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Party walls


Party walls made simple

A beginner's guide to party walls by William Hanbury of Exchange Chambers, Leeds.

April 2007

Introduction

The law relating to party walls is a relatively self-contained area being found largely in the Party Wall Act 1996.

The Act is complex and technical and often advice of specialists will be needed, for example, from surveyors who practise in the area.

It is my aim here to look at the types of problem that arise in practice. The starting position for resolving these problems will nearly always be the Act itself, but, as we shall see, the common law is sometimes still relevant.

What is the position between two owners of adjoining parcels of land which are not built on?

This is not covered by the Act but by the common law. Where the support is derived from land rather than buildings or structures the position is more complex. Where land is supported it is thought that provided the support has been derived naturally from the neighbour's land as long as that land has been there a natural right of support arises, which cannot be removed. This right arises naturally and does not require any grant, actual or fictitious. Where however the neighbour deriving support from his neighbour's land places an additional burden on that land by building on it, it is thought that no natural right of support exists and the neighbour must establish an easement of support by one of the recognised means by which such an easement may be acquired (See Dalton v Angus (1881) 6 App Cas 740).

What is a party wall?

A party wall is a structure that straddles the boundary between two properties as opposed to a structure that demarcates the boundary between two properties, known as a "boundary structure'.

What was the position before the Party Wall Act?

Where a feature is party mutual rights of support arise. However, these rights are negative in character. Therefore in areas that were not covered by local legislation (everywhere other than London and Bristol), in the absence of a right to do so in the deeds, neither neighbour could remove the support derived from the other's structure. However, neither party was under a positive obligation to repair the structure in question.

How do I know if the wall is party?

Usually walls are declared party in the deeds, but it is not always straightforward to find this out. In Burns v Morton [1999] EWCA Civ 1514 the Court of Appeal had to grapple with the term "dividing structure'. They held that, as a matter of construction, this term referred to a party wall.

"T" marks on the plan accompanying the conveyance or transfer will be strong evidence that ownership of the structure in question is "boundary" rather than "party'.

However, it is often difficult to tell precisely where the boundary is in the absence of an express declaration to the effect that dividing structures are party. Remember that in registered land the title plan shows only the general boundary.

The following additional points should also be noted:
  • Beware of assuming that the wall follows the line of the paper title if this can be identified. As the Court of Appeal recently indicated in Palfrey v Wilson [2007] EWCA Civ 94, it is possible for a feature that appears to be party in fact to be a boundary structure by operation of the law of adverse possession.
  • A wall may be party for part of its distance and boundary in another part, e .g. where it provides essential support to a building at ground floor level but no support at first floor level it will be party up to first floor level.

What do I need to know about the Act?

  • The Act does not just apply to party walls proper (as defined in section 20 as "a wall that stands on the lands of different owners to a greater extent than any artificially formed support" but applies to certain works near the boundary). In particular, the Act applies where new building work is carried out within 3 meters of the boundary and the new building in question will be built with foundations deeper than the adjoining building owner's building. There are also restrictions on building within 6 meters in certain cases.
  • The Act seeks to provide a comprehensive code for the conduct of work to structures of the types covered by the Act. One does not therefore need to consider rights of support that arise at common law. This is because the substantive rights that exist in the party wall continue but are suspended as long as the Act is complied with (see s.9 (a)).
  • The Act has a code of notices and counter-notices, the effect of which is that there will be deemed to be a dispute between neighbours if the adjoining owner (the neighbour who is not intending to carry out work) does not consent to the work. This applies both to new building work and proposed work to existing party walls. Where new work is proposed, however, the building owner may carry out the work proposed provided he builds the wall or structure wholly on his own land (save for the footings) even if there is an objection by his neighbour. However, for work to be within the Act the work must be begun within a certain period of the service of the notice.

How do we resolve our dispute?

  • It is sometimes forgotten that the move towards ADR, particularly mediation, has been a recent phenomenon. In 1992, when the related legislation, the Access to Neighbouring Land Act 1992 ("1992 Act"), was enacted, the county court was designated as the forum for dispute resolution. By the time of the 1996 Act, the legislature chose resolution by surveyors.
  • As has been stated the Act provides a comprehensive code for the resolution of disputes. The predominant view is therefore that there is no scope for ADR or arbitration. The role of the county court is only as a forum for appeals, although there is some scope for challenging awards on the grounds of bias and so forth.
  • Section 10 provides that any dispute in respect of any work to which the Act relates must be resolved by the building owner first appointing a surveyor, then a second surveyor being appointed for the adjoining owner. A third surveyor is appointed to resolve any dispute between those surveyors. Thus, the Act was good news for party wall surveyors! Finally, there is a right of appeal to the county court.
  • The role of the county court was recently clarified in Zissis v Lukomski [2006] EWCA Civ 341 in which the Court of Appeal said that the disgruntled neighbour has two choices:
  • He can apply to set aside the award because it is "invalid", for example, because it was made in excess of jurisdiction. This would be by Part 8 application;
  • He can appeal the decision. This appeal would be by way of a rehearing and in the context of the Act; new evidence would and usually should be called at the appeal hearing.

Can I get compensation?

Yes, although there has been a debate over the extent to which business losses could be awarded. However, it is now thought that the award may cover any loses caused by the work including business losses (see section 10 (10)). These losses should be dealt with in the award.

What if my neighbour ignores the Act?

  • In this situation you return to the common law position. Any entry over the boundary line constitutes a trespass and any cracks vibrations and other damage which would otherwise be covered by the award would constitute a nuisance (see Louis v Sadiq [1996] EWCA Civ 935). It is not the case that the court can retrospectively extend time for complying with the notice requirements, although the parties could presumably agree to waive these.
  • The building owner who has failed to comply with the notice requirements in the Act will have no legal right to carry out the work, in the absence of his neighbour's consent, a right in the deeds or another legal right, for example, under the 1992 Act. If he simply proceeds regardless he will receive short shrift from the courts (see Roadrunner Properties v Dean [2003] EWCA 1816).

How does the Act work in practice?

Reasonably well, although a number of important points remain to be resolved and the whole process seems complex and expensive. Certainly, there could have been cheaper and swifter procedures devised. However, the legislation looks set to be on the statute books for many years to come.

William Hanbury


This page deals with three points:
  • The method of challenge to an award and the time limit;
  • The extent to which legal costs can be included in an award, and
  • The calculation of damages under s7

Appeal to the county court

A party wall award made under s10 of the Party Wall Act 1996 may be challenged in the county court under s10(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."
The CA held that an appeal under this section is governed by CPR Part 52. This means that the procedures and time limits under Part 52, rather than those under Part 8 apply. Further, it is an appeal by way of rehearing, rather than a mere review of the award (applying PD 52, para 9.1). Thus, the court will if necessary hear evidence including possibly fresh evidence not available before the surveyor(s) making the original award. (Zissis v Lukomski [2006] EWCA Civ 341). Sir Peter Gibson at para 41:
    "Given that an award under the Act is non-speaking and made without a hearing, I would envisage that the appeal by way of a rehearing will ordinarily require the county court to receive evidence in order to reach its own conclusion on whether the award is wrong."
In this case the district judge dismissed the appeal because the appellant used the wrong procedure even though he found that the addendum award, that was being challenged, was invalid. Technically, he was right that the wrong procedure had been used. However, the award clearly was invalid (not just wrong) and the CA considered that he should have exercised his powers under CPR 3.10 to allow the matter to proceed, either by way of an amendment to the particulars of claim to seek a declaration that the award was a nullity or by way of an appeal under Part 52 (see para 47).

Time limit

The 14 day time limit for appealing an award under s10(17) of the Party Wall etc. Act 1996 begins 14 days from the date that receipt was deemed to have taken place, not from the date of posting (Freetown v Assethold Ltd [2012] EWCA Civ 1657).

Note: In Zissis v Lukomski Sir Peter Gibson also said " ... it is well established that a party challenging an invalid award does not need to do so by the appeal process but may seek declaratory relief or challenge the award's validity by resisting its enforcement or by bringing an action inconsistent with it."(para 45).


Legal Costs not to be included in award

Reeves v Blake
[2009] EWCA Civ 611

Summary

Only costs in relation to the statutory dispute resolution provided for under the Party Wall etc. Act 1996 can be recovered under the award. Other legal costs on ancillary matters could not form part of the award.

Facts

B wished to carry out a development which required a notice under the Party Wall etc. Act 1996 to be served on D. An award was made and works were commenced. D believed that the works exceeded the award and instructed solicitors and counsel to draft injunction proceedings. Before they were issued, B gave undertakings. A new award was drafted which included payment by B of the costs of D’s intended proceedings. B appealed that award.

Decision

In appropriate cases costs could form part of the award; i.e. where they arose out of the statutory dispute mechanism provided for by the Act. However, the costs in the present case did not arise out of the workings of the Act. The intended injunction relied upon common law rights to restrain an injunction or nuisance. They therefore fell outside of the Act and should not have been included in the award.


Damages

Common law principles apply

Lea Valley Developments Ltd v Derbyshire
[2017] EWHC 1353 (TCC)

Summary

The Court has clarified that the provisions in the Party Walls Act 1996 allowing compensation for loss and damage (s7(2) PWA 1996), is subject to the usual common law principles for assessing damages for torts to land.

Facts

The parties owned adjoining freehold properties. The claimant (C) decided to do some works and obtained an award under s10 of the PWA 1996 authorising these which included notifiable excavation works under s6. C then carried out works which undermined its neighbour’s property such that demolition and rebuilding was needed. C applied to Court for a declaration as to the correct method for assessment of damages.

(In separate proceedings D had been unsuccessful in its objection on the basis that the PWA 1996 was a comprehensive code which precluded applications to court (except limited rights of appeal against award decisions).)

The relevant terms of the s10 award stated that C was obliged to:
    "make good all structural or decorative damage to the Adjoining Owner's property occasioned by the works … If so required by the Adjoining Owner, make payment in lieu of carrying out the works to make the damage good, such sums to be determined by the Agreed Surveyor".
C argued that damages should be determined in accordance with common law principles, which enabled the court to make an award on the basis of diminution in value. D contended that the proper basis for damages was laid down in the award, which provided for assessment on the basis of the cost of reinstatement.

Decision

The Court found for C on this point and held that the common law principles which applied to the assessment of damages for torts to land were applicable.

There was no authority as to the proper construction of s7 of the PWA 1996 concerning damages. The relevant wording of the s10 award did not cover the situation that had arisen whereby complete demolition and rebuilding was required, and did not in any event answer the question of the basis upon which any payment in lieu of the making good works should be made. Therefore D was not entitled to the declarations it sought as when assessing compensation for any loss or damage payable under s7(2) of the PWA 1996, the common law principles which applied to the assessment of damages for torts to land were applicable. The application of those principles required the compensation to be such as to put the adjoining owner in the same position as it would have been had the damage to its property not occurred but also to be reasonable as between the claimant and the defendant; that what would be reasonable was highly fact sensitive and there was no rule that required an award of compensation on one basis or the other in every case. The applicable principles in tort were similar to those which applied in contract. In particular, the principle established by Ruxley Electronics & Construction Ltd v Forsyth [1996] AC 344, that where remedial expenditure was out of all proportion to the benefit to be obtained, the appropriate measure of damages was the diminution in value, also held good in tort.

The Court went on to hold, obiter, that the relevant wording of the s10 award was ultra vires as it was mistakenly based upon s2 of the PWA 1996 Act. There is no such provision in s6 and thus there was no power to include this wording in the award.

Comment

The case provides important clarification that the provisions in the PWA 1996 allowing compensation for loss and damage (s7(2)) are subject to the usual common law principles for assessing damages for torts to land. It also highlights the need for clarity when drafting a PWA 1996 award that deals with compensation for damage to a structure or land.


For more information go to: www.partywalls.org.uk

For details of a book on party walls click here.


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