Hole in the wall

The Party Wall Act 1996 regulates work to existing party structures and shared boundary walls. It re-enacted provisions of legislation applying in London only, some of which go back to the mid-nineteenth century. More recent ancestors include the London Building Act 1894, the London Building Act 1930 and part VI of the London Building Acts (Amendment) Act 1939. Cases under the earlier legislation on similar wording remain authoritative and important. Unfortunately, the magpie-like way the Act was compiled has led to some inconsistencies of wording, always fertile ground for lawyers.

Under sections 1 and 2 the Act allows building owners whose properties are separated by party walls (defined by section 20) and party fence walls (essentially garden walls between properties in separate ownership) to carry out works to those walls going beyond what they could do at common law, including demolition and underpinning.

The owner who wishes to do work under the Act is defined as 'the building owner'. He must serve a party structure notice under section 3 of the Act on the other owner ('adjoining owner') before doing works under the Act. Absent agreement, the works must be authorised by an award by a tribunal of surveyors under section 10. This tribunal consists of three members, one appointed by each party and a third selected by the other two. His role is to resolve disputes referred to him by either of the other two and to prevent deadlock.

Section 6 of the Act contains provisions applying where an owner wishes to carry out deep excavations on his land in the vicinity of nearby buildings. The limits within which section 6 applies are defined by reference to depth of the proposed excavation, the depth of the foundations of the nearby buildings and the proximity of those buildings to the excavation. The aim is to protect those buildings against the risk of subsidence from the excavations, by requiring a notice to be served stating whether it is intended to underpin the building of the adjoining owner and providing details of the site and depth of the excavation and the site of any building proposed to be erected.

In contrast to the provisions of sections 1 and 2, these provisions apply so as to limit the building owner's common law rights. At common law an owner is entitled to excavate on his land without anyone's permission, provided subsidence damage to neighbouring and buildings is not caused.

Kaye owed

This distinction lay at the heart of the argument in Kaye v Lawrence [2010] EWHC 2678 (TCC), an appeal under section 10(17) of the Act against a decision of a third surveyor.

Security for expenses was sought by the adjoining owner in respect of works proposed by the building owner falling under section 6. Section 12(1) provides: 'An adjoining owner may serve a notice requiring the building owner, before he begins any work in the exercise of the rights conferred by this Act, to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.'

The building owner argued that excavating on his own land without affecting the adjoining owner's property, although subject to section 6, did not amount to exercising rights conferred by the Act '“ he could carry out such works at common law without the adjoining owner's permission.

He argued the underlined words only applied to explicit rights under the Act to do work to the adjoining owner's property; these rights were those under sections 1(3), 1(6), and 2 '“ covering works to party walls and party fence walls); 6(3) '“ relating to underpinning of the adjoining owner's property; and 8 '“ which grants rights of entry onto the adjoining owner's land.

He pointed out that, historically, the provisions for security first became part of party wall legislation preceding the Act before the adoption of the provisions which were the precursor of section 6. Hence it was unlikely that parliament intended that the security provisions were intended to apply to the exercise of rights under section 6.

The adjoining owner argued that the underlined words were clear and applied to any works under the Act.

Ramsey J upheld the arguments of the adjoining owner. He considered that the wording of the Act was clear and it was not necessary to consider the wording of previous legislation. He observed that it was true that the wording of the Act was not entirely consistent, but that it did not draw a distinction between works to the adjoining owner's property and other works.

He observed that section 10(12)(c) of the Act is expressed in broad terms although his attention was not drawn to other cases which limit the breadth of that section, such as Blake v Reeves. He noted that works of excavation wholly on a building owner's land are likely to cause damage to an adjoining owner's property and that it 'does not make sense to grant security for some works but not other works'.

Ramsey J also relied on two authorities, one under the 1894 and the other under the 1939 Act '“ Selby v Whitbread & Co [1917] 1 KB 736 and Louis v Sadiq [1997] 74 P & CR 325 '“ for the proposition that once the statutory powers are invoked common law rights are supplanted by the statutory scheme.

He concluded: 'Section 12(1) applies to all cases where the building owner is exercising rights under the Act and that includes exercising the supplanted or substituted rights under sections 6(1) and 6(2). There is no reason why it should apply only to work on the adjoining owner's land and the provisions of the statute do not draw a clear distinction in that respect.'

He found on the facts that the works proposed were of a kind where security should be ordered and therefore allowed the appeal and ordered security to be granted.

Digging in

While no doubt justifiable on its facts, the decision is based on the judge's view that an important protection under the Act would be circumvented if security was not available under section 12(1) in respect of excavation works conducted wholly on the building owner's land.

The purpose of requiring security is to provide a fund to which recourse may be had if works under the Act damage the adjoining owner's property. Excavations are par excellence works which may pose a risk of such damage. Had the decision been otherwise there would have proved to be a serious gap in the protection of the adjoining owner. One cannot therefore quarrel with the good sense of the approach to the facts of the case.

But the judge went on to express the wider view that semantic arguments based on minor discrepancies in wording between different sections of the Act originating from different earlier acts is out of place, so that any situation where the Act is engaged brings in full extent of the various rights under it.

Some may think, however, that it would be straining the meaning of the words 'work executed in pursuance of this Act' to include excavation works conducted by a building owner wholly on his own land. The decision depends on the principle that the imposition of a statutory regime has the effect of supplanting all pre-existing common law rights. There appears to be no reason in principle, however, why a statutory regime cannot co-exist comfortably alongside the common law rights of parties, as is the case in many other areas of law, such as employment and landlord and tenant.

The consequences of the decision may be far-reaching. In particular, it may be that a building owner would be entitled to a right of access under section 8 of the Act in respect for the purpose of constructing a development wholly on his own land under section 1(5). If that were correct, many of the provisions of the Access to Neighbouring Land Act 1992 would have been swept away by the 1996 Act. It is questionable whether that was the intention of parliament.

Uncertain ground

There is still uncertainty whether a building owner may carry out works which are potentially subject to the Act without using the Act's procedures if he does not go beyond his common law rights.

In Kaye, section 6 expressly required the building owner to serve a notice and invoke the Act given the position and depth of the excavations in question. But does the same apply where the Act is not explicit? For example, a right to underpin a party wall is granted by section 2 (1). Does this mean that in every case the building owner must invoke the Act even if the work he proposes is limited to the half of the wall he owns and will not interfere with his neighbour's half in any way? It is suggested in Selby that he must invoke the Act as his common law rights have been replaced by the Act. But on the other hand in Louis it was suggested that the building owner retains his common law rights until he invokes the Act.

This point is of practical importance. Failure to comply with the Act gives rise to a risk of proceedings for damages and injunctive relief in respect of any trespass or nuisance arising from the works. But invoking the Act without cause is costly and can cause delay.

I believe that common law rights are not generally taken away by the Act and that the dicta in Selby should be read as applying once the Act is invoked. However, there are risks in carrying out any substantial works to which the Act applies without using its provisions in reliance on common law rights if difficulties arise in the course of the works without possible recourse to statutory powers or an agreed framework for dispute resolution.