Nyree Applegarth, Partner and Head of Property Disputes, looks at an interesting party wall award claim – and why it is important to act swiftly if damage occurs.
A recent decision in the case of Park Lane Holdings Inc v Saidco International SA in the Central London County Court has prompted some lively debate since judgment was handed down in July 2021.
The original party wall award was made in 2009 and, later that year, the adjoining owner reported a leak. The parties corresponded about the leak in the early 2010s but nothing further happened.
For readers who don't know, a party wall award is a legal document which sets out the rights and responsibilities of the owner instigating the building works and owners of the adjacent or nearby property.
In this case, by 2019 the adjoining owner and the building company had gone into liquidation. Some time later in November 2020 the adjoining owner’s surveyor, acting alone, made an addendum award granting compensation at around £445,000 against two companies who were the successive head tenants of the property which was the subject of the original works - despite neither being the building owner in 2009 when the award was given.
The two companies appealed and one of the interesting grounds of appeal related to limitation and whether or not it was too late for the addendum to be given and compensation ordered. The head tenants were successful on all grounds.
The adjoining owners’ surveyor was held to have been misguided in the making of the addendum award in 2020. The judge found that the surveyor had no jurisdiction to make the addendum award because the jurisdiction that he did have only came from his appointment under the original 2009 award in relation to the original building and adjoining owners and not successive owners.
The judge went on to make findings on the limitation point which clarify the law in this area. The judge found that the claim by an adjoining owner for compensation under the Party Wall Act 1996, because it is a claim under statute, does have a limitation period of 6 years from the date of damage under Section 9 of the Limitation Act 1980.
The court looked specifically at whether the time period for determining any compensation started to run when the damage was done or when a statutory determination of damage was actually made. In this case, the judge found that limitation would run from whenever the damage was first suffered, so here from 2009.
This decision accords with a policy of preventing stale claims and allowing an adjoining owner to initiate an award many, many years after damage has originally been caused and when evidence might have been lost. The decision is in line with judicial trends to impose time constraints on the party wall process and is a timely reminder that an adjoining owner who has suffered damage from party wall works should act with all reasonable speed to encourage the surveyors to make a party wall award as soon as possible.
