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Paul LOUIS and Paula LOUIS v. Mohammed SADIQ [1996] EWCA Civ 935 (12th November, 1996)
IN
THE SUPREME COURT OF JUDICATURE
CCRTF
95/1219/C
IN
THE COURT OF APPEAL (CIVIL DIVISION)
ON
APPEAL FROM THE SHOREDITCH COUNTY COURT
THE
CENTRAL LONDON COUNTY COURT
(HIS
HONOUR JUDGE PLATT)
Royal
Courts of Justice
Strand
London
WC2
Tuesday,
12 November 1996
B
e f o r e:
LORD
JUSTICE EVANS
LORD
JUSTICE HENRY
LORD
JUSTICE ALDOUS
-
- - - - -
(1)
Paul LOUIS
(2)
Paula LOUIS
Plaintiffs/Respondents
-v-
Mohammed
SADIQ
Defendant/Appellant
(Computer
Aided Transcript of the Palantype Notes of
Smith
Bernal Reporting Limited, 180 Fleet Street,
London
EC4A 2HD
Tel:
0171 831 3183
Official
Shorthand Writers to the Court)
MISS
ANN MCALLISTER
(Instructed by Messrs Dowse & Co, London, E8 3DF) appeared on behalf of the
Appellant
MR.
DAVID GERREY
(Instructed by Messrs Laurence Brass Conway, London, N18 2SW) appeared on
behalf of the Respondent
J
U D G M E N T
(As
approved by the Court)
©Crown
Copyright
LORD
JUSTICE EVANS :
This
appeal raises issues concerning the rights and duties of neighbours whose
properties are divided by a party wall. Being in London, these are regulated
by statute, as they have been since the 18th century. The statute currently in
force is the London Building Acts (Amendment) Act, 1939.
Facts
The
appellant Mohammed Sadiq is the owner of 50 Jenner Road, London N.16. This is
a two-storey end-of-terrace house. He has lived there since 1985. His
neighbours at no.52 are the respondents, Mr and Mrs Louis, who bought their
property in 1979.
Sometime
in the early summer of 1988 there was an informal conversation between the
appellant and Mrs Louis. He told her that he wanted to build a small further
extension to the rear of his property where there was already an extension
known as the rear addition. She said that she had no objection, and she heard
no more about it.
Then
suddenly, as she put it, in August 1988 the appellant began what proved to be
works of demolition and reconstruction involving the whole of his house.
First, without warning, the garden wall was demolished. Then the rear wall of
the rear addition and the rear wall of the house itself were demolished, the
new extension was constructed and the rear wall partly rebuilt. Then the flank
wall, furthest away from no.52, was demolished and partly rebuilt. Finally,
the front wall was demolished also. This interfered with the party wall, as
the demolition at the rear had done, and damage was caused to the structure of
No. 52, including cracks in its front wall.
At
this stage, as the judge put it, "The Plaintiffs who had up to this point
suffered more or less in silence decided to take legal advice". A writ was
issued and the Plaintiffs sought and obtained an interlocutory injunction. The
injunction was dated 14 October 1988. This restrained the appellant from
carrying out any works of demolition or reconstruction at no.50, save as to the
flank wall, until such time as he had complied with the provisions of the 1939
Act. He had not given the notice required by the Act nor attempted to comply
with its provisions although he was advised by the borough surveyor that he
should do so, before the work began. He was also ordered to provide support
for the front elevation of no.52 at the junction with the party wall and make
good any damage caused.
Work
stopped, except for the shoring-up operation, and the statutory notice was
given in December 1988. The Act provides for the appointment of two surveyors
and in case of dispute they appoint an umpire. The umpire's award was made on
30 July 1991 and the surveyors made their final award on 22 October 1991.
Meanwhile, no.50 remained open to the elements with no front wall and a partly
built flank and rear walls which somehow managed to support the roof. The
injunction was lifted in December 1991 and work began in February 1992. The
appellant repaired the damage caused to no.52 at his own expense, something in
excess of £10,000, and the reconstruction of his own property was complete
by October 1992.
The
respondents claimed damages for losses which they suffered by reason of this
extraordinary catalogue of events. These were substantial. They put no.52 on
the market for sale in June 1988 and accepted an offer of £143,000 in
August. The purchaser required a mortgage advance of £95,000. Valuers
who reported on 13 August 1988 saw that "the adjoining property no.50 is being
improved and extended at the present time . . . . Solicitors should obtain full
details . . . . and should confirm that all such [party wall] notices were
properly served and agreement obtained for the approved plans." Subsequently,
the purchaser withdrew. The judge found :-
"I
am satisfied that all the other matters raised in their report could have been
resolved within a few weeks". (page 5), and
"The
property market in the middle of 1988 was extremely buoyant. Prices were
rising and continued to do so well into 1989. . . . If the Defendant had
properly complied with the Act I am, satisfied that the Plaintiffs would have
still been able to find a buyer and to complete the sale of their property by
the end of October 1988". (page 11).
So
the property remained unsold. It is doubtful whether it was saleable at any
price until the repairs to it and the rebuilding at no.50 were complete in
1992. By May 1994 due to the fall in the market its value was estimated as
£100,000 and in February 1995 when the Plaintiffs served a "Provisional
Schedule of Special Damage" it had fallen still further to £78,000.
Their
failure to sell no.52 affected the plaintiffs in other ways. They planned to
move to Guadeloupe and on 22 July 1988 they purchased a building plot there for
250,000 ff, about £25,000. They had arranged a mortgage of their London
house, no.52, borrowing £65,000 from Barclays Bank in April 1988. Part of
this sum was used to repay earlier loans for smaller amounts. Their building
costs in Guadeloupe were estimated in May 1988 as 680.428 ff, but by February
1995 these had risen to 985,500 ff., an increase of 305,072 ff. over eighty-one
months. Three-fifths of the total costs was in fact incurred during this
period, leaving two-fifths outstanding at the date of trial.
Trial
and judgment
The
respondents abandoned their claim for the fall in value of no.52 as this was
due to the general operation of market forces. However, they maintained a
claim for special damages in respect of mortgage interest which they paid or
were liable to pay to Barclays Bank from the date when no.52 would have been
sold, up to the date of trial. They also claimed special damages for the extra
costs of building in Guadeloupe, and general damages for nuisance etc.
These
claims succeeded, for reasons which are clearly set out in the careful and
comprehensive judgment of His Honour Judge Platt, which was followed by a
supplementary ruling as to the amount of interest on 16 May 1995. He awarded
the following sums :-
(a) Interest
paid from 1 November 1988 to 31 March 1993 : £22,762.07
(b) Extra
building costs, calculated as 2/5ths. of the price increase during the same
period : 79,500 ff.
(c) General
damages : £12,500 (plus £1,500 for a separate item).
The
period under (a) and (b) ran to March 1993 because that allowed the respondents
six months to sell no. 52 after the work was complete.
Appeal
This
appeal is against the awards of special damages under (a) and (b) above. Miss
McAllister on behalf of the appellant submits that there was no basis for the
award of such damages and that in any event the respondents' losses were not
caused by him, or were too remote, or excessive in amount.
Liability
This
makes it necessary to quote from the judgment the basis on which liability was
found to exist. Having held that the defendant's conduct between July and
October 1988 amounted to a nuisance, the judge continued :-
"2. Apart
from the manner in which the work was done did the actions of the Defendant
amount to a nuisance?
On
this issue specific complaint is made of a number of matters.
1.
That
the Defendants interfered with the rear end of the party wall by demolishing
the rear addition wall to number 50 without complying with the provisions of
section 47 of the Act.
2.
That
the Defendant interfered with the foundations of the party wall by digging
foundations for the new extension and the rebuilt rear addition wall of number
50 without complying with the provisions of section 50 of the Act.
3.
That
the digging of foundations for the new extension which encroached onto the
adjoining property caused damage to the foundations to the rear addition to
number 52 necessitating underpinning.
4.
That
the demolition and rebuilding of the rear addition wall to number 50 crossed
over the boundary line at first floor level into the rear addition wall of
number 52 and must have involved physical damage to the rear addition wall of
number 52. ......
5.
That
the Defendant interfered with the front of the party wall by demolishing the
front wall of number 50 without complying with the provisions of section 47 of
the Act.
6.
That
the demolition of the front wall in particular by cutting into the front end of
the party wall caused physical damage to the front wall of number 52 by
separating it to a significant extent from its junction with the party wall."
In
relation to each of these factual issues, the judge found that the appellant's
activities had encroached upon the respondents' property and had caused
physical damage to it. This can constitute a private nuisance in law for which
damages are recoverable ; see
Clerk
and Lindsell on Torts
(17th ed.) para. 24-03, approved by Lord Evershed M.R. in
Thompson
Schwab v. Costaki
[1956] 1 W.L.R. 335, which the judge quoted in full :-
"A
private nuisance may be and usually is caused by a person doing on his own land
some thing which he is lawfully entitled to do. His conduct only becomes a
nuisance when the consequences of his acts are not confined to his own land but
extend onto the land of his neighbour by (1) causing an encroachment on his
neighbours land, when it closely resembles trespass. (2) causing physical
damage to his neighbours land or building or works or vegetation upon it, or
(3) unduly interfering with his neighbour in the comfortable and convenient
enjoyment of his land."
He
then held that the appellant was liable under each of the six heads to which he
had referred :-
"Complaints
1, 2 and 5 are effectively admitted in the sense that the Defendant simply
cannot deny that he did carry out work affecting the party wall and its
foundations without serving notice under either section 50(2) or section 47 at
least two months before commencing work. The nub of each complaint is the
failure to comply with the statutory procedures laid down by the act before
commencing work. I have come to the conclusion that this is a nuisance under
both heads (2) and (3) of the passage from Clerk and Lindsell cited above."
The
mischief which results is that the Plaintiffs as adjoining owners are left in
the position where work has been done to part of their own property without
their having any precise information as to the nature of the work, without
their having any information as to whether and if so how much damage has been
caused to the party wall and without their having any knowledge that the work
has been done either on instruction or advice from a properly qualified
surveyor."
and
"In
my judgment complaints numbered 3 and 4 are true. They both fall under the
headings both of encroachment and physical damage and therefore constitute a
nuisance".
He
made a similar finding regarding complaint no. 6, and he concluded :-
"It
follows in my judgment that each of the six acts complained of created
nuisances for which the Defendant is
prima
facie
liable to the Plaintiffs."
As
regards the mortgage interest claim he made the following specific finding :-
"It
is in my judgment interference with the convenient enjoyment of land to act in
such a way as to make the neighbours property unsuitable security for a
mortgage advance certainly at a time when it is known to be on the market for
sale. Number 52 was known to the defendant to be on the market for sale from
June 1988. It was overwhelmingly likely that any purchaser of number 52 would
require a mortgage to assist in the purchase. It is equally clear from the
mortgage survey and in my judgment equally foreseeable that the failure to
comply with the procedures of the Act would constitute a fundamental obstacle
to the property being judged suitable security for a mortgage advance."
It
is important to note, as the judge did, that there was no claim for the cost of
repairs. This was because the respondents did not incur such costs. The
repairs were done by the appellant himself and at his own expense. "In each
case .... the nuisance has so far as possible been abated and the damage
repaired so that there is no continuing problem." The issue, therefore,
concerned the claim for special damages under these heads, both involving
financial loss.
Liability
Miss
McAllister's submission is that the appellant is under no liability at common
law, because the statutory procedures and remedies for breaches of them depend
entirely on the statute itself : common law rights, duties and remedies are
excluded by the Act. The respondents, represented by Mr Gervey at the trial,
expressly abandoned any claim for damages for breach of statutory duty. There
was no finding that the appellant "exerted his statutory privileges so as to
inflict injury on the Plaintiff by negligence, improper obstructiveness,
avoidable nuisance or unreasonable delay" (per McCardie J. in
Selby
v. Whitbread & Co.
[1917] 1 K.B. 735 at 753). Without such a finding, she submits, the
respondents cannot succeed in this part of their claim. The Act required the
appellant to give prior notice, which he did not, but "failure to comply with
the Act does not
per
se
give rise to an action in nuisance". Moreover, the appellant did give notice
in December 1988, and the subsequent delay was caused by the length of time
which the statutory procedures took. He should not be liable for that delay,
when he was complying with the Act rather than otherwise.
This
analysis of the basis on which liability exists in my judgment is wrong,
although it might be said to be supported by the judge's statement "The nub of
each complaint is the failure to comply with the statutory procedures laid down
by the Act before commencing work", which was reflected in Mr Gervey's
submission to us that the appellant was liable for failing to give the notice
which the statute required. I would prefer to say that the appellant committed
a nuisance because of the work which he did without obtaining statutory
authority, and that liability continued until the works were completed in 1992
because the nuisance continued for that period in fact, rather than because the
statutory procedures took that time to run their course.
If
this view is correct, then it is unnecessary to refer to the statutory
provisions in any detail, but in deference to Miss McAllister's submissions I
will summarise them as follows.
Section
46
specifies the "Right of owners of adjoining lands where junction line is built
on". These rights are given to "the building owner" and they include
demolition as well as strengthening etc. of party structures. However, by
section 47, "Before exercising any right conferred on him by section 46 .... a
building owner shall serve on the adjoining owner .... a "party structure
notice"" (section 47(1), and the notice must be served at least two months
(sometimes one month) "before the date stated therein as that on which the work
is to be begun" (section 47(2). The adjoining owner may then serve a counter
notice (section 48) and where differences arise between them they may appoint
an agreed surveyor or each appoint their own surveyor (section 55(a)). The
parties' surveyors then appoint a third surveyor (section 55(a)(ii)) and there
is a short and, as the present case demonstrates, optimistic time table for the
eventual publication of an award, which may "determine the right to execute and
the time and manner of executing any work and generally any other matter
arising out of or incidental to the difference" (section 55(k)). There is
provision for an appeal to the County Court or to the High Court (section
55(n)(ii)).
These
procedures, however, are all subject to section 47(4) :-
"(4) Nothing
in this section shall prevent a building owner from exercising with the consent
in writing of the adjoining owner .... any right conferred on him by section
46 .....".
So
the statutory scheme is clear. The building owner has certain express rights,
but these can only be exercised (1) with the adjoining owner's written consent,
or (2) in accordance with a valid award by the surveyor or surveyors appointed
under section 55.
The
effect of these provisions and their predecessors has been considered in a
number of authorities. No notice is required in the case of the "mere removal
of a building from an adjoining building without disturbing the party
structure" :
Major
v. Park Lane Company
(1866) L.R. 2 Eq. 453. In
Standard
Bank of British South America v. Stokes
(1878) 9 ch. D.68 the building owner undertook works with the bona fide
intention of supporting the party wall, and at common law the adjoining owner
had no right of action (see page 73). Under the Act, however, the defendant
"had no right to proceed with his work until the direction of the surveyor had
been obtained", and he was liable to be restrained from doing so (page 77).
Sir George Jessel M.R. said this :-
"I
think it the duty of the Court to read these Acts in a reasonable manner, with
a view to carrying out the manifest intention of the legislature that these
party statutes should not be interfered with by building owners without due
notice to the person or persons other than the building owner interested in the
party structure ..... " (page 76).
In
Selby
v. Whitbread & Co.
(cited above) McCardie J. considered the relationship between the statutory
scheme and the parties' rights at common law. He said this :-
"An
examination of the code at once shows that common law rights are dealt with in
a revolutionary manner. The two sets of rights, namely, the rights at common
law and the rights under the Act of 1894 (which followed the Act of 1855), are
quite inconsistent with one another. The plaintiffs' common law rights are
subject to the defendants' statutory rights. A new set of respective
obligations has been introduced the common law was seen to be insufficient for
the adjustment of modern complex conditions. Hence I think that the Act of
1894 is not an addition to but in substitution for the common law with respect
to matters which fall within the Act. It is a governing and exhaustive code,
and the common law is by implication repealed." (page 752).
In
the particular case, he held "the plaintiffs cannot succeed upon their claim at
common law inasmuch as the defendants' party wall notice had been duly given
under the provisions of the Act ....." (page 753). He then referred to actions
which might be brought outside the Act if the building owner abused his
statutory rights (quoted above).
These
authorities establish, in my judgment, that the appellant would not have been
liable on nuisance if he had given notice, or obtained consent, in accordance
with the Act and then done no more than was agreed or was approved by the
surveyors. But then, no damage would have been caused to the respondents'
house, save in the party wall itself, and in that respect no liability would
have arisen. The issue raised in the present case is whether the appellant's
liability at common law is either excluded or reduced by the provisions of the
Act which he invoked, eventually, after the nuisance had arisen.
I
would have no hesitation in rejecting this submission even without reference to
authority, because in my judgment there is nothing in the Act which can be said
to have this effect. The adjoining owner's common law rights are supplanted
when the statute is invoked, which can have the effect of safeguarding the
building owner from common law liabilities when he complies with the statutory
procedures, just as he may incur liabilities under the statute which did not
exist at common law (the
Standard
Bank
decision). But if he commits an actionable nuisance without giving notice and
without obtaining consent, he cannot rely upon a statutory defence under
procedures with which
ex
hypothesi
he has failed to comply. If he does then give notice he will in due course
acquire statutory authority for whatever works are approved or agreed, but in
my judgment this does not relieve him from liability for the continuing
nuisance which he has unlawfully committed, until such time as and to the
extent that such authority is obtained.
This
conclusion is supported by the judgment in
Adams
v. Marylebone BC
[1907] 2 K.B. 822. The decision of the Court of Appeal was that surveyors
appointed to resolve differences between the parties had no jurisdiction to
award compensation to the adjoining owner for inconvenience and loss of trade
caused by works which were authorised by the statute. ".... in my opinion the
mere exercise of such rights cannot afford any ground for compensation under
the Act" (per Vaughan Williams L.J. at 835 ; compare page 841 per Fletcher
Moulton L.J. ".... the adjoining owner has no right to compensation for any
inconvenience caused by operations which the Act has given the building owner a
right to carry out, so long as the latter acts within the provisions of the
Act, for, so long as he does so, his action is lawful.").
The
case was one where unauthorised works were begun before any statutory notice
was served. The adjoining owner, who was a restaurant owner, claimed an
injunction (see [1905] 1 K.B. 661) and in due course was awarded damages for
loss caused by the operations of the building owners prior to the giving by
them of the party wall notice (page 824). It was not clear to the Court what
further claim was then made before the surveyors, but it was assumed that the
adjoining owner had suffered further loss of trade after the notice was given
and the statutory procedures began, by reason of work which was already done.
(see page 828). The Court held that no such claim could be made, and Vaughan
Williams L.J. in the leading judgment expressed the view that no claim would
lie "before any tribunal whatever" (page 829). That was because the work was
"in its nature rightful" (
ibid.)
In
the present case, therefore, Miss McAllister submits that no claim lies for
damage caused after the notice was given, in December 1988. If
Adams
v. Marylebone
was authority for that proposition then of course it would be binding on us,
even if that result seemed not in accordance with principle, for the reasons
stated above. But in my judgment there were two significant features of that
case which are not present here. First, there was an agreement between the
parties when the notice was given "that the work already done should
thenceforward be treated as if it had been done under a notice duly given under
the Act" (page 828). No such agreement is alleged or found to have been made
in the present case. Therefore, the basis for the Court's decision that what
was done was lawful under the Act does not exist here. Secondly, a related
point is that there is no finding in the present case that the statutory
approval when it was given covered all the works which created the nuisance in
1988. It would be surprising if that finding was even suggested, because the
surveyors could hardly have agreed to approve works which caused such
widespread damage to the adjoining house. For example, the appellant failed to
provide shoring when the front wall of his house was removed. So it cannot be
said, in my judgment, that the works which created the nuisance were
subsequently authorised, whether by agreement or by surveyors under the
statutory procedures.
Without
such justification, the appellant has no defence in my judgment to the claim
for damages for the nuisance which he created in 1988 and which continued, on
the judges's findings, until the works were complete.
One
authority, on which we did not hear argument, appears to be directly in point.
In
Upjohn
v. Seymour Estates Ltd.
(1938) 54 T.L.R. 465 the owner of a house, No. 92 Camden Road, began to
demolish his property with the result that his half of the party wall
collapsed. The plaintiff lived next door at No. 94 and as a result his
property was damaged and he suffered business losses. ("His stock suffered
severely, as did his business ...." (p. 466).) The defendants gave notice
under the London Building Act 1930 and surveyors were appointed, but before
their award was published the demolition took place without further notice to
the plaintiff. Goddard J. held that no trespass had taken place but the
defendants were in breach of duty by withdrawing support from the party wall,
and they were liable for "all such damage to the structure as can be proved to
have resulted from the withdrawal, and also for the damage to the stock and
disturbance of the business which was caused by the collapse ...." (p.467). In
short, damages were at large and they were directed to be assessed by an
Official Referee. It was not suggested that they should be reduced by
reference to any award, if there was one, made by the surveyors after the
disturbance took place.
Causation
The
judge found that "if the Defendant had properly complied with the Act ... the
Plaintiffs would have still been able to find a buyer and to complete the sale
of their property by the end of October 1988" (page 11). There was evidence
that the mortgage surveyors, who saw the extent of the demolition and
rebuilding that the appellant was carrying out, were concerned to know that
proper notice had been given and the statutory procedures complied with. The
judge was entitled to hold that the sale actually negotiated with a prospective
purchaser, Miss Knight, or with some other purchaser would have been concluded,
even if the works were in progress, provided they were carried out lawfully
under the Act,
A
fortiori
,
if a notice had been served and as a result the works themselves had not begun.
The appellant submits that the loss of a sale was not shown to have been caused
by his failure to serve the statutory notice, but that is not what the judge
found. "If the defendant had properly complied with the Act" means "if he had
not carried out unauthorised and therefore unlawful work", and undoubtedly it
was those works which were the effective, if not the only cause of the
respondents' failure to sell their house in 1988.
Remoteness
It
is sufficient, in my judgment, that the appellant could reasonably foresee that
the respondents might be unable to sell their house because of the (unlawful)
works which he carried out, at least until statutory authority was obtained and
the works so authorised were complete, and that they might suffer financial
loss in the form of a continued liability to pay mortgage interest on a loan or
loans which would otherwise be repaid. Moreover, the respondents might intend
to build a new property, in this country or overseas, and increased building
costs might be the consequence of delay. None of these was bound to happen,
and it might also have been the case that the respondents would have obtained a
fresh mortgage advance on their new property, for an equal or greater amount,
and therefore would not have suffered any loss of mortgage interest, by reason
of the delay. Both possibilities were reasonably foreseeable and the
respondents did in fact incur this type of loss by reason of their inability to
sell the house for the period in question.
Length
of period/failure to mitigate
The
period covered by the judge's award was from 1 November 1988 until 31 March
1993, made up as follows :
December
1988
Notice
given.
October
1991
Surveyors'
final award.
October
1992
Rebuilding
work complete. This was the work "necessary to repair the front wall of number
52 and tie it in to the rebuilt party wall".
March
1993
Six
months for sale.
The
bulk of this period was taken up with obtaining the surveyor's final award.
The judge examined the reasons for delay, one of which was that the
respondents' surveyor held certain views as to the content of an agreed award
with which the appellant's surveyor disagreed. This led to the appointment of
a third surveyor. A second reason was "the obvious inexperience bordering at
times on incompetence of the Defendant's surveyor". He held that the appellant
could not rely on delay caused by his own appointee, and that the respondents'
surveyor's conduct had not been so unreasonable as to be unforeseeable. "The
truth is that he was throughout as anxious to resolve matters as speedily as
was compatible with his professional duty to protect his clients' interest."
I
can see no ground on which these findings can be challenged, and in the light
of them the appellant's submissions that the period was excessive and that the
respondents failed to mitigate their loss must, in my judgment, fail.
I
therefore would dismiss this appeal.
LORD
JUSTICE HENRY :
I
agree.
LORD
JUSTICE ALDOUS:
I
also agree.
Order:
appeal
dismissed with costs; costs order against the appellant not to be enforced
without the leave of the court; question of enforcement and all questions of
costs adjourned to the Shoreditch County Court.
© 1996 Crown Copyright
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