Property Law uk

Maintained by Gary Webber

Party wall awards

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.


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