In a recent decision of the Technology and Construction Court, it has been decided that the dispute resolution regime contained in the Party Wall etc. Act 1996 ("PWA") does not oust the court's inherent jurisdiction to provide declaratory relief. This means that the court is able to get involved in such disputes and provide directions to the surveyors as to how the dispute should be determined.
Background
The PWA governs the process to be followed when carrying out works either on or close to a property boundary. In the event of a dispute arising between the owners of neighbouring properties, section 10 of the PWA contains a complete code by which these disputes can be determined, without having to go to court. The PWA states that disputes "shall" be settled by the surveyors and gives the surveyors very wide powers, including the power to award appropriate compensation.
Facts of the case
In 2014 Lea Valley Developments carried out excavation works at its development site. The works were adjacent to a block of flats owner by Derbyshire and they caused severe damage to the block. The tenants had to vacate and it was accepted that there was no option but to demolish and rebuild the property. However, a dispute arose between the parties as to the basis on which compensation should be assessed: Derbyshire's surveyor argued that Lea Valley Developments should pay the full cost of demolishing and rebuilding the property; however, Lea Valley Developments' surveyor took the view that the appropriate measure was the diminution in value of the property.
One of the issues between the parties was whether, given the existence of a complete dispute resolution code within the PWA, the court had jurisdiction to determine how compensation should be calculated.
The decision
The court held that it did have the necessary jurisdiction to give this determination. The court has an inherent jurisdiction to give declaratory relief and "very clear wording" is needed to oust this: the PWA does not contain any such wording. As such the court was able to participate in dispute and identify the appropriate measure of compensation, while leaving the surveyors to determine the amount.
This is an interesting decision because there has been no previous authority on this issue; it suggests that there may be other situations in which the court is able to get involved, despite legislation appearing to provide a complete dispute resolution process.
For more information about the operation of the PWA, please see our briefing note Dealing with Party Walls.
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