Two heads may be better than one in a party wall dispute, but should the developer always pay for both?

The Party Wall etc Act 1996 offers parties to a party wall dispute two options for settling their differences: concur in the appointment of a single agreed surveyor or each appoint their own surveyor. The surveyor or surveyors then settle the disputed matter in an award, the reasonable costs of which are normally borne by the building owner.

Whilst a building owner, particularly a homeowner undertaking a domestic project, may prefer the agreed surveyor route as it is likely to be less costly than if two surveyors are involved, conventional thinking is that an adjoining owner should be free to opt for either route without being penalised on costs. The unreported case of Amir-Siddique v Kowaliw & Anor (18 May 2018), heard by His Honour Judge Bailey in the Central London County Court, reminds the unwary that is not always the case.

In the aforementioned case, the building owner (Ms Amir-Siddique) appealed against the costs element of a party wall award, which authorised her proposed works. She claimed that the adjoining owners (Mr & Mrs Kowaliw) had acted unreasonably by declining to let her concur in the appointment of the adjoining owners’ preferred surveyor as the agreed surveyor and, in doing so, caused her to incur unnecessary cost. She sought an order that the adjoining owners pay all the fees she incurred, including fees charged by the appointed surveyors for making the award (£1,500 inc VAT charged by their surveyor and £595 charged by her surveyor), plus her earlier surveyor’s fee for serving notice (£180).

His Honour Judge Bailey stated:

“The standard practice of requiring the building owner to pay the fees both of his and of the adjoining owner’s party wall surveyor must be subject to two provisos. First the fees in question must be reasonable (see s 10(13))… Secondly, the building owner will not be required to pay the adjoining owner’s surveyor’s costs when these have resulted from unreasonable conduct either on the part of the adjoining owner or the surveyor. The adjoining owner must act reasonably…”

“There can be no comprehensive definition of unreasonable conduct for these purposes. The reasonableness or otherwise of any person’s conduct is to be determined against the background of the relevant facts. There must however always be an objective element in the determination. The conduct of any individual has to be set against the standards to be expected generally throughout society.”

The judge held that:

1. The adjoining owners had not acted unreasonably by not reciprocating the courtesy and consideration afforded to them eight years earlier by the building owner (then the adjoining owner), when they (then the building owners) undertook similar work, and by declining to enter into an agreement outside the 1996 Act that would avoid the statutory party wall procedure and associated cost.
2. The adjoining owners had not acted unreasonably within the context of the Act by requiring satisfaction on a matter that they would not be entitled to in a party wall context as a condition of their agreement outside the Act. (The matter related to the precise siting of a dormer window that was proposed to be erected wholly on the building owner’s property.)
3. The adjoining owners had acted unreasonably by not permitting their preferred surveyor to act as agreed surveyor, apparently for no reason, when the surveyor himself was willing to do so and they were aware the building owner wished to keep costs to a minimum. The judge remarked:“The Respondents felt entitled to insist on the “two-surveyor route” but not, in my judgment, on the basis that the Appellant had to pay all the additional costs.”
4. The building owner was liable to pay the fee of the adjoining owners’ surveyor (£1,500), as she would have had to pay that even if the surveyor had acted as agreed surveyor. However, the adjoining owners were liable to reimburse the building owner the £595 fee charged by her appointed surveyor, in light of the fact that the adjoining owners’ unreasonable behaviour had caused the building owner to incur that “wholly unnecessary cost”.

Analysis and commentary

It may seem surprising, on the face of it, that an adjoining owner who opts for the two-surveyor route could be found liable for some of the costs of the award. However, on closer examination of the facts, the judgment is logical.

One purpose of the 1996 Act is to provide an expeditious and cost-effective method of settling any disputes that might arise. Wherever possible, parties should reach agreement themselves, particularly if the proposed works are minor and/or not intrusive. However, in reality, adjoining owners are often concerned that their interests will not be properly protected unless they dissent and appoint a surveyor to settle matters.

The Government’s Explanatory Booklet on the 1996 Act advises building owners who are unable to reach agreement with their neighbour that “the next best thing is to agree with them on appointing … an “Agreed Surveyor”… Alternatively, each owner can appoint a surveyor to draw up the award together.” It advises adjoining owners who are in a similar position, “in these circumstances, and particularly in residential circumstances where surveyor’s fees would significantly increase the project costs, the appointment of an agreed surveyor to resolve the dispute is preferable, especially if the proposed surveyor is not involved in your neighbour’s project.”

Often the building owner will indicate, at the time of serving notice, which surveyor they would intend to appoint in the event of a dispute arising and invite the adjoining owner, should they wish to dissent, to consider concurring in the appointment of the said surveyor as agreed surveyor or otherwise state the name of the surveyor they prefer to appoint. At that point, it would not be unreasonable for the adjoining owner to appoint their preferred surveyor and to expect the reasonable costs to be met by the building owner, in most normal circumstances. However, if the building owner wishes to concur in the appointment of the adjoining owner’s preferred surveyor as agreed surveyor, and if the surveyor is happy to be appointed in that capacity, then refusal by the adjoining owner is likely to amount to unreasonable conduct, unless there is good reason.

So what might a good reason be for an adjoining owner preferring the two-surveyor route to an agreed surveyor? The table below sets out some of the factors that might influence the decision.

Another consideration, as the Government’s Explanatory Booklet puts it, is “if you have chosen to have just the one surveyor … then there is no Third Surveyor to call upon [if you do not agree with what the surveyor is doing]. This is why you should take care in selecting a surveyor and more particularly as to whether you just need the one ‘Agreed Surveyor’.”

Whichever route is chosen, while costs (fees) may be a consideration, it should not be the prime motivation for the selection of any surveyor. Competence and experience are key, as once the appointment is made it cannot be rescinded!

Read the judgment on the website of Nick Isaac of Tanfield Chambers.