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Property Litigation: Failure to Communicate Can Cost You Dear

Thursday, 29 May 2014

Lack of communication is cited as the cause of many of society’s ills but many of us still prefer to ignore what we don’t want to hear. Unfortunately there are usually consequences to burying our heads in the sand, even if it seems an effective tactic in the short term.

This is something that certainly applies to property litigation where any seasoned solicitor will confirm that a great deal of time, money and effort is spent dealing with failed communication of one sort or another. Even where cases never reach trial, significant costs can be incurred unnecessarily because of parties’ unwillingness to engage with one another.

If a claim is discontinued, claimants usually bear the costs of starting proceedings but a 2013 property case turned this on its head when a defendant chose to ignore the claimants, right up to being served with the claim.

Nelson's Yard Management Company & Others v Nicholas Eziefula [2013]

In this case the defendant took the ostrich approach to potential litigation by not responding to the claimants at all before they reached the point of actually issuing proceedings. Although the central concerns of the claimants were then allayed with remarkably little fuss and proceedings were subsequently withdrawn, costs had been incurred by both parties.

The claimants were a group occupying various premises around Nelson’s Yard in Camden which formed neighbouring properties to the freehold property of Nicholas Eziefula. In 2007 Mr Eziefula began excavation works to his property which the claimants believed interfered with party walls under the Party Wall Act 1996, had been started without the necessary planning permission and put the foundations of their properties at risk.

During 2007 four letters were send to Mr Eziefula outlining these concerns and requesting access for surveyors to check the issue regarding the foundations. All of the letters were ignored so legal proceedings were issued by the claimants in 2008.

Subsequently, Mr Eziefula began to communicate with the claimants, inspections were carried out giving the all clear and the claimants sought to discontinue proceedings which they did in 2012.

Who Bears the Costs?

At first instance the court followed the accepted approach in relation to costs, namely that when a claimant discontinues the proceedings, there is a presumption through CPR 38.6 that the defendant should recover his costs.

The claimant appealed this decision on the basis that the behaviour of the defendant was so clearly inappropriate and/or clearly causative of the incurring of unnecessary costs  that he should bear them. The appeal judges agreed and allowed the appeal with Lord Justice Beatson concluding that it was unreasonable conduct which justified disapplying the default rule in CPR 38.6.

This should serve as a warning to those faced with contentious issues; maintaining lines of communication is always worthwhile even when it is difficult. Where legal issues are at stake, an experienced solicitor can assist greatly by offering a dispassionate approach and an indirect conduit through which communication can flow.

For specialist advice contact Jane Canham today by email or telephone 0207 611 4848.

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