Section 77 of the Building Act 1984 (“the 1984 Act”) relates to dangerous buildings. If it appears to a local authority that a building or structure, or part of a building or structure, is in such a condition, or is used to carry such loads, as to be dangerous, the authority may apply to a magistrates’ court, and the court may, where danger arises from the condition of the building or structure, make an order requiring the owner thereof to execute such work as may be necessary to obviate the danger or, if he so elects, to demolish the building or structure, or any dangerous part of it, and remove any rubbish resulting from the demolition, or where danger arises from overloading of the building or structure, make an order restricting its use until a magistrates’ court, being satisfied that any necessary works have been executed, withdraws or modifies the restriction.
Section 78 of the 1984 Act relates to emergency measures in the case of dangerous buildings. Subsection (1) provides that, if it appears to a local authority that a building or structure, or part of a building or structure, is in such a state, or is used to carry such loads, as to be dangerous, and immediate action should be taken to remove the danger, they may take such steps as may be necessary for that purpose.
Subsection (7) of Section 78 provides that where in consequence of the exercise of the powers conferred by Section 78 the owner or occupier of any premises “sustains damage”, but Section 106(1) of the 1984 Act does not apply, because the owner or occupier “has been in default”, the owner or occupier may apply to a magistrates’ court to determine whether the local authority were justified in exercising their powers under this section so as to occasion the damage sustained, and if the court determines that the local authority were not so justified, the owner or occupier is entitled to compensation, and section 106(2) and (3) applies in relation to any dispute as regards compensation arising under the subsection.
Section 106 provides (emphasis added):-
“(1) A local authority shall make full compensation to a person who has sustained damage by reason of the exercise by the authority, in relation to a matter as to which he has not himself been in default, of any of their powers under this Act.
(2) Subject to subsection (3) below, any dispute arising under this section as to the fact of damage, or as to the amount of compensation, shall be determined by arbitration.
(3) If the compensation claimed does not exceed £50, all questions as to the fact of damage, liability to pay compensation and the amount of compensation may on the application of either party be determined by, and any compensation awarded may be recovered before, a magistrates’ court.”
Manolete Partners PLC v Hastings Borough Council [2013] EWHC 842 (TCC), Judgment on 12 April 2013, concerned the entitlement of the Claimant to make a claim against the Council under Section 106 of the 1984 Act for compensation as a result of the Council exercising its powers to prevent access to Hastings Pier under Section 78. The Council’s main defence was that the Claimant was “in default” and therefore Section 106 did not apply. Ramsey J rejected this defence. He held that “default” required breach of an obligation to do something imposed by the 1984 Act itself, and did not extend to breach of a provision of another statute. The Claimant tenant of a bingo hall and amusement arcade on the Pier was not in default of any of the provisions of the 1984 Act. The party in default was the owner of the Pier structure, who was responsible for its dangerous condition or state.