Terms of contract – Service of proceedings – Limitation period – Parties entering into agreement with strict time limit for serving written notice of claims alleging breaches of warranty – Agreement requiring claim to be made within 12 months of serving notice – Whether appellant validly serving notice within time limit – Whether appellant bringing claim within specified time limit – Appeal dismissed
By an agreement dated 2 April 2008, the respondent sold certain shares to the appellant company. Under the terms of the agreement the appellant had to give written notice of any claim for breach of warranty to the respondent by 2 April 2010. By clause 13 of the agreement, notice had to be given in writing and any such notice “may be served by delivering it personally or by sending it by pre-paid recorded delivery post to each party …”. Any notice served personally would be deemed to be received when delivered. Any notice sent by pre-paid recorded delivery would be deemed to be received two business days after posting. Where notice had been given in respect of a claim, the claim would be deemed to have been irrevocably withdrawn unless proceedings were issued and served on the respondent not later than 12 months after the date of the notice.
Having decided that it had claims against the respondent for breaches of warranty, the appellant arranged for notice of its claim to be served on him in two different ways. First, on 30 March 2010, a process server was instructed to deliver a notice to the respondent’s home address. Since no-one was there, he left the envelope ion the front porch on a table (“the first notice”). On the same day, an identical copy of the notice was sent by recorded delivery in an envelope addressed to the respondent. That copy of the notice was deemed received, by virtue of clause 13, on 1 April 2010 (“the second notice”).
On 29 March 2011, a claim form seeking damages of nearly £2 million based on alleged breaches of warranty was taken by a process server to the respondent’s home address. As nobody was at home, he placed the claim form in the letter box serving the property. The documents were not in fact received by the respondent until 2 April when he emptied the letter box. Under CPR, r. 6.14, service of the claim form occurred on 31 March 2011.
On a trial of preliminary issues, the judge held that the appellant was precluded from pursuing its claim because the first notice had been effectively served on 30 March 2010 so that the appellant had failed to serve the claim form within the 12 month specified time limit. The appellant appealed.
Held: The appeal was dismissed.
The concept of “personal service” was well understood to mean service on the recipient personally, not service by the server, or anyone else, personally. Where parties were concerned to prescribe how a notice might be served or delivered, the identity of the server of the notice was rarely, if ever, important, whereas the identity of the recipient was normally of central importance. The law and common sense both support the notion that if “personal” service or delivery of a document was required, it should be handed to the intended recipient personally: Allison Limited v Limehouse & Co [1992] AC 105 and Bottin (International) Investments Ltd v Venson Group Plc [2004] EWCA Civ 1386 considered.
On its true construction, clause 13 of the parties’ agreement was intended to be permissive rather than exclusive as to the methods of service. Clear words would normally be required before one could ascribe to the parties an intention that a recipient who actually received a notice in time should nonetheless be treated as as not having received the notice at all. There was strong commercial argument, as well as a strong argument based on the language of the agreement, for saying that the first notice had been delivered when the respondent saw it. The fact that the appellant delivered the second notice could not retrospectively cause the first notice not to have been validly delivered. If the first notice had been validly served, there was no room for a second notice, not least because a second notice could not retrospectively invalidate, or cancel, an earlier notice which had been valid when served: Yates Building Company Ltd v RJ Pulleyn & Sons (York) Ltd [1976] 1 EGLR 157 considered.
Accordingly, the judge had been right to conclude that the first and second notices had not been delivered personally within the meaning of clause 13 of the agreement on 30 March 2010 and 29 March 2011 respectively, but that the first notice had been nonetheless validly served on 30 March 2010 and the claim form deemed to have been served on 1 April 2011.
(Per Longmore LJ, dissenting) It was counter-intuitive to conclude, when the parties have taken the trouble to spell out that a notice given under the agreement could be served either “by delivering it personally” or “by sending it by pre-paid recorded delivery post” and that, in a case where a notice was to be served on the buyer (a company) it was to be marked “for the attention of directors”, that a notice could be served in any other way the deliverer of the notices chose. The contract could have made the matter clearer by inserting the word “only” before the words “be served” in the expression “may be served”; equally the parties could have added the words “or in any other way” at the end of clause 13.2. As they did neither, it could be said that the clause had either of those meanings. But the common sense of the matter was that by spelling out two methods by which a notice could be served, they did not intend that it be served in any other way: Yates Building Company Ltd v RJ Pulleyn & Sons (York) Ltd [1976] 1 EGLR 157 distinguished.
George Bompas QC (instructed by Stevens & Bolton LLP, of Guildford) appeared for the appellant; Nicholas Lavender QC (instructed by BRM Solicitors, of Chesterfield) appeared for the respondent.
Eileen O’Grady, barrister
