A practising Party Wall Surveyors evaluation of K Group Holdings Inc v Saidco International July 21
In the County Court at Central London, a party wall appeal between Appellant K Group Holdings Inc. and Respondent Saidco International SA. The case, under reference G20CL136, involved a long lease property in Aldford House, located in the Park Lane area of London. Thomas More Building Royal Courts of Justice, under the jurisdiction of His Honour Judge Parfitt, heard the case. This article aims to evaluate the judgment rendered in the case and provide an opinion from the perspective of a practicing party wall surveyor.
Background of the case:
For those unfamiliar with the case the appellant, K Group Holdings Inc., held a long lease in Aldford House, which was previously owned by Park Lane Holdings Inc. It was alleged that during the conversion of the sixth and seventh floors into residential flats in 2009, a leak occurred which affected Flat 54, owned at the time by Saidco International SA. Subsequently, several parties, including Mr. Hattan Pharoan and HRP Foundation, became involved in the dispute.
Proposed construction works undertaken at Aldford House on Park Lane, London, were focusing on the development of the sixth and seventh levels into residential units from 2009 to 2013. Directly beneath these, was Flat 54, which was under the ownership of Saidco. The works were notifiable under the Party Wall etc. Act 1996, H&MUK as building owner served notice on Saidco, the owner of a lease for flat 54 on the floor adjacent the works. Two surveyors were appointed as building owner’s surveyor and adjoining owner’s surveyor respectively to determine the dispute arising in response to the notice served.
A party wall award for the development's notifiable elements was agreed and served by the two appointed surveyors in 2009. Parties in this matter were the building owner H&MUK, and Saidco, as the adjoining owner. The award stated two appointed surveyors, a building owners’ surveyor and the adjoining owner’s surveyor who had duly selected a Third Surveyor.
In 2014 the ownership of Flat 54 transferred to HRP Foundation. It should be noted, however, that Mr Pharoan continuously occupied the flat throughout the relevant timeframe as the adjoining occupier. An issue arose in 2009 when the occupant of Flat 54 raised concerns about a water leakage believed to originate from the above properties, but this remained unaddressed at this time.
A significant time lapse occurred, and it wasn't until 25 October 2019 that action was seemingly initiated. The adjoining owner’s surveyor reached out to the building owners’ surveyor, wishing to address the reported damage. By this time, the building owner surveyor had switched firms, expressing an inability to fulfil obligations tied to his prior statutory appointment. Following a brief communication with the selected third surveyor, the adjoining owner’s surveyor drafted several ex parte awards between July and November 2020, each indicating a different building owner. The last of these pointed to K Group Holdings as the responsible party, claiming compensation of €445,000 for the adjoining owner due to the aforementioned leakage, and in addition to awarding associated costs.
Evaluation of the Judgment by a practicing Party Wall Surveyor:
The first ground of appeal raised the issue of jurisdiction, and it was rightly argued that the party wall surveyor, had no jurisdiction to make an award binding the appellants, as his authority was derived from the 2009 award involving different parties. This ground was upheld, indicating a lack of jurisdiction in his actions.
2. Existence of a Dispute:
The second ground of appeal highlighted that there was no dispute between the appellants and Saidco International SA, which is a fundamental requirement for the jurisdiction of party wall surveyors. The court agreed that the dispute under the 2009 award had been resolved, and no new dispute had arisen, thereby invalidating the party wall surveyor’s jurisdiction and further awards served being ultra virus.
3. Engagement of the Appellants:
Grounds 7 and 11 raised concerns about the party wall surveyor’s failure to invite submissions from the appellants and his attempt to enforce fees outstanding under the 2009 award. It was argued that natural justice required the party wall surveyor to provide an opportunity for all affected parties to participate and have their voices heard. The court agreed that his actions were outside the bounds of natural justice.
4. Limitations and Quantum of Compensation:
Another key aspect of the case was the issue of limitation on compensation claims. The court agreed with the appellant's argument that any claim for compensation under the Act would be subject to a six-year limitation period, Under Section 9 of the Limitation Act 1980, the time period starts from the date when the adjoining owner’s property is damaged. Even if determining the compensation amount necessitates an award, such an award should not be granted after 6 years from the date the damage occurred, as such, the compensation award of €445,000 made by the party wall surveyor was deemed to be outside the time limit and thus invalid.
As a practicing party wall surveyor, I find the judgment in K Group Holdings Inc. v Saidco International SA to be grounded in sound reasoning. The court correctly emphasized the importance of jurisdiction, the existence of a genuine dispute, and the principles of natural justice in disputes determined in accordance with the Party Wall etc. Act 1996.
It is clear from the case that the actions of the adjoining owner’s party wall surveyor, were inappropriate and lacked a legal basis. His failure to engage with the appellants and consider their viewpoints compromised the fairness of the process. Also, attempting to enforce fees and issuing an excessive compensation award which had increased from £50,000 in July 2020 to €445,000, without a clear basis further undermines the credibility of the ex parte awards served by the adjoining owners surveyor.
The judgment serves as a reminder to all practicing party wall surveyors, and all professionals involved in construction dispute resolution of the vital importance of adhering to legal procedures, engaging all relevant parties, and upholding the principles of natural justice. It reinforces the need for a fair and balanced approach in resolving disputes in accordance with the Party Wall etc. Act 1996.
Further Analysis and Implications:
The judgment in K Group Holdings Inc. v Saidco International SA carries significant implications for both parties involved in party wall disputes and professionals in the field. It highlights the potential risks and consequences of disregarding legal procedures, failing to engage with all relevant parties, and exceeding the jurisdiction conferred by statute.
Disputes under the Party Wall etc. Act 1996 often involve complex legal and technical issues, and it is imperative and of good sense for all parties to seek expert advice and representation from a appropriately qualified expert. In this case, the judgment demonstrates the importance of having expert professionals who specialize in party wall matters with construction experience to navigate the legislation of the act. and ensure a fair and impartial determination.
The case emphasizes the need for effective communication and collaboration between all parties to the dispute. The party wall surveyor's role is not merely to make unilateral decisions but rather to facilitate dialogue, listen to all arguments, and seek middle ground and amicable solutions wherever possible. By neglecting this responsibility, the adjoining owners party wall surveyor found his actions called into question, leading to the invalidation of his awards.
The invalidation of the November 2020 award raises the issue of costs incurred by the appellants. Ground 12 of the appeal sought to set aside the costs order, as there was a lack of clarity regarding which costs were covered and whether they extended to the earlier July and September 2020 awards. This highlights the need for precision and transparency in the calculation and allocation of costs to be awarded in party wall disputes, ensuring that these determinations align with the surveyor’s jurisdiction, legal requirements and to maintain fairness for all parties involved.
Moving forward, the judgment in K Group Holdings Inc. v Saidco International SA serves as a precedent, establishing clear guidelines for party wall surveyors and the parties engaged in such disputes. It emphasizes the importance of adhering to procedural fairness, providing opportunities for engagement, and staying within the bounds of granted jurisdiction.
Both legal professionals and party wall surveyors must take note of this case as they navigate future party wall dispute in accordance with the Party Wall etc. Act 1996. It highlights the necessity of conducting due diligence, understanding the legal framework, and skilfully applying the relevant provisions of the Party Wall etc. Act 1996 to ensure a fair and just determination.
My final view:
The judgment in K Group Holdings Inc. v Saidco International SA sets a significant precedent in disputes determined in accordance with the Party Wall etc. Act 1996. It highlights the significance of jurisdiction, the need for the existence of a genuine dispute, and the principles of natural justice. The court's evaluation of the case showcases the potential consequences of disregarding these key factors and ultimately leading to serving a hopeless award.
From a practicing party wall surveyor's perspective, this judgment serves as a valuable reminder of the responsibilities of all surveyors. It underscores the importance of upholding ethical standards, exercising due diligence, and engaging all parties in a fair and transparent manner.
This case emphasizes the need for expertise in the Party Wall etc. Act 1996 when navigating disputes within its jurisdiction, ensuring that the rights and interests of all parties are protected. By understanding and taking on board the ruling in this case, we party wall surveyors can contribute to the fair and orderly determination of party wall disputes thus promoting a harmonious built environment.
K Group Holdings Inc. v Saidco International SA highlights the significance of procedural fairness and the limits of jurisdiction in party wall disputes. It is essential for parties involved in such cases to seek the advice of qualified professionals and ensure that their rights and interests are properly protected and represented.
Stephen Hawes MFPWS MCIOB CIHCM MCIArb AssocRICS MAPM MCABE C. Build E
Director of Stephen Hawes & Co. Party Wall Surveyors
Disclaimer: This article is an opinion piece and should not be construed as legal advice. It is based on the information provided in the case transcript and the understanding of a practicing party wall surveyor. For specific legal guidance, consult a qualified legal professional.