Party wall — Party Wall etc Act 1996 — Award — Underpinning works — Validity of appointment of surveyor — Validity of party wall notice — Whether defects in notice waived by receiving party — Whether refusal to act effectively by surveyor of one party so as to justify ex parte award — Appropriate apportionment of cost of works
The appellant and the respondent were the freeholders of adjoining terraced properties, nos 59 and 57. The respondent’s surveyor, K, served a party wall notice on the appellant and others, under the Party Wall etc Act 1996, notifying them of its intention to carry out underpinning works to all the supporting walls of no 57, including the party wall with no 59, in order to remedy subsidence problems. The notice was given under both section 3, in respect of the proposed underpinning works to the party wall falling within section 2(2)(a), and section 6(5), in respect of “excavation works” with regard to the other walls of no 57.
The appellant appointed L as his party wall surveyor under section 10. L made no formal response to the party wall notice but instead raised various queries, in particular seeking a commitment that the respondent would pay his fees. A third surveyor, S, was appointed by K. Following protracted correspondence, and five months after service of the initial party wall notice, L wrote a letter in which, for the first time, he disputed the validity of the party wall notice under section 6 on the ground that the drawings served with it did not show the site or depth of the proposed excavations as required by section 6(6). He also asserted that the need for the underpinning works had stemmed from tree root damage for which the respondent was responsible, such that the respondent should bear the entire cost of the works pursuant to section 11(5)(b).
K took the view that L’s letter amounted to a refusal to act effectively in respect of the works notifiable under section 6, and proceeded to make an ex parte award in relation to the section 6 issues, pursuant to section 10(6). A second award was then made by S, who apportioned the cost of underpinning the party wall equally between the parties, under section 11(5)(a), to reflect the use that each made of it; he found that the “defect or want of repair” giving rise to the need for the underpinning had not been caused by the respondent’s actions or neglect.
The appellant appealed both awards. He raised issues as to: (i) the validity of K’s appointment, in that it had taken place before the service of the party wall notice; (ii) the matters covered by the section 6 part of the notice and the validity of that part; and (iii) the apportionment of the cost of the works falling within the section 3 part of the notice.
Held: The appeals were dismissed. (1) An appointment of a surveyor under section 19(1)(b) of the 1996 Act can be made before the service of a party wall notice in respect of the proposals to which that notice relates; the appointment will take effect under the Act as and when a dispute is deemed to have arisen. K had been validly appointed in respect of the party wall notice. (2) The term “underpinning” in section 2(2)(a) includes any works that are necessary in order to effect the underpinning, including excavation to reach the proposed location of the underpinning. Accordingly, the entire underpinning exercise in respect of the party wall fell within section 3; only the works to the other walls of no 57 fell within section 6. (3) The August 2005 notice was invalid in so far as it related to the section 6 works, since it did not include the information that section 6(6) required it to contain. A notice under section 6 must give the adjoining owner the necessary information as to the site and depth of any excavation in order to assess any risk to the stability of its building and to decide whether to invoke its right under section 6(3) to require the underpinning. A notice that gives no indication of depth will be inadequate even if it would be easy, as a practical matter, to supply its deficiencies by, for example, contacting the engineer who prepared the drawing in question. (4) A party wall surveyor can waive a defect in a notice by accepting to act as if the notice were valid. L had waived the invalidity of part of the August 2005 notice, or estopped himself from asserting that invalidity, by failing to raise the matter immediately and waiting five months to deploy the matter as a negotiating tool. That was not conduct that should be condoned in the context of operating party wall procedures, given the purpose of the Act and the normal conduct of professionals operating its provisions. Failure to object at the earliest practicable moment could and would reasonably be interpreted by the other party as an election to proceed under the notice in any event. (5) In all the circumstances, L’s letter constituted a “refusal to act effectively” within the meaning of section 10(6), with regard to the works that were properly the subject of the section 6 part of the notice. Accordingly, K was entitled to make an ex parte award, and the award of January 2006 was valid and binding. (6) The concept of “responsibility” in section 11(4)(b) does not equate with legal liability; the test is whether, as a matter of common-sense impression, one party has been more the cause of the relevant defect, damage or disrepair than the other. The respondent was not responsible for the relevant defect because it had done nothing to cause it. Consequently, S had been entitled to find that an equal apportionment of the underpinning costs was appropriate.
The following judgments are referred to in this report.
Delaware Mansions Ltd v Westminster City Council; sub nom Flecksun Ltd v Westminster City Council [2001] UKHL 55; [2002] 1 AC 321; [2001] 3 WLR 1007; [2001] 4 All ER 737
Frances Holland School v Wassef [2001] 2 EGLR 88; [2001] 29 EG 123, CLCC
Gyle-Thompson v Wall Street (Properties) Ltd [1974] 1 WLR 123; [1974] 1 All ER 295; (1974) 27 P&CR 13, Ch
Hobbs Hart & Co v Grover [1899] 1 Ch 11
Pepper (Inspector of Taxes) v Hart [1993] AC 593; [1992] 3 WLR 1032; [1993] 1 All ER 42, HL
Zissis v Lukomski [2006] EWCA Civ 341; [2006] 1 WLR 2778; [2006] 2 EGLR 61; [2006] 30 EG 104
These were appeals by the appellant, N Amponsah Manu, against two awards made by surveyors under the Party Wall etc Act 1996 concerning works carried out by the respondent, Euroview Estates Ltd. |page:166|
Peter Aeberli (instructed by Staniford Wallace) appeared for the appellant; Marie-Claire Bleasdale (instructed by Bude Nathan Iwanier) represented the respondent.
Giving judgment, HH Judge Hazel Marshall QC said:
[1] I have before me two appeals to this court brought by the appellant, Mr N Amponsah Manu, against the respondent, Euroview Estates Ltd, in which he seeks the setting aside of two awards made under the Party Wall etc Act 1996 (the 1996 Act) in respect of works that the respondent wished to carry out to underpin and stabilise its property at 57 Drayton Park, London N5. The appeals are brought under section 10(17) of that Act.
[2] The two awards are, first, an award of Mr Dov Kritzler BSc (Est Man) FRICS FBEng FCIArb, made on 19 January 2006, in respect of works that Euroview wished to carry out, which it understood to fall within section 6 of the Act, and, second, an award made on 28 February 2006 by Mr Martin John Sumner FRICS FBEng in respect of works understood to fall within sections 2(1)(a) and 3 of the Act.
[3] The works in question have now been carried out by Euroview, and these appeals concern, in effect, only money, namely how, as between appellant and respondent, the costs of the works, the costs of their surveyors and the costs of these proceedings should fall. Indeed, with regard to the first appeal, the sole outstanding issue is the cost of these proceedings. It is agreed that my decision on the substantive issues argued will have no actual effect upon the parties’ rights in the events that have happened.
[4] That last fact emerged only during the parties’ final speeches, after the combined appeals had already occupied three-and-a-half days of court time to hear and argue. I was at one time minded to decline to decide the substantive points on the first appeal on the ground that they were hypothetical, but potentially they affect the incidence of costs and, having heard the arguments, I think it more efficient for the final disposal of the entire matter if I do give my reasoned decision. The aridity of the first appeal and its continuation may well though be material to the ultimate issue of costs.
[5] In a similar vein, many of the issues that have at various times been raised in these appeals, whether originally, by amendment or in skeleton arguments, have in the event been abandoned. I shall confine this judgment, therefore, to the issues that were finally pursued in the hearing, except where it is necessary to mention any others.
Properties
[6] Number 57 is an end-of-terrace house having a party wall with no 59. Number 55, on the other side of no 57, is detached from it, with an alleyway in between.
[7] Euroview owns the freehold, having acquired it from Islington London Borough Council (Islington) in June 2005. Mr Manu is the freehold owner of no 59, having retained the basement flat in that property, although he appears to be resident elsewhere and is frequently abroad. The ground-floor flat in no 59 and the maisonette on the first and second floors of no 59 are owned by long leaseholders from Mr Manu.
[8] When Euroview bought no 57, it was in a run-down state and subject to subsidence, although it had already been stabilised with supporting scaffolding. Euroview wanted to redevelop no 57, and therefore to proceed immediately with works to underpin the entire property. This would be done by deepening the foundations by means of digging down beside them and digging in below them to insert concrete “pins” or individual blocks, in a carefully engineered, staggered sequence, all round the supporting walls of the house, including the party wall with no 59.
[9] The carrying out of such works would therefore necessitate following the procedures of the 1996 Act. In outline, this requires the service of notices by the party wishing to do relevant works, on any adjoining owner that is affected in ways that the Act specifies. A statutory procedure is then prescribed to ensure that, unless the adjoining owner gives its consent to the works, a scheme to define the actual works to be done, and the terms upon which they should be carried out, can then be fixed expeditiously, with both parties’ interests being properly represented and protected. This scheme is fixed, either by agreement between the parties, by a single surveyor whom they appoint jointly or by each party having its own appointed surveyor to agree or negotiate the works between them, with a third surveyor also being appointed so that, if necessary, a final decision can be made, either by him as ultimate referee or by a majority decision of two out of the three appointed surveyors. By one of these means, therefore, the exact works, the appropriate terms and conditions for their execution and the appropriate responsibility for the costs of the works and ancillary matters can be decided and then recorded in a party wall award, to which reference can then be made for the parties’ respective rights and obligations, thereby avoiding dispute and delay.
[10] This system was originally applied in greater London, under the London Buildings Act (Amendment) Act 1939. It was found to be sufficiently useful and successful that the 1996 Act extended it nationally.
[11] The scheme of the 1996 Act is clever and intricate. It has to be because it has to provide a single, manageable code to cope, as far as possible, with all predictable routes that negotiations may take between parties that may have a range of different attitudes to works and to each other, so as to enable a final authoritative result to be produced in any instance within the kind of speedy timescale that building or repair projects demand.
Legislation
[12] It is convenient now to set out here the parts of the 1996 Act that are material for this case.
[13] The purpose of the 1996 Act is demonstrated by its preamble, which reads:
An Act to make provision in respect of party walls, and excavation and construction in proximity to certain buildings or structures; and for connected purposes.
[14] Under the definitions in section 20:
“party structure” means a party wall [and …]
“party wall” means
(a) a wall which forms part of a building and stands on lands of different owners to a greater extent than the projection of any artificially formed support on which the wall rests… .
[15] Section 1 of the 1996 Act is concerned with new building. Section 2 is concerned with works to “party structures” and provides:
2(1) This section applies where lands of different owners adjoin and at the line of junction the said lands are built on…
(2) A building owner shall have the following rights —
(a) to underpin, thicken or raise a party structure,…
(b) to make good, repair, or demolish and rebuild, a party structure or party fence wall in a case where such work is necessary on account of defect or want of repair of the structure or wall…
3(1) Before exercising any right conferred on him by section 2 a building owner shall serve on any adjoining owner a notice (in this Act referred to as a “party structure notice”) stating —
(a) the name and address of the building owner;
(b) the nature and particulars of the proposed work including, in cases where the building owner proposes to construct special foundations, plans, sections and details of construction of the special foundations together with reasonable particulars of the loads to be carried thereby; and
(c) the date on which the proposed work will begin.
(2) A party structure notice shall —
(a) be served at least two months before the date on which the proposed work will begin;
(b) cease to have effect if the work to which it relates —
(i) has not begun within the period of twelve months beginning with the day on which the notice is served…
[16] Section 4 provides for counternotices where an adjoining owner wants the above type of works also to accommodate its future plans, and is not material. By section 5:
5. If an owner on whom a party structure notice… has been served does not serve a notice indicating his consent to it within the period of fourteen days |page:167| beginning with the day on which the party structure notice… was served, he shall be deemed to have dissented from the notice and a dispute shall be deemed to have arisen between the parties.
[17] Section 6 moves to a different subject. It deals with excavation works that may affect the stability of adjoining buildings belonging to others. It reads:
6(1) This section applies where —
(a) a building owner proposes to excavate, or excavate for and erect a building or structure, within a distance of three metres measured horizontally from any part of a building or structure of an adjoining owner; and
(b) any part of the proposed excavation, building or structure will within those three metres extend to a lower level than the level of the bottom of the foundations of the building or structure of the adjoining owner.
(2) This section also applies where —
(a) a building owner proposes to excavate, or excavate for and erect a building or structure, within a distance of six metres measured horizontally from any part of a building or structure of an adjoining owner; and
(b) any part of the proposed excavation, building or structure will within those six metres meet a plane drawn downwards in the direction of the excavation, building or structure of the building owner at an angle of forty-five degrees to the horizontal from the line formed by the intersection of the plane of the level of the bottom of the foundations of the building or structure of the adjoining owner with the plane of the external face of the external wall of the building or structure of the adjoining owner.
(3) The building owner may, and if required by the adjoining owner shall, at his own expense underpin or otherwise strengthen or safeguard the foundations of the building or structure of the adjoining owner so far as may be necessary.
(4) Where the buildings or structures of different owners are within the respective distances mentioned in subsections (1) and (2) the owners of those buildings or structures shall be deemed to be adjoining owners for the purposes of this section.
(5) In any case where this section applies the building owner shall, at least one month before beginning to excavate, or excavate for and erect a building or structure, serve on the adjoining owner a notice indicating his proposals and stating whether he proposes to underpin or otherwise strengthen or safeguard the foundations of the building or structure of the adjoining owner.
(6) The notice referred to in subsection (5) shall be accompanied by plans and sections showing —
(a) the site and depth of any excavation the building owner proposes to make;
(b) if he proposes to erect a building or structure, its site.
(7) If an owner on whom a notice referred to in subsection (5) has been served does not serve a notice indicating his consent to it within the period of fourteen days beginning with the day on which the notice referred to in subsection (5) was served, he shall be deemed to have dissented from the notice and a dispute shall be deemed to have arisen between the parties.
(8) The notice referred to in subsection (5) shall cease to have effect if the work to which the notice relates —
(a) has not begun within the period of twelve months beginning with the day on which the notice was served…
[18] Thus, it can be seen that sections 3 to 5 provide a regime for notices and responses in relation to works to a party structure, and section 6 provides a similar regime for notices and responses in relation to works of excavation that might affect the stability of structures solely on the land of an adjoining owner, each providing that, in similar circumstances, “a dispute shall be deemed to have arisen”. The only material difference to which I need draw attention for present purposes, is that between section 3(1)(b) and the corresponding section 6(6), with regard to the requirement in the original notice to provide drawings. In the former case, that particular requirement applies only in the case of a proposal for “special foundations”, which, it is common ground, does not apply in this case. In the latter, the requirement for drawings is general.
[19] I can pass over sections 7 to 9. The next important section is section 10, which provides the scheme for resolving disputes by the appointment of party wall surveyors.
10(1) Where a dispute arises or is deemed to have arisen between a building owner and an adjoining owner in respect of any matter connected with any work to which this Act relates, either —
(a) both parties shall concur in the appointment of one surveyor (in this section referred to as an “agreed surveyor”); or
(b) each party shall appoint a surveyor and the two surveyors so appointed shall forthwith select a third surveyor (all of whom are in this section referred to as “the three surveyors”).
(2) All appointments and selections made under this section shall be in writing and shall not be rescinded by either party.
(3) If an agreed surveyor —
(a) refuses to act;
(b) neglects to act for a period of ten days beginning with the day on which either party serves a request on him;
(c) dies before the dispute is settled; or
(d) becomes or deems himself incapable of acting,
the proceedings for settling such dispute shall begin de novo.
(4) If either party to the dispute —
(a) refuses to appoint a surveyor under subsection (1)(b), or
(b) neglects to appoint a surveyor under subsection (1)(b) for a period of ten days beginning with the day on which the other party serves a request on him,
the other party may make the appointment on his behalf.
(5) If, before the dispute is settled, a surveyor appointed under paragraph (b) of subsection (1) by a party to the dispute dies, or becomes or deems himself incapable of acting, the party who appointed him may appoint another surveyor in his place with the same power and authority.
(6) If a surveyor —
(a) appointed under paragraph (b) of subsection (1) by a party to the dispute; or
(b) appointed under subsection (4) or (5),
refuses to act effectively, the surveyor of the other party may proceed to act ex parte and anything so done by him shall be as effectual as if he had been an agreed surveyor.
(7) If a surveyor —
(a) appointed under paragraph (b) of subsection (1) by a party to the dispute; or
(b) appointed under subsection (4) or(5),
neglects to act effectively for a period of ten days beginning with the day on which either party or the surveyor of the other party serves a request on him, the surveyor of the other party may proceed to act ex parte in respect of the subject matter of the request and anything so done by him shall be as effectual as if he had been an agreed surveyor
…
(10) The agreed surveyor or as the case may be the three surveyors or any two of them shall settle by award any matter —
(a) which is connected with any work to which this Act relates, and
(b) which is in dispute between the building owner and the adjoining owner.
(11) Either of the parties or either of the surveyors appointed by the parties may call upon the third surveyor selected in pursuance of this section to determine the disputed matters and he shall make the necessary award.
(12) An award may determine —
(a) the right to execute any work;
(b) the time and manner of executing any work; and
(c) any other matter arising out of or incidental to the dispute including the costs of making the award;
…
(13) The reasonable costs incurred in —
(a) making or obtaining an award under this section;
(b) reasonable inspections of work to which the award relates; and
(c) any other matter arising out of the dispute,
shall be paid by such of the parties as the surveyor or surveyors making the award determine.
…
(16) The award shall be conclusive and shall not except as provided by this section be questioned in any court.
(17) Either of the parties to the dispute may, within the period of fourteen days beginning with the day on which an award made under this section is served on him, appeal to the county court against the award and the county court may —
(a) rescind the award or modify it in such manner as the court thinks fit; and
(b) make such order as to costs as the court thinks fit.
[20] Finally, section 11 deals with the incidence of the costs of works, and is also material. It reads as follows:
11(1) Except as provided under this section expenses of work under this Act shall be defrayed by the building owner.
(2) Any dispute as to responsibility for expenses shall be settled as provided in section 10. |page:168|
(3) An expense mentioned in section 1(3)(b) shall be defrayed as there mentioned.
(4) Where work is carried out in exercise of the right mentioned in section 2(2)(a), and the work is necessary on account of defect or want of repair of the structure or wall concerned, the expenses shall be defrayed by the building owner and the adjoining owner in such proportion as has regard to —
(a) the use which the owners respectively make or may make of the structure or wall concerned; and
(b) responsibility for the defect or want of repair concerned, if more than one owner makes use of the structure or wall concerned.
(5) Where work is carried out in exercise of the right mentioned in section 2(2)(b) the expenses shall be defrayed by the building owner and the adjoining owner in such proportion as has regard to —
(a) the use which the owners respectively make or may make of the structure or wall concerned; and
(b) responsibility for the defect or want of repair concerned, if more than one owner makes use of the structure or wall concerned.
Facts
[21] Against this background, the facts and issues are as follows.
[22] Having acquired no 57 on 28 July 2005, Euroview appointed Mr Kritzler, of Ord Carmell & Kritzler, as the building owner’s surveyor for the purposes of the underpinning works. On 12 August, he served notices under the 1996 Act on all the adjoining owners, freehold and long leasehold, in no 59. These notices were in a single document, but were given under both sections 3 and 6 of the 1996 Act. This is because they related both to underpinning the party wall and to the excavation works in respect of other walls of no 57 that were within 3m of parts of no 59 and would extend below the foundation levels of that building. (There had already been trial pits dug that had ascertained something of the structure below ground.)
[23] Mr Kritzler also served a notice on the owner of no 55, but in that case the notice was under section 6 only because there was no party wall.
[24] The notices were accompanied by some drawings, namely a plan and an indicative section, coupled with a method statement prepared by engineers, to which I will have to refer later.
[25] The owners of no 55 consented to the works being done. Thus, they caused no difficulty for Euroview, but, importantly, the 12-month time limit under section 6(8) of the 1996 Act began to run.
[26] The owner of the ground-floor flat in no 59 did not consent, but did not appoint his own surveyor, so Euroview was then entitled to appoint a surveyor for him under section 10(4). On their behalf, Mr Kritzler appointed a Mr Shaw. The owner of the maisonette, Dr Athwal, did appoint his own surveyor. He appointed a Mr Paul. Ultimately, Mr Kritzler was able to agree works with both Mr Shaw and Mr Paul, and party wall awards were made, although not for some months. However, matters did not proceed so smoothly with Mr Manu.
[27] Mr Manu was already aware of the problems with the building, and he sent the documents to his building engineer, Mr Paul Riddington, of Peter Dann Ltd. He also consulted a solicitor, a small firm called Blue Star Universal, the principal of which, a Mr Francis Navaratne, holds some 10 qualifications in academic, engineering, legal and arbitration fields. The solicitor wrote an immediate letter to Euroview warning that party wall procedures must be strictly complied with or an injunction would be sought.
[28] Mr Riddington seems to have had little problem with the proposed works. He wrote to Mr Manu on 1 September 2005, advising that he had spoken with the engineer that had prepared the drawings and obtained more detail about the depth of the proposed underpinning. His advice was that the works should be accepted with two conditions, namely that: (i) the depth of the underpinning to be carried out should be agreed at the time, since this was a matter for judgment; and (ii) if necessary, the underpinning should also be required to extend for 1m under the principal walls of no 59 to avoid differential foundation levels. (Subsequently, although not until May 2006, it was agreed that this was not in fact necessary.)
[29] On 9 September 2005, Mr Kritzler sent Blue Star a copy of the party structure notices and, on 12 September 2005, he wrote to Mr Manu, formally requesting a response under the 1996 Act. Having consulted with his solicitor, Mr Manu appointed Mr Philippe Lai as his party wall surveyor.
[30] Now, Mr Lai is not a surveyor. He is a consultant with Staniford Wallace, the firm of solicitors that became the successor to Blue Star at around this time. Mr Lai is a barrister and a solicitor, and he also told me that he has a masters degree in nuclear physics. His practical experience of building was derived from five years’ manual work with Higgs & Hill. Following that, in around 1989, he went to work in property in, I believe, a town planning office. He read for the Bar and became a barrister in 1996. He then did a conversion course to qualify as a solicitor in 1998. He has no qualifications as either a surveyor or an engineer.
[31] The 1996 Act does not say that an appointed “surveyor” must be a person qualified in building surveying or engineering, but it is usual to appoint such a professional because of the nature of the functions that the “surveyor” is required to perform under the 1996 Act. Mr Lai, however, is a lawyer — he has also acted throughout as Mr Manu’s solicitor, as well as his party wall surveyor — and he brought a lawyer’s approach to the matter. He himself characterised his approach as “cautious”. To Mr Kritzler, he was excessively so, to the point of apparent obstructiveness.
[32] The first issue that concerned both parties’ surveyors was the validity of each other’s appointments. This is not that surprising because an award will be binding only if made by a properly appointed surveyor. Mr Kritzler queried the fact that Mr Lai had signed his own appointment on behalf of Mr Manu, and asked for a personally signed appointment. Mr Lai therefore asked Mr Manu to fax a personally signed appointment to him. However, when, on 28 September 2005, Mr Kritzler formally asked Mr Lai to confirm that he accepted the validity of Mr Kritzler’s own appointment and of the party wall notices served, Mr Lai produced a succession of queries concerning the basis of Mr Kritzler’s own appointment, the status of the person (Mr Tuli Grosskopf) who had sent through the appointment documents on behalf of Euroview, verification of Euroview’s title to the property and, subsequently, independent verification of the identity of the directors of Euroview. Having seen the parties give evidence, I have little doubt that this was at least in part a tit for tat for Mr Kritzler’s initial query. Be that as it may, satisfying himself over Mr Kritzler’s appointment occupied Mr Lai during September, October and November 2005, and during this time he never answered the question about the notices.
[33] With regard to the third surveyor, Mr Lai initially proposed yet another non-surveyor for the position, namely (but unbeknown to him) Mr Peter Aeberli of counsel — in fact, the counsel who has subsequently represented Mr Manu in these proceedings. Mr Kritzler did not accept Mr Aeberli, and proposed three alternative names — all surveyors — on 10 October 2005. Mr Lai selected Mr Sumner.
[34] On 15 November 2005, Mr Lai, while still querying the authority of Mr Grosskopf, asked for confirmation from Mr Kritzler that Euroview would undertake to pay his (Mr Lai’s) fees. It is apparent from what was going on behind the scenes that Mr Manu was not willing to pay Mr Lai’s fees and felt that these should be recovered from Euroview, and Mr Lai was trying to achieve this.
[35] Mr Kritzler was becoming irritated by this time, and retorted, on 21 November, that there were no grounds for questioning Mr Grosskopf’s authority, that fees would be dealt with in the eventual award and that if Mr Lai did not formally confirm Mr Sumner as the “third surveyor”, Mr Kritzler would have to invoke the default mechanism for his appointment under the 1996 Act. There was plainly an acerbic telephone conversation between them, because Mr Lai’s reply of 25 November 2005 shows him as taking exception to being called “excessively cautious” and being accused of having an ulterior agenda, while still refusing to take further action until he had established the identity of Euroview’s directors with Companies House.
[36] Having received that confirmation, Mr Lai wrote to Mr Kritzler, on 29 November 2005, saying “In order to avoid any further delay in this matter [my emphasis] I would ask you once again to confirm that your |page:169| client will pay my reasonable fees”, stating that it was not satisfactory for this to be left to the award because awards might “fail”.
[37] Meanwhile, on 30 November 2005, Mr Riddington told Mr Lai that although the drawings delivered in connection with the 1996 Act did not indicate the depth of the foundations proposed, he had spoken with Euroview’s engineer and ascertained that a depth of 1.5m was being proposed; the depth would have to be agreed as excavation proceeded. This was, of course, more or less what he had already told Mr Manu on 1 September 2005, and he had also been keeping Mr Lai abreast of his discussions, in, for example, a letter of 17 October 2005. By this stage, Mr Riddington also noted that the cracks in Mr Manu’s property were now closing sufficiently that monitoring could be discontinued.
[38] On 1 December 2005, Mr Kritzler wrote to Mr Lai, asking him to confirm that he accepted the validity of the party wall notice and, accordingly, of his own appointment, and also of Mr Sumner as the third surveyor, stating that until those confirmations were given, he could not consider Mr Lai’s request for an undertaking regarding his fees. Not unnaturally, Euroview wanted to know that the party wall procedure was accepted to be effective before offering to underwrite the costs of dealing with Mr Lai.
[39] Mr Lai retorted, in a letter wrongly dated 7 November 2005 (it should have been December), that he could not deal with Mr Kritzler’s queries until the issue of his fees had been addressed. He had previously agreed this stance with Mr Manu. Mr Kritzler responded that Mr Lai was choosing not to deal with his questions and, on 22 December 2005, having lined this up in advance, he approached Islington to exercise the default powers to appoint Mr Sumner as third surveyor. They did so on the same day.
[40] On 23 December, therefore, Mr Kritzler wrote directly to Mr Manu, sending copies of the correspondence with Mr Lai. He said that the letter of 7 December (sic) above was viewed as a “refusal to act” rather than as Mr Lai’s deeming himself incapable of acting, but without prejudice and, in case the latter was the better view, he was giving a 10-day notice to Mr Manu, inviting him to appoint a substitute surveyor (under section 10(5) of the 1996 Act).
[41] Mr Kritzler also went so far as to prepare a purported appointment of his own, to appoint Mr Shaw to replace Mr Lai. Points that were originally taken in these appeals as to the effect of this action have been dropped. I therefore mention only that this course does not appear to be authorised by the 1996 Act because section 10(4) applies only to an initial failure of an adjoining owner to appoint a surveyor, not to a failure to appoint a substitute under section 10(5).
[42] On 23 December 2005, Mr Kritzler informed Mr Lai of his letter to Islington and of the appointment of Mr Sumner, and asked him outright if he had asked his appointing owner for an undertaking as to his fees, and if not why not.
[43] On 28 December 2005, Mr Kritzler sent Mr Lai a draft award for consideration, and formally requested him to “act effectively” (a reference to section 10(7) of the 1996 Act) and to respond with his observations on the draft award. He sought at the same time to agree arrangements for access for inspection (which were apparently being arranged through Dr Athwal, the owner of the maisonette). This was necessary for the schedule of condition that was to be attached to the award. The draft award provided for underpinning the party wall and the cutting out and stitching in of brickwork to the front elevation and any other wall necessary for the repair and stabilisation of no 57.
[44] On 3 January 2006, Mr Sumner contacted Mr Kritzler, having been notified of his appointment as third surveyor, and asked to see copies of the original party wall notice and the notices regarding his own appointment and also Mr Kritzler’s appointment before confirming his acceptance of appointment. He said he would then confirm this to Mr Lai.
[45] On 4 January (although again misdating his letter first time), Mr Lai reverted to Mr Kritzler suggesting possible dates for a site visit and promising to revert to Mr Kritzler with his comments on the draft award the following week. Later the same day, he wrote further, approving the draft award except for paras 13 and 14, (although he meant paras 12 and 13). These were the paragraphs that provided for Mr Manu to pay Mr Lai’s fees (to be determined by a further award if necessary) and for Mr Manu to pay 50% of the costs of the works covered by the award. Mr Lai asserted that this was contrary to section 6(3) of the 1996 Act, which (he said) provided that such works should be carried out at the building owner’s expense. He asserted that this section applied rather than section 11.
[46] Behind this assertion lay a point that has been fundamental in these proceedings. As previously indicated, the notice covered works to be carried out under both section 3 (works to a party wall falling under section 2) and under section 6 (works comprising nearby excavations). The issue that has emerged is which works exactly fall under which section? It has been Euroview’s contention that the section 3 works include all the works necessary to underpin the party wall, and the section 6 notice covers excavation works in respect of the underpinning of the other walls, nearby and within 3m. For Mr Manu, however, it has been contended that section 3 does not mention “excavation” but only “underpinning”, and that it therefore covers only works of actual underpinning, and not the excavation works adjacent to the party wall, which are necessary in order to obtain physical access to the structure to carry out the underpinning. These are excavation works that, it is said, also fall under section 6. The significance of this point, of course, is that if works are carried out under sections 2 and 3, the cost is potentially divisible between the two owners, whereas if they are carried out under section 6, they are carried out at the cost of the building owner. The more works falling under section 6, therefore, the less works for which Mr Manu might have to pay.
[47] By a letter dated 4 January 2005, Mr Kritzler carefully explained Euroview’s interpretation of the ambit of sections 3 and 6 and its reasonableness. By a further letter, he enquired whether Mr Lai would agree to an interim award, leaving the issue of defraying the costs of underpinning to be dealt with in a later award. Mr Lai replied on 9 January that the first letter was being considered but that the second suggestion was not acceptable.
[48] On 10 January, therefore, Mr Kritzler sent basic documents, including his draft award, to Mr Sumner for information, setting out what the issues appeared to him to be, and asking Mr Sumner to concur with him, as two of the three surveyors, in making an award substantially in terms of the draft award, or to make his own award. He copied this letter to Mr Lai. On 11 January, Mr Kritzler sent Mr Sumner a new proposed draft award catering for the inclusion of the third surveyor and making provisions imposing certain costs on Mr Manu. He also wrote again to Mr Lai regarding access.
[49] On 12 January 2006, Mr Lai wrote to Mr Kritzler. This is an important letter. Mr Lai first referred to the section 6 works, as he interpreted these, and put forward his legal argument under which (he said) the building owner (Euroview) had to bear all the costs of those works and could not require the adjoining owner to share the costs. This was the argument that I have set out above, that any excavation work comes under section 6 of the 1996 Act only, even where it is carried out as part of a process of underpinning a party wall. Mr Lai suggested that Mr Kritzler should take legal advice on this point.
[50] Mr Lai then stated, for the first time, that Mr Manu “could not” accept that the original party wall notice was valid under section 6 because the drawings served with it did not show either the site or the depth of the proposed excavations. He went on to say:
Once I receive the New Notice and approved plans [a reference to “plans and drawings approved by the relevant local authority”] I shall discuss these with the engineers to see whether, and to what extent, the Building Owner should be required at his own costs to underpin or strengthen the adjoining building [a reference to section 6(3) of the Act].
[51] After repeating his view that the underpinning works did not fall within section 3 of the 1996 Act “because of the excavation works which are necessary as a prelude to underpinning”, Mr Lai then said that the party wall was subject to a “defect or want of repair” because of tree root damage “for which the Building owner is liable in nuisance” and asserted that, therefore, the building owner was entirely |page:170| responsible for that defect and should thus bear all the expenses of the repair work, pursuant to section 11. Finally, he warned that Mr Manu would challenge any award that imposed any costs liability on him for the building works proposed.
[52] On 17 January 2006, Mr Sumner wrote to both Mr Kritzler and Mr Lai announcing that he was satisfied that the original notice was valid, as were the various appointments of surveyors. He proposed to consider whether: (i) the party wall was defective; (ii) the underpinning and ancillary repairs were necessary; and, if so, (iii) the costs should be split 50:50 between nos 57 and 59. He noted that he would either make an independent decision or was being asked to concur with Mr Kritzler’s award. With obvious concern as to the length of time that had elapsed since the original notice, he sought to make urgent arrangements to inspect and indicated that he intended to make an award by 3 February 2006.
[53] Mr Lai now wrote to Mr Sumner, agreeing that underpinning works were required to the wall, but pressing his view that the works were required only because of tree root damage for which the building owner (Euroview) was responsible, so that Euroview should bear the entire costs. He indicated how access for inspection could be arranged, and invited Mr Sumner to consider what he had said about the invalidity of the section 6 notice. He added: “Even though I have agreed the terms suggested by Mr Kritzler, additional terms may be required and I am unable to decide these without full details of the proposed work.”
First award
[54] By now, of course, it was five months since the clock had started to run on the party wall procedures. Mr Kritzler was plainly exasperated by this time. On 19 January, he wrote to Mr Manu, stating that, in all the circumstances, he regarded Mr Lai’s conduct as entitling him, Mr Kritzler, to act ex parte (a reference to section 10(6) of the 1996 Act) and enclosing an award in respect of the works that he (Mr Kritzler) regarded as the subject of section 6 of the 1996 Act. He delivered this by hand and by post. He informed Mr Lai, by a letter of 23 January 2006, of what he was doing.
[55] This award is the subject of the first appeal. It stated that it had been made by Mr Kritzler ex parte on the basis that Mr Lai had, by his letter dated 12 January 2006, refused to act effectively in respect of the works notifiable pursuant to section 6(5) of the 1996 Act. It related specifically only to works that were not to the actual party wall of nos 57 and 59, which was expressly excluded. It referred to underpinning to the internal partitions and to the front and rear elevation walls of no 57, but also, unfortunately, to works to “the back addition of No 59”. (This last was a mistake, and a pretty obvious mistake, for “no 57”. Of course it caused still more confusion in the tense situation of January 2006, but the error was made clear and admitted and recorded in April 2006.)
[56] The award further provided that the works should be carried out at the cost of Euroview but that Euroview should not be required to underpin or strengthen any part of no 59 (including the party wall) in connection with them, although a right to make further awards was reserved. The award made no provision for the payment of Mr Lai’s fees.
[57] On 20 January 2006, Mr Sumner had written to Mr Lai expressing his view that the notice had been valid under section 6, a fact that Mr Lai was continuing to dispute with him. He had also asked for copies of the various engineering reports mentioned by Mr Lai in support of his assertion that the damage to the party wall was the result of tree roots.
[58] Mr Sumner inspected the basement of no 59 on 24 January and the upper parts together with Mr Kritzler on 26 January 2006. On that date, Mr Kritzler informed Mr Sumner of his ex parte award and asked him to regard himself as being confined to the party wall works under section 2 of the 1996 Act, which were the subject of the section 3 part of the party wall notice. He made his submissions on that latter aspect. I need not go into these in detail, although I note reference to a background fact that Mr Manu had failed to insure no 59 and was consequently in dispute with the other occupiers over the damage to no 59, which had deteriorated to the stage where it was subject to a dangerous structure notice. The material points in Mr Kritzler’s letter, for present purposes, are:
(i) a statement, (and a fact relied upon by Mr Aeberli for Mr Manu) that no 57, together with the party wall, had moved away from no 59;
(ii) an assertion that in so far as the damage to the party wall was the result of tree damage caused when the property was in the hands of Islington, this was immaterial and would have to be the subject of separate proceedings because Euroview, the present building owner, was no part of that;
(iii) a submission that a logical split of the costs of underpinning the party wall was 50:50 in all the circumstances; and
(iv) a claim that Mr Lai’s conduct had unreasonably increased the costs of Euroview in dealing with the matter and that this should be reflected in the award.
[59] On 30 January, Mr Kritzler repeated the above views in responding to Mr Sumner’s request for information on engineering reports.
[60] Mr Sumner responded, on 1 February 2006, that he noted the position with regard to the extent of his involvement, but that since he had seen only an engineer’s report from Islington’s engineers (Ellis & Moore), which showed that tree roots had not been found in the one trial pit that had been dug adjacent to the party wall, he was not convinced of the need to underpin the party wall and wanted to see other engineering reports rather than go to the expense of commissioning his own. He exchanged copies of the party wall surveyors’ submissions and documents and required them to copy each other into all future correspondence with him.
[61] On 2 February 2006, Mr Manu appealed Mr Kritzler’s award of 19 January 2006. The grounds of the appeal were initially stated to be that the original party wall notice had been invalid and that there were no grounds for Mr Kritzler to make any binding award on his own. Additional grounds were later added by amendment.
[62] Euroview now instructed a solicitor, and Mr Lai now acting as Mr Manu’s solicitor, as well as his party wall surveyor, threatened injunctions against Euroview if it began to do any of the works before a decision on the appeal, asserting that works could not be started without a valid award being in place, and this validity was being contested. Euroview’s solicitor regarded this approach as obstructive, since it could not see any reason why the works, which no one appeared to suggest were not required, should not be begun by agreement, regardless of any dispute about the validity of the notice or award.
Second award
[63] Mr Lai also advised Mr Sumner to take no further action until the court had made a decision on the appeal. However, Mr Sumner appears to be made of commendably stern stuff, and having now been supplied with, and circulated, Euroview’s engineer’s response to his queries about the design of the remedial works being proposed, he proceeded to make his own award on the section 2 and section 3 issues on 28 February 2006. This was served on Mr Manu on 10 March 2006 following payment of Mr Sumner’s fees.
[64] This award is the second award under appeal. It was described as a third surveyor’s award. Having recorded the history, it records Mr Sumner’s view of the salient facts to be:
1. That the Notice served under the Section 3(1) of the Act was valid
2. Cracking evidence in the front and rear elevations of the Adjoining Owner’s building indicates that the Party Wall has also moved away from the Adjoining Owner’s building and is probably out of plumb.
3. The wall separating the Adjoining Owner’s premises from the Building Owner’s premises is a Party Wall which has subsided more than the adjacent sections of the Adjoining Owner’s building
4. That the Surveyors appointed by the lessees of the two flats [sic] within the upper parts of the premises have agreed in principle that the Party Wall requires underpinning and that the cost of underpinning the Party Wall plus professional costs and VAT should be shared by the owners of 57 and 59 Drayton Park
5. That the site investigation report obtained by the Adjoining Owner’s insurance assessors Messrs Ellis & Buckle recorded no evidence of tree root |page:171| action having caused settlement in the Party Wall (Trial Pit 1 refers) and on the evidence it is not the tree roots which give rise to the need for underpinning
6. That no representations have been received from the Adjoining Owner’s surveyor contending that the Party Wall is not defective nor did not require underpinning, this is acknowledged by the Adjoining Owner’s Surveyor in his letter to me of the 18th January 2006
7. That no representations have been made by the Adjoining Owner’s Surveyor contending that the Building Owner’s Surveyor unnecessarily incurred costs in securing the selection of the third Surveyor and making representations with regard to the differences referred to me.
[65] The first three paragraphs of his award are directly material:
1. That the party wall is defective.
2. That the Party Wall requires underpinning.
3. That the cost of underpinning [plus associated charges] should be borne by the Freeholder of both adjoining properties in due proportion that each party makes use of the wall, ie 50/50.
[66] He then went on to hold that: (i) it was outside his jurisdiction to decide on the incidence of costs as between Mr Manu and the long leaseholders of no 59; (ii) it was outside his remit to deal with any works other than those of underpinning the party wall; and (iii) not having challenged the validity of the party wall notice as served under section 3 of the 1996 Act, Mr Manu could have had no valid objection to his appointment as third surveyor.
[67] He then went on to deal with the objections regarding costs and fees. In a paragraph that duplicated para 3, but dealt with the contrary argument being advanced, he awarded that:
7. That damage giving rise to the need for underpinning having not been caused by actions or neglect of the building owner, I hereby award that 50% of the costs of underpinning [etc] shall be met by the Adjoining Owner.
[68] He went on to award, in para 8, that although their costs of making representations to him should be borne by each party respectively, Euroview had incurred unnecessary costs in securing his appointment, and these should therefore be paid by Mr Manu in the sum of £420 plus VAT. In para 9, he continued:
9. That my costs in relation to this award amount to £1,774.50 plus VAT and having regard to the above hereby award that they shall be paid in full by the Adjoining Owner.
[69] Lastly, he awarded that:
10. Nothing in this Award shall prevent the Adjoining Owners from seeking to exercise their right to damages under common law in respect of any neglect by the Building Owner their predecessor.
[70] This award was appealed by Mr Manu, acting by Mr Lai, on 23 March 2006. The grounds of the appeal were that Mr Sumner was wrong to conclude that Euroview was “not responsible for the defect requiring underpinning within the meaning of s11(4)(b) of the said Act”. Mr Manu also claimed that the court should set aside Mr Sumner’s order regarding costs and should order all the costs, including those of the appeal, to be paid by Euroview, and that the award should expressly be set aside in so far as it purported to determine that the damage had not been caused by actions or neglect on the part of Euroview, on the ground that this was inconsistent with the purported reservation of Euroview’s common law rights against the defendant. Again, further grounds of appeal, namely arguments of ultra vires and assertions of bias and/or breach of natural justice, were later brought in by amendment, but have been abandoned.
[71] I need say little more about the progress of the appeals, which were transferred to this court, except to record that, on 13 June 2006, District Judge Lightman recorded expressly that Mr Manu had no intention to injunct the commencement of works at the properties. The works proposed by Euroview have accordingly been done. After a stay for an attempt at mediation that was unsuccessful, and further consequential directions, the trial of the appeals therefore came before me for four days in May and June 2007.
Extant issues
[72] In the end, out of a large number of issues raised at various times, the following were agreed to be those remaining for decision in the course of this trial:
General
(1) Was Mr Kritzler’s appointment by Euroview invalid on the ground that it preceded the issue of the party wall notice on 12 August 2005? If it is invalid, was this invalidity subsequently waived by Mr Manu or is he estopped from relying upon it? (If Mr Manu is right that Mr Kritzler’s appointment is not valid, all subsequent proceedings in either award would be void. Mr Kritzler’s award would be ipso facto void, and since Mr Sumner’s appointment depended upon the validity of Mr Kritzler’s appointment, Mr Sumner’s would also be void.)
As to the award of 19 January 2006
(2) Was the party wall notice of 12 August 2005 invalid with regard to works proposed under section 6 of the 1996 Act on the ground that it did not comply with section 6(6) of the 1996 Act because it was not accompanied by drawings showing “the site and depth of any excavation the building owner proposes to make” under that subsection? (If it is, this subsequent award was never effective because it was made without legal foundation.)
(3) Did Mr Lai’s letter of 12 January 2006 constitute a “refusal to act effectively” under section 10(6) of the 1996 Act? (That was the basis upon which Mr Kritzler purported to make the award ex parte and so, if it did not, the award is again made without legal foundation.)
(4) Was Mr Kritzler entitled to act ex parte if and when acting under section 10(6) of the 1996 Act, or does that subsection confer no power on the other surveyor to act alone?
As to the award of 28 February 2006
(5) Was Mr Sumner wrong, either as a matter of law or fact, to hold that Euroview was not “responsible” for the defect requiring underpinning, and/or that Mr Manu should bear any part of the cost of underpinning the party wall and associated costs?
(6) Is Mr Sumner’s award challengeable by the appellant on the grounds of:
(i) internal inconsistency in permitting the appellant to exercise its rights at common law; or
(ii) allocating costs illogically?
Evidence and nature of this appeal
[73] I must first deal with the nature of this appeal, which is unusual. As recently decided in Zissis v Lukomski [2006] EWCA Civ 341*, an appeal to the county court under section 10(17) of the 1996 Act is in the nature of a true appeal “by way of rehearing” even though not from a judicial hearing, and is an appeal conducted under CPR 52, except where the statute has provided otherwise (for example, as to time limits for bringing it).
—————————————————————————
* Editor’s note: Reported at [2006] 2 EGLR 61; [2006] 30 EG 104
—————————————————————————
[74] In making awards under the 1996 Act, surveyors are exercising a quasi-judicial function only, and are largely acting as experts. They do not conduct a hearing in the same way as a court or even an arbitrator. Therefore, although the procedure is an appeal by way of rehearing, evidence is called and examined in the usual way of a court hearing, only upon the appeal itself. In consequence, the narrow scope of rules regarding the admissibility of fresh evidence on appeal do not apply. The court is able to substitute its own decision for that appealed from in any way that it thinks right, and will do so with the overriding objective of “dealing with cases justly” in mind. To that end, it will often be appropriate for the court to receive evidence that was not before the surveyor and, as Zissis makes clear, there is ample scope in r 52.11 for the court to be able to do so: see [41].
[75] I received written evidence from Mr Manu under the Civil Evidence Act 1995, he being apparently abroad, but it did not take the matter very far. As will be fairly obvious, the real protagonists in this dispute have been Mr Kritzler and Mr Lai, and I received evidence |page:172| from them both, both in witness statements and orally. I was able to form a clear view about their respective personalities, approaches and expertise. Both witnesses were, I accept, honest witnesses, but the importance of their evidence lies rather more in giving colour to how the procedures of the Act were operated in this case in the context of its general purpose.
[76] Mr Kritzler impressed me as an experienced, competent and eminently practical surveyor. He gave evidence confidently, and I have no doubt that he is good at his job and takes pride in being so. He also struck me as having a forceful personality, and I again have no doubt that this is one of his strengths when it comes to negotiating. He sees his role in a party wall context as negotiating firmly but fairly and promptly to achieve a solution that will enable works to proceed as quickly and economically (for his client) as possible. He seeks to deploy the procedures in the 1996 Act in order to achieve such a result, but he interprets these from the angle of practicality, rather than a refined analysis of principle. I have no doubt that he would be impatient with rules and regulations in so far as these appeared to him to get in the way of a practical result, and that he would have little time and less patience for matters of detail, which he would regard as pedantry.
[77] I formed a far less favourable view of Mr Lai, and I question whether he should ever have offered his services or accepted an appointment as a party wall surveyor in this case. I have already noted that he is, by training, a lawyer and not a surveyor or engineer. Although the 1996 Act does not stipulate that a party wall surveyor should have relevant professional qualifications or expertise, since such a surveyor operates as an expert, it seems fairly obvious that he should be able to make at least basic judgments on the substantive matters in issue without having to seek advice from others on any practical issue. I can see no evidence at all that Mr Lai was able to do that. He appears to have been equipped to apply only legal reasoning and layman’s logic to the task before him. The 1996 Act is intended to provide an efficient procedure to enable building works that will affect neighbouring owners to be put in hand promptly and on a fair and reasonable basis. Mr Lai, however, approached his role as a contentious litigator, entering into a confrontation and seeking to obtain a “win” for his client — which basically meant getting the works done to repair no 59 at the expense of Euroview. He therefore set about using a lawyer’s tactical approach, invoking every point that he could deploy, and calculating when to do so, in order to maximise his client’s negotiating strength. One such useful tactic was the right to insist upon strict compliance with the procedures of the 1996 Act, as he interpreted them, and to issue threats of action if such procedures were not meticulously observed. In addition, two unfortunate factors affected his approach. The first was his personal interest in securing that his fees would be paid. The second was his own need to save face, exacerbated, I have no doubt, by his perception that Mr Kritzler had far greater experience and knowledge in the area than he did, and that Mr Kritzler did not think much of the way in which he was handling the matter. It therefore became a matter of personal pride for Mr Lai that he should score points against Mr Kritzler.
[78] In so far as matters of expertise are concerned, I unhesitatingly prefer the views of Mr Kritzler to those of Mr Lai.
Issues
[79] Against this background, I turn to the issues. In considering the correct construction of the 1996 Act, I bear in mind, first, its practical purpose, already mentioned in [11] above. I also remind myself that the procedures that were chosen to achieve this purpose were not those of a court or tribunal, and were intended to be operated, if not necessarily by total laymen, then at least by professional advisers who are not lawyers, that is, those who are practically experienced and concerned with buildings and buildings works.
First appeal: Award of 19 January 2006
Was Mr Kritzler’s appointment ineffective and void for being premature?
[80] Mr Aeberli, on behalf of Mr Manu, argued that it was. Section 10(1), he says, provides for the appointment of “a surveyor” (section 10(1)(b)) by each party to a party wall dispute only “where a dispute has arisen or is deemed to have arisen”. By definition, he says, this cannot and does not happen until after a party wall notice has been served and the adjoining owner fails, within 14 days, to consent to the works or actively dissents: see section 6(7). The surveyor has to be appointed in relation to an identifiable “dispute” and, until this time, no such dispute can be identified. Therefore, Mr Kritzler’s appointment, made on 28 July 2005, and thus prior to the notice of 12 August 2005, was not effective under the 1996 Act.
[81] In support of this argument, Mr Aeberli relied upon Gyle-Thompson v Wall Street (Properties) Ltd [1974] 1 WLR 123. He submitted that this was authority not only for the proposition that the formal procedures under the 1996 Act must be strictly complied with but also that a valid appointment could be made only after service of a party wall notice so as to give rise to an identifiable dispute.
[82] Ms Marie-Claire Bleasdale, appearing for Euroview, argued that the purpose of the relevant provisions of the 1996 Act is merely to ensure that if there is no agreement as to the relevant works, each party has an identifiable appointed surveyor with authority to perform the statutory functions to resolve the matter. In Gyle-Thompson, the issue was not one of mere timing of an appointment, but whether there had in fact been any such appointment at all.
[83] The defendants in that case wished to reduce the height of a party structure (a wall) between their property and several adjoining properties. There was a fierce dispute about whether they had any legal right to do so. The defendants served party wall notices on 22 February 1972 and an award was made on 20 June 1972. However, matters did not go smoothly and the defendants’ surveyor wanted to make a further award. By that time, the statutory time limit for commencement of the works had expired, so he served a new party wall notice on 20 December 1972, but he served it only on the appellants’ surveyor (not the appellants) and then proceeded to propose an award, in which the third appointed surveyor was prepared to concur, but the appellants’ surveyor was not. A further award made on 6 February 1973 by the two surveyors was appealed. In the appeal, it was decided that, on any basis, the defendants had no statutory right to reduce the height of the wall, but it was also held that the February 1973 award was a nullity because the appellants’ surveyor had never been validly appointed in relation to the 20 December 1972 notice. The fact that he had been appointed in respect of the earlier notice of 22 February 1972 was not good enough. Neither was it good enough that there was evidence of “confirmatory” appointments of him in July or September of 1972, since on no basis could these be related to the matters in dispute under the December 1972 notice.
[84] I agree with Ms Bleasdale. Gyle-Thompson does not decide that a written appointment of a surveyor can and must be made only after the service of any party wall notice (or, more accurately, after the expiry of the time for dissent); it merely decides that there must be an appointment that can be identified as being in respect of the particular matters that are in question under the relevant notice. Given that, as Ms Bleasdale pointed out, the building owner in particular is likely to engage the services of its party wall surveyor before serving a party wall notice, it would be nonsensical, in my judgment, to hold that it could not make a valid appointment until after any difference had actually arisen.
[85] In my judgment, an appointment under section 10(1)(b) can be made before the service of a party wall notice in respect of the proposals to which it relates, and if this is sufficiently shown, the appointment will operate to take effect under the 1996 Act as and when a dispute arises or is deemed to have arisen. I note, incidentally, that in Gyle-Thompson, the defendants’ own surveyor was appointed in December 1971, prior to the defendants serving (through him) the first party wall notice of 22 February 1972, and there was no suggestion, in that fiercely fought case, that that appointment was invalid.
[86] On the first issue, therefore, I find that Mr Kritzler had been validly appointed in respect of the party wall notice of 12 August 2005, notwithstanding that such appointment had been made by the defendant on 28 July 2005. |page:173|
[87] The secondary issue of waiver or estoppel, therefore, does not arise. I make no decision upon it, but I will indicate that, on the facts of this case, I incline to the view that Mr Manu must be taken to have waived or estopped himself from taking any point on the validity of Mr Kritzler’s appointment. Had the issue of validity been raised promptly, it would obviously have been the easiest thing in the world for Euroview to execute a fresh appointment of Mr Kritzler to regularise the position. Mr Lai continued to deal with Mr Kritzler for several months without taking any point on the validity of his appointment, although without formally accepting it either. On 29 November 2005, he expressly accepted Mr Grosskopf’s authority to instruct the service of party wall notices. The point regarding the time of Mr Kritzler’s appointment was not even raised until it appeared in one of the appellant’s skeleton arguments, and it was a theoretical rather than a practical point. In my judgment, this history would be more than enough to justify a finding that Mr Manu had effectively represented to Euroview that Mr Kritzler’s appointment was accepted, and that Euroview had relied upon this sufficiently to its detriment to make it unconscionable that Mr Manu should now be permitted to take the point. However, as I have said, this finding is not necessary to my decision.
Was the party wall notice of 12 August 2005 invalid with regard to works proposed under section 6 of the 1996 Act for non-compliance with section 6(6) of the 1996 Act?
Validity
[88] Section 6 deals with the possible effects of nearby excavations. Its concern is the potential withdrawal of subjacent support for the adjoining buildings and their consequent destabilisation. It provides, therefore, parameters within which excavations by a building owner are deemed to be capable of having that effect: see sections 6(1) and (2). It then provides (section 6(3)) for the right of the building owner to underpin or stabilise the adjacent structure (to protect itself), and for this right to become an obligation if the adjoining owner requests such work. However, in each case, the work is to be “so far as may be necessary”, which will be a matter of professional judgment if the actual works required, and their necessity, cannot be agreed.
[89] The notice that the building owner is required to serve on the adjoining owner under section 6(5) must therefore (by section 6(6)) be accompanied by plans and sections:
showing… the site and depth of any excavation the building owner proposes to make.
[90] The appellants contend that the section 6 notice was invalid in this case because the plans and sections supplied did not show the site and depth of the excavation proposed.
[91] Before I decide this issue, it is convenient to deal with another point, namely what works actually were the subject of the section 3 and the section 6 parts of the 12 August 2005 notice?
[92] I have already referred to the dispute between Mr Lai and Mr Kritzler on this point. This issue, in a nutshell, is the interpretation of section 2(2)(a) and the meaning of the word “underpin”. The fact that works fall under this section leads to their being the subject of a section 3 notice. Such a notice merely has to give “the nature and particulars of the proposed work”. It is common ground that the notice of 12 August 2005 was good and valid in so far as it was given under section 3. Mr Manu has not sought to argue that there was insufficient information as to the “nature and particulars” of the proposed underpinning work itself. However, he disputes what was comprised within that.
[93] The argument is short. Mr Aeberli said that section 2(2)(a) refers to “underpinning” but does not refer to “excavation”. “Underpinning” is the installation of the concrete pin itself — or whatever other form of underpinning is carried out. That word is not apt to refer to the “excavation” that is necessary prior to work and that comes, therefore, under section 6 (since that section is not concerned with the purpose for which any excavation is being carried out). It follows that notice needed to be given under section 6 in respect of the excavation works carried out for the later purpose of doing the underpinning under section 2(2)(a). (I observe that the same argument would apply if the works of underpinning were classified as “repair” under section 2(2)(b).)
[94] I have no hesitation in rejecting this argument. It seems to me to be perfectly clear that by “underpinning” section 2(2)(a) contemplates also whatever works are required in order to effect underpinning, including the obvious need to excavate in order to be able to get at the location for the underpinning. It is also clear, in my judgment, that the scheme of the 1996 Act is to deal individually with separate categories of building operations (that is: new build; works to party structures; and excavations on land that supports adjacent structures) albeit using a similar procedure for resolving any differences that may arise.
[95] I suggested to Mr Aeberli that the consequence of his construction was that there could never be a notice under section 3 alone because the process of underpinning (with the stress on “under”) would always require excavations that would bring section 6 into play. He responded that there were methods of underpinning, by drilling alone (and, I infer, the subsequent injection of concrete or suchlike) that would come within his narrow concept of underpinning alone or underpinning that did not go below foundation level. However, I have no evidence of this, and I cannot imagine that it could possibly be significant. The concept of “underpinning” (and I observe that this concept has been in use under the precursors to this legislation for more than 100 years) conjures up perfectly plainly the concept of digging under foundations to strengthen them from beside and below, and this entire operation is what is contemplated by section 2(2)(a). I also have no doubt that the alternative construction advanced by Mr Aeberli is one that would never even occur to a surveyor or engineer reading section 2(2)(a); it would occur as even a possibility only to a lawyer, and only a pedantic lawyer would treat it seriously.
[96] I therefore conclude that, on the true construction of the 1996 Act, Mr Kritzler was correct to conclude that the exercise of underpinning of the party wall itself came within sections 2(2)(a) and 3 (so that only “the nature and particulars of the proposed work” were required to be given in this regard), and it was only the works to the other walls of no 57, in so far as these came within the statutory distances, that fell within section 6. In the end, of course, it was only such latter works that were dealt with by Mr Kritzler’s award of 19 January 2006.
[97] I turn then to the issue of compliance with section 6 in this regard. The drawings sent with the party wall notice were two sheets prepared by Euroview’s engineer, Martin Redston Associates. The second sheet indicated that the entire foot of the walls around no 57 was to be underpinned in successive strips, 36 in number and 1m long, staggered around the building so as to ensure a sufficient spread of the weak position while underpinning took place. The first sheet described the working method for the underpinning. It showed the construction of the walls of no 57 as being brick, with a widening stepped base or footing at an indeterminate position below ground level (indicated by a discontinuity mark in the brick wall). Immediately below the base of the wall was shown a narrow hatched strip indicated as “75mm dry pack”. This was a reference to the working method by which, after excavation, the cleaning of surfaces and the casting of the concrete slab or “pin” below, dry-pack mortar was to be rammed in between the new and existing footings. Accordingly, below this strip, the section showed a concrete slab of rectangular section deeper than it was wide, being the pin itself. This was said to be “new base to be 900 wide and raised if necessary”, with a measurement of “900” (obviously mm) drawn against its lower edge. No vertical measurement was given. Within the top of this section, a smaller rectangle was indicated with dotted lines, as being the “existing brick [?] and clinker foundation (to be inspected and removed if necessary)”. The drawing was described as “Underpinning plan 1:50”, but it bore the annotations “For discussion” and “Preliminary”.
[98] Mr Aeberli argued that these particulars failed to comply with section 6(6) because they did not show either the site or the depth of the excavations proposed by Euroview to effect its underpinning. In |page:174| fact, he argued, they showed no depth at all. They merely showed the actual pins and did not show the excavation, which would obviously have to be beside the ultimate position of the pins. Neither did they show the depth of the proposed excavations, which would have to go indeterminately lower, for the same reason. Even if one benevolently treated the representation of the pins as showing the excavations, this was not good enough because they still did not show any depth. No vertical measurements were shown at all, and this could not be cured by scaling because the given scale of 1:50 simply did not work. On inspection, the given measurements of 900mm and 75mm were not drawn to a scale of 1:50, but 1:20. However, if one then applied that scale to the drawn thickness of the brick wall, it produced a nonsensical measurement, and this did appear to have been drawn to the scale of 1:50. Again, however, even presuming that a mixing of scales was what had happened, this did not work because the discontinuity in the shown depth of the brick wall meant that there was no way of ascertaining the depth of the pins or (therefore) the depth of the excavation for them.
[99] Mr Aeberli submitted, therefore, that the drawings did not comply with the clear words of section 6(6)(a) and that even a “purposive” approach to the construction of the 1996 Act did not avail because the purpose was to enable the adjoining owner to decide whether it needed or wanted to seek to exercise its rights, under section 6(3), to require works to strengthen or underpin its own building to be done. The drawings must, therefore, give sufficient information to enable the adjoining owner to make this decision, and the particulars required by section 6(6)(a) must, with this in mind, give the site and depth of excavations that might threaten the stability of the adjoining building. He relied, by analogy (because this was a decision under the precursor to section 3 of the 1996 Act, rather than section 6), on the principle in Hobbs Hart & Co v Grover [1899] 1 Ch 11, that the particulars given under a party wall notice “ought to be so clear and intelligible that the adjoining owner may be able to see what counternotice he should give”.
[100] It is really beyond doubt that these drawings left something to be desired, as Ms Bleasdale readily agreed. However, she submitted that they were still valid for the purpose of section 6(6) in that they conveyed sufficient information. First, she drew my attention to the fact that four surveyors, Mr Shaw, Mr Paul, Mr Sumner and, at least by inference, whoever was acting for the owner of no 55 (they certainly had professional advisers) had found no difficulty with the exactly similar notices and information sent to them, and had accepted to proceed on it without alleging its invalidity. That, she suggested, was powerful evidence, from a practical source, that the notice met the requirements of the 1996 Act.
[101] She also suggested that the scaling differences were obviously reconcilable. Anyone with experience of plans and their interpretation would understand what had happened with the scales on the drawings and would be able to interpret them. It was obvious that the vertical side of the concrete pin must be drawn to the same scale as the horizontal one, and if this were calculated, it would show the pin to be 1,400mm. This was a good enough indication. As to the complaint that the depth below ground level was completely unascertainable from the drawings, she suggested that this was a pedantic rather than a realistic point, first because ground level would vary at different points around the building and, second, because until the works were actually done and the excavations made, it was not possible to know what the depth of the existing wall below ground actually was. The drawings merely had to “show”, not to state precisely, the location and depth of proposed excavations, their point being to convey whether there was any risk to the stability of the adjoining owner’s structures so that exact precision was not required. The proposed depth of the pin was therefore the important information in order to show this and, since this could be scaled, sufficient information was contained in the drawing to satisfy the section. Mr Lai (she pointed out) had admitted that he had never even attempted to do this exercise.
[102] She also drew my attention to the fact that, as early as 1 September 2005, Mr Manu’s own engineer, Mr Riddington, had opined that the works should be consented to on two conditions, namely that the precise depth of underpinning be agreed on site and, if it appeared necessary, the underpinning should be extended 1m under the relevant connecting walls of no 59 in order to avoid the stresses of differential support. This again showed, she said, that the notice was perfectly good enough to get the procedures under the 1996 Act working.
[103] However, it is right to say that Mr Riddington, when given these drawings, had done the natural thing and spoken to Martin Redston Associates to find out the depth of the underpinning proposed, and Mr Aeberli submitted that that in itself showed that the notice was deficient and had not complied with section 6(6). Moreover, Mr Riddington of Peter Dann Ltd had been told that the proposed depth of underpinning was 1.75m and not the 1.4m that scaling the pin on the drawing suggested, which again showed that the drawing was deficient. Ms Bleasdale’s riposte to this was that it was merely evidence that the experienced professionals all knew that, in practice, the exact measurement of underpinning required would be agreed on-site at the time and that the degree of information on the drawings required by the 1996 Act could and should be judged in the light of this practical attitude.
[104] I have considered the terms of the notice and plans carefully and I am much impressed by the fact that so many professionals seem to have treated them as being perfectly valid under the 1996 Act. However, I have come to the conclusion that this was more evidence of a practical and co-operative approach on their part, than evidence that the notice itself did comply with the requirements of the 1996 Act with regard to section 6. I remind myself that the notice was a composite notice in respect of both sections 3 and 6 and that the requirements are different, although the relevant property professionals would have had no practical reason to focus on this distinction. I have to do so, and I find myself driven to the conclusion that the terms of this notice did not comply with the requirements of section 6(6) of the 1996 Act.
[105] The purpose of section 6(6) is to give an adjoining owner notice of excavation works that might affect the stability of its building and to enable the adjoining owner to decide whether it foresees a risk in this regard that means that it should invoke its rights under section 6(3). The notice is therefore required to convey the necessary information, which is the “site and depth of any excavation”, sufficiently to enable that assessment to be made.
[106] I accept Mr Aeberli’s point that the notice must therefore be “clear and intelligible” in the respects that will convey that information. I also accept Ms Bleasdale’s points that:
(a) with regard to clarity and intelligibility, the assumption must be that the recipient either is, or will have the advice of, a person who is familiar with interpreting such plans and drawings, and it is not necessary that they should be perfectly intelligible to the untutored layman;
(b) it is not necessary because it is impossible to show an accurate depth from ground level, and it would be sufficient to show depth in general terms or relative to identifiable underground points, such as foundation levels, provided that this is enough to convey the implications of what is being proposed to the kind of recipient mentioned above;
(c) it is not necessary, because it is always likely to be a judgment on-site, to give a perfectly precise prediction of the depth of the excavation or underpinning; and
(d) it is not necessary to include measurements in express numerical terms if the information, and, in particular, the depths in question, are sufficiently “shown” in the sense of being capable of being ascertained or deduced from any other features of the drawing, such as scaling, that such a recipient could be expected to know of and use.
[107] I am not impressed by Mr Aeberli’s argument that no excavation is “shown” at all, since all that is shown is the underpinning itself. The plans and sections show the intended underpinning works and the text indicates that excavation is intended to take place. In my judgment, knowledge of the site and depth of excavations associated with such underpinning would reasonably be expected to be within the knowledge of the recipient of the notice or its adviser, such that it could be said that the site and depth of the excavations was, in principle, |page:175| sufficiently “shown” for the purposes of section 6(6) by drawings showing only the eventual position of the actual underpinning.
[108] However, in this case, not merely is it only the underpinning that is drawn, but no indication of its depth is given. The situation might have been saved if the scaling on the drawing had been coherent and accurate so that it could be applied with confidence, but it is not. Even if a helpful recipient did so, assuming that, at least, the concrete pin had been drawn to the scale applied to the “900” measurement, he would conclude that the depth was 1.4m, when apparently the depth that was actually being proposed was different; for example, Mr Dann was informed that it was 1.75m. Even a helpful recipient who tried to ascertain the depth by making some assumption as to scaling would not, on the basis of this drawing, feel confident of his conclusion, and this rather negates Ms Bleasdale’s point that no other surveyor seems to have had any problem with the drawing. Being practical men, they did exactly what Mr Ridington and Mr Sumner did; they contacted the engineer who prepared the drawing and asked him what was intended with regard to the depths. However, the fact that it was easy, as a practical matter, to supply the deficiencies in a notice does not mean that the notice can be regarded as being valid; it just means that the recipients have been helpful and co-operative and have not sought to take the point.
[109] In my judgment, even construing this notice benevolently with regard to the fact that it is an instrument intended to take effect between practical men for a practical purpose, this document cannot fairly be regarded as including the information that section 6(6) requires it to include. The drawing was sloppy in this regard, and the notice was not valid in so far as it related to section 6 works. That, however, is not the end of the matter.
Waiver/estoppel
[110] Rather surprisingly, given the raft of points that have appeared in this matter, it appeared during closing speeches that there was no specific allegation by Euroview that Mr Manu had waived any deficiency in the notice of 12 August 2005 by Mr Lai’s conduct in response to it. When this was pointed out, Ms Bleasdale submitted that I should and could in fact consider and decide that point because it was simply a matter of finding the legal effect of factual evidence that had been fully gone into; Mr Aeberli argued, unsurprisingly, that it was now far too late for the point to be taken. He nevertheless argued that Mr Lai had in fact not waived any defect in the notice.
[111] There was an issue as to whether Mr Lai could actually do so, given that, it was argued, he was not an agent for Mr Manu but, as appears in the authorities, an independent expert acting in a quasi-judicial function. Mr Aeberli also argued that because he had refrained at any point from stating that the validity of the notice was accepted, even when urged by Mr Kritzler to do so, Mr Lai had not waived any defect in it, nor had he created any estoppel against Mr Manu because there was no representation upon which Mr Kritzler or Euroview could reasonably have relied.
[112] In my judgment, this is a point that it is open to Ms Bleasdale to take, even at the late stage at which it was raised. The factual evidence was fully explored, such that this is really no more than a legal argument. Since the entire conduct of the relevant persons in relation to the notice, and its effects in fact and in law, has been the subject of critical examination in all respects, and questions of waiver or estoppel have been a lively contested issue in respect of other aspects of the case, I find that both the factual material and the relevant legal principles have been sufficiently in issue for it not to be prejudicial to Mr Manu for this point to be considered, even though it was focused upon only during the course of closing submissions.
[113] With regard to the question of Mr Lai’s authority, I fully accept that, in the context of deciding on and negotiating an appropriate award, a party wall surveyor is acting as an independent expert and not as the agent for his appointing party. However, in my judgment, his functions are mixed. Given that he will also conduct the procedural aspects of the party wall procedure, he does there, in my judgment, act as the agent of his appointing owner in the sense that the appointing owner effectively authorises him to take procedural decisions that will bind the appointing owner in that context. In my judgment, therefore, a party wall surveyor can by his acts or conduct in appropriate circumstances waive a defect in a notice or create an estoppel that would bind his appointing owner by accepting to act as though the notice were valid, notwithstanding.
[114] Moreover, in my judgment, Mr Lai’s conduct in responding to Mr Kritzler did amount to a waiver of the deficiencies in this particular notice. I come to this conclusion for three reasons. First, the 1996 Act itself is concerned with bringing about a speedy resolution of differences between adjoining owners so as to enable urgent building works to be done. In that context, any points that are to be taken concerning the alleged inadequacies of a notice served by a party are expected to be taken promptly, as soon as they are apparent. It will not therefore take much for a party to be taken to have waived a right to rely upon some deficiency in the notice.
[115] Second, Mr Lai did not take the point about the inadequacy of the drawings immediately and up front, which would have been the correct way to do so. Instead, I find that he kept it back until January, when it could be deployed more effectively to bring pressure in his negotiations. This is not conduct that should be condoned in the context of operating party wall procedures. More significantly, it is not an attitude that a reasonable party on the other side would expect to encounter, and this underlines the point that failure to take an objection at the earliest practicable moment could and would reasonably be interpreted as electing to proceed under the notice in any event. It was not, in my judgment, sufficient to dispel this impression that Mr Lai simply avoided committing himself to stating that he accepted the validity of the notice for some five months.
[116] Third, this impression is reinforced by the natural reaction of most professionals faced with this situation, and of which there is ample evidence, which is to find out the missing information by ringing up the engineers who prepared the plans, and then, in fact, to waive the original defect by getting on with the job. Mr Lai did not do so, although he liaised with Mr Manu’s structural engineer, who did. Any reasonable giver of the notice, knowing that this is what a normal recipient would do, would reasonably infer that Mr Lai was doing the normal thing, unless Mr Lai made it expressly clear that he was in fact taking formal objection to the adequacy of the notice.
[117] In my judgment, therefore, in the context of the purpose of the 1996 Act and the normal conduct of professionals operating the Act, Mr Lai’s conduct, in studiously avoiding stating that he was going to take a point on the validity of the notice, amounted to a waiver of the deficiencies of this notice. Alternatively, it created an estoppel against Mr Manu subsequently seeking to assert the invalidity of the notice, when he eventually did (through Mr Lai).
[118] I must emphasise that I have come to this conclusion on the particular facts of this case, and it does not mean that professionals can afford to relax their standards when drafting notices in accordance with the 1996 Act requirements. The notice in this case was, in my judgment, inadequate. The mere fact that professionals in this area are usually willing to be practical and cure the problems of a deficient notice by asking for more information does not mean that the statutory requirements of a valid notice are to be interpreted as being less exacting than they are. Professionals preparing party wall notices must be duly careful and thorough so as to provide the information that the 1996 Act lays down, and the fact that, in practice, such points may not be taken is no excuse for being lax about that.
Did Mr Lai’s letter of 12 January 2006 constitute a “refusal to act effectively” under section 10(6) of the Act?
[119] Since this is the basis upon which Mr Kritzler purported to make the award of 19 January 2006 ex parte if it did not, that award was made without legal foundation. |page:176|
[120] Mr Aeberli argued that it did not because all it did was to set out Mr Lai’s position. He relied upon Frances Holland School v Wassef [2001] 2 EGLR 88*. Although focusing upon procedure and deciding that an ex parte award must, to be valid, state accurately and strictly the justification for its having been so made, that case also decided that there, there was no factual ground for finding that the surveyor in question had refused (section 10(6)) or even neglected (section 10(7)) to act. It drew a distinction between the surveyor merely setting out his position (that is, that an award was premature) and doing something amounting to a deliberately ineffective, or even just an ineffective, response. Mr Aeberli submitted that that was all Mr Lai was doing in his letter of 12 January 2006. He submitted that a refusal to act must involve something identifiable as a refusal. Mr Lai had been dealing with the matter by considering, and largely approving, Mr Kritzler’s proposed joint award, but it was only on seeing this that he realised that there was a difference in their perceptions as to how costs should be borne, and all he was doing, in the 12 January letter, was to set out his position with regard to this difference and, in particular, whether Mr Manu could or should be required to pay any part of the costs of any excavation works, even if these were associated with underpinning the party wall. It was irrelevant whether his interpretation of section 6(5) was or was not correct; he was entitled to advance it. There was no refusal to act, even viewed in its more attenuated form of a “refusal to act effectively”.
—————————————————————————
* Editor’s note: Also reported at [2001] 29 EG 123
—————————————————————————
[121] Ms Bleasdale argued that there was such a refusal in the context of Mr Lai’s demanding of a new notice, which necessarily meant a refusal to act on the original one, and demanding plans approved by the local authority, which was not a requirement of the 1996 Act. She further argued that the 12 January letter could and should be interpreted in the context of his earlier conduct, in particular his earlier express refusal to proceed with the matter unless and until Euroview undertook to be responsible for his fees, and the general background of his behaviour — which I think she would not shrink from describing as “obstructive”. She reminded me of what Mr Lai was seeking to achieve for Mr Manu, as evidenced in their e-mail communications behind the scenes. She relied upon para 8.9.1 of Party Walls Law and Practice (Bickford-Smith and Sydenham (2nd ed)), in which it is suggested that the word “effectively” reduces what is required from an outright refusal to something less strong, even though it is suggested that there must be something beyond, say, a mere refusal to attend a meeting. She submitted that Mr Lai’s conduct in this regard was fairly characterised as such a “refusal to act effectively” in relation to the proper subject matter of the section 6 part of the notice.
[122] In my judgment, Ms Bleasdale is correct. I note that it is only in relation to this latter matter that Mr Kritzler purported to act ex parte on the basis of a refusal to act effectively by Mr Lai, and that he relied upon the 12 January 2006 letter in this regard. In my judgment, Mr Lai’s demand for a new notice did amount to a refusal to act effectively on the original one, and I have already held that his alleged reason for doing so was one that he had lost any right to assert. Whether such an attitude is properly viewed as being merely the assertion of a position or argument (and I accept, of course, that merely because such an assertion was in fact proved to be incorrect would not render it a “refusal” to act effectively if it were a point genuinely taken) or whether it is fairly characterised as a “refusal to act effectively” depends upon exactly what the refusal consists of and the context in which it occurs. It will, after all, naturally be interpreted by the other party against the background of what has gone before.
[123] In my judgment, viewed in context, Mr Lai’s conduct on this aspect in his letter of 12 January 2006 could have been, and was, fairly and properly regarded by Mr Kritzler as a refusal to act effectively in relation to the works that were properly the subject of the section 6 part of the 12 August 2005 notice. Although the bare refusal contained in the letter might, in a different context, have amounted to no more than a statement of position, given the combined facts that it was raised so late in the day, more as part of a negotiating strategy than for genuinely good reasons, and against the background of taking a succession of pedantic and difficult points, I find that, in this situation, it did not do so. In fact, I would have regarded his conduct on 1 December 2005, in refusing to deal with Mr Kritzler’s queries as to his acceptance of the validity of the notice and of Mr Sumner’s appointment unless his fees were underwritten, a quite unjustified demand, as being a refusal to act effectively in itself, even though, in the end, Euroview did not seek to treat it as such. In my judgment, it does, however, provide powerful background material as to the fair view of the 12 January 2006 letter.
[124] I am not impressed by the point that Mr Lai was still supposedly going along with arranging access for Mr Sumner (as evidenced, it is said, by his later letter of 18 January 2006), first because that had to happen anyway in respect of the section 3 works and, second, because I have formed the clear view that the degree to which Mr Lai did anything co-operative was colourable and calculated so as to try to reduce the appearance of being obstructive, while at the same time seeking to achieve his objectives by subtly being just that.
[125] I therefore hold that Mr Lai’s letter of 12 January 2006 was, in all the circumstances, a refusal to act effectively, within the meaning of section 10(6) of the 1996 Act, in respect of those parts of the works that were subject to the 12 August 2005 notice that fell under section 6 of the 1996 Act, and Mr Kritzler was justified in treating it as such.
Was Mr Kritzler entitled to act ex parte under section 10(6) of the 1996 Act?
[126] Up until the time of closing submissions in this trial, it was being argued, on behalf of Mr Manu, that on the true construction of section 10 of the 1996 Act, Mr Kritzler was none the less not entitled to make an ex parte award under section 10(6) because of the fact that Mr Sumner had been appointed as third surveyor.
[127] As I understand the argument, it was to the effect that section 10(10) of the 1996 Act required any award under the Act to be made either by an “agreed surveyor” or by all three or any two of the three surveyors appointed “as the case may be”, and that since Mr Sumner had been appointed as third surveyor, the “case” applicable here was that of there being three surveyors. Therefore, Mr Kritzler could not make any binding award on his own; Mr Sumner would have to join in. Alternatively, Mr Sumner could act alone as third surveyor (under section 10(11)). Mr Kritzler could not act alone, however. The reference to an “agreed surveyor” in section 10(10) was inapplicable because there had never been one.
[128] This argument seemed to me entirely to overlook the point that section 10(6) stipulates that anything done by a surveyor authorised to act “ex parte” under that subsection would be just as effectual “as if” he had been an agreed surveyor. On reflection, Mr Aeberli did not press this argument.
Conclusion
[129] As a result of the above reasoning, I therefore conclude that the award of 19 January 2006, the subject of the first appeal, was a valid and binding award, and I will dismiss the appeal in respect of it.
Second appeal: Award of 28 February 2006
Was Mr Sumner wrong to hold or find that Euroview was not “responsible” for the defect requiring underpinning and/or that Mr Manu should bear any part of the various costs of and associated with underpinning the party wall?
[130] The combined effects of subsections 11(4) and 11(5) of the 1996 Act is that whenever works to strengthen or underpin a party wall under section 2(2)(a) are necessary on account of a defect or want of repair, then, as in the case of repair works under section 2(2)(b), the expenses of doing the works are to be defrayed by the owners in proportions that have regard to: (a) the use that they respectively make or may (in future) make of the wall; and (b) “responsibility” for the defect or want of repair if more than one owner makes use of the wall.
[131] Mr Manu appeals against the term of Mr Sumner’s award that allocates such expenses 50:50 as between himself and Euroview, contending that the whole of the costs should be borne by Euroview |page:177| because it bears the entire “responsibility” for the defect or want of repair.
[132] Mr Manu’s representations to Mr Sumner were that no 57 had subsided because of damage caused by tree roots, these being trees growing in the grounds of no 57, and that Euroview, as the owner of no 57, was therefore “responsible” for the defect or want of repair that had given rise to the requirement to underpin the party wall, and ought therefore to bear the entire cost of the underpinning works.
[133] Mr Sumner was not convinced by that. He inspected the property and reviewed the evidence of the engineering reports (to which I have not referred in detail). He noted that of three trial pits that had been dug, the one that was adjacent to the party wall inside the property did not reveal any tree root activity, in contradistinction to the two that had been dug adjacent to the flank wall and the back addition. He also accepted Mr Kritzler’s submission that if the wall needed to be underpinned as the result of tree damage, this was to be laid at the door of Islington and was not the “responsibility” of Euroview, and that the award would not affect Mr Manu’s right to bring a claim against Islington, in nuisance or negligence, for any expenditure to which he had been put, including having to defray expenses under a party wall award regarding underpinning. As between Mr Manu and Euroview, the logical split of costs was therefore simply 50:50 because neither was more responsible than the other, and the wall plainly needed to be underpinned.
[134] Mr Sumner awarded that the costs of the works should be defrayed equally according to use of the wall (para 3), while expressly finding that the damage giving rise to the need to underpin had not been caused by the actions or neglect “of the building owner”, once again supporting a 50:50 split of costs (para 7), but further stating expressly that his award was not to prejudice the right of the adjoining owner to take any action available to him at common law in respect of any neglect by “the Building Owner or their predecessor”.
[135] Mr Aeberli challenged that composite award as a matter of fact and law. He argued that the starting point is that no 57 has in effect caused the damage to the party wall resulting in the requirement to underpin, first because the damage was apparently caused by tree roots, even if these were not adjacent to the party wall, as the most probable cause of all the subsidence. The trees had, of course, been removed by Islington before Euroview purchased the property, and it had been stabilised (and indeed the cracks were apparently beginning to close), but Mr Aeberli’s argument is that that makes no difference, on analysis, because the effect of the general subsidence of no 57 was that since it had subsided it had “taken the party wall with it”, that is, it had pulled that wall away from no 59, thus withdrawing support for no 59. It was plain (he said) that had the works been carried out by Islington, they would have been held responsible to defray the entire cost, but the situation was no different with Euroview because it had acquired a “continuing nuisance” to no 59 in the shape of the inadequate state of no 57 to support no 59 when it purchased, and it became obliged to remedy this state of affairs. It was thus responsible for this state of nuisance and therefore wholly responsible, within the meaning of the 1996 Act, for the defect or want of repair in question, and it should have been held liable to bear the whole of the costs accordingly.
[136] Ms Bleasdale submitted that this is wrong as a matter of the true construction of section 11(4) and the meaning of the word “responsibility”. First, she said that, looking at the terms of the section, “responsibility” means “responsibility according to use”. This is really the natural meaning of the word, but it is supported by the fact that the issue of apportioning “responsibility” is provided for only “if more than one owner makes use of the… wall”. This qualification therefore indicates the nature of the “responsibility” in question. Second, she said that this conclusion is supported by the fact that this is meant to be a practical process, and it cannot have been intended that a party wall surveyor making an award should have to conduct an investigation into potentially complex legal or factual issues of liability or causation and consider where legal liability for negligence or nuisance lies. Third, she said that, as a matter of natural meaning, “responsibility” is confined to a review as between the actual parties to the party wall procedure, that is, Euroview and Mr Manu, and it does not encompass responsibility in an indirect legal sense, for example for a predecessor in title. Assuming the subsidence had been caused by tree root action, this was the responsibility of Islington alone. Finally, she pointed to the fact that, viewed overall, the award recognises and preserves the right of Mr Manu to bring such proceedings as he may be advised in respect of any right to common law damages that he may have, so that, in the end, the award does cater for that possible responsibility in the legal sense.
[137] I prefer Ms Bleasdale’s approach to that of Mr Aeberli. Ms Bleasdale invited me to have regard, in support of her argument, to certain materials recording parliamentary discussions during the passage of the 1996 Act. She submitted that I can and should look at this material under the doctrine of Pepper (Inspector of Taxes) v Hart*. In fact, I do not consider that the qualifying conditions for the admissibility of such material are met, not least because I cannot see any sufficiently relevant, clear and unambiguous statement of intended meaning on the part of the promoter of the legislation, and the final words of the subsection, by which she sets store, seem to have been introduced by an amendment upon which no recorded comment or discussion was made. In the event, though, I have not found it necessary to have regard to such material in order to accept her general argument.
—————————————————————————
* Editor’s note: Reported at [1993] AC 593
—————————————————————————
[138] In my judgment, the concept of “responsibility” in section 11(4)(b) is not, and deliberately not, equated with legal liability. It is a far simpler and more direct concept. I am impressed by the point that the 1996 Act is intended to provide a quick and practical scheme to decide on works that may be urgent, and to provide for their being paid for, but through a procedure to be operated by surveyors and the like, rather than lawyers. I therefore find that it is not being contemplated that a party wall surveyor who makes an award as an expert should have to investigate, consider or decide the niceties of legal liability as though he were a judge in a court of law. I consider that the word “responsibility” was intended to provide a simple and practical yardstick, capable of being applied in a relatively summary way, as a matter of common-sense impression.
[139] In my judgment, “responsibility” in section 11(4), means responsibility according to use, but use in the slightly wider sense of “treatment”, rather than the narrower sense of “turning to account for one’s benefit”. Looked at another way, “responsibility” is the mirror of causation and the test amounts to whether, as a matter of common-sense impression (and if so, to what extent), one party has been more the cause of the relevant defect, damage or disrepair than the other. “Responsibility” may therefore include causing a defect through neglect but, in my judgment, that must still be a direct cause, rather than a consequential, indirect or vicarious one.
[140] By the same token, I also find that the 1996 Act is quite clearly contemplating that the question of “responsibility” is decided only as between the actual parties to the procedures, and not with regard to other persons, such as predecessors in title or third parties. The fact that there is no mechanism in the 1996 Act for apportioning expenses otherwise than as between the actual parties supports this intention, and it is also consistent with a simple assessment of the position and does not risk introducing refinements or subtle arguments over indirect consequences.
[141] In the result, therefore, I find that Mr Sumner was correct to find that Euroview was no more “responsible” for the relevant defect within the meaning of section 11(4)(b) than Mr Manu. The short and simple reason is that it did not do anything to cause the relevant defect. It was simply not responsible for it. Assuming that the damage was caused by tree roots, if anyone was responsible it was Islington.
[142] I reject Mr Aeberli’s argument that Euroview was “responsible” because it “adopted a continuing nuisance” of failure to provide support when it acquired the property and therefore became responsible because it did not remedy it. I observe, first, that this argument is unattractively circular because Euroview was in fact doing the very thing that it is thereby complained that it failed to do, |page:178| in invoking the party wall procedures. Second, it involves equating “responsibility” with (possible) legal liability. Third, “responsibility”, in my judgment, connotes being responsible for the event that occasions the defect, damage or want of repair, not merely being the owner of property that is in a deficient state.
[143] I would add, in this context, that Mr Aeberli relied heavily upon Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55*, but I did not find this case to be of much assistance. It certainly dealt with the issue of abating nuisance by tree roots, but it concerned the issue of whether a party acquiring property being damaged by tree roots could sue in respect of pre-acquisition damage and, furthermore, the decision was not based upon the notion that the damage previously occasioned (but arrested) by tree roots itself gave rise to a liability in nuisance, but rather that the situation had not been arrested because the tree roots were continuing actively to weaken the adjacent property, causing current damage that therefore extended to enable the building owner to recover for the whole of the damage whenever it had occurred: see [33] and [34]. I would add only that the complexities of this case underline my view that it could not have been intended that any party wall surveyor should have to embark upon a similar enquiry or legal analysis in making an award.
—————————————————————————
* Editor’s note: Reported at [2002] 1 AC 321
—————————————————————————
[144] Mr Aeberli also put his argument on the basis of use, suggesting that no 57 was using the party wall by pulling it away from no 59. However, I find the concept of no 57 “using” the wall excessively (or however it is put) in that way to be artificial, and not in any event the test. The test is the owner’s “responsibility” for the defect or want of repair and not some metaphorical “responsibility” attributed to the property. On the facts, it appears that nothing done or even omitted by Euroview actually itself caused anything in the way of a defect or want of repair in the party wall; the evidence is that it had already been stabilised.
[145] For these reasons, therefore, I conclude that Mr Sumner was entitled to find both that the use made by each party of the wall was equal and that there was no inequality of responsibility for the relevant defect as between the two parties, leading to the conclusion that a 50:50 split of expenses was, in principle, appropriate.
[146] The argument on this issue has centred on the construction of the 1996 Act. I did not understand it to be argued that Mr Sumner’s factual decision giving his view of the potential causes of the damage was untenable, and I would add that I regard Mr Sumner’s method of dealing with the problem of 1996 Act “responsibility” as compared with legal liability to have been eminently sensible and practical. It was not his function to decide a claim in nuisance, but he plainly preserved that as a separate matter, thereby protecting Mr Manu’s possible rights if he wished to pursue them.
Is Mr Sumner’s award challengeable by the appellant on the grounds of: (i) internal inconsistency in permitting the appellant to exercise its rights at common law; or (ii) allocating costs illogically?
[147] This leaves only the two final, relatively minor questions above. With regard to the former, I have really dealt with this already.
[148] Mr Sumner made his award based upon the tests that he understood he should apply under the 1996 Act, but expressly recorded that he was not thereby interfering with or prejudicing Mr Manu’s rights at common law. I can see no inconsistency there, either as a matter of applying the 1996 Act or as a matter of there being a coherent structure to the award. Mr Sumner made the limits of his award perfectly plain.
[149] Although it might be said that awarding, in para 7, that “damage giving rise to the need for underpinning having not been caused by actions or neglect of the building owner…” was inconsistent with the implicit acknowledgement in para 10 that there might be a claim for “damages under common law in respect of any neglect by the Building Owner”, that is, in my judgment, merely an infelicitous expression, and in no way an inconsistency that indicates any error of law or fact upon which a challenge to the overall propriety or validity of the award could be founded.
[150] Furthermore, I do not see that it could be argued to create an issue estoppel in favour of Euroview, first because Mr Sumner clearly did not intend it to do so, and he plainly said so. His function is that of an expert and not an arbitrator or court, and although his award is not to be questioned in any court of law except by way of appeal (see section 10(16)), that stipulation does not bear on the issue as to what his award actually was.
[151] With regard to “allocating costs illogically”, this refers to paras 8 and 9 of the award. As to para 8, Mr Kritzler was put to the trouble of invoking the default procedure to secure the appointment of Mr Sumner. He asked for the costs of doing so and Mr Sumner acceded to this request, awarding a relatively modest amount. I can see no reason to hold this to be unjustified.
[152] My only slight concern has been whether Mr Sumner’s award in para 9, that all his own costs should be paid by Mr Manu “in the light of the above”, was proper or reasonable, since the appointment of a third surveyor, and his acting and thereby incurring costs that need to be paid, is an intrinsic part of the 1996 Act process.
[153] However, it appears to me that Mr Sumner was really indicating by this award that he regarded the need to resort to him to act at all as having been brought about by Mr Manu’s (or more accurately Mr Lai’s) behaviour, and that it therefore was unreasonable for Euroview to have to contribute to his fees. In the light of the history, I am not able to say that such a decision was outside the reasonable bounds of his discretion, nor a decision that was not arrived at on a properly reasoned basis, and I therefore do not find the complaint that it was “illogical” (which I take to mean made with no proper reason) to be sustained.
Conclusion
[154] In the event, therefore, I find that the second award was also a valid and binding award, and I will dismiss the second appeal as well.
Appeals dismissed.
