Judicial Guidance on challenging the fee of a Party Wall Act Surveyor

The recent County Court decision in Shamim Amir-Sidddique v Kowaliw and Gigonkowaliw ( 2018 ) has offered some well overdue judicial guidance on the steps to take when appealing the quantum of fees awarded to a party wall surveyor.

Facts 

The facts are pretty straight forward.

The Building owner decided to convert the loft in her property to provide further habitable space, work which also involved the removal of the chimney breast in the first floor front room.  This was clearly  work  that engaged the Party wall Act, though the building owner was hoping the Adjoining owner would return the courtesy she had previously afforded when similar works were undertaken by the Adjoining Owner without Party Wall engagement.

This did not happen, and the Building Owner was forced to serve a party wall notice.  There then followed some acrimonious exchanges over the appointment of the Adjoining Owner’s surveyor, mainly as a result of the Building Owners wish for the Adjoining Owner’s surveyor to act as a jointly appointed surveyor.  The  Adjoining Owner refused, and the Building Owner was forced to appoint a surveyor of her own.   An award was then issued, and the works were completed.  The award provided for the Building Owner to pay the fees of £1500 and her own surveyors fees of £595 and £180 ( the latter relating to the surveyor she had first appointed).

Even though having regard to the extent of the work undertaken the fees did not appear on the high side, the Building Owner appealed the fees aspect of the award.

The matter came before HH Judge Bailey, a Judge with a wealth of experience in party wall disputes. He acknowledged that although there were judges like himself who could drawing on experience, express a view on the reasonableness or otherwise of fees, it was necessary for a party who sought to challenge feed, to come to the court armed with expert evidence, and to also, before the hearing, provide the adjoining owners surveyor with the opportunity to be joined as party, and to be heard on the issue.
He explained:

‘Given the sum at stake, and the cost of mounting an evidence-based challenge to the fees the Appellant’s approach is understandable, but it puts the court in an impossible position. The jurisdiction of the court under s 10(17) of the 1996 Act is plainly wide enough to vary that part of an Award which covers the fees of the party wall surveyor. But the court has to act on evidence and give reasons for any decision. There is an additional complication where a party wall surveyor’s fees are challenged by an appellant. The respondent to the appeal will often have no particular interest in the outcome of the challenge to the surveyor’s fees. Accordingly the party wall surveyor whose fees are being challenged may find that his interests are not being properly protected. Where a party wall award appeal includes a challenge to a surveyor’s fees it is important that this is flagged up in the interim stages of the appeal. The surveyor concerned should then be given an opportunity to apply to be joined to the appeal as a second respondent so that he may take part in the appeal, be required to give disclosure where appropriate, and be permitted to adduce any evidence he wishes in support of his fees.’

The Court laid down some guidelines on the evidence it would expert to see when a party was challenging the reasonableness of fees, and in short this entails the need for expert evidence on the  following:

1. What would a reasonable party wall surveyor charge per hour  for the work in question. The Judge found that ‘There is, incidentally, no clear guidance from any authoritative source on charging rates for party wall surveyors, in contrast to the position in other professions’, and,
2. Analysis of the relevance and reasonableness of time spent on each item of work undertaken by the surveyor ( in effect to determine the reasonableness under s10 (13) ( see below) ).  This the Judge stated would involve the building owner obtaining a third party disclosure order against the adjoining owner surveyor to obtain his time sheets, documents, workings and other relevant papers. HH Judge Bailey acknowledged that there could be circumstances where the adjoining owner would be required to pay part of the fees of his own surveyor.

The Court commented that there are no principles upon which the surveyor or surveyors should act when making awards of costs when exercising their powers under s10(12) and (13) of the 1996 Act.  Looking at liability the Court noted the Act provides, in s 11(1), that except where there is specific provision to the contrary “expenses of work under this Act shall be defrayed by the building owner”. 

HH Judge Bailey reminded us that are provisos to this general  provision:

‘First the fees in question must be reasonable, see s 10(13). The building owner need not pay the adjoining owner’s surveyor’s fees where they are unreasonable in amount because, for example, the surveyor has sought to charge too high an hourly rate, or has charged for unnecessary work, or has taken an unreasonable amount of time to do the work that he has done.

Secondly, the building owner will not be required to pay the adjoining owner’s surveyor’s costs when these have resulted from unreasonable conduct either on the part of the adjoining owner or the surveyor. The adjoining owner must act reasonably.’

On this second proviso the Judge made specific reference to the case of Manu v Euroview Estates Ltd [2008] 1 EGLR 165, 176G, as detailing examples of the type of conduct that might persuade a court, namely:

‘taking pedantic and difficult points, making repeated requests for unnecessary information, insisting on obtaining unnecessary or unnecessarily extensive reports from structural engineers, and in conduct apparently designed to hinder or delay the making of an award.’

HH Judge Bailey added that:

‘The conduct of any individual has to be set against the standards to be expected generally throughout society.’

In the case the Building Owner argued 1) the Adjoining Owner’s refusal to reciprocate the courtesy she had previously afforded, and 2) the seeking of conditions on work that fell outside of the scope of the Act, and 3) the opposition to the Adjoining Owner surveyor acting as a jointly instructed surveyor, all amounted to conduct that would justify visiting all of the fees incurred on the Adjoining Owner.  The Judge was not persuaded on 1 and 2, but did consider it was unreasonable for the Adjoining Owner to refuse to allow the surveyor to act for both, and therefore directed the the Adjoining Owner pay the Building Owner’s surveyor’s ( second ) fees.

Practical Lessons

Hourly Rate 

If you are looking to challenge either on appeal, or on making submission to a third surveyor, the hourly rate charged by a surveyor make sure you adduce expert evidence, perhaps from a few  different surveyors.  In this case the Adjoining Owner actually reduced his hourly rate from £250 to £210 when it came to calculating his fee for the making of the award.  This compares pretty favourably to the hourly rate of some surveyors,  that can be as high as £350 per hour.

Unnecessary work ( e.g non party wall work) and or taking too long to complete work

This will involve a close and forensic look at the work undertaken by the surveyor after the surveyor has produced his working papers, either voluntarily, or by order.  The expert would be able to comment on the necessity of each element of work and having regard to the hourly rate charged assess whether the time taken to undertake the work was reasonable or otherwise.

Conduct of the party

This would in part be covered by the approach referred to above, and an expert would no doubt be expected to comment on whether as a result of the conduct of the appointing owner when compared to the standards expected ‘throughout society’, any work had taken place and/or  taken longer  to undertake.

Though not mentioned in the judgment it is clear that when looking at reasonableness the question of proportionality is also an important factor to take into account.

Adding the Surveyor 

If there is to be a challenge of the surveyors fees there is a need to ensure that before the hearing of the appeal, probably on directions, that the surveyor is given the opportunity to be joined as a party so that he/she can be heard.   The question of  seeking discovery of the surveyors papers should also be considered at this stage.

Conclusion 

In this case having regard to the nature of the works and complexity of the dialogue between the parties  the fees did not seem particularly high,  and the writer is surprised an appeal was launched.  The Building Owner seems fortunate to have succeeded, albeit on one of the three grounds, and it would be interesting to see how the costs of the appeal were apportioned.

David Pett – Solicitor

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