The recent Party Wall judgement in K Group Holdings Inc v Saidco International [2021] raises a number of aspects concerning the appeal against a Party Wall Award. Jason Evans, head of Rapleys’ London Party Wall service considers the impacts of these on future construction projects and the role of a Party Wall Surveyor.

Rapleys Neighbourly Matters team are experienced Party Wall Surveyors administering the Party Wall etc Act 1996 throughout England and Wales (the Act does not apply in Scotland) either for developers (known under the Act as Building Owners’) or neighbours (referred to under the Act as Adjoining Owners’). The statutory provisions of the Act can be triggered when building work is proposed on any site boundary, on a shared structure in different ownership or excavations within a certain distance of neighbouring buildings or structures. As well as performing the roles of Building Owner’s and Adjoining Owner’s Surveyor, we also act in the roles of Agreed Surveyor and Third Surveyor as the process allows.

Overview

The proposed development comprised the refurbishment of the 6th & 7th floors of Aldford House, a property on Park Lane in London. Saidco (a Panamanian company) owned a flat on the 5th floor. The works took place between 2009 and 2013 and a Party Wall Award was published at the outset in relation to the notifiable work relevant to the Act.

Early in the construction process, the occupier of the flat below raised concerns over an alleged water leak emanating from the development site. This issue for, whatever reason, was not addressed at the time and bizarrely several ex parte Awards where then published by the Adjoining Owners Surveyor between July – November 2020 leading to the awarding of a six figure sum to the Adjoining Owner.

The Building Owner, K Group, successfully appealed the November 2020 Award on several grounds.

The judge Parfitt’s, overarching conclusion was: “the circumstances in which this award has been made seem to me uniquely inappropriate and misguided”. Whilst the Award had various shortfalls, this case reminds and clarifies several areas for Party Wall practitioners.

Statue of Limitations

Claiming damages is subject to section 9 of the Limitation Act 1980.  HHJ Parfitt stated in Paragraph 33 of the judgement;

‘’assuming there was one here pursuant to the Act, is one that will be subject to the section 9 limitation award and that that limitation would start to run from whatever date it was…’’ and ‘’so far as concerns a right to compensation which could be within the surveyor’s jurisdiction, that that would also be subject to a six-year bar…’’.

Therefore, claims of damage need to have arisen and been documented within 6 years of occurring. The claim being submitted in this case related to a claim raised 11 years previously.

Enforcement

The Adjoining Owner’s Surveyor purported to enforce payment of his fee in his ex parte Award.  Surveyors do not have power or authority to enforce their own Awards.

Judge Parfitt appears to have extended his view for surveyors enforcing their fees to a Party Wall in its entirety.  Critically the main body of a Party Wall Award must be enforced by the courts if a contravention occurs.

The judgement was at the County Court, and not the High Court, therefore no legal precedent has been set.  However, all practitioners should consider the implications set for existing and future appointments.

Therefore, in practical terms, the following housekeeping points should be borne in mind:

Dispute

  • Surveyors must deal with the actual dispute at hand.
  • In K Group Holdings V Saidco International the first Party Wall Award was served in 2009. The dispute that had arisen was then resolved by service of a Party Wall Award.
  • Numerous changes of property owners arose for the Adjoining Owner which is fine, but crucially the Building Owner had changed in the following 11 years after the publishing of the original Award. The change of ownership does not preclude the ‘original’ Building Owners liability under the Act, as alluded to by HHJ Bailey in Mills v Savage [2016].  On review of the judgement, it became apparent that the original Building Owner had fallen in liquidation, and any recovery of costs would have been extremely difficult.
  • Judge Parfitt does lightly discuss that some form of jurisdiction could have been reviewed from the original Building Owner to the existing Building Owner – however, this appears in a broader legal sense that actual scope in pursuant of the Party Wall etc. Act.
  • It was deemed incorrect to serve an Award on the new (and current) Building Owner as they were not and had not been a party to the original deemed dispute.

Parties to the Award

In this particular case several ex parte Awards had been served from the Adjoining Owner’s Surveyor – each time naming a different Building Owner. The third and final Award had been served to the appellants of the judgement.

Incidentally, the appellant did not own the property where the notifiable works were carried out in 2009 and therefore was not a party to the dispute.  Furthermore, the Building Owner to the site where the works had been carried out had not appointed a surveyor under section 10, nor had a surveyor been appointed on their behalf under section 10(4) of the Act.

Panamanian Law

  • An interesting take home from the judgement was the potential impact from Panamanian Law.
  • Paragraph 5 of the judgement

‘’Saidco were placed into some form of suspension which, according to the evidence before me, involved a notice being attached in the Panamanian Registry that said Saidco were “ Suspendido” on 26 November 2019 and the evidence before me says that meant, as a matter of Panamanian law, the company could not act or make claims, and so on’’.

This case illustrates that the Party Wall process requires careful navigation. If you are planning your next development, give us a call to discuss your obligations under the Act. Or, if you are neighbour to a development and require a surveyor to represent you, we’d be delighted to assist. We operate across the UK.

Our Neighbourly Matters team provide Rights to Light, Daylight & Sunlight, Access Arrangements and Boundary Dispute services. Get in touch with a member of our nationwide team for specialist surveying assistance.