Louise Clark explains a court’s ruling that an adjoining owner cannot unilaterally trigger the dispute resolution procedure under the Party Wall etc Act 1996.
Key points
- For the dispute resolution procedure under the 1996 Act to apply, a notice needs to be served by the building owner
- An adjoining owner cannot unilaterally trigger the dispute resolution procedure
- Where the 1996 Act does not apply, an adjoining owner has common law remedies for trespass and nuisance
In Power and another v Shah [2023] EWCA Civ 239; [2023] PLSCS 45 the Court of Appeal has considered a novel but important question under the Party Wall etc Act 1996. Can an adjoining owner rely on the dispute resolution procedure under the Act where the building owner has not served any notice and maintains that the Act does not apply?
The law
The 1996 Act extended to England and Wales the procedure for London contained in the London Building Acts (Amendment) Act 1939 when a building owner wanted to carry out works in or around a party structure. The building owner was obliged to give notice in writing to an adjoining owner and any differences between them would be resolved by one surveyor or by a surveyor appointed by each party and a third surveyor.
The 1996 Act essentially mirrors the provisions of the 1939 Act. Section 2 relates to circumstances where a building or boundary wall lies on the line of junction between lands of different owners. In such circumstances the building owner has extensive rights to deal with the party structure – to underpin, make good, repair, demolish or rebuild it – provided that all damage occasioned to the adjoining premises or their internal furnishings and decorations is made good.
Before exercising any right conferred by section 2, a building owner must serve a party structure notice on the adjoining owner which gives details of the proposed works and when they will begin, which must be no less than two months after service of the notice. An adjoining owner is entitled to serve a counter-notice, but unless it consents to the notice it is deemed to have dissented from it and a dispute is deemed to have arisen.
Section 10 of the 1996 Act addresses the resolution of disputes. The parties can agree to appoint one surveyor or can each appoint their own surveyor who can, if required, select a third surveyor to settle by award any matter connected with any work to which the 1996 Act relates and any dispute between the parties. This includes the right to execute any work, the time and manner of executing any work, and the costs of making an award. The award is conclusive but the parties have 14 days in which to appeal.
The background
The case concerned works carried out by the respondent to his home at 34 Bull Lane, Dagenham. He did not serve a notice under the 1996 Act because his planning consultant advised that the works did not fall within the ambit of the statute. The adjoining owners at 36 Bull Lane disagreed and claimed that they had suffered damage as a result of the works.
The adjoining owners appointed the second appellant to act as their surveyor under the 1996 Act and, since the respondent failed to engage in the process, the second appellant appointed the first appellant on his behalf. In July 2018, the appellants issued an award determining that the respondent’s works required notice under the statute, the works had damaged 36 Bull Lane and the respondent was to pay compensation to the adjoining owners of £4,223 excluding VAT plus their fees of £4,630.
The respondent did not pay the sums claimed and the appellants brought enforcement proceedings for non-payment in the Magistrates Court under section 17 of the 1996 Act. Those proceedings were stayed pending determination of the respondent’s challenge to the award. He obtained judgment that the award was null and void because the 1996 Act did not apply, and so the dispute resolution mechanism was not engaged. The appellants’ appeal was dismissed.
The decision
The Court of Appeal also dismissed their second appeal. On a proper construction of the 1996 Act, the lower courts were correct to conclude that, in the absence of a notice from the building owner, the dispute resolution mechanism under the Act had not been engaged.
The building owner’s rights under section 2 are expressly subject to service of a notice in advance under section 3. Service of the notice in advance is mandatory before a building owner is entitled to carry out any works to a party structure under section 2 of the 1996 Act.
The dispute resolution mechanism in section 10 is limited to “any matter connected with any work to which this Act relates” so is only engaged where section 2 applies following service of a notice under section 3. The requirement for notice is an important mechanism by which the scope of the work to be carried out can be agreed in advance.
There is nothing in the 1996 Act which permits an adjoining owner unilaterally to trigger the dispute resolution mechanism and the Court of Appeal considered that express wording would be necessary to permit an adjoining owner to engage the mechanism, in the absence of a section 3 notice, because they were unhappy with works that had been carried out.
Where the 1996 Act does not apply, the adjoining owner is not without a remedy. It is entitled under the common law to pursue claims in trespass and nuisance through court proceedings and to seek an injunction where appropriate. Those rights are supplanted by the dispute resolution mechanism under section 10 when the 1996 Act applies.
Louise Clark is a property law consultant and mediator
