Many party wall surveyors and legal practitioners have traditionally considered that the dispute resolution mechanism in the Party Wall etc. Act 1996 operates as long as there is a dispute between two property owners relating to applicable building work – and more so where damage has arisen.
The rationale for this is the absence of any express terms in the wording of the act about service of notice as a prerequisite for the operation of its provisions and, importantly, the appointment of surveyors. In this respect it is unlike its statutory predecessor, the London Building Acts (Amendment) Act 1939.
Shah v Power and Kyson  EWHC 209 (QB) has put the matter beyond doubt. In this recent case, a building owner carried out notifiable works without serving a notice on the adjoining owner in accordance with the 1996 Act.
The works in question caused damage to the adjoining owner's property, so the adjoining owner appointed a party wall surveyor, Kyson, to resolve matters. The building owner was invited to appoint a surveyor but declined. Kyson therefore appointed a surveyor, Power, for him, purportedly under section 10(4)(b) of the 1996 Act. The two surveyors then made an award dealing with compensation and their fees.
The building owner appealed the award, which was held by the county court to be void. The surveyors then appealed that decision in the High Court. The High Court dismissed the appeal and upheld the decision of the county court on the grounds of no notice, no act. That is, the provisions of the act are not invoked where notice has not been served. This naturally precludes the appointment of surveyors, as the act's dispute resolution scheme is also unavailable where the legislation itself has not been invoked.
The decision has also reminded surveyors that they do not have jurisdiction to make awards dealing with common law matters, as established in Reeves v Blake  EWCA Civ 611. Common law will apply where the act has not been brought in to play.
Shah runs the risk of becoming a rogue's charter. If a building owner does not wish to be troubled by the service of notice and the cost or delay of involving surveyors, why not ignore the act altogether?
Although the Shah decision could leave unnotified adjoining owners at risk, they are not without legal recourse.
In the first instance, a building owner who proceeds with notifiable works but does not serve notice will lose the benefit of the legislation, including rights of access to perform works in pursuance of the act. They will also run the risk of exposure to a claim under the common law.
The common law causes of action open to an adjoining owner include claims under the torts of nuisance, trespass and breach of statutory duty – that is, for failure to serve a notice in the first place – although the latter remains an area of unsettled law. A claim for negligence might also be brought in some situations, such as where works are carried out carelessly.
It is important to note that the act permits certain works that would ordinarily amount to a trespass, such as the projection of foundations over the legal boundary and access over the adjoining owner's property. Where the act applies, access over an adjoining owner's property to perform the works is also available, even where the adjoining owner has not given permission.
The act also permits what would otherwise amount to a nuisance, such as cutting away parts of the adjoining owner's property to accommodate the building owner's works. Clearly, these rights cannot be enjoyed by a building owner who fails to comply with the act, leaving the adjoining owner to bring the appropriate claim.
Where works are imminent – or have already commenced – the most attractive remedy for an adjoining owner will often be to apply for an injunction to restrain the building owner. The court may grant an injunction to prohibit the works where the adjoining owner can demonstrate that these threaten to adversely affect their rights.
However, the adjoining owner will need to act quickly. An injunction is a discretionary remedy, and the court will consider the promptness of any application before granting relief.
In light of the Shah decision, some building owners might now be tempted to start notifiable works without serving notice on the adjoining owner, in the hope the latter won't have the inclination or resources to take legal action to protect their rights. However, the outcome for an errant building owner could be an injunction preventing the completion of the works, or an order for damages and an order to pay the adjoining owner's legal costs.
Such a risk should persuade the wary building owner to consider their position carefully, particularly on complex projects where the inevitable delay caused by legal proceedings will increase costs. After all, the act was drafted for the purpose of keeping such neighbourly disputes out of court.
Related competencies include: Conflict avoidance, management and dispute resolution procedures, Legal/regulatory compliance