Background
In Power and Kyson v Shah [2023] EWCA Civ 239 the Court of Appeal considered what they described as a "novel but important issue" in connection with the Party Wall etc. Act 1996 (PWA 1996). Can an adjoining owner seek to rely on the dispute resolution procedure provided by Section 10 of the PWA 1996, in circumstances where the building owner, who intends to carry out or who has carried out building works, has served no notice under Section 3 of the PWA 1996 in respect of the works, and maintains that the PWA 1996 does not apply?
Mr Shah, the building owner, had carried out works to his home without serving notice under the PWA 1996 as he maintained that it did not apply in the circumstances. The adjoining owners alleged that the PWA 1996 did apply and that the works caused damage to their property, so they invoked the Section 10 procedure. Mr Kyson was appointed to act as surveyor for the adjoining owners and Mr Power was then appointed as surveyor for Mr Shah using the default procedure as Mr Shah did not engage with the statutory process as he said it did not apply.
The party wall surveyors determined that the works did require a notice under the PWA 1996, that the works had caused damage and as a result, they issued an award accordingly. Mr Shah refused to pay the award and claimed that it was void because the PWA 1996 did not apply.
The arguments
During this further appeal, the parties re-ran the arguments that had been heard by the lower courts. On behalf of the adjoining owners, it was submitted that Section 10 of the PWA 1996 was invoked, is "widely drawn" and that the purpose of the PWA 1996 was to resolve disputes without parties having the recourse to the courts. Counsel for the adjoining owners said that any other interpretation of the PWA 1996 would mean that if a building owner wrongly refused to serve a notice or acknowledge the applicability of the PWA 1996, the adjoining owner would be left with no other option but to seek an injunction in court.
On behalf of Mr Shah, it was submitted that the PWA 1996 did not replace common law. Whilst it provides the building owner with new rights, those rights only arise if the mechanism set out in the PWA 1996 has been properly triggered, which can only happen if the building owner serves a Section 3 notice. If there is no notice as in this case, the PWA 1996 simply does not apply.
Court of Appeal decision
The Court of Appeal ruled in favour of the Building Owner, observing that on a proper interpretation of the PWA 1996, Section 10 could only apply "in respect of any matter connected with any work to which the Act relates", meaning in respect of works to which a notice had been served. In the absence of a notice from the building owner under Section 3, Section 10 and therefore any subsequent party wall award, is null and void.
The Court highlighted that instead the adjoining owners would have had the usual claims for damages in trespass, nuisance or negligence available to them.
The Court of Appeal's ruling, whilst logical, does appear likely to result in more litigation being necessary. Until this case it was relatively common for adjoining owners to invoke the party wall award process, on the basis that it is usually quicker and cheaper to resolve party wall disputes via surveyors than via the Courts. However, this "No notice, No award" ruling means that an aggrieved adjoining owner now has no alternative to Court proceedings.
