Case No. HT-2025-000039 , HT-2-25-000040 - [2025] EWHC 2005 (TCC)

The background to the dispute is as follows. The Claimant, RBH, is a building contractor and acts primarily through its managing director and owner, Mr Roger Huntley. The Defendants are Mr Ashley and Mrs Tracy James. In 2019, Mr and Mrs James purchased a property at Ferndown, Saunton, North Devon with the intention of demolishing and reconstructing it. In about January 2022, RBH was engaged by Mr and Mrs James to provide site and project management services in relation to the construction of a large luxury house on the site. Mr Huntley had worked for Mr James before. Mr James is said by RBH to be a property developer. It is accepted that he works in the property business. The precise nature of his work is a matter in dispute. He is a director of Trilogy Property Ltd, which is a family property business. Mrs James is a medical secretary. She is also a director of Daicko Developments Ltd, a property development company set up on 22 February 2022.

The contract was agreed orally. Nonetheless, it appears to be common ground that RBH was to be paid, first, a fee of £1,000 per week for supervision and project management, and, secondly, an additional fee of £10,000 per month for 18 months also for supervision and project management. RBH was to be reimbursed any costs incurred procuring subcontractors and materials. RBH’s position is that it was also entitled to a fee on top of its costs to cover overheads and profits.

The work started in about January 2022, and RBH ceased work on site in about April 2024. The parties appear to have fallen out, and the works were incomplete. By that time, RBH had received £1,310,039. On 18 November 2024, a claims consultant acting on behalf of RBH served an application for payment on Mr and Mrs James. The sum claimed was £663,016.16. The application was made by way of an email which attached an Excel spreadsheet. It stated that the due date for payment was 18 November 2024 and the final date for payment was 5 December 2024. It said that the total sum owing was £1,973,055.20. A further schedule showed that a total of £1,310,039.04 had already been received, and so the balance owing was the sum to which I have already referred, that is £663,016.16. The Excel spreadsheet provided a detailed breakdown.

On 27 November 2024, Mr and Mrs James served a letter in response, which they say is a valid payless notice. The validity of this document is the issue in the Part 8 proceedings. Given its importance, I set it out in full.

“Dear RBH Building Contractors Ltd

Notice of intention to withhold payment in respect of an Application for Payment dated 18 November 2024

We write in connection with the Application for Payment dated 18 November 2024 sent by email by Edward Ranns at 11:58 (the "Application") and hereby notify of you of our intention to withhold payment of the sum claimed. We intend to withhold payment of £663,016.16 and accordingly intend to make payment of £0.

The reasons for withholding the sums claimed are that:

Thus Mr and Mrs James’ position was that no sum was owing at all. I note that they had at that stage taken legal advice from Taylor Wessing Solicitors. They did not, at that point, argue that adjudication was inapplicable because they were residential occupiers.