Party Walls & Access to Neighbouring Land

Transcription

1 Party Walls & Access to Neighbouring Land Tuesday, 10 September 2013 Catherine Urquhart Russell Stone Tel: , Fax: Page 1

2 CONTENTS THE SPEAKERS... 3 ACCESS TO NEIGHBOURING LAND 1. The need for legislation What an applicant must establish How an Access Order works The parties' obligations Relationship with the Party Wall etc Act How to apply for an Access Order.13 PARTY WALLS 1. Main definitions in the Act Works outside the Act The Dispute Process New walls Legal proceedings Appeals THE PROPERTY AND HOUSING GROUP Tel: , Fax: Page 2

3 THE SPEAKERS. Russell Stone (1992) Russell Stone is a Deputy District Judge and the head of the Property Group at Ely Place. Russell deals with all aspects of residential property disputes, including breach of covenants, restrictive covenants, easements, nuisance, boundary disputes, co-ownership, and undue influence issues. He has also recently been engaged in a significant number of cases for housing developers in claims seeking damages against purchasers who bought properties off plan immediately prior to the recession and who were then unable to obtain finance and complete due to the crash in property prices, and also has been successful in recovering over 1m in a claim arising from a fraudulent property transaction. Russell s recent cases include Guy -v- Barclays Bank Plc [2010] EWCA Civ 1396, [2011] 1WLR 681 which was a significant attempt to re-open an appeal concerning rectification of the Land Register consequential upon a fraudulent sale and subsequent charge. Catherine Urquhart (2010) Catherine joined Ely Place Chambers in 2011 upon successful completion of her pupillage at the set, and is building a practice which encompasses property work as well as employment, personal injury and other areas of practice in Chambers. Catherine has experience of claims for possession and rent arrears on behalf of both private and public authority landlords. She acts for landlords and tenants and is regularly instructed to advise parties before hearings, as well as to represent them in court. She also advises on property ownership and ToLATA matters and last year gave a talk as part of the Property Group seminar series on constructive trusts and the decisions in Stack v Dowden and Jones v Kernott. Tel: , Fax: Page 3

4 ACCESS TO NEIGHBOURING LAND & THE ACCESS TO NEIGHBOURING LAND ACT 1992 Before the 1992 Act - The need for legislation 1. Before the Access to Neighbouring Land Act 1992 ( the Act ) came into force on 31 January , a failure to get on with your neighbour could have serious consequences if you needed to get on to their land to carry out repairs to your property. 2. At common law, if you needed to use your neighbour s land (for example to erect scaffolding) when doing work to your own property, in the absence of a specific right such as an easement or covenant that allowed such access, you needed their permission to enter their land otherwise you were a trespasser. Awkward neighbours could make life tricky for those who genuinely needed to undertake repairs, but who could not do so without encroaching on the neighbour s land, however briefly. Those who found themselves with an un-cooperative neighbour could find that an inability to carry out essential repairs could even have a negative effect on the value of their property or their ability to sell it. 3. Two important principles were in collision: the idea that an Englishman s home is his castle on the one hand, and the public interest in ensuring that the nation s housing and other building stock can be maintained, repaired and indeed sold on the other hand. 4. Some judges took a creative approach to getting round this difficulty. In Woollerton and Wilson Ltd v Richard Costain Ltd [1969] 1 W.L.R. 411, Costain, a well-known building company, was contracted to put up a 300ft building for the General Post Office on a narrow street in Leicester. A tower crane was installed in one corner of the site, and from time to time the boom would swing over the plaintiffs factory and warehouse, which was across the road from the building site. Costain offered to pay 1 Access to Neighbouring Land Act 1992 (Commencement) Order 1992 (SI 1992/3349) Tel: , Fax: Page 4

5 250 per week for the right to continue to trespass into the plaintiff s airspace but this was refused, although the plaintiffs accepted that they were not at all inconvenienced by the swinging boom. 5. Stamp J accepted that it was no answer to a claim for an injunction to say that it didn t cause the plaintiffs any harm if an injunction wasn t granted in such circumstances, the defendants would essentially have been given a licence to continue the trespass. And it was agreed that Costain was trespassing. Thus in law, the judge found, he was obliged to grant the injunction against Costain. 6. But his solution to Costain s difficulties was to use his discretion to suspend the injunction for a couple of years, which would allow Costain to finish the building work. He took into account the behaviour of the parties including Costain s offer of a substantial sum of money to the plaintiffs and the fact that the airspace had only assumed a value because of the particular circumstances of this situation. Stamp J accepted that I am giving with one hand and taking away with the other in principle there ought to be an injunction but on the particular facts of this case not until the defendants have had a proper opportunity of finishing the job (at [416D]). 7. This practical solution was disapproved by subsequent authorities. For example, in John Trenberth Ltd v National Westminster Bank Ltd & Anor (1980) 39 P. & C.R. 104, the parties owned adjoining properties on Bute Street in Cardiff. Nat West urgently needed to repair the front of its building because water damage had pushed the stone slabs outwards, creating a hazard. Moreover, the bank was under a statutory duty (under the Public Health Act 1936) to maintain the building in a safe condition. To effect the repairs, Nat West s contractors needed to access the plaintiff s property to erect scaffolding, but the plaintiffs refused access and, when the bank went ahead with the work anyway, they issued a writ demanding that the scaffolding be removed. Tel: , Fax: Page 5

6 8. Walton J accepted that Nat West found itself in a dilemma caught between the Scylla of the dangerous building and the Charybdis of trespassing on the plaintiffs land 2, but he was firmly on the plaintiffs side and granted them an injunction in the terms sought. He dismissed out of hand Nat West s case that the repairs were not for commercial benefit but for safety reasons (including the safety of the plaintiffs): If the building was dangerous, another alternative could easily be to pull it down and start all over again. But, of course, that course would be one which would cost them a great deal of money, and so they deliberately chose the less expensive course of trespassing upon the plaintiffs land It seems that a correct interpretation of the law before the Act came into force meant that rights to land trumped all, including safety concerns. This difficulty was considered by the Law Commission in which proposed a system by which the courts would have the power to grant a right of access over a neighbour s land, in limited circumstances and with safeguards in place to protect the neighbour s interests. The right of access would be for repair and preservation purposes only, and improvement or alteration work would not be permitted unless it was incidental to the essential repair work. 10. In 1992, the Act was passed, adopting many but not all of the Law Commission s proposals. Now, owners of land whose neighbour will not cooperate however unreasonably with their need to carry out repairs can apply to court for an Access Order to compel such cooperation. 2 At [106] 3 Ibid 4 Law Com 151 (Cmnd 9692, Dec 1985), Rights of Access to Neighbouring Land Tel: , Fax: Page 6

7 The 1992 Act - Access Orders What an applicant must establish to obtain an Access Order 11. Section 1 of the Act sets out the scope of an Access Order. The basic right granted by s1(1) gives a person the right to apply for an Access Order so it does not have to be the owner or occupier of the dominant land. Such an applicant should also think carefully about the party that they will bring their application for an Order against (that is, the party with whose consent they must dispense in obtaining an Order), because there may be several interested parties on the neighbour s side for example, a freeholder, a leaseholder, or someone entitled to a right of way. The applicant must identify the party or parties who is/are able to give or refuse permission to access the neighbouring land. 12. For the purpose of the Act, the terms dominant land and servient land refer respectively to the applicant s land and the neighbour s land. Although the terms are commonly used in the law of easements, there is no easement as such in this situation the language is simply used to describe the way that a court order may override the normal law of trespass. Land is simply interpreted in the Act as does not include a highway, and thus in other respects the definition in the Interpretation Act 1978 applies: Land includes buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land 5. Case law has determined that land includes a party wall for the purposes of the Act, considered below 6. The Act does not mention Crown lands and so is not binding in relation to them. 13. Enter and entry are widely defined in the statute at s8(1). Any reference to an entry upon the servient land includes a reference to doing on that land anything necessary to carry out works to the dominant land which are reasonably necessary for its preservation. 5 Interpretation Act 1978 s5 Sch 1 6 Dean v Walker (1996) 73 P. & C.R. 366 Tel: , Fax: Page 7

8 14. Section 1(2) and 1(3) set out several preconditions to the granting of an Access Order. 15. There must have been a refusal of consent: the Act only operates in situations where the neighbour has refused to agree to the applicant s request for access (s1(1)(b)). So the Act will not help an applicant whose neighbour has given consent, but on terms that the applicant does not like (for example if the applicant is being asked to pay the neighbour, or to do the work in a certain way). 16. The works must be reasonably necessary for the preservation of the applicant s property (s1(2)(a)) and works cannot be carried out, or would be substantially more difficult to carry out, without access to the neighbour s land (s1(2)(b)). What constitutes works is enlarged upon by s1(4), which defines basic preservation works as: (4) any of the following, that is to say (a) the maintenance, repair or renewal of any part of a building or other structure comprised in, or situate on, the dominant land; (b) the clearance, repair or renewal of any drain, sewer, pipe or cable so comprised or situate; (c) the treatment, cutting back, felling, removal or replacement of any hedge, tree, shrub or other growing thing which is so comprised and which is, or is in danger of becoming, damaged, diseased, dangerous, insecurely rooted or dead; (d) the filling in, or clearance, of any ditch so comprised; but this subsection is without prejudice to the generality of the works which may, apart from it, be regarded by the court as reasonably necessary for the preservation of any land. 17. Thus the works permitted are narrowly defined. They must be basic preservation works that are necessary to preserve or repair the property, and those works specifically set out at s1(4)(a) to (d) are to be regarded as reasonably necessary. Other works may also be considered so depending on the facts of the matter. Tel: , Fax: Page 8

9 18. By s1(5), it is clear that if works incidentally involve improvements or demolition, that will not prevent an Access Order being granted if the works are otherwise reasonably necessary for the preservation of any land, but it is therefore also clear that works which are of a merely cosmetic nature, or for example the building of a new development, will not qualify. Nor does the Act give the applicant the right to repair the adjoining property, which means it cannot help applicants whose neighbouring property suffers from damp, rot or other endemic problems which are affecting the applicant s own property. 19. The neighbour s rights are protected by s1(3) which sets out that an Access Order will not be granted (even if the works are deemed to be reasonably necessary) if the neighbour s rights are interfered with, or he would suffer hardship, to such a degree that it would be unreasonable to grant the Order. Moreover, pursuant to s1(7), the neighbour has a right to inspect the applicant s land not only to ascertain whether works are reasonably necessary for the preservation of that land but to inspect the carrying out of those works. How an Access Order works 20. Section 2 of the Act sets out both the terms that an Access Order must contain, and terms that it may contain. Under s2(1), the Order must state: a. the works that can be done pursuant to the Order b. the area of servient land that can be entered to undertake those works, and c. the date or period upon which the land may be entered for that purpose. 21. Gale 7 considers whether the language of the Act could be interpreted so as to apply for an Access Order which gives the applicant an ongoing authority to re-enter the neighbouring servient land whenever repairs need to be undertaken to the applicant s property. Gale doubts whether this interpretation would be correct, given the requirement that the works must be reasonably necessary, but it seems that this point has not been tested in the courts. 7 Gale on Easements, 19 th edn, at Tel: , Fax: Page 9

10 22. Further to that, the Order may impose other terms and conditions. These may be to avoid or restrict loss, damage, injury, inconvenience or loss of privacy to any affected party (s2(2)), and more specifically the Order may stipulate such matters as the date(s) and time(s) the works may be done, the manner in which they are done, the people who can do the works, and any other precautions thought necessary (s2(3)). Compensation and consideration 23. Section 2 of the Act allows the court to impose terms and conditions in the Order concerning the payment of compensation to the neighbour in respect of loss or damage (s2(4)), and to pay a consideration to the neighbour if the applicant obtains a financial advantage by doing the works (s2(5)). 24. As well as paying compensation for any loss or damage (s2(4)(a)), the Order may oblige the landowner to obtain appropriate insurance to protect the neighbour (s2(4)(b)). 25. A consideration can only be paid if the works are not to residential land (s2(5)). Otherwise, the Order may provide that a sum is paid to the neighbour, calculated by reference to the likely financial advantage to the applicant and the degree of inconvenience suffered by the neighbour (s2(6)). The financial advantage is not the basis of the compensation, but a matter to which the court must have regard when assessing any compensation. 26. The court can also order the applicant to pay any reasonable expenses incurred by the respondent which are not recoverable as costs (s2(9)(a)), and can order the applicant to give security for any sum that may become payable to the respondent or any other party (s2(9)(b)). Tel: , Fax: Page 10

11 27. One of the few reported cases arising out of the Act deals with the issue of costs. In Williams v Edwards [1997] C.L.Y. 561, the respondent refused to discuss the applicant s request for access, so the applicant issued proceedings to obtain an Access Order. Negotiations then took place and consent was given for the work on condition that the applicant paid the respondent s costs on a high scale. The court held that the respondent had behaved unreasonably and penalised him in costs, allowing only lower scale costs to be recovered and setting off some of the applicant s own costs against them. The parties obligations under an Access Order 28. Section 3 of the Act spells out the obligations of both sides once an Access Order is made. 29. The neighbour (respondent) must allow the applicant or his associates to do anything authorised by the Order (s3(1)). The applicant s associates are defined as anyone that the applicant authorises to carry out the works (s3(7)). 30. If the applicant and/or his associates enter the servient land and operate within the terms of the Order, they will not be deemed to be trespassers. Section 3(2) allows the applicant to enter the land to do the specified works, to bring in the necessary materials or equipment, and also to bring on to the servient land any waste that is produced by the works, albeit that the court may vary or exclude the latter two provisions if it deems that necessary (s3(4)(a)). 31. The applicant is obliged to ensure that he removes any waste from the servient land, makes good the land and indemnifies the respondent for any damage (s3(3)). Any of these requirements can be varied or excluded by the court (s3(4)(b)). Who is bound by an Access Order? 32. The Act refers throughout to the applicant but not to his successors in title, so the benefit of an Access Order would appear to be personal to the applicant and thus could not be enforced by his successors in title. Tel: , Fax: Page 11

12 33. The position is different as regards the respondent (neighbour) s successor in title, or anyone who acquires an interest or estate in or right over the servient land after the making of the Order. The Order is binding on them (s4(1)), providing that the Order has been registered. 34. If the respondent s land is registered, a notice should be entered on the register protecting the rights conferred by the Order (Land Registration Act 2002 s32), and if the respondent s land is unregistered, the Order can be registered as a land charge in the register of writs and orders affecting land (s5(1), amending the Land Charges Act 1972 by inserting s6(1)(d)). An application for an Access Order is treated as a pending land action for the purposes of the LCA 1972 and the LRA 2002 (s5(6) of the Act). 35. Either party may apply to court to vary or suspend an Access Order under s6(1), and the court can order a party who does not comply with an Order to pay damages under s6(2). 36. There is no specific enforcement provision in the Act, and the provision for damages in s6(2) is stated to be without prejudice to any other remedy available, so it seems likely that a party seeking to enforce the terms of an Order would need to apply for an injunction. Relationship with the Party Wall etc. Act The Act came into force in 1993, some four years before the Party Wall, etc. Act 1996 ( the 1996 Act ) came into force 8. The 1996 Act gave building owners substantial rights to carry out works to party walls (defined for the purposes of the 1996 Act in terms of the function of the wall rather than of its ownership). 8 On 1 July 1997 (Party Wall etc. Act 1996 (Commencement) Order 1997 (SI 1997/670)) Tel: , Fax: Page 12

13 38. The powers granted by the 1996 Act include the right to enter any land, remove any furniture and fittings, and even to break in (accompanied by a police officer) if deemed necessary for one of the purposes of the legislation, being the construction of a new party wall, repairs or other works to an existing party wall, and certain excavation works (ss 1, 2, 6). 39. The rights are more sweeping than those available under the Act, and so a landowner will only rely on the Act if he cannot bring himself within the ambit of the 1996 Act. 40. The only appellate case under the Act, Dean v Walker (1997) 73 P. & C.R. 366, was heard before the 1996 Act came in to force. It held that the Act defined land sufficiently widely to include the common law definition of party walls. The position now would be that anyone who can use the 1996 Act should do that and so would not need to avail themselves of an Access Order under the Act. The Act therefore has diminished in importance since the introduction of the 1996 Act, but applicants who, for example, own a property that runs right up to the boundary of the neighbour s property, but where there is no corresponding structure on the neighbour s side (ie no party wall), will still need to use it. Procedure 41. An application for an Access Order must always be started in the County Court 9, though it may be transferred to the High Court if the circumstances are considered such as to merit that. The procedure set down in CPR Part 8 must be used, and details of what should be set out in the claim form are given in the Practice Direction to Part 56 (56PD.64, paragraph 11). The six matters that must be set out are: a. Details of the dominant and servient land involved, and whether the dominant land includes residential property; b. The works required; c. Why entry to the servient land is needed, with plans if applicable; 9 High Court and County Courts Jurisdiction Order 1991 s6a Tel: , Fax: Page 13

14 d. Names and addresses of people who will carry out the works; e. The proposed date of the works; f. What, if any, insurance provision has been made. 42. The Practice Direction states that the owner and occupier of the servient land must be the defendants to the application. In some cases, the applicant may not know the identity of the owner or occupier of the servient land, and that may encourage some applicants to simply go ahead with the works without bothering to get an Order. However, it is probably prudent to apply for an Order in case the owner emerges part way through the works and objects to them. CPR 8.2A provides a mechanism for issuing a claim form without naming a defendant. Conclusion 43. The scarcity of case law resulting from the Act could suggest two things: the Act has done a great job and is working well, or it is so little used that few unhappy litigants have emerged to test it. The number of Access Orders made under the Act is not known, but it seems likely that the introduction of the Party Wall etc. Act 1996 will have drawn some of the litigation that might otherwise have fought under the Act. Nevertheless the Act would appear to offer a reasonably straightforward solution to a problem that previously bedevilled property owners. CATHERINE URQUHART Tel: , Fax: Page 14

15 PARTY WALLS & THE PARTY WALL ETC. ACT 1996 A brief history 1. Party Wall legislation commenced in the City of London after the Great Fire of London in 1666 by an Act enacted in 1667 for the rebuilding of London. 10 Section 8 of this Act required party walls and piers to be set out on each building ground by the first builder and convenient toothing for joining the next building to; thereafter no person was to join to that wall / pier without having reimbursed the first builder. 2. It was not until the 18 th and 19 th centuries that subsequent legislation elaborated the position in the Metropolitan Building Act 1855, then in the London Building Act 1894 and the London Building Acts 1939 (Part VI). 3. The Party Wall etc. Bill was introduced to the House of Lords as a Private Members Bill by Lord Lytton, a practising chartered surveyor. The aim of the Act was to introduce to the whole country the scheme in Part VI of the London Building Acts 1939 which until then only applied to Inner London Boroughs. 4. Although introduced as a Private Members Bill, it received support from the Government and received Royal Assent on 18 July 1996 and was brought into effect on 1 July Main Definitions in the Act s Party Wall: a. A wall which forms part of a building and stands on lands of different owners to a greater extend than the projection of any artificially formed support on which the wall rests; and b. so much of a wall not being a wall referred to in paragraph (a) above as separates buildings belonging to different owners Car II c.3 Tel: , Fax: Page 15

16 Thus Party Walls are broadly speaking boundary walls belonging to one or more building. 6. Paragraph (a) concerns external walls of single buildings astride the boundary (not necessarily equally). Note if the whole wall is on one party s land and only the footings / foundations are on the other it is not a party wall. 7. Paragraph (b) concerns walls attached to buildings on both sides (e.g. terraced houses). In this case it is the separation of buildings belonging to different owners. These walls do not have to sit astride the boundary and can be on one side of it. Note the phrase so much of thus it is only the part of the wall adjoining the property and does not include parts extending above or either side of that building. 8. Party Fence Wall: A wall (not being part of a building) which stands on land of different owners and is used or is constructed to be used for separating such adjoining lands, but does not include a wall constructed on the land of one owner the artificially formed support of which projects into the land of another. 9. Thus it is a wall standing astride a boundary. The distinction between a party fence wall and a party wall is that it is not part of a building and is essentially free standing, such as a garden wall. Again if only footings or foundations project beyond the boundary it is not a party fence wall. 10. Party Structure: A party wall and also a floor partition or some other structure separating buildings or parts of buildings approached solely by separate staircases or separate entrances. 11. Thus this deals with the horizontal as opposed to the vertical and to parts of buildings (i.e. floors, ceilings and walls of flats). 12. Owner (a) anyone receiving or entitled to receive, the rents and profits; (b) anyone in possessions (except a mortgagee, a tenant at will, or a periodic tenant from year to year or a lesser period); Tel: , Fax: Page 16

17 (c) a contractual purchaser of an interest in land, including a contract for a lease (other than a periodic tenancy excluded by (b)). 13. Note that although by this definition a large number of properties may be occupied by someone who is not an owner (i.e. most Assured Shorthold Tenants), occupiers are still given rights to compensation (s.7(2)) and the right to notice before their land is entered for works (s.8) but have no rights in the deliberations leading to any award determining the works that may be carried out. 14. Agents are not owners. Thus Receivers are not owners under the Act. 15. Also note that there may be more than one Adjoining Owner entitled to service of notices under the Act (such as a freeholder and long leaseholder(s)). However, the Act does not contain any procedure for consolidating related disputes. There can only be two parties to any one dispute. Overview of the Act 16. The Act firstly deals with AND ONLY WITH the limited factual situations relating to building works at or close to the boundary between land owned by different owners. Secondly it provides for a special dispute resolution procedure applying ONLY to situations where rights under the Act are exercised. This involves at the parties option either a decision of a single jointly appointed surveyor or an informal tribunal of three surveyors. In both cases the decision AWARD is final unless appealed to the County Court. 17. There are essentially three situations where the Act applies: a. Works to existing party walls and structures (mainly ss.2-5); b. Excavations below the level of the foundations of nearby (not necessarily adjacent) buildings (s.6) c. The proposed construction of a new Party Wall or wall up to but not across the boundary (mainly in s.1). Tel: , Fax: Page 17

18 18. The Act also deals with: a. Compensation for damage arising from work carried out under the Act (mainly s.7); b. The dispute resolution process (s.10); c. Liability for construction costs & expenses (s.11). Costs include professional fees under the Act, the notice procedure and the dispute process. Expenses are the costs of the works, and any dispute as to their apportionment under the Act is the subject of the dispute resolution process. These can include costs for the sharing of a new party wall under s.1 including contingent liabilities if the extent of the use of the wall by an Adjoining Owner changes. They can also include liabilities of Adjoining Owner for defect or want of repair (and other scenarios in s.11). S.13 provides for the Building Owner to serve an account within two months of the day when the works in respect of which expenses are claimed are completed. Time is of the essence in this regard (see Spiers & Son Ltd v Troup (1915) 84 LJKB 1986). The Adjoining Owner has one month to serve a notice of any objections and, if they do, a dispute is deemed to have arisen which is resolved under s.10. If there is no notice of objection served there is deemed to be no such objection and the Adjoining Owner will then be liable for the sum claimed on the account. In this regard there is no decision on whether time is of the essence but this would be harsh. Where expenses are due there is an unusual form of security under s.14 in that the Property in the works to which the expenses relate vests entirely in the Building Owner until he is paid. d. Security for expenses (s.12) S.12 confers rights in certain circumstances on both the Building Owner and the Adjoining Owner to require that the other give security for expenses. Tel: , Fax: Page 18

19 S.12(1) gives the Adjoining Owner the right to call for security before works are commenced. The reason for this is obvious. Under the Act the Building Owner can embark on extensive works affecting the adjoining property but the right is not conditional on financial substance or even security. s.12(2) gives reciprocal rights to the Adjoining Owner. The reason for this is less obvious but they can require or impose additional works by a counter-notice and may incur liability to contribute under other provisions of the Act. S.12(2) also (oddly) allows the Building Owner to seek security merely because the Adjoining Owner has referred to by commentators as the tit-for-tat provision. The only time limitation on the giving of a notice for security is that it must be before the works commence. If an Adjoining Owner fails to respond to a notice seeking security within a month either by providing the security requested or initiating a dispute under s.10, then: (1) any requirement for additional works in their counter-notice will cease to have effect; AND (2) any security notice served by them will also cease to have effect. Where there is an award for security against an Adjoining Owner it must be complied with within one month or the same two sanctions apply. There is no penalty against a Building Owner who fails to respond and no time limit BUT s.12(1) makes it clear that the Adjoining Owner is entitled to require that the security is given before works are started. e. Rights of Entry (s.8) 19. The Act does not make it a criminal offence not to comply with its provisions except in relation to a refusal to allow entry in accordance with its terms. Nor does it provide any direct sanction for failure to follow its terms. Tel: , Fax: Page 19

20 20. When carrying out works a Building Owner: a. Must not cause unnecessary inconvenience over and above that which will inevitably occur when such works are properly undertaken (s.7(1)); b. Must provide temporary protection needs to be in place for adjacent buildings and property where necessary (e.g. hoardings) (s.7(3)); c. Is responsible for making good any damage caused by the works or must make payment in lieu if the Adjoining Owner requests it (s.7(2)). Works outside the Act 21. A building owner who carried out works to party walls / structures without following the Act faces no direct sanction under the Act but does expose himself to common law claims for trespass / nuisance whereas consent under the Act provides a defence to such claims. 22. Thus there is no direct claim for failing to comply with the terms of the Act. However in Crowley v Rushmoor BC [2009] EWHC 2237 (TCC) HHJ Thornton QC specifically found that a claim under the 1996 Act was one of those rare claims arising from a breach of statutory duty that permitted an affected private individual to recover damages on the assumption that the direct claim was limited to sums that the surveyor(s) would have awarded as compensation under the Act. 23. No doubt informal agreements outside the Act often work well between neighbours BUT where the proposed works are complex or the parties are more at arms length such a stance is likely to look short-sighted. 24. The Act includes benefits as well as burdens but these benefits only apply if works are being carried out pursuant to the Act. Thus if the Act is not followed or consent is not given in writing then, by way of example, the building owner proposing works will lose: a. a legal right to carry out works; b. their enforceable right of entry; c. their right to recover certain expenses. Tel: , Fax: Page 20

21 25. Potentially even more significantly, the Adjoining Owner will lose: a. A right to have the works (and any deviations from them) fully defined so as to protect them; b. The right to serve a counter-notice; c. The right to require underpinning; d. Rights to protection during the works; e. Rights to compensation under the Act; f. The right to security for expenses. 26. Likewise both parties will lose the machinery for the dispute resolution process through surveyors. Thus in works of any complexity there are significant advantages to both sides in following the scheme of the Act. There is certainly scope for greater expense in litigation if the Act is not followed. 27. Given that the procedures under the Act involve potential interference with property rights it is clear that the procedures must be strictly observed see Gyle-Thompson v Wall Street (Properties) Ltd [1974] 1 Al ER 295, Louis v Sadiq [1997] 1 EGLR 136 & Roadrunner Properties v Dean [2004] 1 EGLR Gyle-Thompson laid down three key basic rules: a. The procedures laid down by the Act must be strictly observed; b. The powers of the Building Owner as to works on party walls are strictly defined by s.2; c. If the Act has not been complied with, any purported award from the flawed procedure is a nullity which does not have to be appealed and which is not binding. 29. By way of example, in Woodhouse v Consolidated Property Corp. [1993] 1 EGLR 174 an argument that the issue of an award by the Third Surveyor created an estoppel failed because the Third Surveyor was held to have acted ultra vires. Tel: , Fax: Page 21

22 30. Two further points are established by Louis v Sadiq: a. The Adjoining Owner s common law rights are supplanted when the Act is invoked. BUT the Building Owner is liable for any nuisance arising from encroachment or physical damage to the Adjoining Owner s land unless or until the Act is operated; and b. The Act does not authorise retrospective awards. 31. However, it is possible for irregularities to be waived. In Manu v Euroview Estates (before HHJ Marshall QC in CLCC on 23 July 2007) it was said that any points on alleged inaccuracies of a notice should be taken promptly and it will not necessarily take much for a party to waive a right to rely on some deficiency in the notice. 32. Clearly some works are so minor that service of a notice will not be considered necessary or appropriate e.g.: a. Drilling into a party wall to fit plugs and screws for ordinary wall units or shelving; b. Cutting into a party wall to add or replace recessed electrical wiring and sockets; or c. Removing old plaster and re-plastering. 33. The key is whether the work may have possible consequences for the structural strength and support functions of the wall as a whole OR cause damage to the Adjoining Owner s side of the wall. Works to Party Structures (sections 2 5) 34. The primary aim is to allow building owners whose buildings are separated by party walls to carry out works to the party wall so as to facilitate rebuilding or repairing their buildings. These rights are more extensive than could apply at common law, and are defined in s.2(2) of the Act. The most common examples of the rights under s.2(2) are: Tel: , Fax: Page 22

23 a. repairs to a party wall; b. insertion of damp proof course; c. underpinning the whole thickness of wall (e.g. to prevent settlement); d. to cut into a wall to take the bearing of a beam (e.g. in a loft conversion); e. to raise the height of a party wall (e.g. adding another storey); f. to increase the wall downwards (e.g. to form a basement); g. to demolish and rebuild a party wall (e.g. if it is structurally defective or does not comply with statutory requirements); h. to cut off projections from a party wall (or from an adjoining owner s boundary or external wall) if necessary to build a new wall adjacent to it (e.g. removing chimney breast). Although these are the most common, s.2 should be considered to ensure that the works proposed are works falling within the Act. 35. Note that where party walls and structures are modified, repaired or demolished and rebuilt, s.11(4) and (5) provide that the costs of work will be shared where the work is necessary on account of any defect or want of repair in proportion to the use that each party makes of it and the responsibility of each for the want of repair or defect. Also, where use is made of party walls previously built at the cost of the Adjoining Owner, the Act also makes provision for a fair payment to them. 36. The prescribed procedure is: Building Owner serves Party Structure Notice (PSN) which: (1) must comply with s.3 (state the name and address of the building owner and state the nature of the proposed works and the date that it is proposed for them to begin); The notice must be sufficiently clear and intelligible to allow the Adjoining Owner to see what counter-notice they should give. (2) Set out work proposed in terms of the list of s.2 rights; Tel: , Fax: Page 23

24 (3) The notice has to be served AT LEAST TWO MONTHS before the planned starting date for the works. Although the adjoining owner may agree to allow works to start earlier, they are not obliged to. (4) The notice is only valid for one year (this will not prevent works where a dispute is referred to surveyors within the year see Willoughby v Eckstein [1939] Ch 167). In Manu v Euroview Estates a notice was held to be invalid (in respect of excavations under s.6) where drawings indicated the dimensions of proposed underpinning but not the site and depth of the excavations. HHJ Marshall QC made four points of useful guidance: (a) as regards clarity and intelligibility, the assumption must be that the recipient either is, or will have the advice of, a person who is familiar with interpreting such plans and drawings, and it is not necessary that they should be perfectly intelligible to the untutored layman, (b) it is not necessary, because it is impossible, to show an accurate depth from ground level, and it would be sufficient to show depth in general terms or relative to identifiable underground points such as foundation levels, provided this is enough to convey the implications of what is proposed to the kind of recipient mentioned above, (c) it is not necessary, because it is always likely to be a judgment on site, to give a perfectly precise prediction of the depth of the excavation or underpinning, and (d) it is not necessary to include measurements in express numerical terms if the information, and in particular the depths in question, are sufficiently "shown" in the sense of being capable of being ascertained or deduced from any other features of the drawing, such as scaling, which such a recipient could be expected to know of and use. There are no prescribed forms of notice under the Act. However they must be in writing. There is no provision for amendment. Tel: , Fax: Page 24

25 Section 15 deals with service of notices. There are three primary methods: (1) delivery to the recipient in person; (2) sending by post to their usual or last known residence or place of business in the UK; and (3) in the case of a corporate body, delivery to secretary or clerk at its registered office or by sending it by post to the secretary or clerk at that address. Where service is on an owner (as opposed to occupier) then it may be addressed to the owner, without naming them, of the premises (which must be named). This notice may be delivered to a person at the premises or if there is none, served by fixing it to a conspicuous part of them. Adjoining Owner may: (1) Serve a counter-notice under s.4 A counter-notice may be served within one month setting out what additional or modified works the Adjoining Owner would like to be carried out for their benefit (e.g. building in chimney breasts / flues, piers or recesses etc.). By way of an example, the owner could be proposing works reducing the height of a party wall but the adjoining owner wants the height maintained so that they may still enlarge their property in due course. The only other objection concerns special foundations (not discussed in detail in this seminar). These are defined in s.20 as foundations in which an assemblage of beams or rods is employed for the purposes of distributing any load. Thus applying to pad and raft foundations and, probably, ground beams supported on piles. There is an absolute right for an adjoining owner to veto these on their land (s.7(4)). If a counter-notice is received the Owner must respond within 14 days or a dispute is deemed to have arisen. (2) Consent to the work Tel: , Fax: Page 25

26 Note consents mean to specific works it is not possible to rely on a reservation clause allowing works on an adjoining structure as dispensing with requirements under the Act, nor is a general consent dispensing with the requirements of serving a PSN possible. OR (3) Make some other (or no) response. If a counter-notice is served, the Building Owner must comply unless the execution of works in the counter-notice would be injurious to the building owner, cause unnecessary convenience to him or cause unnecessary delay in the execution of the works pursuant to the PSN (s.4(3)). The costs of complying with the works in the counter-notice are to be paid by the Adjoining Owner requiring them. If consent (in writing) is given, work proceeds. If there is no response or no agreement within 14 days, a dispute is deemed to arise, and is determined by surveyors under s.10. The Dispute Process under section If s.10 applies and there is a dispute, then the procedure is that: (1) An agreed surveyor is appointed or each party appoints their own surveyors who then select a third surveyor; (2) The agreed surveyor or any two of the appointed/selected surveyors make an award; (3) Under s.10(11) either party or their surveyor can call on the third surveyor to determine the disputed matters. If this happens then the settling of the award is entirely in the hands of the third surveyor. (4) The award is final subject to an appeal to the County Court within 14 days (s.10(17)). Tel: , Fax: Page 26

27 (5) Any further appeal lies to the Court of Appeal and is a second appeal for the purposes of CPR Part Any appointment or selection of surveyors under s.10 must be in writing (s.10(2)). The appointment / selection also shall not be rescinded by either party, thus making it irrevocable. 39. There are default powers to cover death and incapacity of surveyors, neglect or refusal to appoint a surveyor, and neglect or refusal by a surveyor once appointed to carry out his functions: a. If either party refuses to make an appointment under s10(1)(b) or neglects to do so for 10 days after being served with a request to do so, then the other party may make an appointment on behalf of the defaulting party. There does not appear to be anything to prevent the party appointing the surveyor they have already appointed, thereby converting them into an agreed surveyor. b. If either of the parties surveyors refuses to select a third surveyor or neglects to do so after being served with a request by the other surveyor, then an application may be made to the appointing officer (the person appointed by the local authority under the Act for this purpose) or to the secretary of state. c. In the case of death of an agreed surveyor, the process has to begin again (s.10(3)). In the event of the death of a party s own surveyor then the party can appoint another in their place the acts of the predecessor remain valid (s.10(5)). In the event of failure to appoint there is no right on the other party to appoint in this instance. In the event of the death of a third surveyor then the parties two surveyors must appoint a third again and the same default provision applies in this case (s.10(9)). Tel: , Fax: Page 27

28 d. Similar provisions apply in the event of refusal to act or where a party s surveyor neglects to act for 10 days after being served with a notice requesting them to do so. However in these cases by virtue of s.10(6) and (7) then the other party s surveyor may proceed to act ex parte and anything done by that surveyor shall then be effectual as if they had been an agreed surveyor. 40. In Frances Holland School v Wassef [2001] 2 EGLR 88 it was held that an ex parte award must state accurately the justification for its having been made ex parte, i.e. neglect or refusal as the case may be. So an award issued following a 10-day notice could not rely on refusal as a justification. 41. In Manu it was held that refusal to act effectively arose where the surveyor for the adjoining owner wrote a letter demanding a fresh notice, and plans approved by the local authority, against the background of previous conduct in taking pedantic and difficult points. It was suggested that refusing to act unless his fees were paid would also be such refusal. See [ ]. 42. Surveyors have no jurisdiction to make an award allowing work not authorised by the Act, or to decide disputed boundary issues. The limits of jurisdiction are not unfettered. Examples of void or partly void awards for straying outside the Act may include: a. An award on an invalid notice because the Act does not apply or it is served on incorrect people Gyle-Thompson v Wall Street (Properties) Ltd. b. If works are carried out before service of a belated notice but the premature works cause a collapse, the question of the responsibility for the collapse arises purely at common law and there is no jurisdiction to determine a award under the Act Woodhouse v Consolidated Property Corp. As Evans LJ put it in Louis v Sadiq [1997] 1 EGLR 136 (@139c): Tel: , Fax: Page 28

29 the statutory scheme is clear. The building owner has certain rights but these can only be exercised (1) with the adjoining owner s written consent or (2) in accordance with a valid award by the surveyor or surveyors. However in Rodrigues v Sokal [2008] EWHC 2005 (TCC) HHJ Toulmin concluded that an award made in respect of works both before and after an award was said to be conclusive even in respect of earlier works and the nuisance was abated by the later award under the Act. The distinction between Louis v Sadiq being that in the earlier case the works could never have been approved [para 63]. c. An award cannot direct payment to a person not entitled to it under the Act Re Stone & Hastie [1903] 2 KB 463; d. An award for works under section 2 cannot be made unless the works fall within one of the descriptions in s.2(1) - see Gyle-Thompson where for example it was made clear that an award may not authorise works which will permanently interfere with an easement of light. 43. It is not necessary that a surveyor's appointment post-dates the dispute - Manu v Euroview Estates at [84]. Surveyors need not be professionally qualified or qualified as surveyors (see Manu) but must be natural persons. It is uncertain whether an employee of one party can be his surveyor. 44. The surveyors acting are probably not arbitrators and as such there is no duty upon them to give reasons for their awards. They must act independently but can take into account the interests of their appointing party: Chartered Society of Physiotherapy v Simmons Church Smiles [1995] 1 EGLR There is also no express provision giving them immunity from suit for acts done during their functions. There remains a debate as to whether they may be liable or whether they may be characterised as quasi-arbitrators and thus protected by the House of Lords decision in Sutcliffe v Thakrah [1974] AC 727. The general view is that surveyors will be liable for negligence in the preparation of an award but there is no time to discuss that specifically today. Tel: , Fax: Page 29

30 46. The Award is to define: the right to execute any work the time and manner of executing any work any other matter arising out of or incidental to the dispute including the costs of making the award; See s.10 (12). 47. The last of these, any other matter arising, is deliberately wide. Thus ancillary questions as to what compensation is to be paid, contributions to expenses and costs should be dealt with by surveyors. 48. That costs in relation to the statutory process itself could be subject of an award was approved in Onigbanjo v Pearson [2008] BLR 507 (before HHJ Birtles in the Mayor s and City of London County Court) and approved by the Court of Appeal in Reeves v Blake [2009] EWCA Civ 611, [2010] 1 WLR In general the costs should be borne by the building owner. The Act provides by s.11 that in general the expenses of work under the Act should be borne by the building owner. There are specific exceptions, including where underpinning is involved due to the defective state of the wall, one providing that the expense is to be borne by the owners according to the use each makes or may make of the wall and the responsibility for the defect (s.11(4)). In Manu this was held to mean responsibility according to use without taking into account the possible legal liability of one party for the effect of prior subsidence. The surveyors did not have to consider or decide the niceties of legal liability - see [138]. 50. However it should be noted that the Court of Appeal in Reeves v Blake determined that the wide words in s10(12) do not extend to the costs of preparing, but not instituting or pursuing proceedings at common law for an injunction. Tel: , Fax: Page 30