A couple of weeks ago the Court of Appeal handed down judgment in Patel v Peters  EWCA Civ 335 in which the Court gave guidance on the correct interpretation of section 10(7) of the Party wall etc. Act 1996 (“the 1996 Act”). I acted for the successful appellants.
Mr and Mrs Patel wanted to undertake works to their property that were subject to the 1996 Act. They appointed Justin Burns as their surveyor. Notices were served, and the Respondents appointed Grant Wright. Eventually principal awards authorising the works were made by Mr Burns and the third surveyor in two cases, and Mr Burns acting ex parte in one.
Those awards provided for Mr Wright’s fees to be determined by any two of the three surveyors.
Mr Wright sent across some timesheets totalling just under £20,000. This was substantially more than other surveyors had charged at around £2,500.
On 21 December Mr Wright wrote to Mr Burns stating:-
“…whilst you must take this as Notice served upon you to act effectively under Section 10(6) and (7), I will not be considering that the ten days have expired re. Section 10(7), until the public holidays have been adjusted for. If you fail to respond effectively to my submission and offer to jointly review the timesheets and works, etc. then I will exercise my authority to either proceed ex-parte or to enjoin with Mr Frame, to advance the matter…
On 6 January 2011 Mr Burns responded:-
As previously stated, I do not intend to go through your timesheets as I already know that a large percentage of the time you expended on this matter was unnecessary and inappropriate. It is not fair to expect me to pick through your barely legible notes to establish what was and wasn’t relevant. I will therefore measure your proposed fee against the time I think a reasonably competent surveyor would have spent on these awards considering the scope and complexity of the proposals (notwithstanding the fact that some of these tasks could have been undertaken by an administrator or assistant surveyor on a much lower hourly rate)
Mr Burns then went on to assess Mr Wrights’ fee at £2,925 from which he deducted the fees of the third surveyor incurred in making the principal awards.
On 7 February Mr Wright proceeded to make three awards ex parte and awarded himself totaling £20,412.00. Mr and Mr Patel appealed.
A number of preliminary issues regarding the validity of the awards were listed for trial before HHJ Hand QC in the Technology and Construction List at Central London County Court. Those issues were decided in favour of the Respondents. Mr and Mrs Patel referred the case to the Court of Appeal.
Two principal issues came before the Court of Appeal:-
- Whether a failure to comply with a section 10(7) request creates a “continuing state of affairs” so that a surveyor who neglects to act effectively within the 10 day period may still act effectively after that period, or whether, once the 10 days had passed, it was a “once-and-for-all” power so that later compliance could not remedy the default.
- Whether Mr Burns’ email of 6 January was “acting effectively”
Although Richards L.J, giving the lead judgment, thought this case turned on its own facts the decision does give some guidance on the application of section 10(7) requests.
On the first issue his Lordship found that an unanswered section 10(7) request creates a continuing state of affairs i.e. as soon as the defaulting surveyor responds effectively to the requests, even if it is outside the 10-day period, that brings to an end the serving surveyor’s ability to make an ex-parte award. In his Lordship’s words:
“If that surveyor neglects to act effectively for a period of 10 days after service of a request on him, the requesting surveyor can get on with the matter by proceeding to act ex parte. If, however, the surveyor in receipt of the request acts effectively after the 10 day period but before relevant action has been taken by the requesting surveyor, the rationale for empowering the requesting surveyor to act ex parte has disappeared and there is no reason why the normal procedures under section 10 should not apply.”
On the second issue his Lordship found that Mr Burns’ action came nowhere near a failure to act effectively:
“It is true that Mr Burns refused to review the timesheets; but he gave a reasoned justification for that refusal and he put forward a reasonable alternative basis on which he said the fee should be calculated. He engaged head-on with the subject-matter of the request and set out his position in respect of it. To my mind, this came nowhere near to a refusal or neglect to act effectively”
The appeal was granted.
As above, although his Lordship thought that this case could be decided on its own facts, it does provide some useful guidance:-
- A defaulting surveyor can still act effectively after a 10-day notice under section 10(7) and, if he does so, he brings to and end the ability for the other surveyor to act ex-parte.
- All a surveyor need do to answer a section 10(7) request is to “…[engage] head-on with the subject-matter of the request and set out his position in respect of it”. This means that the days of some surveyors saying “if you don’t agree with me I will regard you as not acting effectively” are over.
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