Party Walls — London Building Acts (Amendment) Act 1939 — Surveyor’s party wall award — Damage to adjoining owner’s property to be made good at cost of building owner — Whether adjoining owner entitled to register caution against title of building owner
By a party
wall award dated December 23 1992, and made under the London Building Acts
(Amendment) Act 1939, the plaintiff building owner was permitted to carry out
work on land which is partly the property of the plaintiff and partly the property
of the defendant adjoining owner. The award imposed on the plaintiff an
obligation at its expense to make good damage to the defendant’s building, and
in the event the plaintiff fails to do so, the defendant is entitled to
carrying out such works at the plaintiff’s expense and upon the plaintiff’s
land. The defendant’s premises were damaged by the plaintiff’s excavations and
the defendant registered a caution against the plaintiff’s title at HM Land
Registry. The plaintiff applied to have the caution removed on the ground that
the defendant did not have a cautionable interest.
on a cross-undertaking by the plaintiff as to damages. There is no right in an
‘adjoining owner’ who has the benefit of a
a person or body who can enter a caution on the register as a person having an
interest in land belonging to the building owner. Although in certain
circumstances the defendant adjoining owner might in due course become entitled
to enter the plaintiff’s land, such right is not sufficient to entitle the
defendant to have such an interest as can be protected by a caution.
The following
cases are referred to in this report.
Clayhope
Properties Ltd v Evans [1986] 1 WLR 1223;
[1986] 2 All ER 795; [1986] 2 EGLR 34; (1986) 279 EG 855, CA
Linton
International Ltd v Noble (1991) 63 P&CR
452
This was a
hearing of a notice of motion in an application by originating summons by the
plaintiff, Observatory Hill Ltd, against the defendant, Camtel Investments SA,
for the removal of a caution.
Wayne Clark
(instructed by Simmons & Simmons) appeared for the plaintiff; Alan Steyner
(instructed by Cumberland Ellis) represented the defendant.
Giving
judgment, Judge Levy said: Observatory Hill Ltd
(‘the plaintiff’) is a company which owns property in London W8, which includes
Observatory 1, 2, 3, 5, 5A, 6 and 12 of Observatory Gardens. The ultimate owner
of the plaintiff company is a company which is, I think, incorporated in
Luxembourg.
The defendant
company, Camtel Investments SA (‘the defendant’), is a company incorporated in
Panama, which owns property adjoining the plaintiff’s premises in such a way
that the two properties share a party wall.
The difficult
London Building Acts (Amendment) Act 1939, has been invoked by the plaintiff
and there has been an award made under the provisions thus invoked. It is
common ground between counsel appearing for the plaintiff and the defendant
that the substantial renovations which have been made by the plaintiff on the
plaintiff’s premises have caused more than minimum damage on the land owned by
the defendant.
The defendant
has placed on Her Majesty’s Land Registry a caution in respect of the interest
which it says it has on the plaintiff’s land and the plaintiff has commenced
proceedings by way of originating summons ordering that the caution entered by
and on behalf of the defendant on or about June 19 in the proprietorship
register of its title be vacated and the defendant to take all such steps and
effect all such things as necessary to ensure that the caution is vacated.
Soon after the
originating summons, the plaintiff issued and served a notice of motion and
affidavit seeking to remove the caution summarily. The motion first came before
Harman J on July 2. On that day, he gave liberty to the defendant to file
evidence in answer to the evidence of the plaintiff by 5:30 last Friday and
ordered that the motion should come before the court today.
The defendant
has so filed an affidavit and the plaintiff has filed an extra affidavit beyond
that which was before Harman J on July 2, which I have read without objection
from the defendant’s counsel.
The situation
is abundantly clear: the defendant’s premises has been damaged because of the
work done by the plaintiff in excavation. The award made by the very
experienced arbitrator makes it quite clear that work will have to be done not
only on the defendant’s land but also on the plaintiff’s land to remedy the
damage caused by the plaintiff. In such circumstances the question is raised as
to whether there is a cautionable interest in the defendant.
In his latest
skeleton argument prepared over the luncheon adjournment, Mr Alan Steyner, who
has put the matter persuasively on behalf of the defendant, says this: the
defendant has an interest in the plaintiff’s land sufficient to lodge a caution
under section 54(1) of the Land Registrations Act 1925, by virtue of the party
wall award made on December 23 1992, under the provisions of the London
Building Acts (Amendment) Act 1939. The award: (a) permits the plaintiff to
carry out work on land which is partly the property of the plaintiff and party
the property of the defendant; (b) imposes on the plaintiff an obligation to
make good at his own expense all structural and decorative damage that the
defendant’s building occasioned by the works; and (c) in the event that the
plaintiff fails to do so, the defendant is entitled to carry out such works at
the plaintiff’s expense and upon the plaintiff’s property.
For present
purposes Mr Wayne Clark, who appears for the plaintiff, accepts the fact of the
award and the consequences of it as spelled out by Mr Steyner. The issue
between the parties is as to whether that amounts to a cautionable interest.
In that respect
I have been referred to passages both in the current edition of Emmet on
Title and to sections of Ruoff and Roper on Registered Conveyancing,
and to several decided cases. It is common between counsel that the facts on
which I am asked to pronounce do not fall between any of the decided cases.
I am, to some
extent, encouraged by the stance taken by Noggs J in giving his decision in Linton
International Ltd v Noble (1991) 63 P&CR 452, where he looked
closely at the rights of a party to have a caution on the register before
coming to the conclusion on the facts of that case that there were no such
rights.
So far as Emmet
is concerned, there is this passage at 10.008:
Caution
against dealings: A caution against dealings has a similar effect.
That is
referring to the paragraph above, which reads:
A caution
provides a means whereby a person interested may be warned before registration
of title is effected or before any disposition is registered which might
adversely effect him. There are two types of caution: (i) against first
registration, and (ii) against dealings with registered land or a registered
charge.
And then the
passage deals first of all against first registration. Then the passage on
10.008 continues:
It is
substantially a hostile action, and the procedure is designed accordingly. A
person interested under an unregistered instrument, or interested as a judgment
creditor or otherwise in any land or charge registered in the name of another,
may lodge a caution to the effect that no such dealing with such land or
charges to be registered until notice has been served on him.
A question
arises as to what is an unregistered instrument; in that regard, I have been
referred to section 3 of the Land Charges Act, which does not give an enormous
amount of help and it is clearly the position at the moment that the defendant
is neither a judgment creditor nor anything approaching one. The best claim
that the defendant has is a potential interest to enter on to the plaintiff’s
land if and so far as the award of the arbitrator is not in due course observed
and put into effect by the plaintiff.
The passage in
Emmet continues by giving examples of many cases, and then at the foot
of page reads:
The interest
of a contributory and creditor in land of a company in liquidation is not
a minor interest which can be protected by caution … Nor is a provision for a
sum additional to the purchase price to be payable if development occurred.
Similarly, it
is not thought that a Mareva injunction, which does not strictly involve
any interest in land, can properly be protected by a caution … However a
receivership order obtained by a tenant against his landlord could be so
protected.
And there is a
reference to Clayhope Properties Ltd v Evans [1986] 1 WLR 1223*,
one of the cases to which I have been referred.
*Editor’s
note: Also reported at [1986] 2 EGLR 34
Having regard
to the foregoing, in my judgment, there is no right in an adjoining owner who
has the benefit of an award under the 1939 Act to become a person or a body who
can enter a caution on the register as a person having an interest in land.
Such a person or body does not come within any of the categories which are now
shown to exist as a person having an interest in land; I think it would be
unwise to enlarge that category.
In the
circumstances it seems to me that the submissions made by Mr Steyner cannot be
right. I recognize that in certain circumstances the defendant might in due
course become entitled to enter on to the plaintiff’s land but such a right is
not sufficient as now to entitle the defendant to have such an interest in the
plaintiff’s land as can be protected by a caution on the register. The fact
that there is a party wall there, in some part of which the defendant may have
some interest, does not seem to me to be a sufficient interest in land any more
than does the fact that the implication of the 1939 procedures have been
invoked.
In the
circumstances it seems appropriate to me to give the relief sought by Mr Clark
in his notice of motion, that is to remove the caution on the register, on the
cross-undertaking proffered by the plaintiff. I accept as suitable the words in
the fifth exhibit to Mr Gordon Hunter’s affidavit:
Upon the
plaintiff by its counsel undertaking to abide by any Order this court may make
as to damages in case this court should be of the opinion that the defendant
shall have sustained any, by reason of this Order, which the plaintiff ought to
pay
I should make
it clear that although the defendant does have ample other remedies in its
hands if the caution is removed, as I shall order, I recognize that the
existence of a caution on the register of title of the plaintiff’s land
improves the bargaining position of the defendant in his dispute with the
plaintiff, but that is no reason for a remedy for which there is no statutory,
legal or equitable right.
Orders
accordingly.
