UK: Party Wall Act Update: Counter-Notices And Statutory Duties

The Technology & Construction Court (in the County Court sitting in Birmingham) has clarified the purpose of a counter-notice issued under section 4 of the Party Wall etc. Act 1996 ("the Act"), and considered the scope of the statutory duty imposed by the Act.

Background

In Bridgland –v- Earlsmead Estates Limited [2015] EWHC B8 (TCC), a dispute arose between the two owners of adjoining commercial units in Stoke-on-Trent. Between 2007 and 2009, Earlsmead had demolished its own unit, leaving Bridgland's previously enclosed flank wall partially exposed and susceptible to damp from the famous wet and windy conditions of Staffordshire. Earlsmead failed to serve any notice under section 3 of the Act (which requires a building owner to serve a "party structure notice" on an adjoining owner in order to propose certain works affecting a party structure).

Bridgland issued court proceedings, with the full trial scheduled to take place in early 2016.

But in the meantime, Earlsmead made two alternative applications in respect of the following paragraphs of the Particulars of Claim:

"(i) The defendant failed to serve on the claimant a notice of the kind described in section 3 of the Party Wall Act 1996, thereby depriving the claimant of the opportunity to avail herself of the counter-notice regime described in section 4...Had the claimant been afforded this opportunity she would have been able to require the works to be performed in such a way as to prevent the issues of damp arising.

(ii) In breach of section 7(1)...the defendant failed to demolish the Trafalgar Works in such a way as to avoid unnecessary inconvenience being caused to the claimant."

Under section 4 of the Act, an adjoining owner may serve a counter-notice in response to a section 3 notice. This notice, to summarise, allows the adjoining to require certain work to be carried out in addition to or alongside that proposed by the building owner in the initial notice.

Earlsmead applied for the above paragraphs to be struck out (on the basis that they diclosed no reasonable claim) or alternatively for summary judgment to be granted in its favour (on the basis that this part of Bridgland's claim had no reasonable prospect of succeeding).

Decision of the Court

His Honour Judge Grant agreed with the application for strike-out.

He described his decision as arising out of "a relatively short point of statutory construction". His point was that the section 4 counter-notice (if put to use) only allows an adjoining owner to require other work to be carried out on the party structure which may reasonably be required for said owner's convenience. This other work is, by necessity, not the same work as that originally proposed by the building owner.

Therefore, a section 4 counter-notice cannot legitimately specify the manner in which proposed works must be carried out. It follows that Bridgland could not be said to have lost the opportunity to "require" the works to be performed in a certain way. The paragraphs in question failed to advance a reasonable cause of action and were therefore struck out.

On sub-paragraph (ii) and section 7 of the Act, the decision was the same. Again, this was on the basis of statutory interpretation of the relevant provisions of the Act. In this case, HHJ Grant found that section 7(1) did not create a separate and distinct statutory duty, on the part of the building owner, not to cause the adjoining owner unnecessary inconvenience. In fact, this section is to be viewed as a supplementary section that acts to qualify other rights provided by other parts of the Act.  For this reason, the breach of statutory duty asserted by Bridgland was not a reasonable cause of action, and the paragraph should be struck out accordingly.

Following paragraph 28 of the judgment, the adjoining owner must first "exercise and extinguish their remedies provided by the 1996 Act before resorting to court proceedings".

Conclusion

The judgment, whilst ostensibly a ruling on two relatively straightforward questions of statutory interpretation, is a helpful reminder to consider the wording of the Act strictly and carefully at all times (although it should be remembered that this is not a binding precedent, as a County Court decision on an interim application).

With regard to section 4, the Court has clarified that a counter-notice cannot mandate the manner of carrying out proposed works. Furthermore, parties who are entangled in court proceedings involving the Act should be careful not to claim, in blind fashion, a generic breach of statutory duty without being sure of their footing.

If nothing else, this case reminds us of the value of taking expert advice on the provisions of the Act, and that misunderstanding the regime established by the Act can be a costly mistake.

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