Party Walls and Costs - An Eyewateringly Wrong Decision - Dewar Hogan Solicitors. London.

Party Walls and costs

an eye-wateringly wrong decision!

Party Walls and costs – an eye-wateringly wrong decision!

Party Walls and costs – an eye-wateringly wrong decision!

Every now and then a judicial decision comes along which is so eye-wateringly wrong, in its consequences if not in its reasoning, that all well-intentioned people in the relevant field just know it will have to be corrected in due course either by the Court of Appeal or Parliament, and resolve with a sigh that in the meantime they will just have to put up with the consequences.

For some reason the field of party walls seems to be particularly prone to such decisions – one distinguished party wall surveyor of my acquaintance seldom greets me without the words ‘another bloody dreadful decision’ coming out of his mouth inside the first minute. And it is in that field that Mr Justice Holgate recently delivered a particularly magnificent specimen of this type in the case of The Queen on the application of Farrs Lane Developments Limited –v- Bristol Magistrates Court, with one James McAllister as an interested party.

The facts of the case were simple (the grand name arises because the actual case was a judicial review, but it doesn’t matter). Mr McAllister was appointed as a developer’s party wall surveyor. He made ten party wall awards with various adjoining owners, each of them declaring that the developer would pay his fees in a certain sum. The developer didn’t pay. Mr McAllister pursued them in the magistrates’ court; the magistrates’ court made an order in his favour, and the developer applied for judicial review of that decision.

The issue therefore was a stark one; does the Party Wall Act allow surveyors simply to declare that their fees are such and such an amount and that their appointing owner has to either pay them or appeal to the county court?

It’s fair to say that for a great many years nobody of any reputation in the field had ever dreamed that such an award could be made, so to that extent Mr McAllister should be congratulated on his ingenuity. The conventional view was that the tribunal composed of the three party wall surveyors is appointed to resolve disputes between the building owner and the adjoining owner, and that if it makes an order about costs it is, in substance even if not in form, an order that one owner (usually the building owner) reimburse the other (usually the adjoining owner) for the costs which the adjoining owner has incurred under the contract by which he appointed his own party wall surveyor, just like litigation. This view was even confirmed by a county court decision in which a surveyor, unpaid by his own appointing owner, sued not his own client but the building owner, relying on an award that said the building owner should pay the adjoining owner’s surveyor’s costs, and lost.

One might well feel for the unnamed surveyor in that case, who was at least trying to save his own appointing owner money and hassle. In Mr McAllister’s case, however, he was seeking to present his own appointing owner with a fait accompli, having sat in judgment on the amount of his own fees, in several cases without even an adjoining surveyor joining in the award.

The judgment proceeds, to this eye, with a dizzying series of non sequiturs, although one has to admit that literally read the Act could perhaps mean what Holgate thinks it should mean. Rather than a line by line critique, perhaps it’s more sensible to stand back and consider what would follow if this judgment stands.

First of all, was there anything wrong with the existing system? Of course not. Party wall surveyors can get themselves paid perfectly well. Nothing compels any party wall surveyor to accept any appointment save on terms he considers satisfactory. An agreed surveyor can make it clear that he will release his award only once his fees are paid. A third surveyor likewise (the Act envisages this). Any surveyor can ask for money on account, or agree any charging basis he wants. A party wall surveyor no more needs the unique right to adjudicate and assess his own fees than a solicitor acting in litigation would do – and for anyone who’s never seen the judiciary in action commenting on solicitors’ fees, it’s not too much to say that we solicitors are a fair way away from being allowed to do that.

Second, what is the complaint most frequently made about the party wall system? It is that once appointed a party’s surveyor is completely out of control. A surveyor can contest issues his appointing owner doesn’t care about at all, rack up fees his appointing owner doesn’t want him to in the imagined exercise of his duty or – worse, and not unheard of at all – in attempting to persuade his opposite number to agree his fees rack up costs for both sides and even the expense of an unsuccessful trip to the third surveyor, all of which costs will fall to be paid by his appointing owner.

Even worse, appointing owners tend to feel (often quite rightly) that the party wall surveyors are well known to one another, and (less often rightly) that they are allowing their previous acquaintance to affect how they deal with matters.  If the practice proposed by Mr Justice Holgate becomes commonplace, so that the party wall surveyors are resolving disputes not only between the two appointing owners, but between the appointing owner of one of the surveyors and the surveyor himself, perhaps with the assistance of a third surveyor whom the owner had no part in choosing but was chosen by the two party wall surveyors, then this perception in some quarters that the entire profession is a self-serving cabal is only going to continue.

These dangers surely outweigh the convenience to party wall surveyors this decision provides. The party wall professional bodies are presently preparing proposals for revisions to the Party Walls Etc. Act. One hopes that they will perceive the damage threatened to their wider interests should the practice suggested by this decision become widespread – there are some pretty rogues among party wall surveyors, who won’t hesitate to exploit it – and suggest a suitable amendment to make it clear that the Act was never intended to have the effect Mr Justice Holgate has held that it does.