Party wall – Party Wall etc Act 1996 – Award – Legal costs – Respondent commencing works not authorised by surveyor’s award – Appellant preparing legal proceedings for injunction – Proceedings not instituted after respondent giving undertakings – Subsequent surveyor’s award directing respondent to pay appellant’s legal costs of contemplated proceedings – Award varied by judge – Whether surveyors having power to award legal costs under 1996 Act – Appeal dismissed
The respondent purchased an end-of-terrace house that she proposed to replace with a new building comprising three flats, including one at basement level. She served two notices on the appellant under section 1(5) and section 6(1) respectively of the Party Wall etc Act 1996. By a surveyor’s award made under the Act, it was determined that the first notice was invalid but the second was valid.
The respondent began works in respect of excavations and foundations that she considered to have been authorised by the award. The appellant took the view that a further award was necessary before the works could proceed. Her solicitor instructed counsel to draft particulars of claim for an injunction and other relief. In the event, those were not served, and no proceedings were begun in the light of undertakings given by the respondent not to carry out further works for the time being.
A further surveyor’s award was subsequently made under the 1996 Act procedures. This authorised and directed the content, manner and timing of the works to be carried out by the respondent. It further directed her to pay the appellant’s “solicitor’s and legal fees” of £7,651 plus VAT, which had been incurred in respect of the contemplated proceedings.
On the respondent’s appeal to the county court, the judge varied the award by deleting the direction as to legal costs. He held that section 10(12) and (13) of the 1996 Act did not permit surveyors making an award under that Act to provide for the payment of the costs of litigation. The appellant appealed. She contended that her legal costs were an “other matter arising out of or incidental to the dispute” within section 10(12) and (13).
Held: The appeal was dismissed.
In view of the nature of the disputes referred to surveyors under the 1996 Act, and the wide wording of the relevant provisions of section 10, the section gave to appointed surveyors the power to order the payment by one adjoining owner of legal costs reasonably and properly incurred by another: Onigbanjo v Pearson [2005] BLR 507 applied. However, that power was restricted to costs connected with the statutory dispute resolution mechanism, being a dispute arising under the provisions of the 1996 Act. It did not apply to legal costs incurred in court proceedings to enforce common law or equitable remedies such as damages or an injunction for trespass or nuisance or the threat of them, or to preparations for such proceedings. To confer on appointed surveyors the power to provide for costs incurred in connection with actual or contemplated litigation in court would be inconsistent with the statutory objective of the 1996 Act of providing a mechanism for dispute resolution that avoided recourse to the courts. Such litigation, resulting from non-compliance with the dispute resolution mechanism, fell outside the statutory dispute resolution framework.
Moreover, appointed surveyors had no power under the 1996 Act to grant common law or equitable relief for causes of action in trespass or nuisance, which were the causes of action in issue in the appellant’s contemplated proceedings: Woodhouse v Consolidated Property Corporation Ltd [1993] 1 EGLR 174; [1993] 19 EG 134 and Louis v Sadiq [1977] 1 EGLR 136; [1997] 16 EG 126 considered. The discretionary power to make costs orders did not sit comfortably with any parties other than the court or body that had the ability and right to adjudicate the causes of action and grant the substantive relief sought, particularly where those other parties were not lawyers. Further, in the ordinary way, no costs were recoverable by a party that prepared for litigation that was never instigated, and there was no rational policy reason why an adjoining owner in the appellant’s position should be treated more favourably.
Nicholas Isaac (instructed by Penman Johnson LLP, of Watford) appeared for the appellant; Stephen Bickford Smith (instructed by Child & Child) appeared for the respondent.
Sally Dobson, barrister
