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Legal Round-up of 2010 Smith -v- Jones Lecture given to the Pyramus & Thisbie Club, Surrey Branch, on 18 February 2011 by Matthew Hearsum Morrisons Solicitors.

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Presentation on theme: "Legal Round-up of 2010 Smith -v- Jones Lecture given to the Pyramus & Thisbie Club, Surrey Branch, on 18 February 2011 by Matthew Hearsum Morrisons Solicitors."— Presentation transcript:

1 Legal Round-up of 2010 Smith -v- Jones Lecture given to the Pyramus & Thisbie Club, Surrey Branch, on 18 February 2011 by Matthew Hearsum Morrisons Solicitors LLP

2 Smith v Jones A Moot before Mr Justice Akenhead on 21 July 2010 at the Technology and Construction Court, London

3 The Cast Mr JonesBuilding Owner Mrs Taylor Adjoining Owner Mr SmithAdjoining Owners Surveyor

4 Mr Smith: Dont worry about my fees, they will be dealt with in the award and Mr Jones will have to pay them

5 11.That the Building Owner shall immediately on the signing of this Award pay the Adjoining Owners Surveyors fees of £1,500 plus VAT in connection with the preparation of this Award, and one subsequent inspection of the works. In the event of damage being caused or other contingencies or variations arising, a further fee shall be payable.

6 Mr Smith Mr Jones Magistrates Court X Appeal to High Court Mrs Taylor Intervenes

7 Mr Smiths Case s. 10(13) PWeA 1996: The reasonable costs … shall be paid by such of the parties as the surveyor or surveyors making the award determine

8 Mr Smiths Case Award Surveyor Building Owner Adjoining Owner

9 Mrs Taylors Case 1. Nothing in the Letter of Appointment 2. Mr Smith told her she would not be liable for his fees 3.Award says that Mr Jones is to pay Mr Smiths Fees 4.Supported Argument that Award was a contract

10 Mrs Taylors Case Norweb PLC v Dixon [1995] 3 All ER 952 Dyson J: (now Lord Dyson) …a relationship which results from some degree of legal compulsion is nevertheless regarded as contractual because the parties still have considerable freedom to regulate its incidents.

11 Mrs Taylors Case 1. Nothing in the Letter of Appointment 2. Mr Smith told her she would not be liable for his fees 3.Award says that Mr Jones is to pay Mr Smiths Fees 4.Support Argument that Award is a contract 5.Apply general principals of Statutory Interpretation

12 Mrs Taylors Case The Court should interpret legislation: 1. In favour of a common sense construction and against absurdity 2.Against an unworkable or impractical result 3.Against an inconvenient result

13 Mr Joness Case 1. Irrelevant whether Mr Smith can recover against Mrs Taylor 2. Award is not contractual 3.Court must look at s. 10 in its entirety

14 Others Chris CuthbertDonald Jessop Robin AinsworthSimon Levy Andrew SmithMatthew Hearsum David Bowden

15 Decision 1. Appeal Dismissed 2. Only BO and AO can enforce or appeal an Award 3.Parliament did not intend surveyors to be able to enforce or appeal 4.Award is not a contract

16 Conclusion 1. Surveyors cannot enforce on their awards directly 2. Take an Assignment of the Debt

17 Conclusion Investors Compensation Scheme v West Bromwich Building Society [1998] 1 all ER 98 Lord Hoffman: The assignee either acquires the right to the money (or part of the money) or he does not. If he does, he necessarily acquires whatever remedies are available to recover the money or the part which has been assigned to him.

18 Conclusion 1. Surveyors cannot enforce on their awards directly 2. Take an Assignment of the Debt 3. Include more detailed Terms & Conditions in letter of appointment

19 Legal Round-up of 2010 Kaye -v- Lawrence Lecture given to the Pyramus & Thisbe Club, Surrey Branch, on 18 February 2011 by Matthew Hearsum Morrisons Solicitors LLP

20 x Sandbanks, Poole

21 £25,000 in 1965!

22 The Cast 126 Panorama Road-Mr Kaye-AO 124 Panorama Road-Mr Lawrence-BO 3 rd Surveyor-Mr Whittingham

23 The Award A bond or other form of security cannot be requested under section 12(1) of the Party Wall etc Act unless the building owner intends to exercise rights conferred by the Act as [sic] is proposing to carry out some work to the Adjoining Owners land or property. That is not the case in this instance. … Each member of the design team and also the Building Owner are to obtain Professional Indemnity Insurance cover to a minimum value of £2m. Evidence of maintenance of such cover for a period of two years following completion of the substructure works is to be provided to the Adjoining Owner. … Each member of the design team and also the Building Owner are to obtain Professional Indemnity Insurance cover to a minimum value of £2m. Evidence of maintenance of such cover for a period of two years following completion of the substructure works is to be provided to the Adjoining Owner. … Each member of the design team and also the Building Owner are to obtain Professional Indemnity Insurance cover to a minimum value of £2m. Evidence of maintenance of such cover for a period of two years following completion of the substructure works is to be provided to the Adjoining Owner.

24 The Green Book Security can only be requested if the building owner intends to exercise rights conferred by this Act, ie he is proposing to carry out some work to the adjoining owners land or property. If he is simply excavating his own land then the adjoining owner has no right to receive security under this section

25 The Supporting Document Given the granular nature of the soils underlying the site and the scope of the basements works proposed it is considered likely that any structural damage to the adjoining houses associated with vibration or ground movement would become apparent reasonably quickly

26 Which Court? Kaye v Lawrence [2010] EWHC 2678 Ramsey J: 13.In my judgment, because an appeal under s. 10(17) of the 1996 Act is a creature of statute, this court cannot ignore the fact that the county court is the appropriate court and seize jurisdiction which has not been given to it

27 The Issue in Dispute 1.Can the Surveyors make an award of Security for works under s. 6? 2.Should the Surveyors make an Award of Security?

28 A failure to determine? Kaye v Lawrence [2010] EWHC 2678 Ramsey J: 4.The central question on this appeal …is whether security can be requested when works are being carried out only on the building owners land and not just when works are being carried out on the land of the adjoining owner, as suggested in [the Green Book] Commentary

29 The Issue in Dispute 1.Can the Surveyors make an award of Security for works under s. 6? 2.Should the Surveyors make an Award of Security? 1.Can the Surveyors make an award of Security for works under s. 6? 2.Should the Surveyors make an Award of Security?

30 Mr Kayes Case 1.s. 12(1) contains no such restriction or limitation 2.When a s. 6 notice is served BOs common law rights cease to apply 3.No sense in differentiating between work on BOs land and work on AOs land

31 Mr Lawrences Case 1.Distinction between rights conferred and works in pursuance 2.Historic development of the relevant sections

32 Historic Development The Metropolitan Building Act Any Adjoining Owner may, if he thinks fit, by Notice in Writing given by himself of his agent, require the Building Owner, before commencing any Work which he may be authorized by this Act to execute, to give such Security as may be agreed upon, or, in case of Difference, may be settled by a Judge of the County Court, for the Payment of all such Costs and Compensation in respect of such Work as may be payable by such Building Owner.

33 s. 2s. 6(1)s. 6(2)s. 12 X X Metropolitan Building Act 1855s. 83work which he may be authorised …to execute

34 Historic Development The London Building Act An adjoining owner may if he think fit by notice in writing require the building owner (before commencing any work which he may be authorised by this Part of this Act to execute) to give such security as may be agreed upon or in the case of difference may be settled by a Judge of the County Court for the payment of all such expenses costs and compensation in respect of the work as may be payable by the building owner

35 s. 2s. 6(1)s. 6(2)s. 12 X X Metropolitan Building Act 1855s. 83work which he may be authorised …to execute London Building Act 1895s. 88 X work which he may be authorised …to execute s. 93

36 Historic Development The London Building Act An adjoining owner may if he thinks fit by notice in writing require the building owner (before beginning any work which he may be authorised by this Part of this Act to execute) to give such security as may be agreed upon or in the case of difference as may be settled by the judge of the county court for the payment of all such expenses costs and compensation in respect of the work as may be payable by the building owner.

37 s. 2s. 6(1)s. 6(2)s. 12 X X Metropolitan Building Act 1855s. 83work which he may be authorised …to execute London Building Act 1895s. 88 X work which he may be authorised …to execute s. 93 London Building Act 1930s. 114s. 119 X work which he may be authorised …to execute

38 Historic Development The London Building Act An adjoining owner may by notice in writing require the building owner before he begins any work in the exercise of the rights conferred by the Part of this Act to give such security as may be agreed between the owners of in the event of dispute determined by a judge of the county court for the payment of all such expenses costs and compensation in respect of the work as may be payable by the building owner

39 s. 2s. 6(1)s. 6(2)s. 12 X X Metropolitan Building Act 1855s. 83work which he may be authorised …to execute London Building Act 1895s. 88 X work which he may be authorised …to execute s. 93 London Building Act 1930s. 114s. 119 X work which he may be authorised …to execute London Building Act (Amendment) Act 1939 s. 46 s. 50(1)(a) s. 50(1)(b) work in the exercise of the rights conferred by …this Act

40 Decision 1.Historic analysis did not assist 2.Rights Conferred & Works in Pursuance not different + no difference between s. 7(1) & s. 7(2) + s. 2(2)(f) works

41 Decision Kaye v Lawrence [2010] EWHC 2678 Ramsey J: 61.I therefore consider that in accordance with the authorities cited above, the common law rights are supplanted and substituted by the provisions of the Act and that this applies as much to sections 6(1) and 6(2) as it does to section 6(3) or any other provision of the 1996 Act. I do not consider that there is a proper distinction between rights that only exist under the 1996 Act and rights that exist at common law and which are regulated by the 1996 Act …

42 Decision Kaye v Lawrence [2010] EWHC 2678 Ramsey J: 61. … The Act creates new rights which do not exist at common law permitting the building owner to carry out work on the land of the adjoining owner. However, whilst at common law the building owner would have a right to carry out work on their own land, those rights in relation to the area within 3 or 6 metres of the boundary are supplanted or substituted by the provisions of sections 6(1) and 6(2) of the 1996 Act. 61. … The Act creates new rights which do not exist at common law permitting the building owner to carry out work on the land of the adjoining owner. However, whilst at common law the building owner would have a right to carry out work on their own land, those rights in relation to the area within 3 or 6 metres of the boundary are supplanted or substituted by the provisions of sections 6(1) and 6(2) of the 1996 Act. 61. … The Act creates new rights which do not exist at common law permitting the building owner to carry out work on the land of the adjoining owner. However, whilst at common law the building owner would have a right to carry out work on their own land, those rights in relation to the area within 3 or 6 metres of the boundary are supplanted or substituted by the provisions of sections 6(1) and 6(2) of the 1996 Act.

43 Decision Selby v Whitbread & Co [1917] 1 KB 736 McCardie J: the common law was seen to be insufficient for the adjustment of modern complex condition. Hence I think that the Act of 1894 is not an addition to but in substitution for the common law with respect to the matters which fall within the Act. It is a governing and exhaustive code, and the common law is by implication repealed.

44 Conclusion 1.Only a County Court Decision + but likely to be followed 2.Limited to whether surveyors can order security + remember AO has to request security 3.Other Implications + resolution of s. 1(5) & s. 8 ? + easier to obtain injunctions

45 About Me Matthew Hearsum Solicitor & Arbitrator Morrisons Solicitors LLP Wimbledon 5 th Floor, Sterling House 6 – 10 St Georges Road Wimbledon London SW19 1SY Woking 2 nd Floor, Cleary Court 169 Church Street East Woking Surrey GU21 6HJ


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