consequential amendments to every single item which remains in the schedule.

On the summary judgment application, page 2, on line 2, "Letters sent", I will reduce that to an allowance for 20 letters. "Telephone calls" - I will reduce that to 25 units. I note that counsel has advised in conference in this case, and accordingly I will reduce counsel's brief fee to £1,350. . I am not saying, of course, he cannot recover it from his client, but they cannot recover it from their opponents. You will have to work out what the consequences of all that are. E It is beyond me at 4.45 on a busy Friday! MR. DOOLEY: I am much obliged. MR. WATSON: Your Honour did indicate earlier, I think, though did not in that sum, that on the third page

JUDGE OVEREND: I am sorry, I meant to indicate that the hearing fees, 1 , 2, 3 and 4, all go. Is that the one you were referring to?

MR, WATSON: That was. Yes, thank you.

JUDGE OVEREND: And parking - 5. Do you have a figure now of £48,314.54?

MR. DOOLEY: That is agreed.

JUDGE OVEREND: And costs in the figure of £ pounds, which you will notify to the court before five o'clock, please. I have dealt with leave to appeal. Is there anything else? Have you drawn up that cert i f icate - the leave to appeal B cer t i f i ca te?

THE CLERK: Yes, your Honour.

MR. WATSON: Can I just raise one matter that occurs to me -I had not thought of it before. Obviously we have a certain time limit within which we have to make our decision as to whether we are going to appeal. If we are going to appeal, we would want to make an application for a stay of judgment for the reasons that I have explained in my submissions and in my skeleton. There are two possibilities. I can make that application at such time as we do, if we do, lodge a notice of appeal to this court or to the Court of Appeal, or alternatively your Honour could consider the matter now and say that the judgment is not to be enforced for four weeks, and that if within that time I lodge a notice of appeal, then there is a stay of execution pending the hearing; but I think there are two possible ways of dealing with it.

JUDGE OVEREND: Well, there is a third - to have a stay for 28 days, or until further order, whichever is the sooner.

That gives you the opportunity of a telephone conference application saying: "We have appealed; here is the notice of appeal" which you have faxed in. "Can we have a stay?" MR. WATSON: And that is perhaps the best of the three selections.

JUDGE OVEREND: Then at least I have (a) knowledge and (b) control.

MR. WATSON: May I ask your Honour to consider making that order, please?

MR. DOOLEY: I am concerned, because of the scheme of the Act, the object it is intended to achieve and the fact that it is not being achieved by anything except payment in accordance with the adjudication. I appreciate the difficulty of what would happen to the money - that is quite clear; there is no doubt at all that ray client company is in some difficulty - but delay of the sort that is anticipated, I would suggest, is not appropriate, given the scheme of the Act. In those circumstances, I would discourage your Honour from making that order. I, of course, would like judgment to stand with no further order. If there is to be any order, then at least I suggest the money ought to come into court and be earning more interest.

JUDGE OVEREND: I t wi l l earn more in terest anyhow, wi l l i t not?

MR. DOOLEY: Theoret ica l ly. We do not know the posi t ion of the defendants, of course.

JUDGE OVEREND: Well, you have not - well, there you are.

Very well . There wi l l be a stay of the judgment for 28 days, or unti l further order. The intention is that if a dec is ion is made to proceed .w i th the appeal , then the appe l lan t would have to lodge no t ice of appea l , and the e a s i e s t w a y f o r g e t t i n g a f u r t h e r o r d e r i s a t e l e p h o n e conference, which you can get with me on BT, using "Barney" A

. -Anything else?

I cer t i fy tha t th is i s a t rue and accurate verba t im t ranscr ip t o f an ext rac t o f proceedings in the case of Samuel Thomas Construct ion L td, v .