CHARTERED BUILDING SURVEYORS
Specialising in boundaries in England and Wales-
where they are and what rights exist across them. Working on the edge -
facilitating construction in the urban environment, helping to maximise
site use, minimise cost and delay caused by neighbours, and protecting
the rights of owners of land and buildings from building works and
associated activities nearby.
Compensation: a short note written for the Party Wall Discussion Group
Paul
Chynoweth
December 12, 1998
I
have just caught up on the discussions regarding the above and
have to agree with Roger's point that compensation under
section 7(2) would indeed include compensation for loss of trade.
Adams v Marylebone Borough Council, if anything, tends to support this position as:
1. That case was decided under the 1894 Act which contained no GENERALright to compensation equivalant to section 7(2)
2.
The Court of Appeal based their decision that compensation
could not be awarded in this case entirely on the rights of the
adjoining owner contained in section 88(6) of the 1894 Act [which was
broadly the same as sections 2(2)(a) and 2(3)(a) and
(b) of the 1996 Act]. These rights only related to the making good of
damage. A right to have made good obviously only
relates to physical damage and on this basis loss of trade cannot be
considered.
3.
During the course of their deliberations the judges
considered all the other possible bases for the award of compensation
within the 1894 Act and noted that each of the construction situations
catered for within the legislation had their own specific
compensation provisions which varied in their scope according to the
severity of the encroachment onto neighbouring land.
4.
Section 93 of the 1894 Act (which now appears as section 6
of the 1996 Act) contained the most draconian right in respect
of adjoining land - the right to enter adjoining land and actually
underpin a neighbour's building. Not surprisingly the
accompanying compensation provisions were equally draconian. They were
contained in section 93(3) in the following
(familiar?) terms:
The
building owner SHALL BE LIABLE TO COMPENSATE the adjoining owner
and occupier for ANY
INCONVENIENCE LOSS OR DAMAGE which may result to them by reason of THE
EXERCISE OF THE POWERS
CONFERRED BY THIS SECTION.
I
read this as providing an AUTOMATIC right to compensation on a
strict liability basis for ANY inconvenience, loss or
damage which is caused by the act of underpinning (which is the power
conferred by section 93). ANY LOSS clearly
includes a reference to loss of trade as a type of loss that is
recognised as recoverable in other areas of the law. I must say
that, in these circumstances this all seems entirely fair to me. If
someone started underpinning my house to assisit their own
development plans then I think I would want these types of guarantees!
5.
I would suggest that legislators behind the 1996 Act (are
any of you listening?) have done a very strange thing indeed.
They have ridden roughshod over the principle, identified by the
judgements in Adams v Marylebone, that rights to
compensation should be individually tailored to the degree of intrusion
onto adjoining land and created a compensation regime
that is now contradictory. For example, the limited right to have
damage made good still survives under section 2 and more
extensive rights to compensation still survive under section 1 - but
what on earth have they done with section 6 (which deals
with the most draconian intrusion of all)? Well, actuallly they've
removed the compensation provision entirely! Section 6 has
had some fairly crude surgery performed on it leaving only (the now
entirely meaningless) section 6(10) as a relic of its
former compensation provisions [see 1939 Act sections 50(2)(d) and
50(3)]. No matter however as the surgery also includes
a very handy bit of cutting and pasting. The very draconian and tailor
made entitlement to compensation for underpinning
works (section 93(3) 1894 Act; section 50(2)(d) 1939 Act) now appears
in substantially the same form as section 7(2) of the
1996 Act (even though it now seems to make all the other more limited
compensation provisions elsewhere in the Act
redundant).
6.
In my submission the effect of all this is that the
draconian, strict liability obligation to compensate for ANY LOSS OR
DAMAGE now applies to all work undertaken under the Act and not simply
underpinning work, which was formerly the
case. Hence if Adams v Marylebone Borough Council was heard again
today, under the 1996 Act, it would surely be decided
differently.
My
apologies if this is all rather detailed but I have to admit to
more than a passing interest in the subject - it forms the subject
area for a dissertation I am currently doing for the RICS as part of my
APC.
Thanks for listening.
Paul
Chynoweth
Paul
Chynoweth
Party Wall Discussion Group
DAVID BOWDEN & ASSOCIATES CHARTERED BUILDING SURVEYORS
27 Selby Road London E11 3LT 020 7377 9494
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