Painless extraction from a Party Wall dispute – Lahrie Mohamed and Shehara Lahrie V Philip Antino and Raymond Stevens (2017)
There will be times when parties involved in a Party Wall process become disillusioned with the cost and inadequacies of the mechanism for resolving and determining issues between them. They are often left feeling trapped, facing every rising fees, and looking for a way out. The problem lies with s10(2) of the Party Wall Act 1996 (Act) which prevents a party from rescinding the appointment of a party wall surveyor.
This is the situation faced by the parties in Lahrie Mohamed and Shehara Lahrie V Philip Antino and Raymond Stevens. ( 2017) HH Judge Edward Bailey.
The facts were not unusual.
The, Claimants, home owners ( Owners) wished to carry our development and refurbishment work to their property which included the construction of a basement. Some of the works featured fell within the Act as ‘notifiable’ work.
The owners served a Party Wall Notice on the adjoining owners ( Neighbours). The Neighbours appointed a party wall representative, the First Defendant, Philip Antino ( Antino ), and the Owners appointed Michael Osborne ( Osborne ) a party wall surveyor. Antino and Osborne then in line with the usual process, agreed on the appointment of Raymond Stevens ( Stevens) , the Second Defendant, as the third surveyor.
The subterranean work was complex and required expert input before a re-design of the scheme was agreed and a substantive award was made in 2015. Shortly afterwards Stevens was replaced by Mr Redler, as the Third Surveyor.
There then followed a series of legal actions when the Owners and Neighbours fell out with each other during the course of the works. There was also discord between the Owners and Antino and the surveyors themselves.
In May 2016 a mediation took place at which Antino was excluded.
At the end of the process agreement was reached to compromise the issues between the Owner and the Neighbour. A consent order in the form of a Tomlin Order ( Order) was issued. Though the parties had agreed to end the dispute they had not resolved their differences. The Order provided a mechanism for resolving the differences then existing and any fresh issues which arose in the future. This provided for the issues to be resolved by an independent surveyor and an evaluator.
One of those issues to be determined in this way was the reasonable fee to be paid by the Owner in respect of the services provided by Antino, Stevens and Calder, an expert appointed by Antino to assist with the re-design of the scheme.
Essentially, the Order took the issues out of the jurisdiction of the Party Wall Act meaning the appointed Party Wall representatives were essentially left high and dry.
Antino was not happy and claimed the Order was ultra vires. He pointed to s10(2) of the Act where it requires all appointments to be in writing and not to be capable of rescission by either party. Antino and Stevens then wrote to the independent surveyor appointed under the Order to express their views, and as a result the surveyor decided he could no longer accept the appointment.
Antino then wrote to Redler and Stevens inviting them to make an award warning if they refused he would produce an ex parte award. Stevens supported Antino.
The Owners solicitor on learning of this wrote to Antino seeking an undertaking not to make or purport to make any award and threatening an injunction. In addition to this Redler disagreed with Antino pointing out the Order did not rescind the appointments under the Act but rather resolved the issues which meant there was nothing further for the surveyors to resolve under the Act. As will be seen Redler was spot on with his assessment.
Antino jumped on this communication and claimed that as there was a dispute between him and Redler this amounted to an issue under 10(12)( c) and 13 ( c) and was one which could be determined within the jurisdiction of the Act.
Antino then wrote to Stevens inviting him to resolve 11 areas of dispute in his role as Third Surveyor. In response the Owners solicitors applied for interim injunctive relief and pending the final hearing undertakings were supplied by Antino and Stevens.
At the substantive hearing which came before HH Judge Edward Bailey the claimant sought a declaration that Antino and Stevens had no locus to make further awards and for an injunction to prevent them from making any awards.
Essentially the issue to be determined was whether it was possible for parties by agreement or otherwise to contract out or avoid the operation of the Act.
The Judge dismissed Antino’s argument that the consent order amounted to an attempted recision of his appointment, and that of Mr Stevens, and was therefore contrary to s10 (2). The Consent Order did not, nor did it purport to rescind the appointments. Instead the Judge found its wording made it clear that there was no longer any dispute for the purposes of s10 of the Act between the parties.
The Parties had agreed a mechanism for considering and resolving any present and future differences so there was no longer any scope for a dispute between them. S10 only became engaged in the event of a dispute.
The Judge explained:
‘The 1996 Act provides a mechanism for resolving disputes; there must be a dispute for the resolution mechanism to be engaged. Once there is a dispute, whether actual or deemed, the resolution mechanism provided by the Act is mandatory. Section 10(1) is in mandatory terms, and engages “[w]here a dispute arises or is deemed to have arisen between a building owner and an adjoining owner” and providing that the owners, as ‘parties’ ‘shall concur in the appointment of one surveyor’ or ‘shall [each] appoint a surveyor’. But there must be a dispute before any appointments are made’.
In terms of future issues it was clear there there existed a perfectly reasonable and workable process for considering and determining these issues so there could never be any dispute for the purposes of s10.
As for the issues which arose and existed at the time of the Order relying on the present tense used within s10(10) the Judge found that ‘…..that if a matter ceases to be in dispute there is no dispute remaining to be settled by the surveyors.’ Therefore no need for the surveyors to proceed to make an award.
This the Judge went onto say was consistent with the Act and the policy of the Civil Procedure Rules:
‘The argument that the 1996 Act requires the surveyors to proceed to an award even where the parties have reached agreement would be wholly against the general principle that parties who are sui juris are free to make such agreements as they wish to make, provided that they are not illegal in nature. It is also against the clear policy of the CPR for the court either to restrain two parties from reaching an agreement on any subject matter which has been referred to party wall surveyors under the 1996 Act, or to hold unlawful and therefore unenforceable any agreement they do happen to make, simply on the basis that a reference has been made to the surveyors. Very clear statutory words would be required before the court would act in this way, and there are no such words in the 1996 Act.
One might ask why were the surveyors were so keen to keep the Owner and the Neighbour engaged within the the 1996 Act. In short the concern was fees and in Antino’s case the fear without an Award with his fees added he would not be able to avail himself of the summary process within the magistrates court to seek recovery of the fee if it was not paid’.
There was no question that either party was looking to avoid payment of the surveyor’s fees and the Judge found it perfectly reasonable for the parties to agree, as they did, that if there was any issue on this that it could not be determined outside the Act in accordance with the agreed process. The fact Antino was deprived of a particular avenue of enforcement was neither here nor there. Is in short there was no need for an Award to be made to record the fees of the surveyors.
The judge found :
‘In the ordinary course of events, however, it is to be anticipated that the adjoining owners will pay the fees of their appointed surveyor and any engineer engaged by them, and that the building owners will reimburse them for such payments. This provision of the Consent Order is consistent with the normal expectation on the question of fees. There is also the implication in the Consent Order that the adjoining owners will also meet the third surveyor’s fees, or part of them, and thus expect reimbursement of this expenditure by the building owners’.
So Antino and Stevens were left fully adrift not only in the hands of other surveyors ( those appointed under the Consent Order ) in terms of the assessment of their fees, but also having to meet a substantial cost lability for losing this action.
The practical implications here are worthy of note. The decision has created a means for those who start off in dispute with a solution to extract themselves from the Act and/or those who operate within it, if a stage is reached whereby a different mechanism for resolution of the issues can be agreed. It also helps those parties avoid the closed shop which exists between certain surveyors when it comes to determining between themselves how much they should pay each other. In this case the parties through the agreement established an independent and probably much cheaper mechanism for resolving any dispute over the amount of fee the owner had agreed to pay the surveyors and expert. This should come as a relief to those owners and neighbours who often find themselves facing high and disproportionate fees.
It would suggest that if parties become concerned at any time about the escalating fees of the surveyors within a party wall dispute, it is open to them to agree to end the dispute, and to refer their differences, both existing and present, to an outside mediator to consider and determine. As the surveyors found here to their extreme cost, there is very little then can do about this apart from claiming their reasonable fees.
This authority also suggests that even where a dispute has arisen, there is nothing to require a party wall surveyor to proceed to make an award where, as is often the case, the parties reach an agreement, and there is no longer a dispute between them. There is nothing to prevent them from recording their agreement in a different form, and to implement the terms thereof, without the need for an award. The award offers no more security than a written agreement, and is equally as enforceable.
David Pett. Solicitor
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