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									 Legal Round-up of 2010

           Smith -v- Jones


Lecture given to the Pyramus & Thisbie Club,
    Surrey Branch, on 18 February 2011
                      by
             Matthew Hearsum
           Morrisons Solicitors LLP
            Smith v Jones

      A Moot before Mr Justice Akenhead
                      on
                 21 July 2010

at the Technology and Construction Court, London
             The Cast

Mr Jones         Building Owner

Mrs Taylor       Adjoining Owner

Mr Smith         Adjoining Owner’s
                 Surveyor
Mr Smith:

    “Don’t worry about my fees, they
    will be dealt with in the award
    and Mr Jones will have to pay
    them”
“11.   That the Building Owner shall immediately on the
       signing of this Award pay the Adjoining Owner’s
       Surveyor’s fees of £1,500 plus VAT in connection
       with the preparation of this Award, and one
       subsequent inspection of the works. In the event of
       damage being caused or other contingencies or
       variations arising, a further fee shall be payable.”
                  X
            Magistrates Court
           Appeal to High Court




                    Intervenes
Mr Smith
                                  Mr Jones




                    Mrs
                   Taylor
               Mr Smith’s Case

s. 10(13) PWeA 1996:

     “The reasonable costs … shall be paid by
     such of the parties as the surveyor or
     surveyors making the award determine”
                            Mr Smith’s Case

                 Surveyor                     Surveyor




Building Owner                                     Adjoining Owner
         Mrs Taylor’s Case

1.   Nothing in the Letter of Appointment

2.   Mr Smith told her she would not be liable for his fees


3.   Award says that Mr Jones is to pay Mr Smith’s Fees

4.   Supported Argument that Award was a contract
                    Mrs Taylor’s Case
Norweb PLC v Dixon [1995] 3 All ER 952


Dyson J:
(now Lord Dyson)

           “…a relationship which results from some degree of
           legal compulsion is nevertheless regarded as
           contractual because the parties still have considerable
           freedom to regulate its incidents.”
         Mrs Taylor’s Case

1.   Nothing in the Letter of Appointment

2.   Mr Smith told her she would not be liable for his fees


3.   Award says that Mr Jones is to pay Mr Smith’s Fees

4.   Support Argument that Award is a contract

5.   Apply general principals of Statutory Interpretation
                 Mrs Taylor’s Case
The Court should interpret legislation:


     1.      In favour of a common sense construction and against
             absurdity

     2.      Against an unworkable or impractical result


     3.      Against an inconvenient result
           Mr Jones’s Case

1.   Irrelevant whether Mr Smith can recover against Mrs
     Taylor

2.   Award is not contractual

3.   Court must look at s. 10 in it’s entirety
                  Others

Chris Cuthbert       Donald Jessop
Robin Ainsworth      Simon Levy
Andrew Smith         Matthew Hearsum
David Bowden
                  Decision

1.   “Appeal” Dismissed


2.   Only BO and AO can enforce or appeal an Award


3.   Parliament did not intend surveyors to be able to enforce
     or appeal

4.   Award is not a contract
               Conclusion

1.   Surveyors cannot enforce on their awards directly


2.   Take an Assignment of the Debt
                            Conclusion
Investors Compensation Scheme v West Bromwich Building Society
[1998] 1 all ER 98


Lord Hoffman:

            “The assignee either acquires the right to the money (or part
            of the money) or he does not. If he does, he necessarily
            acquires whatever remedies are available to recover the
            money or the part which has been assigned to him.”
               Conclusion

1.   Surveyors cannot enforce on their awards directly


2.   Take an Assignment of the Debt


3.   Include more detailed Terms & Conditions in letter of
     appointment
Legal Round-up of 2010

         Kaye -v- Lawrence

Lecture given to the Pyramus & Thisbe Club,
    Surrey Branch, on 18 February 2011
                      by
             Matthew Hearsum
          Morrisons Solicitors LLP
    Sandbanks, Poole




x
£25,000 in 1965!
                        The Cast

126 Panorama Road   -     Mr Kaye          -   AO

124 Panorama Road   -     Mr Lawrence      -   BO

3rd Surveyor        -     Mr Whittingham
                             The Award

“A bond or other form of security cannot be requested under section 12(1)
of the Party Wall etc Act unless the building owner intends to exercise
rights conferred by the Act as [sic] is proposing to carry out some work to
the Adjoining Owner’s land or property. That is not the case in this
instance.

…
Each member of the design team and also the Building Owner are to
obtain Professional Indemnity Insurance cover to a minimum value of £2m.
Evidence of maintenance of such cover for a period of two years following
completion of the substructure works is to be provided to the Adjoining
Owner.”
                        The Green Book


“Security can only be requested if the building owner intends to exercise
rights “conferred by this Act”, ie he is proposing to carry out some work to
the adjoining owner’s land or property. If he is simply excavating his own
land then the adjoining owner has no right to receive security under this
section”
             The “Supporting Document”

“Given the granular nature of the soils underlying the site and the scope of
the basements works proposed it is considered likely that any structural
damage to the adjoining houses associated with vibration or ground
movement would become apparent reasonably quickly”
                       Which Court?
Kaye v Lawrence [2010] EWHC 2678


Ramsey J:


       “13.    In my judgment, because an appeal under s. 10(17)
               of the 1996 Act is a creature of statute, this court
               cannot ignore the fact that the county court is the
               appropriate court and seize jurisdiction which has
               not been given to it”
           The Issue in Dispute

1.   Can the Surveyors make an award of Security for
     works under s. 6?

2.   Should the Surveyors make an Award of Security?
               A failure to determine?
Kaye v Lawrence [2010] EWHC 2678


Ramsey J:

       “4.     “The central question on this appeal …is whether
               security can be requested when works are being
               carried out only on the building owner’s land and not
               just when works are being carried out on the land of
               the adjoining owner, as suggested in [the Green
               Book] Commentary”
           The Issue in Dispute

1.   Can the Surveyors make an award of Security for
     works under s. 6?

2.   Should the Surveyors make an Award of Security?
               Mr Kaye’s Case
1.   s. 12(1) contains no such restriction or limitation

2.   When a s. 6 notice is served BO’s common law rights
     cease to apply

3.   No sense in differentiating between work on BO’s land
     and work on AO’s land
          Mr Lawrence’s Case
1.   Distinction between “rights conferred” and “works in
     pursuance”

2.   Historic development of the relevant sections
                  Historic Development
The Metropolitan Building Act 1855


 “87.     Any Adjoining Owner may, if he thinks fit, by Notice in Writing
          given by himself of his agent, require the Building Owner,
          before commencing any Work which he may be authorized
          by this Act to execute, to give such Security as may be
          agreed upon, or, in case of Difference, may be settled by a
          Judge of the County Court, for the Payment of all such Costs
          and Compensation in respect of such Work as may be payable
          by such Building Owner.”
                                 s. 2    s. 6(1)   s. 6(2)   s. 12
Metropolitan Building Act 1855   s. 83     X         X       “work which he
                                                             may be authorised
                                                             …to execute
                  Historic Development
The London Building Act 1894


 “ 94.   An adjoining owner may if he think fit by notice in writing require
         the building owner (before commencing any work which he
         may be authorised by this Part of this Act to execute) to give
         such security as may be agreed upon or in the case of
         difference may be settled by a Judge of the County Court for
         the payment of all such expenses costs and compensation in
         respect of the work as may be payable by the building owner”
                                 s. 2    s. 6(1)   s. 6(2)   s. 12
Metropolitan Building Act 1855   s. 83     X         X       “work which he
                                                             may be authorised
                                                             …to execute
London Building Act 1895         s. 88   s. 93      X        “work which he
                                                             may be authorised
                                                             …to execute
                 Historic Development
The London Building Act 1930


 “121.   An adjoining owner may if he thinks fit by notice in writing
         require the building owner (before beginning any work which he
         may be authorised by this Part of this Act to execute) to give
         such security as may be agreed upon or in the case of
         difference as may be settled by the judge of the county court for
         the payment of all such expenses costs and compensation in
         respect of the work as may be payable by the building owner.”
                                 s. 2     s. 6(1)   s. 6(2)   s. 12
Metropolitan Building Act 1855   s. 83      X         X       “work which he
                                                              may be authorised
                                                              …to execute
London Building Act 1895         s. 88    s. 93      X        “work which he
                                                              may be authorised
                                                              …to execute

London Building Act 1930         s. 114   s. 119     X        “work which he
                                                              may be authorised
                                                              …to execute
                 Historic Development
The London Building Act 1939


 “57.    An adjoining owner may by notice in writing require the building
         owner before he begins any work in the exercise of the rights
         conferred by the Part of this Act to give such security as may be
         agreed between the owners of in the event of dispute
         determined by a judge of the county court for the payment of all
         such expenses costs and compensation in respect of the work
         as may be payable by the building owner”
                                  s. 2       s. 6(1)    s. 6(2)      s. 12
Metropolitan Building Act 1855    s. 83        X           X         “work which he
                                                                     may be authorised
                                                                     …to execute
London Building Act 1895          s. 88      s. 93        X          “work which he
                                                                     may be authorised
                                                                     …to execute

London Building Act 1930          s. 114     s. 119       X          “work which he
                                                                     may be authorised
                                                                     …to execute

London Building Act (Amendment)   s. 46    s. 50(1)(a) s. 50(1)(b)   “work in the exercise
Act 1939                                                             of the rights conferred
                                                                     by …this Act
                           Decision
1.   Historic analysis did not assist

2.   “Rights Conferred” & “Works in Pursuance” not different

              + no difference between s. 7(1) & s. 7(2)

              + s. 2(2)(f) works
                               Decision
Kaye v Lawrence [2010] EWHC 2678
Ramsey J:
  61.       I therefore consider that in accordance with the authorities
            cited above, the common law rights are supplanted and
            substituted by the provisions of the Act and that this applies
            as much to sections 6(1) and 6(2) as it does to section 6(3) or
            any other provision of the 1996 Act. I do not consider that
            there is a proper distinction between rights that only exist
            under the 1996 Act and rights that exist at common law and
            which are regulated by the 1996 Act …
                              Decision
Kaye v Lawrence [2010] EWHC 2678
Ramsey J:
  61.       …
            The Act creates new rights which do not exist at common law
            permitting the building owner to carry out work on the land of
            the adjoining owner. However, whilst at common law the
            building owner would have a right to carry out work on their
            own land, those rights in relation to the area within 3 or 6
            metres of the boundary are supplanted or substituted by the
            provisions of sections 6(1) and 6(2) of the 1996 Act.”
                             Decision
Selby v Whitbread & Co [1917] 1 KB 736
McCardie J:


     “the common law was seen to be insufficient for the adjustment of
     modern complex condition. Hence I think that the Act of 1894 is not
     an addition to but in substitution for the common law with respect to
     the matters which fall within the Act. It is a governing and
     exhaustive code, and the common law is by implication repealed.”
                     Conclusion
1.   Only a County Court Decision

           + but likely to be followed

2.   Limited to whether surveyors can order security

           + remember AO has to request security

3.   Other Implications
           + resolution of s. 1(5) & s. 8 ?

           + easier to obtain injunctions
                            About Me

                      Matthew Hearsum
                       Solicitor & Arbitrator
                      Morrisons Solicitors LLP

       Wimbledon                                    Woking
5th Floor, Sterling House                   2nd Floor, Cleary Court
6 – 10 St George’s Road                    169 Church Street East
       Wimbledon                                    Woking
   London SW19 1SY                            Surrey GU21 6HJ

                matthew.hearsum@morrlaw.com

								
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