Third surveyors, the impartial arbiters of the party wall world, rarely feature prominently in party wall litigation. However, there have been two recent County Court cases in which the selection and purported removal of third surveyors has been considered by the Court, in both cases HHJ Bailey in the County Court at Central London.
The Role of Third Surveyors under the Act – Third surveyors are selected, under section 10(1)(b) of the Party Wall etc. Act 1996 (“the Act”) by the two surveyors appointed respectively by the building owner and the adjoining owner. Their selection should be the first order of business of the party-appointed surveyors. If the appointed surveyors cannot agree on that selection, they can delegate the task to the local authority’s appointing officer under section 10(8).
Once selected, the third surveyor has two potential roles. The first, under section 10(10) is to make an award with one or both of the party-appointed surveyors, i.e. by agreement with one or both of them. Such awards have become more common recently, but effectively depend upon the third surveyor completely agreeing with one of the two party-appointed surveyors on the content of an award.
The third surveyor’s second role, under section 10(11) is the more common, and more traditional role, namely to act as the arbiter or referee of any dispute referred to him by either the party-appointed surveyors, or the parties themselves.
Typically, a dispute will be referred to the third surveyor for determination under section 10(11). The precise terms of that referral may be further defined as between the parties at the invitation of the third surveyor, who will then typically invite written submissions by the surveyors and/or the parties as to the issue(s) in question. Thereafter, the third surveyor will produce his decision in the form of a third surveyor’s award, which award will also typically award the costs of the referral to the winning party. The process is thus closely analogous to small-scale litigation, and is to be contrasted with the normal situation where the building owner will be expected to pick up all of the costs of an award.
Removal of third surveyor – It is commonly and correctly said that third surveyors are often not aware that they have been selected, since they will normally only be approached where the two party-appointed surveyors have been unable to agree and make a two-surveyor award under section 10(10).
Like the party-appointed surveyors under section 10(1)(b), and pursuant to the terms of section 10(2) the third surveyor cannot be sacked by the parties. That sub-section provides:
“All appointments and selections made under this section shall be in writing and shall not be rescinded by either party.”
The cases – In the case of Reeves v Young decided on 3rd January 2017 in Central London County Court, Alistair Redler had been selected by the party-appointed surveyors as the third surveyor. Thereafter, in circumstances less than completely clear, but apparently arising from an understandable desire to have the same third surveyor selected in relation to the adjoining owners on both sides of the building owner’s property, the surveyors, in their substantive award, recorded that they had selected Philip Antino as the third surveyor.
Thereafter, a referral was made to Mr Antino, who proceeded to make an award, purportedly as third surveyor, and thereafter sought to enforce payment of his fees under that award. The award was challenged as having been made without jurisdiction (“ultra vires“), on the basis that Mr Redler remained the properly selected third surveyor, and the party-appointed surveyors therefore had no power to appoint Mr Antino as his replacement; consequently Mr Antino had no jurisdiction to make an award.
HHJ Bailey upheld the challenge to Mr Antino’s would-be third surveyor’s award. He held that the prohibition in section 10(2) against the parties sacking any of the surveyors extended also to a prohibition against the appointed surveyors sacking the third surveyor.
The judge also rejected arguments based on both section 10(16) and estoppel. It had been argued that the recital in the substantive award that Mr Antino was the third surveyor could not be challenged because of the effect of section 10(16), and that the subsequent carrying out of works by the building owner in reliance upon that award estopped the building owner from now asserting otherwise.
The judge noted, in rejecting those arguments, that the naming of Mr Antino as third surveyor was merely a recital, and did not form any part of the body or substance of the award. As to the estoppel argument, this was rejected on the basis that estoppel could not override the statutory provisions, which dictated that Mr Redler remained the selected third surveyor.
There are some similarities between the Reeves case and that of Property Supply and Development Ltd v Verity decided on 17th December 2015, also by HHJ Bailey. In that case, the parties’ initially appointed surveyors had selected a third surveyor, Mr Cane. In due course both parties’ appointed surveyors declared themselves incapable of acting. The adjoining owner appointed a replacement surveyor, Mr Frame, who then sought both to appoint a surveyor on behalf of the building owner (because the building owner had not himself yet appointed a replacement), and then a replacement third surveyor as well.
As far as the third surveyor was concerned, the argument was that, upon one or both of the originally appointed surveyors declaring themselves incapable of acting, the third surveyor was automatically de-selected, and the replacement building and adjoining owner’s surveyors could therefore select a new third surveyor. In the event this argument did not get off the ground, because the judge held that Mr Frame had not been entitled to appoint a replacement surveyor on behalf of the building owner. However, the judge did make it clear, in an obiter comment at paragraph 29 of his judgment, that the originally selected third surveyor remained in post, and the appointed surveyors had no right to select a replacement. That decision is of course consistent with his more recent decision in Reeves.