PROPERTY JOURNAL

Fair principles for party walls

Surveyors should take care to avoid bias and potential conflicts of interest when working on party walls

Author: Angela Gregson

11 March 2019

The role of a party wall surveyor is a unique one. During the course of a surveyor's retainer, the duties placed on them change.

When a surveyor is first appointed, this appointment is a straightforward one: it is based on the contract between the surveyor and the appointing property owner and the common-law duty of care that arises between them. The party wall surveyor must act with the reasonable skill and care that could be reasonably be expected of such a professional who is competent. Therefore if they fail, for example, to ensure that a notice has been served on the correct party, they may be liable to their client for damages.

Matters become more complicated once a party wall surveyor is appointed or selected pursuant to section 10 of the Party Wall etc. Act 1996. Once appointed under the Act, the surveyor has in addition to their duties to their client a statutory duty to resolve any actual or deemed dispute pursuant to section 10. Those duties must also be exercised with reasonable care and skill.

There is some guidance in case law on the duties of party wall surveyors. In the unreported case Longmire v Maldura (29 January 2015), His Honour Judge Bailey at the Central London County Court held that surveyors appointed under the Act hold a quasi-judicial function, and as such cannot delegate that function to others – even to other surveyors in their own practices – and it is the appointed surveyor who must sign the award. This emphasises the fact that the appointment of a party wall surveyor under the Act is personal to them and not the appointment of their company.

Further helpful guidance on this point was given by HHJ Bailey in the unreported Barberini v Stancati (2016), where he stated:"the decision-making involved in an award cannot be delegated ... However, any work that is necessary to enable the decision can be delegated. I refer to the condition survey, engineering calculations, drawings and matters of that sort". Therefore, the duties of party wall surveyors in this regard are quite clear; they may delegate the fact-finding part of their role, but they must not delegate any of their quasi-judicial functions.

It is generally accepted that party wall surveyors perform a quasi-judicial function. In the unreported case Mills v Savage (2016), HHJ Bailey said: "party wall surveyors are exercising a quasi-arbitral function. They are bound by the rules of natural justice. It is axiomatic that, in considering and making an award, a party wall surveyor – and this must include the third surveyor – must enable the parties to make submissions if they wish and must give due considerations to any submissions made."

To be clear, the rules of natural justice are rules of fair play, originally developed by the courts of equity to control the decisions of inferior courts, and then gradually extended, particularly in the 20th century, to apply equally to the decisions of administrative and domestic tribunals and any authority exercising an administrative power that affects a persona's status, rights or liabilities. Any decision reached in contravention of natural justice is void as ultra vires; that is, beyond their powers.

"Party wall surveyors perform a quasi-judicial function and as such cannot delegate that function to others"

When it comes to natural justice, there are two principal rules.

Nemo judex in causa sua (or in propria causa): this is the rule against bias, that is, against departure from the standard of even-handed justice by those who occupy judicial office. No person may be a judge in their own cause, so that any decision, however fair it may seem, is invalid if made by a person with any financial or other interest in the outcome or any known bias that might have affected their impartiality (see R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [1999] 2 WLR 272 (HL); Porter v Magill [2001] UKHL 67, [2002] 2 AC 357; Davidson v Scottish Ministers [2004] UKHL 34, [2005] SC 7).

Audi alteram partem: this means "hear the other side". A decision cannot stand unless the person directly affected by it was given a fair opportunity both to state their case and to know and answer the other side's (see R v Chief Constable of North Wales Police, ex p Evans [1982] 1 WLR 1155 (HL); R v Army Board of the Defence Council, ex p Anderson [1992] QB 169; R v Secretary of State for the Home Department, ex p Doody [1994] 1 AC 531 (HL)).

The rules of natural justice set a minimum standard of procedural fairness. In the context of appointing party wall surveyors, the rule of natural justice that surveyors will encounter most regularly is that of bias: it is my understanding that it is not unusual to appoint a family member or employee as one's party wall surveyor, or for party wall surveyors to appoint close friends as the third surveyor. In order to avoid the potential of an award being deemed void and unenforceable due to a breach of the rules of natural justice, no such appointments should be made if at all avoidable. Appointing owners should select independent surveyors where possible.

There are clear parallels between the duties owed by surveyors to their clients and those other professionals owe their clients. In Barker v Baxendale Walker [2017] EWCA Civ 2056, a Court of Appeal case about a solicitor's negligence in relation to advice given on a tax avoidance scheme, Lady Justice Asplin stated that the relevant test is whether a reasonably competent solicitor in the defendant firm's position would have provided a specific warning, given the "significant risk" that the interpretation of the law was wrong and that the structure adopted could be successfully challenged.

The Court of Appeal held that, even where a solicitor's interpretation was likely to be correct, there could still be an obligation to draw to the client's attention the risk of an alternative interpretation, and that it could be negligent to fail to do so. LJ Asplin stated "the lawyer ... must evaluate the legal position and determine whether in all of the circumstances [they] should advise [their] client that there is a significant risk that the view that [they have] taken about the substantive matter in question may be wrong".

This case has particular relevance in the field of party wall law as there are many instances where more than one interpretation might legitimately be taken. In cases where there may be a "significant risk" that the interpretation the party wall surveyor is giving of the law may be wrong, they are under a duty to warn the client about this. If they fail to do so, then they may be acting negligently.

The role of a party wall surveyor is a complicated one. Party wall surveyors should therefore be careful to avoid the potential pitfalls.

angelagregson@childandchild.co.uk

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