Patel & Patel v Peters, Peters, Levy, Fox, Conway & Conway [2014] EWCA Civ 335

Dr. Antino’s analysis of the above case

8 years on and party wall surveyors still misunderstand/misquote this case.

 I sincerely hope this blog puts to bed the misconceived interruptions of the Judgement.

This was a matter in the Court of Appeal Civil Division on an Appeal from the Central London County Court of a Judgment handed down by HHJ Hand QC (Case No. 2CL20031).

Was the Appeal worth the financial expense?

The dispute was over Mr. Wright’s ex parteaward for his fees of £20,000 and upheld by HHJ Hand. This was challenged in the Court of Appeal where the Patels incurred substantial legal costs. 

Who were the winners in this case?  Not the adjoining owners and most certainly not Mr. Wright!!

Whilst the Appeal was upheld, the Patels did not recover anywhere near all of their costs. Indeed, the shortfall i.e., the difference between the costs and those awarded against the Respondents adjoining owners exceed Mr. Wrights' fees, this was due to the expertise of  Mis Ashley of AJA Legal Services.

Where was the common sense in not trying to reach an agreement somewhere in between possibly?  In any event, the Patel’s spent considerably more money than they would have done if they had simply paid Mr. Wright in the first instance.

Where is the logic in that? 

Were the Patel’s correctly advised in the first instance and was it sensible to rely on Mr. Burns and Mr. Frame’s assessment of Mr. Wright’s fees?  Circa £2,500 reasonable?

Given the Building Owners’ works involved a complex basement construction where there are six adjoining owners in separate private houses in the Hampstead, were Mr Burns and Mr frame being reasonable in their section 10 (10) award to expect Mr Wright to have completed those works for the £2,500 i.e., £416 per adjoining owner?

The Appeal

The Appeal was before Lord Justice Richards, Lord Justice Beatson and Lord Justice Briggs.

Mr. Nicholas Isaac (as he then was) and Ms. Cecily Crampin both of Tanfield Chambers www.tanfieldchambers.co.ukwere instructed for the appellants, the six Respondents (adjoining owners) represented themselves through Dr. David Levy.  The matter was heard on the 17th March 2014, I was in attendance.

Their Lordships judgment sets out in paragraph 2 the central issue of the appeal which related to: -

 “Whether or not the Appellants surveyor, Mr. Justin Burns, had refused or neglected to act effectively, upon receipt of a s.10(6) or (7) of the Act request, with the consequence that the Respondents surveyor (Mr Grant Wright) was empowered to act ex-parte in issuing an Award in respect of his own fees.”

That is the extent of the Judgment and the decision nothing on costs

I have seen correspondence between Mr. Burns, Mr. Frame, and Mr. Wright because I was in fact asked to provide some guidance to Mr. Levy on a number of issues arising out of these party wall matters, and I in fact attended the March hearing.

The Facts

Mr. Wright had served a legitimate request under s.10(7) on the 21st of December thus effectively triggering the 10-day period within which Mr. Burns should have responded to stop any ex-parte rights.  He did not.

For reasons which are not clear, Mr. Wright stated within the s.10(7) request that he will not be considering that the 10 days have expired until the public holidays had been adjusted for.

There are no provisions within the Act to adjust any 10-day period for Bank Holidays or weekends.  Presumably, Mr. Wright was simply being reasonable, a gentleman and professional in anticipation of Mr Burns doing the same and reaching a reasonable compromise on his fees.

Mr. Wright’s decision to adjust for holidays etc. effectively made the s.10(7) period at large.  Because he did not act ex-parte within the 10-day period or indeed prior to Mr. Burns's email of the 6th January which was served outside of the 10-day period, Mr. Burns was at liberty to reply but it does not make the £2,500 a reasonable sum.

That was a fatal error on Mr. Wright’s part, he had left the door open for Mr. Burns to adopt whatever strategy such as a 10(10) referral to Mr. Frame until such time as an ex-parte Award had been served.

Mr. Wright’s timesheets totaled just under £20,000 which does not in itself seem an exorbitant amount of money when compared to the Appeal costs of six figures.  There are 6 adjoining owners and that works out at an average of £4,000 per party wall matter and it was a complex basement in Hampstead.

Mr. Wright assumed that 10-days having passed Mr. Burns was not entitled to respond outside the 10 days and/or that his response was not an effective response and served a ex parteAward

Therefore, the Lordships had to deal with two discreet points: -

1)    Whether a failure to comply within 10-days of a s.10(7) request creates a continuing state of affairs so that the surveyor who neglects to act effectively may still act effectively thereafter, or whether, once the 10-days have expired, it is a “once-and-for-all” power so that later compliance could not remedy the default.

 

2)    Whether Mr. Burns's email of the 6th January 2012 was “acting effectively”.

That is the extent of the matters that the Lordships had to consider. 

They did not address the strategy or the techniquethat Mr. Burns adopted with Mr. Frame. 

That has never been tested in a Court of Law, and most certainly it is wrong for surveyors to claim Mr. Burns and  Mr. Frame’s strategy as having been supported by the Court.

If Mr. Wright had served an ex-parte Award on the 10th day of the s.10(7) request, being the 31st December or indeed any time before Mr. Burns reply of 6th January 2012 that would have been a valid ex-parte Award. 

The Patel’s only option would have been to appeal the Award and/or to obtain a declaration of invalidity (which it would not be) because it complied with the provisions under s.10(7) or simply have the fees awarded by Mr. Wright adjusted in accordance with s.10(17).

 Judgment

The Appeal decision does not give anything other than guidance on the application of s.10(7) request and the 10-day period having a continuing state of affairs until an ex-parte Award is served.

Their Lordships have determined that whilst the Act specifies a 10-day period that passes before a surveyor can proceed ex-parte under s.10(7) that does not preclude the recipient surveyor from responding at a later date providing that response is before any ex-parte Award has been served.

The second point that their Lordships decided was whether or not Mr. Burns email of the 6th January albeit outside the 10-day period) was acting effectively.  Mr. Wright believed that it was not acting effectively and this is where I disagree with Mr. Wright.  Even though I do not accept that Mr. Burns's assessment was reasonable he was nonetheless entitled to respond and express his opinion because time was at large due to Mr. Wright having failed to serve an ex-parte Award.

Just because a recipient of that response does not agree with it, would not necessarily be a failure to act effectively in general terms, but ultimately that would depend on the response.

A similar situation arose in the Bansal v Myers case in that case as the adjoining owner surveyor I had invited the BOS to respond to my fees under a s.10(7) request.

The BOS refused to state “you must discuss them with the BO”, which clearly was a failure to act effectively, as held by HHJ Platt thus triggering my right under s.10(7) to act ex-parte and to award my fees as I believed them to be reasonable.

The BO appealed and lost.  HHJ Platt ruled that my request under s.10(7) was correct because the BOS response was a refusal to act effectively.

That is the fundamental difference between the Patel & Patel case and the Bansal v Myers case.

 Justin Burns & Alex Frame's approach

These two surveyors determined that they would reach a conclusion on Mr. Wright’s fees without involving him is that reasonable?

Their approach appears to be based on a misconceived assumption that there was a standard (one price fits all) fee for party wall matters.  Although they both regularly charge considerably more than £416 for an Award.

Anyone of any experience acting within the Party Wall Act will know that each case turns on its own merits.  Indeed, whilst it would appear that Mr. Wright’s fees of £20,000 might appear excessive, when broken down into the 6 adjoining owners, that is an average cost of £4,000 per owner, and thus not necessarily THAT excessive or unreasonable. 

 

Notwithstanding, Mr. Burns's figure of £2,500 for all six Awards WAS BASED on his refusal to even consider Mr. Wright’s Time sheets!!!!

 

How could Mr. Burns's assessment be objective or reasonable?

Is that an appropriate response?

Does it demonstrate impartiality or reasonableness?

If you consider those costs in relation to the six-figure legal costs, is there approach disproportionate to the matter, and indeed it was subsequently found on legal assessment to be an excessive fee.

 Respondents’ liability on costs

 I referred the Respondents to Ms. Avril Ashley of AJA Legal Services www.ajalegal.com an eminent expert on legal costs.  She advised and indeed represented the Respondents and successfully argued that (Mr. Isaac and Mr.Hearsum’s costs) were excessive and should be reduced.

The balance of legal COSTS paid by the Patels.

Therefore, on reflection were Mr. Wright’s fees unreasonable when compared to the legal costs?  

What would you, the reasonably-minded independent observer conclude?

Was the building owner’s approach misconceived?

These are the important questions that should be answered.