When is a party wall surveyor not a party wall surveyor?

 Nicholas Isaac KC explores the implications of recent case law on the jurisdiction of party wall surveyors under the Party Wall etc. Act 1996, including when surveyors become functus officio and the extent of their ability to deal with subsequent disputes.

When does a party wall surveyor become functus officio (“having performed his office”) in relation to a dispute under section 10 of the Party Wall etc. Act 1996 (“the Act”)? Are party wall surveyors functus when a substantive award is made or do they retain residual jurisdiction to deal with subsequent disputes? If so, to what extent?

Party wall surveyors tend to assume that they retain jurisdiction to make subsequent awards to resolve subsequent disputes between the building owner and adjoining owner. In fact, there appear to be two provisos to the continuing existence of such jurisdiction: (1) The existence and extent of a subsequent dispute; and (2) The extent to which the party wall surveyors’ express and/or implied appointment extends to such subsequent disputes. This article explores the second of those provisos.

Recent case law

The case of Fernando v LB Newham decided by HHJ Parfitt at the Mayor’s and City of London County Court on 3 June 2024 has caused a good deal of consternation amongst party wall surveyors. In that case, an appeal under section 10(17) of the, the Court set aside an award awarding compensation to an adjoining owner: “on jurisdictional grounds for the reasons summarised in the Annex to this order”. The relevant part of the annex provided as follows:

1. “On 21 February 2021 the First Respondent served notice under the Party Wall etc Act 1996 (“PWA”). A dispute arose and an award settled that dispute on 22 February 2012.

2. A new dispute arose between the parties regarding damage to the Appellant’s property. This dispute was the subject of court proceedings and settled by a Tomlin Order in November 2013.

3. Thereafter further damage accrued to the Appellant’s property and the Appellant wishes compensation for the totality of these losses (which appear substantial).

4. The surveyors appointed under the 2021 notice had become functus following the resolution of that dispute. Further the parties’ own resolution contained in the Tomlin Order resolved issues of damages up to that date. The existence of those proceedings was a plain indicator that the surveyors were not accepted by the parties as having any on-going jurisdiction (such as might otherwise have formed as estoppel).

5. The further awards would appear to have been made without jurisdiction and are consequentially void…” This decision is consistent with HHJ Parfitt’s decision in the earlier unreported case of K Group Holdings Inc v Saidco International SA decided at Central London County Court on 19 July 2021 where the judge said: “what cannot happen is for the surveyor to take for himself a sort of overarching jurisdiction to determine anything that might arise at any point in relation to [the adjoining owner’s property] and the works that were done between 2009 and 2013 simply on the basis of the 2009 award… There was no relevant dispute.”

The implications

The most common secondary dispute occurs when the building owner’s works cause damage to the adjoining owner’s property. The issue between the parties is then the extent of the damage properly attributable to the building owner’s works and the quantum of compensation payable in respect of such damage. HHJ Parfitt’s decisions in Fernando and Saidco have led parties to question whether and to what extent party wall surveyors retain jurisdiction to make subsequent “addendum” awards after an initial award has been made.

On analysis, it appears that there are two situations where the appointed party wall surveyors will not have jurisdiction to resolve disputes subsequent to the initial dispute in respect of which they were appointed: (1) Where it can properly be said that the initial dispute has been fully resolved by the initial award; and/or (2) Where the surveyors’ letters of appointment are insufficient to cover their appointment in respect of subsequent disputes.

In the first case, whilst many substantive awards will deal with all matters comprehensively, thus rendering the surveyors functus, the surveyors will retain jurisdiction where there are – expressly or impliedly – matters that remain in dispute arising from the notice and deemed dispute. Common examples might be the quantum of the adjoining owner’s surveyors reasonable fees, the provision of suitable method statements in respect of the notifiable works, or the provision of appropriate scaffolding designs in respect of those works.

The second case illustrates a problem and simultaneously suggests a practical solution. Party wall surveyors must be appointed in writing under section 10(1) of the Act. Party wall organisations and individual surveyors tend to use standard form appointment letters that differ depending on whether the appointment is in respect of a building owner or adjoining owner. Whilst some of the commonly-used wording in building owners’ surveyors’ appointments is sufficient to cover disputes subsequent to the initial (usually deemed) dispute, that used in adjoining owners’ surveyors’ appointments rarely is. The author suggests that all party wall surveyors carefully review their standard form appointment letters to ensure that the do cover secondary and/or subsequent disputes to the initial dispute in respect of which the surveyors are appointed.

This article was first published by Estates Gazette and can be found here.