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Does the “No notice, no Act” party wall decision leave us in a no win situation?
  • Jan 24, 2023
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by Tim Reid, Counsel at Hogan Lovells

For many property practitioners, whose work comes within the orbit of the Party Wall etc. Act 1996 (PWA 1996), the High Court’s decision in Power and another v Shah earlier this year only confirmed what they already believed: if a building owner has not served a party wall notice before embarking on their works, an adjoining owner cannot invoke the dispute resolution process under section 10 of the PWA 1996 to seek redress and compensation.

But what does that mean in practical terms for the adjoining owner, and is either party better off as a result?

Power and another v Shah
The issue before the High Court in Power v Shah was relatively narrow. A building owner had carried out works on their property without serving any notices on his neighbours (Mr and Mrs Power) under the PWA 1996, believing that the PWA 1996 was not invoked by works of the sort being carried out, which included the removal of a chimney breast.

After the works had commenced, the Powers claimed that the works had damaged their property and they purported to appoint a party wall surveyor under the PWA 1996, who proceeded to make an award that required the building owner to make a payment of £4,630 to the Powers.

The award was appealed to the County Court, which dismissed the award on the basis that the dispute resolution process under the PWA 1996 could not be invoked and an award could not be validly made, where the building owner had not triggered the statutory regime by service of a party wall notice. The High Court agreed with the County Court, holding that the dispute resolution process under the PWA 1996 cannot be triggered unilaterally by an adjoining owner and the PWA 1996 cannot be invoked retrospectively once an adjoining owner has decided that they have suffered loss or damage.

“No notice, no Act, and no winner”
I cannot help thinking that “No notice, no Act” means “No notice, no Act, and no winner”.  When the statutory process under the PWA 1996 is available but is not followed, it is not only the adjoining owner who is deprived of rights that it should have been able to exercise if the Act had been brought into play.

In Power v Shah, the building owner claimed that they believed the PWA 1996 didn’t apply to their works, hence their failure to serve notice (itself a breach of statutory duty). It appears that they were wrong, and any building owner who passes up the opportunity to serve notices under the PWA 1996 deprives themselves of the rights and protections afforded to a building owner under the Act. This includes a right to enter upon the adjoining owner’s land and a right to have any dispute with their neighbour resolved under the section 10 process by  independent and specialist party wall surveyors.

The adjoining owner is similarly deprived of the ability to seek a party wall award providing it with financial compensation for loss or damage. They cannot serve an enforceable counter-notice requiring the building owner to incorporate additional works under sections 4(1) and 6(3), and they will not see the benefit of an award put together by specialist surveyors charged with ensuring (among other things) that the works are carried out in an appropriate manner.

The absence of available remedies under the PWA 1996 also forces the aggrieved adjoining owner to embark on what are arguably more time consuming and expensive dispute resolution processes:

• A County Court damages claim carries with it significant court fees and the under-resourced court system is already under a lot of strain, meaning long delays before a trial.

• Injunction proceedings are notoriously costly for an applicant, who will usually have to pay into court a cross-undertaking for the respondent’s damages as a condition of obtaining an injunction. The court might also refuse an injunction if the adjoining owner has acted too late, and the works have already been carried out.

Although we now have a binding authority providing welcome clarification that the PWA 1996 regime will not be engaged where the building owner has failed to serve a party wall notice, it is difficult to see how this position could benefit either party to the dispute.

The PWA 1996 should not be seen as a costly burden on building owners, but as something that confers on them and their neighbour valuable rights, together with a streamlined and specialist dispute resolution process. To my mind, a failure to avail yourself of the statutory process can be costly for both building owner and adjoining owner, and building owners shouldn’t hesitate to serve the appropriate statutory notices if they think there is a possibility of the PWA 1996 Act applying to their works.

This article first appeared on the Practical Law Construction blog.