Party on down: why the Party Wall Act doesn’t stand up

The Party Wall Act 1996 has just been given an airing. A clumsy piece of legislation; too complicated – it’s high time that parliament took it apart. Just look at what happened in this tiddler of a case between neighbours. The idea of the legislation is not really to drag the ins and outs of bashing seven bells out of a chimney breast in front of three courts and five judges. But that’s what happened in this dispute between two neighbouring households in Dagenham: Power & Kyson vs Shah [2023] EWCA Civ 239.

What is meant to happen instead is that the disputing parties bring in a building surveyor. It’s much cheaper, too. A surveyor’s award decides what’s to be done and when and what safeguards are deployed. It’s called a party wall award.

The neighbours at 34 and 36 Bull Lane, Dagenham, live a few inches apart. Mr Raheel Shah at No 34 carried out works indoors. Next door, Mr and Mrs Panayiotou said the removal of the chimney breast at No 34 had caused damage to their home, No 36, and asked for £4,223 in compensation. No, said Mr Shah. As “adjoining owners”, the Panayiotous triggered the Party Wall Act, but Mr Shah said the works were nothing to do with that and refused to pay. That’s when the fun started.

The Party Wall Act’s wording requires a dispute – yet, paradoxically, the adjoining owner is not allowed to trigger the act. Only the building owner can do that

Truth to tell, the fun started about 800 years ago in London’s cheek-by-jowl timber houses, when the spread of fire drove people up the wall. By 1666 the Pudding Lane bakery affair had whipped up enthusiasm for an act of parliament called the London Building Act, which much later led on to the nationwide Party Wall Act 1996. In short, doing work on the boundary will trigger the act. However, there are complications.

The senior Court of Appeal judge, Peter Coulson, said in the Dagenham case: “This appeal raises a novel but important issue in connection with the Party Wall Act 1996.” Mr Shah, as “building owner”, didn’t use the act to give notice and describe the works to his neighbours. My guess is that he had never heard of the Party Wall Act, or just shrugged and bashed out the works on the wall. So the adjoining owners at No 36 triggered the procedure. If you are a lawyer, you might spot that the act’s wording requires a dispute – yet, paradoxically, “the adjoining owner is not allowed to trigger the act. Only the building owner can do that.” Rather than knocking down chimney breasts on their party walls, many lawyers are probably knocking their heads against a chimney breast trying to fathom what this act of parliament intends.

>>Also read: A quick guide to the Party Wall Act 1996: what it is and what work it covers

>>Also read: Home extension is building too

The act says: “A building owner shall serve on any adjoining owner a notice called a party structure notice.” This notice will give chapter and verse about the intended works, plus two months’ notice of the commencement and so on. The adjoining owner is then permitted to serve a counter notice, so as to crystallise a dispute. If the building owner says nothing, a “deemed dispute” arises and the neighbours then attempt to appoint an “agreed surveyor”, or choose to each select their own surveyor, who in turn appoints a third surveyor. By the way, all this rigmarole is paid for by the building owner. And if the building owner is lackadaisical or idle, then the adjoining owner will appoint a surveyor for their neighbour, and by now they will be firmly off the neighbour’s Christmas list.

Mr and Mrs Panayiotou, the adjoining owner in this case – you will remember that they were disgruntled about the works on the wall so they triggered the procedure. The two surveyors awarded them the £4,223 compensation and another £4,630 in surveyor’s fees, saying Mr Shah was to pay up. He said no. The Panayiotous then went to the central London county court, where the judge said the whole process was a waste of time because the act doesn’t allow the adjoining owner to take the initiative, even if the neighbour refuses to play ball. It requires the building owner to start that ball rolling. So the Panayiotous, this time with King’s counsel and another barrister, went on appeal to the High Court. Mr Justice Eyre said that no dispute had arisen because of technical rules in the Party Wall Act saying that a dispute requires a party structure notice by the building owner. By now the dispute was as big as the Fire of London – in fact but not in law, because no dispute can arise by virtue of a party structure notice issued by the adjoining owner. Mr and Mrs Panayiotou lost again.

So they went to the Court of Appeal. And lost again. No notice meant no dispute, which meant no Party Wall Act applied. The two surveyors’ award of compensation was void.

I shudder to think what the legal costs are of all this. We ought not to have an act of parliament that is so unfortunate. It needs big, red writing, with a big, red warning to adjoining owners to keep off. Their only route to compensation is via the common law in nuisance, trespass and so on.

As to improving the Party Wall Act, it goes without saying that it should be made much clearer about the trigger. Go further: introduce Construction Act adjudication for deciding compensation for damage done by the work. Make the relationship between building owner and adjoining owner a deemed construction contract under the 1996 act. Then invite the neighbour to the next barbecue.

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple