S10 (10) of the Party Wall Act 1996 and the Exploitation of the Building Owner
Sunday, 7 October 2018
Dispute
No where in the Party Wall Act 1996 ( ‘Act’) is a ‘dispute’ defined.
The Collins Dictionary defines a ‘dispute’ as ‘an argument or disagreement between people’.
If on serving a party wall notice the adjoining owner assents to the proposed notifiable works, there is not of course a dispute, whereas if there is no response within 14 days of service a dispute is ‘deemed’ to exist. A disagreement will also arise of course, if the adjoining owner expressly objects to the proposed works.
The existence of a ‘dispute’ is important for two reasons. Firstly, without one there is no jurisdiction for a surveyor to be appointed, and secondly a deemed or existing dispute is a prerequisite for the making of a party wall award.
As for appointment, RICS issued Guidance Notes on the Party Wall Act states:
'The full extent of the dispute should be given upon which subsequently appointed or selected surveyors can determine’
Even where the adjoining owner has assented at the outset, the Act can still be engaged if during or following the completion of works a ‘dispute’ arises. The relevant provision is S10 (10) of the Act and provides the surveyors' tribunal is competent to make awards on matters which are in dispute between the parties and which are also connected with work to which the Act relates.
The surveyors also have the power to determine any other matter that may arise out of the dispute which has been referred to them or which is in some way incidental to it
Their appointment is fundamental to achieving the purposes of the legislation and is widely credited with avoiding disputes between neighbouring owners that might otherwise result in litigation. The surveyors’ authority and power to make awards is not derived from their contractual appointment, but from the the provisions of the Act. Failure therefore to follow the requirements of the Act can render an award invalid.
What happens when a dispute or deemed dispute arises following service of the Notice?
The usual course when a dispute arises, or is deemed to have arisen, following service of the Notice, is for surveyors to be appointed, and for there to be an award, or party wall agreement put in place to regulate the works before they commence. Usually, this will also provide a mechanism for the resolution of further disputes should they arise.
The s10 (10 ) appointment
The position becomes a little less clear when the adjoining owner having assented at the outset subsequently decides to look to challenge the continuation of the works. On the face of it this triggers a dispute and the opportunity to engage the s10 (10) dispute resolution process emerges.
However, it does not necessarily follow that just because the adjoining owner has decided for whatever reason to raise a concern a party wall dispute arises.
There may be a number of reasons for the development. For example, the adjoining owner may have suffered some damage to their property during the course of the notifiable works, and becomes nervous about the prospect of the building owner making the work good, or offering compensation. The adjoining owner may, by way of a further example, have become fed up with the building owner’s builder taking advantage of previously agreed access rights.
On the face of it these examples suggest a disagreement, and per se would justify the establishment of the s10(10) process. However, in both cases the situations could have easily arisen through nothing other than a misunderstanding, and or, without the building owner’s prior knowledge, especially if a contractor is involved.
Furthermore, for there to be a disagreement there needs to be a difference in views, and if on enquiry the building owner accepts the view of the adjoining owner can it really be said that a dispute exists. Clearly if one party accepts the position of the other there is no need or justification for the party wall dispute resolution provisions to be invoked.
It is the uncertainty surrounding the adjoining owners change of heart that often exposes a building owner to the risk of financial exploitation by the ‘cowboy’ party surveyor who often circles looking for opportunities of this type.
More often or not a building owner is forced due to pure ignorance of the workings of the Act to accept the appointment of the adjoining owner’s surveyor, even though there is no actual dispute present. It is only once the surveyor has bedded him or herself in that a dispute is then created to justify the appointment, and the massive fee accumulation that will inevitably follow. Its not too long before the building owner finds him or herself caught up in a protracted, very expensive and, more to the point, totally unnecessary process, and one from which there is no escape.
So what can be done if this imprisonment occurs?
For there to be an award there needs to be an existing dispute. This is clear from the present tense of the language used in s10 (10).
This was made clear by HH Judge Bailey in the judgment he delivered in Mohamed and Lahrie and Antino and Stevens (2017) when dismissing the notion that the making of an award is always a necessary feature of the s10(10) process:
‘The argument that the 1996 Act requires the surveyors to proceed to an award even where the parties have reached agreement would be wholly against the general principle that parties who are sui juris are free to make such agreements as they wish to make, provided that they are not illegal in nature. It is also against the clear policy of the CPR for the court either to restrain two parties from reaching an agreement on any subject matter which has been referred to party wall surveyors under the 1996 Act, or to hold unlawful and therefore unenforceable any agreement they do happen to make, simply on the basis that a reference has been made to the surveyors. Very clear statutory words would be required before the court would act in this way, and there are no such words in the 1996 Act’.
If therefore the building owner agrees with the views/demands of the adjoining owner no dispute can be said to exist, and the need for an award ceases.
In so far as the fees of the adjoining owners surveyor is concerned, even though there would be a strong argument to justify refusal to accept liability ( on the basis there was no dispute available in the first place to justify the s10 (10) appointment), this could ironically be viewed as a dispute, and result in the making of an award. The best advise would be to offer and pay a small, but reasonable fee, and to then leave the adjoining owner to decide whether or not to run the cost risk of a third surveyor referral.
Practical Advice
If notifiable works are to be undertaken always serve a valid party wall notice.
If the neighbour objects, or does not respond, look to find out why, and wherever possible establish a party wall agreement to regulate the proposed work, and to provide a mechanism for resolution to cover the possibility of a dispute arising in the future. This will due to the decision in Mohamed ( above) reduce the risk of exposure to the cowboy surveyor, and also the probability of facing a huge fee liability.
This advice should equally be followed even if your neighbour consents to the works. It is not uncommon for long standing neighbours to fall out, often for reasons unconnected with the build, such as pure jealously. By having in place an agreement to provide for the resolution of any dispute that might arise later will make it very difficult for s10(10) to be invoked.
If there is no agreement in place, and a prima facie dispute follows assent, then find out what has gone wrong, and fix it quickly. Don’t let a dispute develop, and make sure that if the adjoining owner surveyor decides to unilaterally appoint him or herself, that you make it clear there is no disagreement. Follow this up with a written agreement, and ensure this has provision built into it to resolve any future disagreement that may arise. This may mean swallowing your pride, and making concessions beyond normal expectation, however do bear in mind that entering the party wall arena can often be akin to handing the adjoining owner’s surveyor a winning lottery ticket.
David Pett - Solicitor
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