Young & Anor v Bemstone Ltd (t/a Bemstone Homes)

In a claim for damage caused by neighbouring excavation and construction works, the claimant must establish that the works were the most likely cause of the damage. Causation should be assessed robustly and sensibly by reference to the evidence as a whole. Where inadequate planning, piling, restraint or containment materially threatens the stability of adjoining land, the resulting structural damage may be attributed to the works. Under the Party Wall Act 1996, adjoining owners and occupiers may recover compensation for loss or damage caused by authorised works, including reasonable related costs. Compensation may include reasonable remedial works, rental loss and diminution in capital value, subject to mitigation.

The Youngs owned a house adjoining a site where Bemstone demolished an existing dwelling, substantially excavated the ground and constructed two four-storey houses. The works involved piling and a retaining structure in sandy ground. The Youngs alleged that the works caused cracking, movement and loss of support to their property.

The proceedings were cross-appeals concerning damage, causation, remedial works, rental loss, diminution in value and recoverable costs under the Party Wall Act 1996. The central issues were whether the damage was caused by Bemstone’s works, what remedial measures were reasonable, and what compensation followed.

1. Causation. The court found that the adjoining property had no significant pre-existing structural defect. The damage emerged after excavation and piling. The relevant service excavations were not the primary cause. The court was required to take a robust and commonsense approach and held that the construction works were the most likely cause of the damage.
2. Construction methodology and restraint. The project required close planning and management because of the fine, free-running sand and the substantial excavation beside the adjoining property. The evidence showed inadequate lateral restraint before completion of the building, movement of the piled wall and insufficient evidence that competent engineering methods had been followed. The court accepted that this movement affected the stability of the sandy mass beneath the Youngs’ house and its foundations.
3. Remedial works. The court accepted the need for underpinning and the remedial items identified by the Youngs’ expert. The reasonable cost was £107,000 plus VAT, namely £126,312 inclusive of VAT.
4. Compensation. Under section 7(2) of the Party Wall Act 1996, the Youngs were entitled to recover compensation for loss of rent and diminution in value. The appropriate rental value was £1,900 per month. The property’s value was assessed at approximately £800,000 if repaired and £620,000 in its damaged condition, producing a diminution of £180,000. The mitigation objection was rejected because the damaged property was unattractive to tenants.
5. Costs. The successful appellants were entitled to the costs of the appeal and reasonable costs incurred in investigations and making the relevant party wall awards.

The judgment records that the proceedings were cross-appeals concerning party wall awards and compensation. No separate lower-court citation or prior decision is stated in the judgment.