Power & Kyson v Shah [2023] EWCA Civ 239
In early March, the Court of Appeal handed down their decision in the case of Power & Kyson v Shah [2023] EWCA Civ 239. This is one of a handful of cases concerning the Party Wall Act 1996 (“the Act”), which is a testament to the way in which the Act operates circumventing the need for the Court’s intervention.
Interestingly, the issue at the forefront of Power & Kyson v Shah, that is that no party structure notice was served on the Appellant, came to light after the surveyors had correctly followed the dispute resolution procedure, which is set out in section 10 of the Act, and jointly made an award of compensation.
Background of the Case
In 2018 the building owner, Mr Shah, carried out works to his property which, he argued, did not fall within the remit of the Act and as a result he had not served notice under section 3 of the same. The adjoining property owners (Mr and Mrs Panayiotou), took issue with the works proceeding without notice to them and asserted he works caused damage to their property. They, therefore, sought the help of a surveyor, Mr Power. Mr Shah was not willing to appoint his own party wall surveyor. Following the procedure set out in the Act, one was therefore appointed on his behalf, Mr Kyson.
The two surveyors issued an award of compensation in favour of Mr and Mrs Panayiotou. Mr Shah did not pay. The two surveyors then bought proceedings in the Magistrates Court, under section 17 of the Act, to enforce the award. In response, a Part 8 Claim was issued by Mr Shah purporting that the award was null and void. In the first instance, HHJ Parfitt agreed with Mr Shah’s assertion and the award was deemed void.
The first appeal to the High Court occurred in February 2022 and was quickly dismissed by Eyre J and this brings us to the second appeal, bought in the Court of Appeal in March 2023
The Judgment
The decision to dismiss the first appeal, was upheld. The award remained void and the Court confirmed that the Act does not apply without first being invoked by way of a section 3 notice.
Lord Justice Coulson, at paragraph 25 of the Judgement stated that “the service of the notice is fundamental to the whole structure of this part of the Act”.
Impact of the decision
The Judgement clarified that the Act cannot be unilaterally invoked by one party without the engagement of the other. In cases such as this, the “aggrieved party” has common law remedies to rely upon (e.g. injunctive relief) as opposed to using the statutory resolution process set out in the Act which requires engagement from both sides.
The precursor to the Act was the London Building (Amendment) Act 1939 which required the building owner to serve a notice prior to carrying out works with the intention of resolving any disputes before they arose. The Act had much the same purpose - the intention to avoid disputes and prevent litigation. That being said, the construction of the Act to achieve the purpose can only go so far and on that point, LJ Coulson stated, at paragraph 23:
“Merely because a statute was intended to achieve a general result does not mean that its individual provisions have to be interpreted as providing for that general result if the language used Parliament simply does not warrant or justify it”
He goes on to explain that statutes often have multiple purposes and when interpreting them, the purposes can be conflicting. An important purpose of the Act was the transparency afforded by service of the section 3 notice to enable early negotiation and agreement on the extent of the works, effectively avoiding disputes altogether.
There is certainly some concern about the lasting effect of this case. surveyors cannot unilaterally trigger the section 10 dispute resolution process. As such aggrieved adjoining owners effected by works which have started without a notice being served, will need to rely on common law remedies to protect their property. Injunctive relief applications are often costly and time consuming which negates the purpose of the Act. This case highlights the need for stricter guidance pertaining to works to party walls in order to prevent the Court’s being overwhelmed with applications for injunctive relief. Perhaps an amendment to the Act to allow surveyors to unilaterally engage the section 10 procedure if one party is in default, or even a mandatory arbitration requirement for parties in dispute, to allow for a determination as to whether works fall under the remit of the Act itself?
In any event, this case certainly muddies the waters (or the walls)!
If you have any questions regarding this, please contact Abigail Laborero on 01788579579 or info@brethertons.co.uk.
