Excavation – Nuisance – Party walls – Surveyors

Christine Reeves v Beatrice Blake: CA (Civ Div) (Lords Justice Mummery, Moses, Etherton): 24 June 2009

The appellant (R) appealed against a decision concerning the ability to provide for payment of legal costs under a party wall award.

The respondent (B) owned a house, the flank wall of which abutted R's driveway. B proposed to demolish the house and replace it with a new building. B served on R a notice under the section 1(5) of the Party Wall etc Act 1996 and a second notice under section 6(1). The first notice was served on the basis that B proposed to construct a new wall on the boundary with R’s driveway. The second notice was served because the level of B's new basement would be substantially below the level of the foundations of R’s garage. The parties appointed surveyors who appointed a third. The third surveyor determined in an award that the first notice was invalid but that the second notice under section 6 was valid. B took the view that the award authorised works in respect of excavations and foundations and those works were begun on her instructions. R considered, correctly, that a further award was necessary before the works could proceed. She consulted solicitors who advised her to take High Court proceedings for an injunction. Counsel settled draft particulars of claim and draft witness statements were also prepared. B gave an undertaking not to carry out further work for the time being and no proceedings were ever begun. The surveyors then produced an award authorising the work to be carried out and directing B to pay R’s solicitors’ and legal fees in respect of the contemplated proceedings. On appeal to the county court, the judge ordered that the second award be varied by deleting the legal costs direction. R submitted that the surveyors had authority to give the legal costs direction in the second award under section 10(12)(c), under which an award might determine ‘any other matter arising out of or incidental to the dispute’, and section 10(13)(c), under which the reasonable costs incurred in ‘any other matter arising out of the dispute’ were to be paid to such of the parties as was determined by the appointed surveyor or surveyors.

Held: In view of the nature of disputes referred to surveyors under the 1996 act and the wide wording of sections 10(1), 10(10), 10(12)(c) and 10(13)(c), there might be circumstances in which appointed surveyors had the power under section 10 to order payment by one adjoining owner of legal costs reasonably and properly incurred by another, Onigbanjo v Pearson [2008] BLR 507 MCLC approved. The power to order payment of such costs was, however, restricted to costs connected with the statutory dispute resolution mechanism. As a matter of interpretation, the dispute mentioned in those provisions of section 10 was a dispute arising under the 1996 act. By contrast, proceedings in court to enforce common law or equitable remedies, such as damages or an injunction for trespass or nuisance or the threat of them, fell outside the 1996 act, as did preparations for such proceedings. The purpose of the 1996 act was to provide a mechanism for dispute resolution which avoided recourse to the courts. A power of the appointed surveyors under the 1996 act to make provision for costs incurred for the purpose of actual or contemplated litigation in court would be inconsistent with that statutory objective. The appointed surveyors had no power to grant common law or equitable relief for causes of action in trespass or nuisance, Woodhouse v Consolidated Property Corp Ltd [1993] 66 P & CR 234 CA (Civ Div) and Louis v Sadiq 59 Con LR 127 CA (Civ Div) considered. Those were the causes of action for the contemplated and threatened proceedings by R. Leaving aside the 1996 act, no one had suggested any example of parliament conferring on one or more persons, whether or not lawyers, power to make orders for payment of the costs of actual or contemplated litigation, where the court alone or some body other than those persons had the power to determine the substantive dispute. Further, in the ordinary way, no costs were recoverable by a party who prepared for litigation which was never instigated.

Appeal dismissed.

Nicholas Isaac (instructed by Penman Johnson) for the appellant; Stephen Bickford Smith (instructed by Child & Child) for the respondent.