A recent Supreme Court decision has the potential to have wide-reaching consequences for property owners.
In the case of UKI (Kingsway) Limited (Respondent) v Westminster City Council (Appellant) the Supreme Court (“the Court”) was asked to determine whether a completion notice had been served under the Local Government Finance Act 1988 (“the Act”).
UKI (Kingsway) Limited (“UKI”) was responsible for the redevelopment of 1 Kingsway. Westminster City Council (“the Council”) asked UKI’s agents to confirm the identity of the owner of the building, but the agents declined to do so without obtaining instructions from their client, which were not forthcoming. At the relevant time the building was managed by Eco FM (“Eco”), which had no authority to accept service of documents on behalf of UKI.
On 5 March 2012 the Council delivered a completion notice to 1 Kingsway addressed to the owner. It was given to a receptionist employed by Eco, who scanned and emailed a copy to UKI. It was received by UKI not later than 12 March 2012.
The issue for the Supreme Court was whether the completion notice was validly served on the date that it was received by UKI, in circumstances where:-
- it was not delivered directly to UKI by the Council, but passed through the hands of the receptionist employed by Eco who was not authorised for that purpose by either party; and
- it was received by UKI in electronic rather than paper form.
Summary of the Court’s reasoning
The Court looked at what ‘serving’ or ‘giving’ a notice entails. Lord Carnwath (giving the decision for the majority) quoted Lord Salmon in Sun Alliance and London Assurance Co Ltd v Hayman  1 WLR 177, 185 CA that “any requirement in a statute or a contract for the giving of a notice can be complied with only by causing the notice to be actually received – unless the context or some other statutory or contractual provision otherwise provides…”
The Court then considered whether the wording would preclude other methods of giving a notice. They looked to Slade LJ’s comments in Galinski v McHugh (1988) 57 P & CR 359 (where he referred to a similar service provision in the Landlord and Tenant Act 1927) which he determined was “intended to assist the person who is obliged to serve the notice, by offering him choices of mode of service which will be deemed to be valid service, even if in the event the intended recipient does not in fact receive it.” The Court held that the Act provides for three specific methods of service but does not exclude other methods of service available under the general law, stating that “[s]pecific statutory provisions such as paragraph 8 are designed, not to exclude other methods, but rather to protect the server from the risk of non-delivery.”
The Court then considered “whether it matters that the notice reaches the intended recipient, not directly or through an agent authorised for that purpose, but by the action of a third party.” The Court was of the view that there only needs to be a sufficient causal connection between the server’s actions and the receipt of the notice by the recipient.
The Court then turned to the fact that the notice had been served by email. The Court referred to authorities where notices given by fax were held to have been validly served, and said that “no good reason has been suggested for distinguishing that from transmission by email as in this case.”
The Court considered that the key issue was whether the Council “caused” the notice to be received by UKI. The Court said “there needs to be actual receipt of the notice, and a sufficient causal link with the actions of the council”. They considered that there was and the notice had in this case been served by the Council.
The decision follows the trend in recent cases whereby courts have taken a more purposive approach to service, looking at whether notices have been actually received rather than the form in which they were received. This includes a move towards allowing documents to be sent by email. In a business environment where more and more businesses are moving away from maintaining physical premises and electronic signatures are becoming more widely accepted, the move away from the need for a physical piece of paper to be handed to an individual seems to be sensible. It does however mean that individuals and companies need to be vigilant in respect of monitoring all communications, including electronic.
The best practice for a party serving a notice remains to ensure that the relevant statutory scheme is followed. As Lord Carnwath says “The simple answer for the authority may be that, where the date of service is critical, it is able to choose a statutory method which eliminates or minimises the risk of the notice being rendered invalid by failure to specify the correct date of service.”
Michelle Goodrum, Senior Associate Solicitor at Sykes Anderson Perry Ltd