Service of notices

What are the requirements for valid “service” of a completion notice?

The background

In January 2009, UKI began the redevelopment of a building at 1 Kingsway.  In February 2012, Westminster City Council informed UKI’s agents that it intended to serve a completion notice specifying a completion date of 1 June 2012.  The Council asked the agents to confirm the identity of the owner of the building, but the agents declined to do so without obtaining instructions from UKI.  At the time, the building was managed by Eco FM under a contract with UKI, but Eco had no authority to accept service of documents on its behalf.  

On 5 March 2012, the Council delivered a completion notice by hand to the building, addressed to the “Owner, 1 Kingsway, London WC2B 6AN”.  It was given to an Eco receptionist, who scanned and emailed a copy of the notice to UKI.  UKI received the notice no later than 12 March 2012.

UKI’s agents appealed against the completion notice on 29 March 2012, on the grounds that the service of the notice was invalid.  Shortly after, the premises were brought into the list with a rateable value of £2.75m.  Appeals were made against both the completion notice and inclusion of the premises in the list and were initially heard by the Valuation Tribunal.  That decision was later reversed by the Upper Tribunal but re-instated by the Court of Appeal. 

Following a further appeal, the Supreme Court needed to determine whether the completion notice was validly served on the date it was received by UKI, despite:

• not being delivered directly to UKI by the Council, but passing through Eco’s unauthorised receptionist
• being received by UKI in electronic form.

The decision

It was widely agreed by the Supreme Court that the method of attempted service adopted by Council was “far from ideal”. 

However, whilst paragraph 8 of Schedule 4A to the Local Government Finance Act 1988 outlines three specific methods of service, these do not exclude the availability of others.  The purpose of these reliable methods is simply to minimise the risk of non-delivery.  On the facts of this case, as the name and address of the owner could have been discovered by reasonable enquiry, it is clear this was not done.

However, the Supreme Court went on to consider the two legal issues highlighted below.

Indirect Service

Of relevance in this case is whether it matters that the notice reaches the intended recipient indirectly and through the actions of an unauthorised third party. 

Consideration was given to the role of the Eco receptionist as an interposing third party.  Whilst concepts of agency or statutory delegation remain irrelevant, it was held that the Eco receptionist did what could reasonably be expected of a responsible employee in that position. 

Discussions regarding uncertainty were held to be unpersuasive, as the legislation does not make exhaustive provisions for the methods or dates of service.  If the date of service is critical to the situation, the relevant authority may wish to minimise the risk of invalidity or failure by specifying the date of service.  However, in this situation, the risk of prejudice to the building owner is limited as non-statutory methods depend on actual receipt by the intended recipient.

Electronic Communication

Consideration was also given to the electronic nature of the notice received by UKI. 

Prior to the Electronic Communications Act 2000, service by fax was considered valid.  Whilst service by fax is not entirely analogous with service by email, there is no good reason to distinguish these transmissions.  Therefore, the Supreme Court held that Parliament must be taken to have legislated against that background. 

The Respondent was unable to indicate any provision of the 2000 Act which expressly or impliedly restricted the previous law.  The purpose of the Electronic Communications Act in 2000 was to provide clear guidance on the use of electronic methods of service by the authorities.  The Supreme Court did not believe that this Act would be undermined by a ruling that, on the facts of this case, notice was successfully served by email.

Consequently, it was concluded by the Supreme Court that notice was successfully served and the property was brought into the rating list with effect from 1 June 2012.  The Supreme Court reversed the decision made by the Court of Appeal, allowing the appeal and restoring the order of the Upper Tribunal.

Why is this important?

The UK Supreme Court has ruled that a document served indirectly or electronically can still be deemed properly served.  This reaffirms the position that if a notice reaches the intended recipient, it is often enough for service purposes provided there is nothing to the contrary specifying service to be effected in a particular way.  Furthermore, despite traditional reservations about service by electronic means, these can still be effective if not expressly ruled out.

Any practical tips?

Ensure that notice permissions in agreements are clear and practical.  When serving a notice, ensure that contractual and/or statutory methods are followed precisely.