Robert Taylor v Peter Jones & Anor

Compensation under the Party Wall etc. Act 1996 is limited by causation. The court must identify the damage caused by the works and then the work required to repair that damage. Practical necessity alone does not make the cost of remedying a pre-existing defect recoverable. Where repair is appropriate, the reasonable repair cost may be awarded. Betterment is treated differently according to whether the claimant chose an improvement, obtained a pecuniary saving, or received only an unavoidable non-pecuniary benefit. On costs, an appeal proceeding by way of rehearing may make the respondent the successful party despite the appellant reducing the monetary award.

Mr Taylor appealed two awards made under the Party Wall etc. Act 1996 in favour of Mr and Mrs Jones and Mr Spriggs. His works caused movement and damage to their properties, but investigations also revealed long-standing defects which pre-dated the works. The third surveyor awarded compensation, and the County Court, on a rehearing, upheld liability while reducing the amounts awarded and ordering Mr Taylor to pay 75% of the respondents’ costs.

Before the Court of Appeal, Mr Taylor challenged liability for the cost of underpinning the pre-existing defective rear wall and challenged the costs order. The central issues were the scope of statutory causation, the treatment of betterment, and identification of the successful party in an appeal conducted by way of rehearing.

Nugee LJ gave the judgment, with Bean LJ and Macur LJ agreeing. The appeals were allowed in part.

1. Under section 7(2) of the Party Wall etc. Act 1996, compensation is payable for loss or damage resulting from the works. The analysis requires the court to identify the damage caused by the works, determine the appropriate measure of compensation, identify the work needed to repair that damage, consider betterment, and quantify the cost. General reasonableness is relevant to the choice between diminution in value and repair cost, but it does not answer the causation question.
2. The works caused a small movement of the rear wall, associated cracking, separation and dropping of internal walls, and dropping of three floor slabs. The dpc crack, the unsupported rear wall and the void beneath the unaffected floor slab pre-dated the works. The respondents were therefore entitled to the cost of repairing the damage caused by the works, but not to the cost of remedying unrelated pre-existing defects.
3. The betterment authorities, including Harbutt’s Plasticine Ltd v Wayne Tank and Pump Co Ltd [1970] 1 QB 447, Lagden v O’Connor [2003] UKHL 64 and Sartex Quilts & Textiles Ltd v Endurance Corporate Capital Ltd [2020] EWCA Civ 308, establish that unavoidable new-for-old replacement does not automatically require a deduction. A deduction may be justified for optional improvements or a proved pecuniary saving. The burden of proving such saving lay on Mr Taylor, and it was not discharged.
4. Although underpinning the rear wall was practically necessary before the other works could safely be undertaken, it was required to remedy the pre-existing unsupported wall, not to repair the damage caused by Mr Taylor’s works. Ground 2 therefore succeeded. The case was remitted for the County Court to determine the recoverable sum.
5. Ground 1 failed. Although an appellant who improves his monetary position will ordinarily be the successful party on an appeal by way of review, these appeals proceeded by way of rehearing. The respondents bore the burden of establishing damage, causation and quantum, and succeeded on the central causation issue. The Judge was entitled to treat them as the successful parties and to order Mr Taylor to pay 75% of their costs. The costs below nevertheless required reconsideration following the result on Ground 2.

1. Court of Appeal (Civil Division) The appeals were allowed in part. Ground 2 was allowed, Ground 1 was dismissed, and the compensation issue was remitted for reconsideration. The decision is reported at [2024] EWCA Civ 170.
2. County Court at Central London HHJ Backhouse heard the appeals by way of rehearing and, on 7 March 2023, upheld Mr Taylor’s liability, reduced the awards and ordered him to pay 75% of the respondents’ costs.
3. Third surveyor Awards were made on 20 August 2021 under section 10(11) of the Party Wall etc. Act 1996.