R (on the application of Farrs Lane Developments Limited) v Bristol Magistrates’ Court and James McAllister [2016]: Recovering unpaid fees in the Magistrates’ Court

As some of you may be aware, I have been involved in a high profile party wall case, which reached its conclusion in the High Court (Administrative Court) on 9th February 2016 by way of Judicial Review proceedings.  

In 2014 I had made several awards under the Party Wall etc. Act 1996 (“the Act”) as both Building Owner’s Surveyor and Agreed Surveyor on a large development in Bristol.  The awards were not appealed by either party and each award contained directions as to payment of the fees of both surveyors (in the three surveyor tribunal awards acting under section 10(1)(b)) or the Agreed Surveyor where acting under section 10(1)(a). Owing to the Building Owner’s refusal to pay my awarded fees in full, I took the usual action in the Magistrates’ Court pursuant to section 17 of the Act.  Nick Isaac of Tanfield Chambers represented the Building Owner and I represented myself.  I won and was awarded all fees owing and my costs in bringing proceedings at my full professional rate, despite being a litigant in person.  Rather than appeal the decision on the facts to the Crown Court, the Building Owner, again under the guidance of their legal team, applied to the Magistrates’ Court to ‘case state’ the decision up to the High Court on the points of law Nick Isaac had argued precluded the Magistrates' from deciding in my favour.  This was on the grounds the court had no jurisdiction on the basis: (1) My fees were not in ‘dispute’ between the Building Owner and Adjoining Owner and could not, therefore, be awarded; (2) I could not award fees to myself, either as Building Owner’s Surveyor or Agreed Surveyor and that ‘costs’ of making the awards could only be awarded to the parties; (3) I had no locus to bring proceedings for enforcement of fees under the Awards in the Magistrates’ Court as I was not a party to the dispute; (4) The Magistrates’ court erred in awarding me my costs at my full professional rate as a litigant in person as such costs were wholly unreasonable (at the Magistrates’ hearing he tried to argue that I could only claim the litigant person in rate of £19.00 per hour as authorised by the Civil Procedure Rules, albeit I successfully argued that CPR did not apply in the Magistrates' Court).  The Magistrates’ Court refused to state the case on the basis it was a ‘frivolous’ application, and then further refused to meet the demands of the Building Owner’s pre-action protocol letter to reconsider.  Accordingly, the Building Owner made an application to the High Court for permission to escalate the matter to Judicial Review on the basis they (or at least Nick Isaac) believed the Magistrates’ Court had reached the wrong decision in law, rather than on the facts of the particular case (which would have been the grounds of a traditional appeal).  Permission for Judicial Review proceedings was given, at which point I appointed Stuart Frame of Staple Inn Chambers as my counsel.  I was cited as the ‘Interested Party’ and Bristol Magistrates’ Court were cited as the defendants.

On counsel’s advice, I remained neutral on whether the case should have been stated or not, but did ask the High Court to, as part of the Judicial Review proceedings, go on and decide the points of law raised by Nick Isaac on the Appellant/Building Owner’s behalf.  The Appellant/Building Owner agreed and this meant, under the guise of a Judicial Review, we now have binding authority on these points of law.  Interestingly, Bristol Magistrates’ Court decided to take no part in the Judicial Review proceedings and did not want to be represented.  They took the view that they had not erred in law and the Act was clear on all the points.  They were proven to be correct.

The High Court decided all points of law as to the interpretation of the Act in my favour and dismissed the application for Judicial Review of the Magistrates’ decision.  Nick Isaac therefore lost on all points and costs were awarded against his client, the Building Owner.   The implication of this decision is that, as party wall surveyors, we now have binding authority to support our cause and enable us to award and collect our fees in an efficient manner in the Magistrates’ Court without the need to seek recourse in contract in the County Courts.  Obviously, to lay a complaint in the Magistrates’ court, the action must still be taken within 6 months of the sum payable becoming due.

This case has decided: 

  1. ‘Costs’ includes fees and disbursements in the context of the costs of making or obtaining awards;

  2. We may award fees to ourselves;

  3. We may award fees regardless of whether or not those fees are the subject matter of a dispute as between the respective Owners or the appointed Surveyors;

  4. We may direct which party shall pay our fees, and this need not go through the parties themselves.  Therefore, we can award that the Building Owner pays the Adjoining Owner’s Surveyor directly and no deed of assignment will be needed by the Adjoining Owner’s Surveyor to pursue those fees against the Building Owner directly;

  5. An underlying contract is neither here nor there – provided there is an underlying dispute and the tribunal is properly constructed and acting intra vires, then the statutory provisions of the Act supersede any contractual arrangements (this is what makes item 4 above possible).

The Judge reiterated the wide reaching powers of party wall surveyors, but there is a warning.  This case has also decided that where an award is appealed due to the level of the surveyor(s) fees (for instance - where the Building Owner appeals an Award because of the amount of the Adjoining Owner’s Surveyor’s fees), and where the Adjoining Owner takes a neutral position in the appeal proceedings, then the court may join the offending surveyor as a respondent to the action.  This means that he/she may be liable for costs in the proceedings if it is found that those fees were unreasonable and justified the appeal.  This is the downside of item 4 above as the absence of the need for a contract between the Building Owner and the Adjoining Owner’s Surveyor enables the Building Owner to make a surveyor he has no contractual relationship with liable for his costs in appeal proceedings.  This falls under the court’s powers in section 10(17)(b) of the Act.  However, the judge did state this would only be likely in rare circumstances, but equally serves as a salutary warning to all party wall surveyors when it comes to awarding their fees.

The point regarding litigant in person rates in the Magistrates’ Court was not decided one way or the other since the Magistrates’ have absolute discretion to award costs they consider to be ‘just and reasonable’ pursuant to section 64 of the Magistrates’ Courts Act 1980.  The fact that the Judicial Review was dismissed means this has not been interfered with, so in my case, the Magistrates’ decision to award my full professional rate for bringing proceedings was preserved.

This decision has therefore established that the Magistrates’ Court is the only court in which to enforce sums payable in pursuance of the Act.  Zissis v Lukomski [2006] EWCA Civ 341 established that awards for costs under the Party Wall etc. Act 1996 cannot be enforced in the county court under CPR 70.5, meaning enforcement in the Magistrates’ Court is the only route for enforcement of an award and the sums payable therein.  Obviously, there is nothing preventing surveyors suing their appointing owner/client in the county court for unpaid fees in contract, but it begs the question why this method would ever be considered given the efficiency of the Magistrates’ route and the potential to recover all costs along the way.

 All in all this is a good result for party wall surveyors which has clarified certain parts of the Act in their favour, but against the opinion of many party wall lawyers who have, until now, sought to make it difficult for surveyors to obtain efficient summary payment of their awarded fees via the Magistrates’ route.  This highlights the fact that, as with any statutory interpretation, the words of the Act should be given their ordinary and natural meaning and the Act should be interpreted in a literal context unless to do so produces a manifest absurdity.  No such absurdity arose here.

The case will be reported shortly and can be cited when next in the Magistrates’ Court should you be challenged by opposing counsel as to your locus to bring the proceedings.  However, ensure to word the fee clause in the award carefully and clearly.

One final point, Nick Isaac was heavily criticised by the Judge for escalating the matter on the basis his legal costs far outweighed the total sums originally being claimed by me in the Magistrates’ Court.  However, in escalating matters so far, we now have this decision.  So it has been beneficial, albeit at a heavy cost to the losing party.

James McAllister LL.M BSc(Hons) MRICS MCIArb FFPWS

Director

The Party Wall Consultancy

www.partywallconsultancy.com

 

Posted on February 11, 2016 .