The failure of Section 10(4) of The Party Wall Act
Section 10(4) simply does not work, either for the adjoining owner who has a surveyor thrust upon him, or the building owner who has to pay.
Section 10(4) states:
If either party to the dispute—
(a) refuses to appoint a surveyor under subsection (1)(b), or
(b)neglects to appoint a surveyor under subsection (1)(b) for a period of ten days beginning with the day on which the other party serves a request on him, the other party may make the appointment on his behalf.
Understanding the meaning of the section is important – and there are several points of discussion. It is also necessary to appreciate the context.
Ordinarily, section 10(4) comes about following the lack of response to a notice served under sections 3 and 6 of the Act. Section 1 is unique, in that if an adjoining owner does not respond to the notice, there is no requirement to proceed with section 10(4). The adjoining owner has 14 days to respond to a notice, otherwise (save for section 1) a dispute is deemed. The next step is to send the ‘ten-day request’ on the adjoining owner to appoint a surveyor. After the passing of ten days from the date the request was served, the building owner ‘may’ appoint a surveyor to act on the adjoining owner’s behalf.
The word ‘may’ has caused some confusion, though most surveyors understand that the building owner cannot proceed further until the following happens:
1. The adjoining owner consents to the work
2. The adjoining owner appoints a surveyor
3. The building owner appoints a surveyor on behalf of the adjoining owner
Some people argue that the word ‘may’ suggests the appointment of a surveyor is optional, and therefore not necessary, but it would be extremely imprudent to proceed with that interpretation, and the consensus is that a surveyor must be appointed. Instead, the meaning of the word ‘may,’ is linked with timings. A notice is valid for one year, so a building owner can allow pretty much one year for the adjoining owner to respond. The building owner is not obliged to appoint a surveyor on behalf of the adjoining owner immediately, instead, for various reasons or no reason at all, the building owner can give the adjoining owner more time to respond. Section 10(4) puts the building owner on the front foot, in that at any point after the ten days have passed, he can appoint a surveyor to act on behalf of the adjoining owner, without warning.
On the face of it, this may seem a sensible way to ensure that the adjoining owner’s interests are protected, however, there are clear flaws to section 10(4).
Firstly, and most importantly, the building owner can choose a surveyor to act on behalf of the adjoining owner. The Act literally allows anyone to be a surveyor, save for the building owner himself, or the adjoining owner. This can give rise to inappropriate appointments – and it often does. The building owner may wish to go with the cheapest surveyor, or a surveyor who will be ‘easy to get on with’. Often, the building owner will ask his surveyor for advice, and there is a whole economy of 10(4) appointments that can be traded amongst surveyor to increase profits.
There are a couple of cases which may highlight how 10(4) appointments have gone a bit wrong. In ‘Property Supply & Development Ltd v Verity,’ Mr Frame (President of the Faculty of Party Wall Surveyors) appointed a fellow director, Mr Campbell, under section 10(4) to act on behalf of the building owner. Mr Campbell and Mr Frame selected another director of the Faculty as the Third Surveyor – Mr Bright.
Apart from the fact that the 10(4) appointment and third surveyor selection were found not to be valid, it simply does not look good that three surveyors known to each other and all associated with the Faculty at high level were involved in one party wall matter. Regardless as to whether the surveyor’s intentions are just and reasonable, it should be understandable that a building owner may consider the choice of surveyors to be unfair.
Judge Bailey commented ‘I note in passing that it is an unfortunate feature of the facts of this case that after Mr Steven Campbell accepted appointment by Mr Frame on behalf of the building owner, he did not trouble to make any contact whatsoever with the building owner before making an award. In this regard Mr Campbell could doubtless point to the fact that the Act does not expressly require a surveyor appointed on behalf of either party to be in communication with the party concerned but it would be surprising if by failing to put in an express requirement to that effect, parliament was intending to encourage surveyors to have no regard whatsoever to their appointing party, even where that party is only nominally the appointing party. Mr Campbell’s behaviour in this regard cannot have helped progress matters in a positive way.’
What makes this all more difficult to stomach, is that there was a third surveyor ready to join with Mr Frame to make an award (a Mr Cane), but Mr Frame bypassed him and installed surveyors of his choice to administer the Act.
The choice of a surveyor is important, and indeed Judge Bailey, rightly or wrongly, criticised the appointment of Robert Hopps under section 10(4) in Gray v Elite Town Management Limited stating ‘the court readily accepts that Mr Williams would have had to have searched far and wide to find a surveyor who shared Mr Gray’s views, but it would have been better, very much better, had a surveyor been selected who was prepared to show some sympathy for those views…’.
Party appointed surveyors are not required to act impartially (an agreed surveyor and the third surveyor must). It seems that Judge Bailey is recommending that surveyors make selections under 10(4) in such a way that is sensitive to the needs to the adjoining owner (or the building owner in some cases). A party appointed surveyor should act on behalf of the party for which he is appointed, and with the inappropriate choice of surveyors it can often end up as a de facto agreed surveyor.
This is where section 10(4) fails both sides. The building owner has to pay additional surveyor’s fees, above and beyond the impartial agreed surveyor, whilst the adjoining owner is often saddled with inadequate representation.
Going further, there is some very poor behaviour that takes place – though believed to be rare. A surveyor can simply withhold a notice, along with the ten-day request, to create the circumstances for a section 10(4) appointment to apply. The adjoining owner would simply receive an award. This can work if the adjoining owner is likely to be difficult, or it is believed he will appoint a difficult or expensive surveyor. Another motivation is simply surveyor greed, as if notices aren’t posted, the surveyor knows he will get an appointment and therefore a fee.
Another example of poor behaviour is where the Act is used aggressively, and high fees are promoted, without question. When a surveyor appoints another surveyor under 10(4) there is the opportunity to allow matters to run without anything or anyone to keep behaviour in check. There have been examples where the building owner has had to appeal an award to challenge excessive fees, and this may have been avoided had a different surveyor been appointed under 10(4). The installation of a friend as a surveyor acting on behalf of another party is dangerous, and can lead to one party being overlooked and badly burnt.
There are no easy solutions to counter the failure of section 10(4), especially as those who administer the Act stand to increase profits by taking commercial decisions with regards to 10(4) appointments).
Two suggestions are as follows:
1. If there are multiple adjoining owners and one has responded appointing a surveyor, consideration should be given to appointing that surveyor under section 10(4) to act on behalf of any interests that failed to respond to the ten-day request. This means that neither the building owner nor the building owner’s surveyor had a hand in the appointment of the adjoining owner’s surveyor, they merely proceeded with a surveyor already involved and chosen by another adjoining owner.
2. There could be a new system for appointments under 10(4) that is similar to that of the ‘appointing officer’ who can select a third surveyor as per section 10(8) of the Act. This could be set up by professional bodies, but it would require transparency and integrity to work. Unfortunately, professional bodies, as shown in ‘Property Supply & Development Ltd v Verity’ would need to change their approach to ensure confidence in the process.
Section 10(4) is failing the building owner who has to pay, as well as the adjoining owner whose needs are often overlooked. The only winners are the surveyors who can appoint their friends, ensuring both their companies receive payment for serving an easily agreed award. Remember, in the case of Property Supply & Development Ltd v Verity it was vey unlikely that the President of the Faculty would have disagreed with a Director of the Faculty, but if they did, they had another Director of the Faculty installed as the third surveyor who would have been in an awkward position. That being said, when you appoint a friend, the third surveyor is simply not needed, and the selection is symbolic, serving only to ensure the Act is administered legally.