Ex parte awards under the Party Wall Etc. Act 1996 – Approach with caution
Few cases concerning the Party Wall Etc. Act 1996 (“the Act”) reach the Court of Appeal. Statutory appeals to the County Court under section 10(17) of the Act represent the vast majority of party wall cases litigated, and appeals from decisions of the County Court in such cases are second appeals for the purposes of the CPR, and must generally fulfil the “general public importance” requirement before permission to appeal to the Court of Appeal will be given.
In Patel & Anr v Peters & Others  EWCA Civ 335 the Court of Appeal turned its attention, for the first time, to ex parte awards made under section 10(6) and 10(7) of the Act.
Under section 10 of the Act disputes must be resolved by an award. In the most common situation, where the parties have each appointed a surveyor, and the two surveyors have selected a third surveyor, awards will usually be made by the parties’ surveyors jointly, or, where they cannot agree an award, by the third surveyor after referral to him. However, if one of the parties’ surveyors fails to co-operate in the making of an award, sections 10(6) and (7) of the Act provide for the other party’s surveyor to make an award on his own “ex parte”.
The routes to an ex parte award under section 10(6) and (7) are slightly different. Section 10(6) applies where the defaulting surveyor “refuses to act effectively”. Section 10(7) applies where the defaulting surveyor “neglects to act effectively for a period of ten days beginning with the day on which either party or the surveyor of the other party serves a request on him”. In each case, where a default has taken place, the non-defaulting surveyor “may proceed to act ex parte”.
In Patel it was the adjoining owner’s surveyor who made ex parte awards determining the quantum of his fees to be paid by the appellant building owners, relying both upon a refusal under section 10(6) and a neglect to act after notice under section 10(7).
Although the principle of liability for fees was not in issue, the two surveyors found themselves unable even to agree how to approach determination of the quantum of those fees. Grant Wright, the adjoining owner’s surveyor, wanted the two surveyors to go through his timesheets, which he provided in manuscript form. Justin Burns, the building owner’s surveyor, disagreed. He said he would judge on the basis of the time a competent surveyor should have spent on the matter. The adjoining owner relied upon a letter dated 21st December 2011 from Mr Wright to Mr Burns as a formal request under section 10(7) to go through the timesheets and agree the quantum of his reasonable fees.
Mr Burns did not reply until 6th January 2012, outside the ten-day period prescribed by the Act. In that reply Mr Burns repeated that he did not intend to go through the timesheets, and instead set out a figure for Mr Wright’s fees based on the time he said a competent surveyor should have spent in making the party wall awards. Mr Wright made three awards – there were three adjoining owners – on 7th February 2012, awarding his fees in full.
In the Court of Appeal, the decision turned on two points. First, whether an effective act outside the ten-day notice period under section 10(7) could prevent an ex parte award being made thereafter. Secondly, whether Mr Burns’ reply of 6th January was an effective act (and not a refusal to act).
At first instance HHJ Hand had said:
“But the Act does not require the party giving notice to take action immediately upon the expiration of the period. It only permits him or her to do so. In my judgment it creates a continuing state of affairs and I would venture to suggest, without deciding, because it is not covered by the preliminary issues, that the state of affairs ends either by the neglectful party taking action in respect of the subject matter of the request or by ‘the surveyor of the other party’ commencing to act ‘ex parte’.”
The Court of Appeal disagreed that this point was not covered by the preliminary issues, but agreed with HHJ Hand’s view as to the effect of section 10(7). Richards LJ, giving the leading judgment, said:
“I am in agreement with the view expressed by the judge on this question. Section10(7) empowers the requesting surveyor to proceed to act ex parte in respect of the subject matter of a request if (i) the surveyor on whom the request is served neglects to act effectively and (ii) a period of 10 days has elapsed since the request was served; but there is nothing in the subsection to suggest that if the “defaulting” surveyor brings his neglect to an end and acts effectively after the expiry of the 10 day period but before the requesting surveyor has proceeded to act ex parte, the requesting surveyor can nevertheless still proceed to act ex parte.” (para 26)
On the second point, the Court of Appeal was firmly of the view, on the facts, that Mr Burns’ letter was an effective act for section 10(7), and was not a refusal to act under section 10(6):
“He gave a reasoned justification for [his] refusal and put forward a reasonable alternative basis on which he said the fee should be calculated. He engaged head-on the subject-matter of the request and set out his position in respect of it” (para 29)
Although the Court of Appeal was at pains to say that this was a case which turned on its own facts, at least one other important lesson can be learnt from it, namely that ex parte awards under the Act should be a matter of last resort. As LJ Richards noted, this “was a classic situation for the involvement of the third surveyor, not for one of the surveyors to proceed ex parte”.