The Court of Appeal ("CA") unanimously allowed appeals relating to the Party Wall etc Act 1996 (“PWA 1996”) in their judgment of Taylor v Jones and another [2024] EWCA Civ 170 on 28 February 2024. The CA highlighted the appropriate questions to be asked by the Court where building owners comply with the PWA 1996 before carrying out any work, but substantial damage to adjoining properties still occurs. 

On the facts of Taylor, experts determined that the adjoining properties had significant pre-existing problems and any slight movement may have caused substantial damage. The building owner's work triggered the damage. The dispute related to the extent to which the building owner should pay for the cost of remedial works. 

The five questions arising in such cases are as follows:

1. What damage had been caused by the works?
2. How should adjoining owners be compensated? 
3. What work was necessary to repair the relevant damage?
4. Should any deduction be made for betterment?
5. What was the actual cost of carrying out the relevant repairs? 

Section 7(2) of the PWA 1996 requires building owners to compensate adjoining owners for “any loss or damage which may result to any of them by reason of any work executed” in pursuance of the Act (emphasis added). Common law principles for assessing damages remain applicable. Giving the leading judgment, Nugee LJ held that this case related to question three above. The relevant damage was the damage to internal walls and slabs caused by the building owner's work. The building owner was not liable to compensate the adjoining owners for a longstanding defect to their external wall, because it had not been caused by the building owner's work - the building owner's work simply brought the defect to light and made it necessary for the adjoining owners to do something about it.