Is the party over for party wall surveyors?

On 7 March, the Court of Appeal handed down judgment in Power and another v Shah [2023] EWCA Civ 239; [2023] PLSCS 45, about the extent of the jurisdiction of party wall surveyors appointed under the Party Wall etc Act 1996. The “novel but important” issue for determination was whether an adjoining owner could seek to rely on the dispute resolution procedure set down by the Act in the not uncommon situation where a neighbouring building owner had failed to serve notice under the Act but instead had pressed on with works that should have been the subject of notice, causing damage.  On the facts of the case, the adjoining owner had appointed the second appellant party wall surveyor to deal with the damage caused by her neighbour. The second appellant in turn appointed the first appellant surveyor under the default procedure set down by the Act. The two surveyors then made an award requiring the respondent to compensate the adjoining owner for the damage, and pay the fees of both surveyors. It was in enforcing those fees in the magistrates’ court that matters unravelled for the appellants, as the respondent alleged that they had no jurisdiction under the Act to make the award at all, and issued proceedings for a declaration to that effect.  The ruling The Court of Appeal highlighted the important distinction between an adjoining owner’s rights at common law and those under the Act itself. If the Act is invoked, the adjoining owner’s common law rights are substituted for statutory rights, which supersede the common law. If not, the adjoining owner’s common law rights remain intact.  The question then is when can the Act be invoked and by whom? The answer, said the Court of Appeal, is that the Act is invoked at the point of service of a party structure notice. Until then, the position is governed by the common law.  That had been the accepted position under the Act’s statutory predecessor (the London Building Acts (Amendment) Act 1939). The Act had not been intended to radically change the law but merely to extend to the rest of the country the “tried and tested” procedure set down in the 1939 legislation, which applied only in London. The adjoining owner does not have the option to choose between remedies at common law or under the Act, and there is no procedure by which the adjoining owner could initiate any process under the Act.  Accordingly, the position is this: no notice, no Act. Faced with a neighbour who has chosen (either deliberately or in ignorance of the Act’s provisions) not to serve any party structure notice but instead to commence work, the adjoining owner is left with common law remedies only; namely, the right to bring claims in trespass, nuisance and negligence, and the right, if appropriate, to seek an injunction, and/or damages. The implications Property litigators will know, however, that it is not as simple as all that. The dispute resolution procedure under the Act has the benefit of being quick, cheap and practical – three words that are not often associated with contested litigation.  The reality is that, if a building owner is carrying out work without having first served a notice under the Act, the adjoining owner will have little option but to seek an urgent interim injunction requiring their neighbour to stop work until notice has been served. As well as the significant upfront cost involved, the innocent adjoining owner is also likely to be required to give an undertaking in damages, and to demonstrate that they are good for the money if the undertaking is called on. This may well be a risk too far for many adjoining owners, especially if the loss and damage complained of is moderate. There will inevitably be building owners who take heart from this decision and press on with works without serving notice in the hope that their neighbours will not have sufficient resources or appetite to issue legal proceedings. That said, a finding in the appellants’ favour would have had other unattractive consequences. The Court of Appeal pointed out that surveyors appointed under the Act need not have any professional surveying qualifications. They are not therefore necessarily regulated in the same way as other professionals would be (although of course many party wall surveyors are regulated by the RICS). If the Act could be invoked by an adjoining owner unilaterally, then that would have the effect of removing any rights that the building owner had at common law and their right of access to the court (save by way of an appeal of a party wall award) and substituting them for a determination of rights by someone without any qualifications in the area. There would be obvious scope for this to be abused by an adjoining owner seeking to frustrate or delay works being carried out. It is not unknown, for example, for party wall surveyors to target potential adjoining owners from grants of planning permission and thereby stir up disputes where previously none existed.  Very few party wall cases ever make their way to the Court of Appeal because of the strict test that applies to second appeals. There is accordingly very little high authority about how the Act is intended to work in practice. Though this decision may be felt by some to create something of a licence for developers to ignore the provisions of the Act and to press on without appointing a party wall surveyor, surveyors still have a key role to play. In particular, swift action by a surveyor acting for an adjoining owner in these circumstances could be vital in stopping work before significant damage is caused, or at the very least recording the condition of the adjoining owner’s property and the cause and progress of any damage as it happens so that proceedings at common law may be issued. Nicholas Isaac KC and Katie Gray acted for the appellants Photo © Krakograff Textures/Unsplash