In Samuel Thomas Construction Ltd v Anon (2000) TCC the issue was whether the construction contract was with a residential occupier and therefore whether the adjudicator had jurisdiction and whether his decision had any effect.

Mr. and Mrs. (Anon) decided that they wanted to move to East Budleigh. They had sold their property, and they bought a temporary accommodation. They did that because they were interested in buying a barn at Hill Farm. 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 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 barns, the courtyard and the drainage for all 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 contract was under the JCT minor building works form.

Section 106 of the Housing Grants, Construction and Regeneration Act 1996 defines "construction contract with a residential occupier", as

"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."

Samuel argued that there was jurisdiction in the adjudicator on two grounds.  First that the term "dwelling" referred 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.  It was argued that the Act was designed to assist the construction trade and resolve those numerous disputes that arise, but that Parliament wished to exclude from the effect of the Act the multitude of contracts between residential occupiers and small builders 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.  Samuel argued secondly that the contract related to two barns and a garage block, so that even if one of them was to be used for the private occupation, it was a commercial development - it was not a contract "principally" related to operations on a dwelling.  

His Honour Judge Overend held that a residential occupier does not have to be in occupation. That was perfectly obvious from the words "intends to occupy as his residence". 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.  If one started off with a derelict barn which was intended to convert it into a dwelling, at some stage it would cease to be a derelict barn and would become the beginning of a partly-constructed dwelling.  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 were operations on barn B, which was an agricultural barn which, shortly after the works commenced, was transformed into a partially-constructed dwelling, or partly-converted dwelling.  If the matter related to barn B alone, there would be absolutely no difficulty at all in deciding that it principally related to operations on a dwelling.  Barn B, perfectly clearly, was a barn which was to become a dwelling which was to be occupied as the residence. 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 the barns. Insofar as the contract related to creating a garage block it was not an operation which was ancillary to operations on a dwelling. The courtyard and the drainage were probably mostly relevant to barn B.  Uncontested evidence showed that the valuation of the works relevant to barn B amounted to about 64/65 per cent of the total contract sum.

Judge Overend held  that the contract did not principally relate to an operation on barn B. It related to barn A, barn B, the garage block for all barns, as well the courtyard and the drainage, and was not excluded under section 106(l)(a) of the Act.  Summary judgment was therefore granted.