Dillard v F & C Commercial Property Holdings Ltd  EWHC 1219 QB
Parties to a potential dispute under the Act can enter into a binding agreement to pursue an alternative dispute resolution procedure, effectively contracting out of the Act.
Level of Court
This is a decision on appeal to the High Court, and is therefore binding upon the County Court.
Mr Dillard was the adjoining owner of property adjacent to that owned by the building owner, F&C. The latter was planning a very extensive redevelopment, and entered into a deed with Mr Dillard prior to works commencing (“the Deed”), to regulate relations between them in relation to the development. The Deed included both a clause requiring the parties to adhere to the requirements of the Act, and a clause providing for a specified dispute resolution procedure, by way of an expert. Various awards were made, the last of which was an addendum award in which the parties’ surveyors awarded a total of £9,350 in respect of compensation for damage caused by notifiable works to Mr Dillard’s building. Mr Dillard contended that the true cost of consequential repairs would exceed £500,000, and therefore appealed the addendum award. In that appeal he contended not only that the cost awarded was vastly inadequate (a point not dealt with in the preliminary issue and appeal summarised here), but also that the surveyors did not have jurisdiction to make the addendum award because the cost of repair was a dispute in relation to which the surveyors’ jurisdiction under section 10 of the Act had been ousted by the Deed. F&C applied to strike out those parts of the appeal challenging the jurisdiction of the surveyors to make the addendum award. HHJ Bailey allowed that application, and it was his decision which was then appealed to Akenhead J.
Whether the parties were (1) able to, and (2) had, as a matter of construction, ousted the jurisdiction of the surveyors under section 10, and instead imposed on themselves the dispute resolution procedure set out in the Deed.
Although the parties in the event agreed that it was possible for them to “contractually opt out of the Act”, Akenhead J said that they were right to have done so. The issue therefore became a pure question of construction, i.e. what the Court understood the parties to have meant by the words they used in the Deed. The judge placed particular emphasis on the fact that the Deed had provided for Mr Dillard to be indemnified in relation to damage caused by any of the development works carried out by F&C, i.e. not limited merely to party wall works, and that “any dispute” in relation to such compensation was to be dealt with under the dispute resolution procedure provided for by the Deed. The wider significance of this case is therefore limited to a confirmation that it is open to the building owner and adjoining owner to contract out of all or part of the Act.
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