Kaye v Lawrence

This appeal raises an important practical question on the extent to which security may be required under section 12(1) of the Party Wall etc. Act 1996 (“the 1996 Act”). Although a similar provision has been in existence in Inner London since the Metropolitan Building Act 1855 and more recently has been generally applicable in England and Wales under the 1996 Act, there appear to be no reported decisions on the meaning of that subsection.

The only relevant commentary on section 12(1) of the 1996 Act is contained at page 106 of the Party Wall Explained (2nd Edition) produced by the well respected Pyramus & Thisbee Club (“the Green Book”). That society of people interested in party wall matters is named after the adjoining owners in Roman mythology who, unlike some owners these days, exchanged words of affection through a crack in the party wall.

In the commentary on section 12(1) in the Green Book the authors say as follows:

“Security can only be requested if the building owner intends to exercise rights “conferred by this Act”, ie 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.”

The central question on this appeal from an award under the 1996 Act is whether security can be requested when works are being carried out only on the building owner’s land and not just when works are being carried out on the land of the adjoining owner, as suggested in that commentary.

Under section 10(17) of the 1996 Act appeals from an award of the third surveyor under the Act are to be brought in the County Court. These proceedings were commenced in the Bournemouth County Court. The parties applied to have the matter transferred to the Technology and Construction Court at the High Court in London. As the statutory appeal is required to be made to the County Court I raised the question of my jurisdiction and, after the hearing, received written submissions from the parties on this issue.

In the event, the parties are agreed that I can proceed by using the powers under section 5(3) of the County Courts Act 1984 which provides that “...every judge of the High Court...shall, by virtue of his office, be capable of sitting as a judge for any county court district in England and Wales...”. In addition the parties agree not to take any point on the basis that I do not have jurisdiction to decide this appeal.

The parties also referred me to section 42 of the County Courts Act 1984 which provides at section 42(2) that “a county court may order the transfer of any proceedings before it to the High Court”. They also refer to the decision of the Court of Appeal in Zissis v Lukomski [2006] EWCA Civ 341 at para 24 where Sir Peter Gibson referred to the decision of His Honour Judge Humphrey LLoyd QC in Chartered Society of Physiotherapy v Simmonds Church Smiles [1995] EGLR 155. In that case Judge LLoyd QC had dealt with an appeal under the relevant section of the previous 1939 Act which had been transferred to the High Court as official referees’ business.

In Zissis the Court of Appeal did not deal with the question of whether the appeal could be brought in the High Court because the appeal in that case was from Brentford County Court and the issue was whether CPR Part 52 applied to an appeal under section 10(17) of the 1996 Act. In such circumstances I do not consider that the decision in Zissis supports the ability to bring an appeal in the High Court by transferring an appeal to the County Court to the High Court under s.42 of the County Courts Act 1984.

However, in the Chartered Society case Judge LLloyd QC said at 156 that “the appeal was transferred (by virtue of section 42 of the County Courts Act 1984) to the High Court as official referees' business on May 25 1994.” That was an appeal under the 1939 Act which provided at section 55(n) that:

“Either of the parties to the difference may within fourteen days after the delivery of an award made under this section appeal to the county court against the award and the following provisions shall have effect: —

(i)

Subject as hereafter in this paragraph provided the county court may rescind the award or modify it in such manner and make such order as to costs as it thinks fit;”

Under the 1939 Act section 55(n)(ii) then provided that if the matter related to a claim for more than £100, “all proceedings in the county court shall be stayed and the appellant may bring an action in the High Court against the other party to the difference.” Section 55(o) then dealt with such an action brought in the High Court. Judge LLoyd QC had to deal with an issue, Issue (B), which was “Whether the appellant is entitled to prosecute an appeal under section 55(n)(ii).”

In dealing with Issue (B) he said this at 156:

“The respondent's first submission was that as a result of the transfer from county court there was before the court the appeal which was formerly before the county court, and not the type of proceedings in the High Court for which provision made in section 55(o) of the Act. Although it would therefore be technically open to this court to apply section 55(n)(ii) (as the conditions there set out would be satisfied since the appellant was insured and the value of any award was clearly going to be over £100) and thus to stay the proceedings and to require fresh proceedings to be brought in the High Court, it would not be sensible to do so. The respondent is clearly right in this submission and for practical purposes issue (B) disappears, but it will be answered in the affirmative. I did not understand the appellant to submit to the contrary once it became clear that the respondent accepted that the appeal was before the High Court, by virtue of the transfer, as an appeal under section 55(n)(i).”

In that case there was therefore acceptance that the appeal under section 55(n)(i) was before the High Court because of the transfer and the court went on to consider the main issue which was the nature of an appeal, whether it was by way of review or re-hearing.

In my judgment, because an appeal under section 10(17) of the 1996 Act is a creature of statute, this court cannot ignore the fact that the county court is the appropriate court and seize jurisdiction which has not been given to it. However, given the importance of the matter and the fact that the parties have agreed that the appeal should be determined in the TCC in London, I consider that it was appropriate for this appeal to be dealt with in the High Court. In the circumstances I consider that the proper route for me to deal with this case is for me to sit as judge of the County Court under section 5(3) of the County Courts Act 1994 having transferred the case to the Technology and Construction Court at the Central London Civil Justice Centre.

In the event, as the parties have expressly consented to my dealing with this matter in the High Court then, as in the Chartered Society case an alternative route would be for me to transfer the case to the High Court under section 42 of the County Courts Act 1994.

The Appellant, Mr Geoffrey Kaye, is the adjoining owner who lives at 126 Panorama Road, Sandbanks, Poole a house which, as shown in a photograph produced at the hearing, is of modern construction and has a glass facade. The Respondent, Mr Matthew Lawrence, is the building owner and he owns a site at 124 Panorama Road where he intends to carry out construction works. By a Notice dated 29 June 2009 Mr Lawrence gave Mr Kaye notice under section 6(1) and 6(2) of the 1996 Act that “it is intended to build within 3 and 6 metres of your building and to a depth as defined in the Act, by carrying out the works as detailed below.” In capital letters it said “IT IS NOT PROPOSED TO UNDERPIN OR OTHERWISE STRENGTHEN THE FOUNDATIONS OF YOUR BUILDING”.

The Notice stated that if Mr Kaye did not consent to the works within 14 days he was deemed to have dissented under section 6(7) of the 1996 Act and a difference would be deemed to have arisen. It further stated that, in such a case, Mr Lawrence would appoint Mr Darren Frias-Robles as his Surveyor. On the standard form attached to that notice Mr Kaye responded on 8 July 2009 to say that he dissented from the above works and confirmed that a dispute had therefore arisen between himself and Mr Lawrence and he appointed BE Willis Partnership as his Surveyor for the purpose of resolving the dispute in accordance with section 10 of the 1996 Act. The two surveyors then appointed Mark Whittingham as the third Surveyor and by an award dated 19 January 2010 Mr Whittingham determined certain disputed items pursuant to section 10(11) of the 1996 Act.

In respect of disputed item 1, the potential for vibration induced or subsidence damage to Mr Kaye’s property during the work to 124 Panorama Road, Mr Whittingham stated that the building owner was to amend the design of the contiguous piled retaining wall and the amended design calculations were to be provided to the adjoining owner’s Surveyor for review and agreement. In relation to disputed item 2, the need for supplementary measures to prevent loss of retained sand between the contiguous piles, Mr Whittingham found that the proposed method for sealing the gaps between the piles was not appropriate and that the building owner should therefore provide amended proposals to address this issue together with details of the proposed method of dewatering 124 Panorama Road and the intended means of protecting 126 Panorama Road against possible adverse effects, for review and agreement by the adjoining owner’s Surveyor.

In relation to disputed item 3 which gives rise to this appeal, there was a request to provide a bond or project-specific insurance policy in respect of potential damage to 126 Panorama Road during the works to 124 Panorama Road, Mr Whittingham stated as follows at paragraphs 8 and 9 of the award:

“A bond or other form of security cannot be requested under s12(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.

Each member of the design team and also the Building Owner are to obtain Professional Indemnity Insurance cover to a minimum value of £2m. Evidence of maintenance of such cover for a period of two years following completion of the substructure works is to be provided to the Adjoining Owner.”

In a supporting document to his Party Wall Award Mr Whittingham cited at paragraph 5.15 the relevant passage from the Green Book set out in paragraph 3 above. He said this at paragraph 5.18:

“Given the granular nature of the soils underlying the site and the scope of the basement works proposed it is considered likely that any structural damage to the adjoining houses associated with vibration or ground movement would become apparent reasonably quickly.”

As a result he said at paragraph 5.19 of the supporting document that, provided that each member of the design team and the developer had professional indemnity cover to a minimum value of say £2m and evidence of maintenance of such cover was provided to the joint owner for a period of two years following completion of the substructure, then he did not consider that any supplementary project-specific insurance ought to be necessary over and above those already agreed.

The contentions of the parties on this appeal have been set out in submissions served on behalf of the Appellant and responded to on behalf of the Respondent. In addition the Respondent provided a skeleton argument.

It is convenient at this stage to set out the full wording of section 12 (1) of the Act which is in the following terms:

“Security for expenses

An adjoining owner may serve a notice requiring the building owner before he begins any work in the exercise of his rights conferred by this Act to give security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.”

On behalf of the Appellant Ms Sarah Hannaford QC submits that the plain meaning of section 12(1) is that an adjoining owner has the right to request security from a building owner who intends to carry out “any work in the exercise of rights conferred by this Act”. She contends that section 12(1) contains no restriction on the right to request security and is not limited to cases where the building owner intends carrying out work to the adjoining owner’s property. She submits that if that had been the intention it could easily have been stated. She submits that the “rights conferred by this Act” include the rights derived from sections 6(1) and 6(2) as well as those in sections 1 and 2.

She points to the definition of “building Owner” at section 20 of the 1996 Act. That section provides that in the 1996 Act,

“unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them –

...

“building owner” means an owner of land who is desirous of exercising rights under this Act;”

Whilst she accepts that at common law the building owner has a right to carry out operations within three and six metres of an adjoining building provided that this does not give rise to an actionable tort by the adjoining owner, she submits that where notice is given under the provisions of the 1996 Act those rights cannot be exercised and that the rights of the building owner depend either on consent or on the determination of the rights by an award under the 1996 Act. She relies on the definition of building owner as being an owner “desirous of exercising rights under this Act” and submits that those rights include rights under sections 6(1) and 6(2).

She submits that when the purpose of the provision is considered, it makes no sense to differentiate between work carried out on the adjoining owner’s land and work carried out on the building owner’s land. She points out that, particularly on the facts of this case, as indicated in paragraph 5.18 of Mr Whittingham’s supporting document, damage could arise from excavation on the building owner’s land because of the granular nature of the soils and the scope of the basement works. That she says gives rise to the need for security much more than certain works which might otherwise be carried out on the adjoining owner’s property. Therefore, Ms Hannaford QC submits that Mr Whittingham was wrong in failing to provide for security and that section 12(1) of the 1996 Act does not limit security to cases where the building owner is proposing to carry out some work to the adjoining owner’s land or property.

On behalf of the Respondent Mr Martin Hutchings submits that the important words in Section 12(1) are the reference to “works in the exercise of the rights conferred by this Act”. He submits that the reference to “rights conferred to this Act” must be taken as a reference to the following explicit rights.

He submits that none of these rights are rights which Mr Lawrence has proposed to or intends to exercise pursuant to the Notice. He says that the award was only made in respect of the Notice which Mr Lawrence was required to serve because he intended to excavate on his own land within the specified distances of Mr Kaye’s land. He submits that the effect of sections 6(1) and 6(2) is not to confer rights on Mr Lawrence but precisely the opposite. He submits that it restricts Mr Lawrence’s common law rights because it requires him to serve a Notice on Mr Kaye even though he is intending to do nothing on Mr Kaye’s land nor is he intending anything in relation to any party wall or other structure on the boundary of their respective lands. He submits that without serving a Section 6(5) Notice Mr Lawrence cannot build on his own land within the specified distances and that service of the required Notice under Section 6(5) cannot amount to the exercise of “conferred rights”.

He points to the use of the wording “before he begins any work in the exercise of the rights conferred by this Act” in Section 12(1) and draws a distinction between that and other wording including the wording “in respect of any matter connected with any work to which this Act relates” which is used in Section 10(1) to define the meaning of a dispute. He also draws support from the wording of section 12(2) which, he says, assists in showing that the trigger for the right to seek security under section 12(1) is the exercise of one of the explicit rights which he submits are “rights conferred by this Act.” As a result he submits that Mr Whittingham was correct in determining by his award that he did not have jurisdiction to make an award for security against Mr Lawrence in respect of the works which were the subject of Mr Lawrence’s Notice under section 6(5) of the Act.

He submits that elsewhere in the Act the phrase “by reason of any work executed in pursuance of this Act” is used where a more general application is intended compared to the phrase “exercising any rights conferred by the Act”: see section 7 (2), Section 7(3), 8(1) and 12(1).

The 1996 Act follows closely the provisions of the London Building Acts. As was stated by the Earl of Lytton in the House of Lords during the Parliamentary committee stages of the Party Wall Bill, “The intention remains, as always, that the Bill will follow as closely as possible the London Building Acts which are its role model and the precedents and practice which have been established for inner London over a long period of time.”

The London Building Acts were derived from the Metropolitan Building Act 1855 and the London Building Act 1894. The London Building Act 1930 and the London Building Act 1935 were then followed by the London Building Acts (Amendment) Act 1939 and these Acts together were known as the London Building Acts 1930 to 1939.

The provision relating to security was contained in section 87 of the 1855 Act which provided that the Adjoining Owner could require the Building Owner “before commencing any Work which he may be authorized by this Act to execute” to give security. Under that Act the Building Owner had certain rights in section 83 as to party structures which now find expression in section 2(2) of the 1996 Act. There was no provision in relation to matters now dealt with under sections 1 or 6 of the 1996 Act.

The 1894 Act repeated at section 88 the provision in section 83 of the 1855 Act as to rights relating to party structures. It also brought in new provisions in section 87 which introduced rights of owners to erect walls on the line of junctions (similar to section 1 of the 1996 Act) and in section 93 which imposed an obligation to underpin or strengthen adjoining owner’s foundation when the building owner was constructing work within 10 feet of the adjoining owner’s building to a level lower than the foundations of that building (similar to section 6(1) of the 1996 Act). At section 94 there was a similar provision to section 87 of the 1855 Act as to the giving of security.

The 1930 Act repeated at section 113 the rights in section 87 of the 1894 Act, at section 114 the rights in section 88 of the 1894 Act and at section 119 the rights in section 93 of the 1894 Act. Section 121 contained a similar provision to section 94 of the 1894 Act as to the giving of security.

The 1939 Act then repeated those provisions but introduced two particular changes. At section 50(2) it introduced an obligation to underpin or strengthen adjoining owner’s foundation when the building owner was constructing work within 20 feet of the adjoining owner’s building and within a forty-five degree limit (similar to section 6(2) of the 1996 Act). It also amended the wording of section 57 which dealt with security so that the provision now applied to a building owner “before he begins any work in the exercise of the rights conferred by this Part of this Act.”

Mr Hutchings seeks to draw support for his submissions by the way in which the statutory provisions have developed. In essence he says that the security provision pre-dated the provisions now to be found in sections 6(1) and 6(2) of the 1996 Act; the 10 foot/3 metre rule introduced in 1894 did not restrict the rights of the building owner to build on his own land unlike section 6 of the 1996 Act and the change in the trigger for security from “before commencing any Work which he may be authorized by this Act to execute” to “before he begins any work in the exercise of the rights conferred by this Part of this Act” suggests that the intention was not to apply the requirement for security to the obligations in the 1939 Act which are similar to sections 6(1) and 6(2) of the 1996 Act.

He also says that the definition of “building owner” in the 1939 Act which was derived from the 1855, 1894 and 1930 Acts, did not fit in with the reference to “building owner” in section 50 (relating to the 10 foot/3m or 20 foot/6m provision) of the 1939 Act and the same was true of the definition of “building owner” in the 1894 Act and the 10 foot provision in section 93 of the 1894 Act. He says that an owner who wanted to build in the 10 foot/3m or 20 foot/6m area might not be “desirous of building a party wall or structure” as stated in the definition.

He submits that the meaning of “building owner” in section 6 of the 1996 Act cannot be read consistently with the definition in section 20 of the 1996 Act and is probably an anomaly carried over from the 1894 and 1939 Acts. As a result he submits that nothing is to be drawn from the fact that the definition in section 20 of the 1996 Act is “an owner of land who is desirous of exercising rights under this Act” and where the term building owner is used in section 6 of the 1996 Act it should be construed as referring to “an owner of land” only.

Ms Hannaford QC says that the court need have no reference to the various Acts which preceded the 1996 Act in order to construe sections 6 and 12(1) of the 1996 Act. She submits that there are differences in wording between section 6 of the 1996 Act and section 50 of the 1939 Act and between the definition of “building owner” under the two Acts and therefore it cannot be presumed that Parliament intended to replicate the position as it stood in the 1939 Act. Nor she says is this a case for the application of the Barras principle because this is not a case where the relevant wording used in the 1939 Act had been interpreted by the courts so that the replication of the same or similar wording would give rise to the conclusion that Parliament intended the 1996 Act to be interpreted in the same way as the predecessor Act or Acts.

She also submits that the rule in Pepper v Hart [1993] AC 593 has no application here. She referred to the speech of Lord Browne-Wilkinson at 634 D to E where he said:

“In my judgment, subject to the questions of the privileges of the House of Commons, reference to Parliamentary material should be permitted as an aid to the construction of legislation which is ambiguous or obscure or the literal meaning of which leads to an absurdity. Even in such cases references in court to Parliamentary material should only be permitted where such material clearly discloses the mischief aimed at or the legislative intention lying behind the ambiguous or obscure words. In the case of statements made in Parliament, as at present advised I cannot for see that any statement other than the statement of the Minister or other promoter of the Bill is likely to meet these criteria.”

She submits that, first, sections 6 and 12(1) of the 1996 Act are neither ambiguous nor obscure and their literal meaning does not lead to an absurdity. She further submits that there is nothing in the parliamentary material to assist in the interpretation of those provisions save for a reference to the purpose of section 6 being “to protect existing structures” and to there being “improved failsafe mechanisms within the Bill.”

In construing the statute the basic principles of construction to be followed are those which are set out in sections 195 and 197 of Bennion on Statutory Interpretation (Fifth Edition) at 548 to 552 referred to as the plain meaning rule and the commonsense construction rule. In relation to the plain meaning rule, as Lord Reid said in Pinner v Everett [1969] 1 WLR 1266 at 1273:

“In determining the meaning of any word or phrase in a statute the first question to ask always is what is the natural or ordinary meaning of that word of phrase in its context in the statute? It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intention of the legislature, that it is proper to look for some other possible meaning of the word or phrase. We have been warned again and again that it is wrong and dangerous to proceed by substituting some other words for the words of the statute.”

In relation to the commonsense construction rule, as stated in section 197 of Bennion, when considering “which of the opposing constructions of the enactment would give effect to the legislative intention, the court should presume that the legislator intended common sense to be used in construing the enactment.”

In this case the task is to construe sections 6 and 12(1) of the 1996 Act in accordance with those general principles. In doing so, whilst I am grateful to Mr Hutchings for his diligence in providing the legislative history which shows the development of the provisions, I am not persuaded that this is a case where I can derive assistance from similarities or differences in the provisions of the various statutes. Despite the diligence of counsel, they have been unable to find any previous decision which assists and the only relevant commentary which bears on the issue is essentially that in the Green Book cited at paragraph 3 above.

Equally, whilst there are two constructions put forward I have not found it necessary to enter into the realms of Parliamentary material because I have been able to resolve the issue without finding that the legislation is ambiguous or obscure or that the literal meaning leads to an absurdity, being the threshold requirements in Pepper v Hart. In any event, there is nothing in the Parliamentary material which is of assistance. It is evident that the purpose of section 6 is “to protect existing structures” by considering the provision itself and the general reference to “improved failsafe mechanisms” does not clearly disclose the mischief aimed at or the legislative intention lying behind section 12.

I now turn to consider the rival contentions of the parties on the meaning of section 12 of the 1996 Act. Much of the debate centres around the meaning of the phrase “any work in the exercise of the rights conferred by this Act” in section 12. The right of the adjoining owner to require the building owner to give security depends on notice being given to the building owner before he begins such work.

Mr Hutchings has carried out a careful textual analysis and has identified where in the 1996 Act the building owner has rights. This led him to submit that it is only work in the exercise of those “rights” to which the provisions of section 12 apply. Thus his contention is that the rights which give rise to the requirement for security under section 12 are limited to sections 1(3), 1(6), 2, 6(3) and 8(1) of the Act. In the case of sections 1(3), 6(3) and 8(1) there is no express reference to “right” in the sub-section but Mr Hutchings contends that those provisions give the building owner rights.

He submits that Parliament has chosen to make a distinction between work carried out under the exercise of “rights” and work otherwise executed pursuant to the 1996 Act. He further submits that where rights are given under the 1996 Act they are almost always on land of the adjoining owner, although he accepts that this may not always be the case. For instance, under section 2(2)(f) the work permitted is “to cut into a party structure for any purpose” and such cutting into the party structure may be carried out entirely on the building owner’s land. He says that the right given in section 2(2)(f) to carry out work on the adjoining land is a right which supplements the common law right.

He also says that section 10(12)(c) permits the third surveyor in his award to determine “any other matter arising out of or incidental to the dispute including the costs of making the award.” That, he submits, is a broad power which permits the award to deal with such matters as insurance as it does in this case. However, he submits that this does not give the ability to award security when it is not given in section 12.

I agree with Ms Hannaford QC that the distinction which Mr Hutchings seeks to make between provisions that give rights and those which do not is an artificial one. The 1996 Act provides that the building owner must give notice if he wishes to carry out work under sections 1, 2 and 6. If the matter is not agreed between the parties, the matter has to be resolved by an award of the surveyors or the third surveyor. Unless and until that happens the building owner cannot carry out the work and then can only carry out the work in accordance with the agreement or the award.

There is no doubt that, as Mr Hutchings submits, the provisions of the 1996 Act use different phrases to describe the subject matter of the Act. Thus, in particular, section 7(1) like section 12(1) talks about “any right conferred on him by this Act” and section 7(2) talks about “any work executed in pursuance of this Act”. The question, though, is whether they give rise to an intended distinction. He says that in this way the statute distinguishes between provisions which give rise to rights and those which give rise to work executed in pursuance of the Act. He submits that the provisions of section 6(1) and 6(2) fall into the latter category and that section 12(1) does not apply to that work because any work carried out under those provisions is not “work in the exercise of the rights in pursuance of this Act” to which section 12(1) does not apply.

I do not consider that the use of different phrases within the Act leads to the conclusion that they were applying to different subject matter. I agree with Ms Hannaford QC that in the context of sections 7(1) and 7(2), there is no commonsense reason why the obligation of the building owner in section 7(1) not to cause “unnecessary inconvenience” should not apply to section 6(1) and 6(2) works but the obligation in section 7(2) to compensate for any loss or damage should apply to section 6(1) and 6(2) works.

It is evident from the provisions relied on by Mr Hutchings as giving rights, such as section 2(2)(f) that, even within those provisions, all the relevant work could be carried out on the property of the building owner. In such circumstances I do not consider that it could be argued that security would only apply to work being carried out on the adjoining owner’s land. For instance, cutting into the party structure on the building owner’s land could weaken the structure and cause damage to the structure on the adjoining owner’s land. On this basis, whilst the views expressed by the Pyramus & Thisbee Club command respect, I do not consider that they are correct in saying that security can only be requested when the building owner is proposing to carry out some work to the adjoining owner’s land or property and not if he is simply excavating his own land.

There is therefore no sensible reason based on a distinction between work on an adjoining owner’s land and on the building owner’s land for the provisions of security to apply only to sections 1(3), 1(6), 2, 6(3) and 8(1) of the Act and not to section 6(1) and 6(2).

Mr Hutchings seeks to distinguish between rights that do not exist at common law and therefore only exist under the 1996 Act and rights that exist at common law and which are regulated by the 1996 Act.

I was referred to two decisions which deal with aspects of rights under predecessor provisions of the 1996 Act. First, in Selby v Whitbread & Co [1917] 1 K.B. 736, McCardie J had to deal with a question of whether common law rights of support co-existed with the provisions of the London Building Act 1894. At 752 he said this:

“Did such rights co-exist conjointly with the respective rights of the plaintiffs and the defendants under the London Building Act of 1894 in respect of rebuilding operations. In my opinion the answer is clearly No. The plaintiffs' and defendants' premises were within the area of the Act. The Act dealt in a striking and exhaustive fashion with the respective rights of owners within the statutory area whose land or buildings adjoined. An examination of the code at once shows that common law rights are dealt with in a revolutionary manner. The two sets of rights, namely, the rights at common law and the rights under the Act of 1894 (which followed the Act of 1855), are quite inconsistent with one another. The plaintiffs' common law rights are subject to the defendants' statutory rights. A new set of respective obligations has been introduced. The common law was seen to be insufficient for the adjustment of modern complex conditions. Hence I think that the Act of 1894 is not an addition to but in substitution for the common law with respect to matters which fall within the Act. It is a governing and exhaustive code, and the common law is by implication repealed. I follow the views on this point of Jessel M.R. in the case of Standard Bank of British South America v. Stokes (1878) 9 Ch. D. 68 at 73, Warrington J. in Lewis v. Charing Cross Ry. Co. [1906] 1 Ch. 508 at 516, and also the dictum of Collins M.R. in Leadbetter v. Marylebone Corporation [1904] 2 K. B. 893 at 897. I therefore hold that the plaintiffs cannot succeed upon their claim at common law inasmuch as the defendants' party wall notice had been duly given under the provisions of the Act of 1894.”

In the more recent case of Louis and Louis v Sadiq (1997) 74 P. & C.R. 325 a building owner had commenced work without operating the procedures under the London Building Acts (Amendment) Act 1939 but then, after an injunction was taken out by the adjoining owner, had complied with the procedures. The Court of Appeal had to consider whether the building owner’s liability at common law for damages for nuisance was excluded or reduced by the provisions of that Act. In holding that such liability was not excluded Evans LJ, giving a judgment with which the other members of the court agreed, referred to authorities including Selby v Whitbread and said at 332:

“These authorities establish, in my judgment, that the appellant would not have been liable in nuisance if he had given notice, or obtained consent, in accordance with the Act and then done no more than was agreed or was approved by the surveyors. But then, no damage would have been caused to the respondents' house, save in the party wall itself, and in that respect no liability would have arisen. The issue raised in the present case is whether the appellant's liability at common law is either excluded or reduced by the provisions of the Act which he invoked, eventually, after the nuisance had arisen.

I would have no hesitation in rejecting this submission even without reference to authority, because in my judgment there is nothing in the Act which can be said to have this effect. The adjoining owner's common law rights are supplanted when the statute is invoked, which can have the effect of safeguarding the building owner from common law liabilities when he complies with the statutory procedures, just as he may incur liabilities under the statute which did not exist at common law (the Standard Bank decision). But if he commits an actionable nuisance without giving notice and without obtaining consent, he cannot rely upon a statutory defence under procedures with which ex hypothesi he has failed to comply. If he does then give notice he will in due course acquire statutory authority for whatever works are approved or agreed, but in my judgment this does not relieve him from liability for the continuing nuisance which he has unlawfully committed, until such time as and to the extent that such authority is obtained.”

These authorities show that, when the provisions of the relevant Act are operated, the common law rights are “supplanted” or “substituted” by the rights under the Act in relation to matters dealt with under the Act. Mr Hutchings says that these cases were dealing with what is now sections 1 and 2 of the 1996 Act and not with the equivalent of sections 6(1) and 6(2). He points to the provision of section 6(10), which finds no equivalent in sections 1 or 2, under which the building owner is not relieved from “any liability to which he would otherwise be subject for injury to any adjoining owner or adjoining occupier by reason of work executed by him.” He says that this shows that sections 6(1) and 6(2) do not supplant or substitute the common law rights.

I accept that, as Ms Hannaford QC points out, section 6(10) preserves common law rights for injury but not for loss and damage which is dealt with under section 7(2). Also as she says, without this provision, the inference would be that section 6 did affect the rights of the adjoining owner. In my judgment this supports the fact that the rights of the building owner were supplanted or substituted by section 6, so that the right to carry out works within 3 or 6 metres of the boundary was supplanted by the provisions of section 6 of the 1996 Act which preserve certain rights under section 6(10).

I therefore consider that in accordance with the authorities cited above, the common law rights are supplanted and substituted by the provisions of the Act and that this applies as much to sections 6(1) and 6(2) as it does to section 6(3) or any other provision of the 1996 Act. I do not consider that there is a proper distinction between rights that only exist under the 1996 Act and rights that exist at common law and which are regulated by the 1996 Act. The Act creates new rights which do not exist at common law permitting the building owner to carry out work on the land of the adjoining owner. However, whilst at common law the building owner would have a right to carry out work on their own land, those rights in relation to the area within 3 or 6 metres of the boundary are supplanted or substituted by the provisions of sections 6(1) and 6(2) of the 1996 Act.

I consider that this approach is supported, as Ms Hannaford QC submits, by the definition of building owner as being “an owner of land who is desirous of exercising rights under this Act.” This indicates that the building owner is exercising rights under the 1996 Act when he acts as such. This would include occasions when, under sections 6(1) and 6(2) of the 1996 Act, he carries out excavation within 3 metres or 6 metres of the boundary. In order to carry out that excavation he must give notice of his proposals and he has the right or, if required by the adjoining owner, the obligation to “underpin or otherwise strengthen or safeguard the foundations of the building or structure of the adjoining owner” under section 6(3). These are supplanted or substituted rights which he is exercising under sections 6(1) and 6(2).

On my reading of section 12(1) of the 1996 Act, it applies to all cases where the building owner is exercising rights under the Act and that includes exercising the supplanted or substituted rights under sections 6(1) and 6(2). There is no reason why it should apply only to work on the adjoining owner’s land and the provisions of the statute do not draw a clear distinction in that respect. Further, in principle and on the facts of this case, the carrying out of works within 3 or 6 metres of the boundary would be as likely to cause loss or damage so as to justify security as would works carried out under section 6(3) or other provisions of the 1996 Act. Further, in cases where work is being carried out under a number of sections of the Act, it does not make sense to grant security for some works but not other works when, even on Mr Hutchings’ submissions, liability for loss and damage under section 7(2) would apply to all works.

I should add that given the wide terms of section 10(12)(c), as accepted by Mr Hutchings, I see no reason why the award cannot also deal with security under that provision and I understand that commonly, as here, such matters as insurance are included under this provision. I consider that this broad power is consistent with section 12(10) applying to all provisions of the Act, including sections 6(1) and 6(2)

Accordingly, for the reasons set out above, in my judgment the third surveyor erred in law in construing section 12(1).

First, he erred in holding that the Appellant was not entitled to security under section 12(1) for work carried out under sections 6(1) or 6(2) of the 1996 Act because he wrongly held that the building owner was not exercising rights conferred by the Act in carrying out such work. As set out above sections 6(1) and 6(2) of the 1996 Act do confer rights and section 12(1) security can be requested for that work.

Secondly, there is no requirement in the 1996 Act that security can only be requested where the building owner is proposing to carry out some work to the adjoining owner’s land or property.

As a result paragraph 8 of the Award should have read that “A bond or other form of security can be requested under section 12(1) of the Party Wall etc Act 1996 where the owner intends to exercise rights conferred by section 6(1) or 6(2) of the Act and section 12(1) applies where the building owner is proposing under the provisions of the Act to carry out work to his land or work to the adjoining owner’s land.”