Construction works – Request for security – Respondent building owner giving notice of building works – Appellant neighbour seeking bond or other security against damage to property – Surveyor concluding request for security not available since respondent not carrying out works to appellant’s land — Whether appellant entitled to request security where works only on respondent’s land – Appeal allowed
The appellant owned a house that adjoined the respondent’s property. The respondent intended to carry out construction works on his site. By a notice issued under section 6(1) and 6(2) of the Party Wall etc. Act 1996, he informed the appellant of his intention to build within three to six metres of the appellant’s building to a depth defined in the Act, but that he did not propose to underpin or otherwise strengthen the appellant’s foundations.
The appellant objected to the proposed works. Each party subsequently appointed a surveyor to resolve the ensuing dispute in accordance with section 10 of the 1996 Act. The two surveyors appointed a third surveyor to determine certain disputed items, pursuant to section 10(11).
Under section 12 (1) of the 1996 Act, the appellant requested a bond or project-specific insurance policy in respect of potential damage to his property. However, the third surveyor declined the request because the respondent, the building owner, did not intend to exercise rights conferred by the Act to carry out work to the land or property belonging to the appellant, as the adjoining owner. He suggested that each member of the design team, as well as the respondent, should obtain professional indemnity insurance cover to a minimum value of £2m. The appellant was to be provided with evidence of the maintenance of such cover for a period of two years following the completion of the substructure works.
The appellant appealed. The matter had been transferred to the Technology and Construction Court at the request of the parties, but since, under section 10(7) of the 1996 Act, appeals from an award of the third surveyor were to be brought in the county court, the judge sat as a judge of the county court under section 5(3) of the County Courts Act 1994.
The central question was whether the appellant cold request security when works were restricted to the building owner’s land.
Held: The appeal was allowed.
The third surveyor had erred in law in holding that the appellant was not entitled to security under section 12(1) for work carried out under section 6(1) or 6(2) of the 1996 Act. He had wrongly held that the respondent, as the building owner, was not exercising rights conferred by the Act in carrying out such work; those provisions did confer rights and section 12(1) security could be requested. Further, the 1996 Act did not provide that security could be requested only where the building owner was proposing to carry out work to the adjoining owner’s land or property.
The 1996 Act had created new rights, which did not exist at common law, permitting a building owner to carry out work on the land of an adjoining owner. Although under common law the building owner had t right to carry out work on his own land, section 6(1) and 6(2) of the 1996 Act allowed him to carry out excavation works within three to six metres of his boundary. In order to carry out that excavation, the building owner had to give notice of his proposals, and he had the right or, if required by the adjoining owner the obligation, to underpin or otherwise strengthen or safeguard the foundations of the building or structure of the adjoining owner under section 6(3).
Section 12(1) applied to all cases where the building owner was exercising rights under the Act, including the supplanted or substituted rights under section 6(1) and 6(2). There was no reason why it should apply only to work on an adjoining owner’s land and the statutory provisions did not draw a clear distinction in that respect. Further, the carrying out of works within three to six metres of the boundary would be as likely to cause loss or damage so as to justify security, as would works carried out under section 6(3) or other provisions of the 1996 Act. Where work was carried out under a number of sections of the Act, it made no sense to grant security for some works but not others when liability for loss and damage under section 7(2) would apply to all works.
Given the wide terms of section 10(12)(c), there was no reason why the award could not also deal with security under that provision, and commonly, as here, such matters as insurance were included under it. That broad power was consistent with section 12(10) applying to all the provisions of the Act, including section 6(1) and 6(2).
Sarah Hannaford QC (instructed by Sylvester Amiel Lewin & Horne) appeared for the appellant; Martin Hutchings (instructed by Laceys Solicitors) appeared for the respondent.
Eileen O’Grady, barrister
