Practice Changing Party Wall Case Law – Kaye v Lawrence (2010)

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

The Background

Mr Matthew Lawrence (the ‘building owner’), owner of a site known as 124 Panorama Road, Sandbanks, Poole, served notice on the owner of 126 Panorama Road, Mr Geoffrey Kaye (the adjoining owner), under sections 6(1) & 6(2) of the Act in relation to a proposed new dwelling. The notice confirmed that it was not ‘intended to underpin or otherwise strengthen’ the foundations of the [building owner’s] building”.

The adjoining owner dissented to the notice and, to resolve the resulting dispute, both owners appointed their own surveyors. The appointed surveyors selected a third surveyor.

The adjoining owner requested ‘a bond or project-specific insurance policy’ (in effect, security in accordance with Section 12(1) of the Act) to protect against the cost of making good damage to his property caused by the works.

It is assumed that the request for security was refused and that the appointed surveyors disagreed on the legitimacy of the request as the matter was referred to the third surveyor for determination.

The third surveyor determined that ‘…security cannot be requested under S.12(1) of The Party wall etc. Act unless the building owner intends to exercise rights conferred by the Act as is proposing to carry out some work to the adjoining owner’s land or property. That is not the case in this instance’.

The adjoining owner appealed the third surveyor’s award.

The full judgment is available on this link.

Question to be Determined by the Court

Whether the adjoining owner had the right to request security in relation to works that were being undertaken wholly on the building owner’s land (as opposed to say, work affecting a party wall).

More specifically, the building owner’s counsel argued that requests in accordance with section 12(1) could only be served ‘in the exercise of the rights conferred by this Act’ and that excavating on one’s own land was not a ‘right’ under the Act.

The Decision

Judge Ramsey confirmed that where work falls within the scope of the Act, an owner’s common law rights, such as the right to excavate on your own land, is supplanted by the Act (there was earlier authority for this view, such as Louis v Sadiq [1996]).

In light of this, he considered the distinction which the building owner’s counsel sought to make between provisions of the Act that give rights and those which do not to be an artificial one.

Mr Kaye’s request for security was therefore legitimate.

How the Decision has Changed Procedures

It obviously extended the scope of the works in relation to which an adjoining owner could request security to include excavation on the building owner’s own land.

It also appears to have been the trigger for a large increase in the volume of requests for security more generally. Prior to this case, a busy party wall surveyor might have dealt with one or two each year but, within a couple of years, adjoining owners on virtually every project that involved a subterranean extension or underpinning to a party wall were requesting security (no doubt on the advice of their surveyor).

Final notes

The third surveyor’s determination relied upon guidance that was included in the P&T Green Book that was current at the time. It read as follows:

“Security can only be requested if the building owner intends to exercise rights “conferred by this Act”, i.e. he is proposing to carry out some work to the adjoining owner’s land or property. If he is simply excavating his own land, then the adjoining owner has no right to receive security under this section.”

This is a good example of why the Green Book should only ever be treated by surveyors as an opinion, albeit one that carries some weight as it has been arrived at by a group of experienced surveyors after extensive consideration.

Presumably, the authors of the Green Book also noticed that works notifiable under section 6 of the Act, unlike those set out in section 1 & 2, were not described as being a ‘right’ and considered that difference to be deliberate.

The judge’s view that all notifiable works should be considered rights under the Act has implications for further rights which only apply to ‘works in pursuance of the Act’ such as the right of access in accordance with section 8(1). However, the confirmation in section 8(1) that such access must be ‘necessary’, confirms that not all excavation work falling within the scope of the Act enjoys a right of access.

The security being requested in this case was in the form of ‘a bond or project-specific insurance policy’. By confirming the that the request was legitimate, the judge, perhaps inadvertently, confirmed that security in forms other than cash may be requested. Having said that, it would be difficult for appointed surveyors to award anything other than a cash sum when determining a dispute relating to a security request.

While preparing an update on the case for a FPWS faculty meeting that I was arranging at the time, I spoke to the adjoining owner’s surveyor who confirmed that, following the decision, the security issue was resolved by way of a project specific insurance policy.

Panorama Road in Sandbanks is said to contain the most expensive coastal properties in the world and has been home to some celebrity residents over the years (one of which was the other adjoining owner in this case).

Written by Justin Burns BSc (Hons) MRICS

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