Randall Wayne Dillard v F&C Commercial Property Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 16 April 2014 |
| Neutral Citation | [2014] EWHC 1219 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case Nos: QB/2013/0589 |
| Date | 16 April 2014 |
[2014] EWHC 1219 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
HHJ BAILEY
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Akenhead
Case Nos: QB/2013/0589
Jonathan Gaunt QC (instructed by Dewar Hogan) for the Appellant
John de Waal QC (instructed by Forsters LLP) for the Respondent
Hearing date: 3 April 2014
The Background
The Appellant, Randall Wayne Dillard, acquired a large Georgian house in Soho, 23, Great Pulteney Street ("the Adjoining Premises") as his home, in or shortly before 2006, and carried out apparently substantial refurbishment and redecoration at those premises. The Respondents, F&C Commercial Property Holdings Ltd ("the Developer") owned 24–27, Great Pulteney Street, which was adjacent to the Adjoining Premises. The Developer wanted to re-develop its site, this involving the demolition of existing buildings, and, sensibly, the two parties entered into a deed dated 8 October 2007 ("the Deed") to regulate the relations between them in relation to this development. The Developer had secured a planning permission and conservation area consent on 18 July 2007. I will return in detail to the Deed but, although it had a specified dispute resolution procedure (Clause 12) it also, by Clause 11, required the parties to adhere to the requirements of the Party Wall etc Act 1996 ("the Act").
Following the postponement of its development to 2010, the Developer appointed Mr Aaron Morris as its surveyor and Mr Dillard appointed Mr Geoff Shore as his surveyor. On 17 December 2009, 9 February 2010, 8 April 2010 and 20 December 2010 Mr Morris on behalf of the Developer served various notices under the Act on Mr Dillard. The two surveyors appointed Mr North as the "Third Surveyor". Following various disputes or differences between the parties, these three surveyors produced three awards under the provisions of the Act on 25 March 2010, 26 July 2010 and 21 January 2011 with an "Addendum Award" on 5 April 2013, which was the first to address compensation.
Mr Dillard issued an Appellant's Notice in the Central London County Court, asking for a re-hearing, complaining that the latest award gave "no reasons and was made without consultation with me as to the likely cost of remedying the disrepair caused by the" developer's works and that "the award is a nullity since it deal with matters which by agreement…[the parties] agreed to refer to determination by an expert…rather than the party wall surveyors". Mr Dillard says that the cost of remedial works and likely losses will exceed £500,000 rather than the £9,350 allowed in the Addendum Award. The Grounds of Appeal attached were in these terms:
"1. The Award ought to be set aside because the parties have agreed another method of assessing the compensation which would be payable to the Appellant by the Respondent for any damage to the Appellant's property…caused by the Respondent's works…
2. The Appellant and the Respondent entered into an agreement governing the said works dated 8 th October 2007.
3. Clause 7 of that agreement provided for the Respondent to indemnify the Appellant in respect of any damage to the Appellant's property and clause 7.5 provided that in the event of any dispute resulting from the said obligation the matter will be referred to the dispute resolution procedure set out in clause 12 of the agreement (which provided for determination by an expert).
4. Clause 10 of that agreement provided for the Respondent to indemnify the Appellant in respect of increased running costs and servicing of, and any damage to, the Appellant's air handling unit. Clause 10.4 provided that any dispute relating to the requirements of that clause should be referred to the dispute resolution procedure set out in clause 12 of the agreement.
5. The Appellant was not aware until very shortly before the purported Award was made that the party wall surveyors intended to deal with the question of compensation, and were in the process of gathering evidence from the structural engineer and interior designer as to the extent of, and the likely cost of remedying, the observable damage to his property.
6. The award should be set aside and the matter remitted to an expert for determination in accordance with the agreed procedure.
7. In the alternative, the amount of compensation specified in the award is wholly inadequate and the court should set the award aside and substitute its own award. The Appellant will present expert evidence as to the true extent and cost of the damage once he has been able to obtain it…"
The Developer applied to have Paragraphs 1,2, 3, 4 and 6 of the Grounds of Appeal struck out. HHJ Bailey, who is the specialist TCC judge at the Central London County Court, heard this application on or before October 2013 and delivered an ex-tempore judgment, allowing the application. In essence, he decided that the dispute resolution procedure within the Act was not contractually ousted by the Deed and in effect that the Addendum Award was jurisdictionally valid. Although he accepted apparently that there were "two parallel (but not exactly coextensive…) procedures for dealing with disputes" (Paragraph 26), he accepted that Clause 11 of the Deed by which the parties agreed to "adhere to the requirements of the" Act had a literal meaning He therefore struck out the requisite paragraphs.
Mr Dillard then issued an Appellant's Notice on 25 October 2013 seeking to challenge this decision in the Queen's Bench division before a High Court judge essentially on the ground that the judge's interpretation of the Deed was wrong.
The Deed
The recitals to the Deed were:
"A. The Developer is the freehold owner of the Site and the Adjoining Owner is the freehold owner of the Adjoining Property
B. The Developer wishes to redevelop the Site and has obtained the Planning Permission for the Scheme
C. The Developer and the Adjoining Owner acknowledge that the Scheme will have an impact on the Adjoining Property and have agreed to document the agreement reached between them in relation to this."
Clause 1.1 contains definitions including the Building Works: "the demolition of the existing building on the Site and works of development to be carried out at the Site in accordance with the Scheme", the Site being the Developer's property and the Scheme being those works proposed in the requisite Planning Permission.
Clauses 3 and 4 provided for in the Developer not to construct a new building on the Site containing windows, apertures openings or terraces or flat roofs which respectively faced or overlooked the Adjoining Property as well as in relation to rights of light.
Clause 7 is an important clause in this case with Clause 7.1 requiring the Developer to take comprehensive Schedules of Condition "of the Adjoining Property covering all internal and external elements and roof surfaces and these were to be signed by surveyors acting for both parties". Clause 7.2 provided as follows:
"In the event of any damage the Developer shall, if so required by the Adjoining Owner, promptly make good, repair or rectify such damage or deterioration to the reasonable satisfaction of the Adjoining Owner at the cost of the Developer."
Clause 7.4 provided:
"The Developer will indemnify and keep the Adjoining Owner indemnified against all loss, damage, claims and expenses relating to the structure, fabric and contents of the Adjoining Building arising directly as a result of the Building Works."
Clause 7.5 provided:
"In the event of any dispute resulting from the extent of the Developer's obligations in this clause the matter will be referred to the Dispute Resolution Procedure set out in Clause 12."
Clause 9 set out obligations on the Developer to procure that the effects of noise and vibration were kept to a minimum, that disruptive elements of work were approached "sensitively", that appropriate work methods were used to limit the escape of dust and dirt and the like. Clause 10 related to the AHU on the roof of Mr Dillard's house which provided for ventilation and air conditioning:
"10.2 The Developer will implement the necessary protection to the AHU during the Building Works as agreed between the parties at the end costs.
10.3 The Developer will also meet the costs of increased filter changes to the AHU and increased servicing by a suitably qualified contractor nominated by the Adjoining Owner as frequently as necessary and the cost of repair or, if necessary replacement, of the whole or any part of the AHU damaged by builder's dust or debris.
10.4 Any dispute resulting from the interpretation or requirements of this Clause will be referred to the Dispute Resolution Procedure set out in Clause 12."
Clause 12 addressed the Dispute Resolution Procedure referred to in Clauses 7.5 and 10.4 and 10.4:
"12.1 In this Deed, where any matter falls to be agreed between the parties both parties will seek to resolve the issue as quickly as possible through their respective surveyors.
12.2 If the matter can not be agreed within 10 Working days of the date when it falls to be decided, the issue should be referred on the application of either party for the determination of a single expert to be agreed between the parties within a further period of 10 Working Days or in the absence of such agreement to be appointed on the application of either party by the President for the time being of the Royal Institute of Chartered Surveyors on such terms as to the liability and remuneration of such expert as the president shall direct.
12.3 Such expert shall afford to the parties an opportunity to make representations in writing and (save for manifest error) his determination shall be final and binding upon the...
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