Practice Changing Party Wall Case Law – Evans v Paterson (2021)

This is part of our series on court judgements that significantly changed the way that surveyors administer the Act.

The Background

The owner of Princes Gate Mews, London SW7 2PS, Mr Evans (the “building owner”), planned to construct a basement extension. She notified the owners of number 11, Ms Paterson and Ms McGeevy-Harris (the “adjoining owners”), under the Act. The adjoining owners dissented to the notices and each party appointed their own surveyor.

The appointed surveyors agreed and served an award authorising the works (there was a complication relating to consent for the use of for special foundations which required a Third Surveyor award but that’s not directly relevant to the judgement).

Following completion of the works, the adjoining owners noticed some cracking and reported it to their surveyor who informed the building owner’s surveyor. Both surveyors inspected the damage and proceeded to make an award in respect of compensation payable by the building owner to the adjoining owners (£8,130) and their own additional fees.

The building owner appealed the award.

The full judgment is available on this link.

Question to be Determined by the Court

There were multiple grounds of appeal but the first, that the surveyors did not have the jurisdiction to serve the further award, was determined as a preliminary matter by HHJ Backhouse.

The building owner argued that as she had not been made aware of the damage, there was not a dispute for the appointed surveyors to determine.

The Decision

The judge allowed the appeal on the basis that the building owner’s appointed surveyor, nor either of the adjoining owners, had made the building owner aware of the damage (indeed the building owner only became aware of the damage when the further award was served).

HHJ Backhouse made it clear that a dispute must have arisen for the surveyors to make an award for compensation under section 7(2) of the Act.

As the entire further award was set aside that included the surveyors’ costs.

How the Decision has Changed Procedures

The section of the Act which governs the appointment of surveyors is headed “Resolution of disputes” and opens with the line “Where a dispute arises or is deemed to have arisen …”. Most experienced party wall surveyors would therefore have been aware that surveyors are appointed to resolve disputes. Where things had become hazier was in defining the purpose of an award. The general principle is set out in 10(10)(b) as any matter relating to the notified works “which is in dispute between the building owner and the adjoining owner” but the scope of such a dispute is then confirmed in 10(12) which includes the rather imprecise phrase “any other matter arising out of or incidental to the dispute”. This impreciseness was seized upon by surveyors when it suited their, or their appointing owners’, purposes.

This case is unusual as it would have been very easy for the building owner’s surveyor to keep her updated on matters and, presumably, he regretted not doing so. Where the difficulty of having to confirm a dispute prior to acting more commonly arises is where works have commenced after surveyors have been appointed but before an award has been agreed and served. Two examples come to mind:

Just prior to this case, a very experienced surveyor insisted to me that an “award of record” was necessary to confirm what unauthorised works had been undertaken by my appointing owner and to determine his fees. As his fees were going to be the subject of a referral to the Third Surveyor, I included the “award of record” point and the Third Surveyor agreed with me that there was no basis in the Act for such a document. The fees were confirmed in the Third Surveyor’s award so there was no need for an award to be agreed between the surveyors. I can see how this would be frustrating for the adjoining owners, they might have to explain to a future purchaser why there was no award, but this judgment confirms that it was the correct decision.

At around the same time, I was appointed by an adjoining owner and the building owner proceeded with the works prior to an award being agreed (the building owner did not provide the information that I thought was necessary to agree an award). I raised an invoice to cover the time that I had spent on the matter and sent it to the building owner, via his surveyor, for payment. The message came back that the building owner did not dispute responsibility for my costs but was not going to pay the invoice. This appears to have been an agreement between the building owner and his surveyor to create a dead end – without a confirmed dispute, there was no basis for an award and, without an award, I could not enforce payment of my invoice. Eventually, I gave the building owner a deadline by which to make payment after which I would assume that he was disputing the quantum of my fees. When the deadline passed, I referred the matter to the Third Surveyor who accepted that the quantum of my costs was in dispute and served an award which I could enforce.

There are parallels between the above experience and the situation that adjoining owners often find themselves in having suffered damage. The damage is reported to the building owner, generally via the surveyors, who gives a vague undertaking to deal with the matter but then does nothing (or highlights the issue to their builder who does nothing). My advice to adjoining owners (in addition to never dealing directly with the building owner’s contractor) is to bring the matter to a head e.g. obtain an estimate for the remedial works and send it to the building owner for payment by a set date. Once that date passes, there is a confirmed dispute that can be referred to the surveyors (the risk of incurring additional fees will generally focus the building owner’s mind).

Final notes

In the 2016 case Farrs Lane Developments Ltd v Bristol Magistrates Court (2016) the court rejected the claimant’s argument that an award may not deal with the surveyor’s fees where they are not the subject of the dispute. This created an exception to the “no dispute, no award” principle albeit a narrow one.

The joint Defendant in the Farrs Lane Judicial Review (the surveyor whose fees were at stake), James McCallister, also acted for the adjoining owners (and was a joint Respondent) in Evans v Paterson. He cited the earlier case as part of the defence, but it was rejected by HHJ Backhouse due to the different circumstances i.e. the surveyor’s fees in Farrs Lane where incidental to the dispute resolved by the service of the primary award rather than a new matter as in Evans v Paterson.

The judgment in Evans v Paterson calls in to question the seemingly settled principle that a surveyor or surveyors appointed to deal with a dispute or deemed dispute arising following the service of notice(s) remain appointed to determine any subsequent disputes relating to the same works (such as in relation to damage claims). As a result, surveyors have started to make this explicit in their letters of appointment.]

Written by Justin Burns BSc (Hons) MRICS FFPWS

If you require advice on a party wall matter, you are welcome to contact us on 020 7183 2578 or via email.