The Supreme Court has allowed an appeal in a significant case in relation to the service of documents, ruling that a completion notice handed to a third-party receptionist and then e-mailed to the correct recipient was validly served.
The decision has been welcomed as a “vote of confidence” in electronic communications from the country’s highest court.
Roger Cohen, partner at Bryan cave Leighton Paisner, said: “The Supreme Court has seen the future and it works. In deciding that the completion notice had been validly served, because it reached the developer by e-mail, the justices have affirmed modern methods of communication. So this is a vote of confidence in electronic communications as well as a lifeline for a billing authority that otherwise would have suffered a material loss of income.”
Giving the court’s unanimous ruling, Lord Carnwath allowed the appeal by Westminster City Council and ruled that service of the completion notice on UKI (Kingsway) Ltd – the owner of floors 3-6 of No 1 Kingsway, London, WC2 – was valid under Schedule 4A of the Local Government Finance Act 1988.
This was despite the fact that the receptionist to whom the notice was given was employed by the building manager, which had no authority to accept service on UKI’s behalf, because the receptionist scanned and emailed a copy of the notice to UKI.
The case, which has flip-flopped through the appeals system, raised points about the practicalities of serving completion notices and the validity of electronic communications in such circumstances.
A completion notice is served by local authorities on the owners of properties to notify them that they consider the building to be finished and therefore eligible to be charged rates. They can be served up to three months before the property is finished.
Throughout the dispute, UKI (Kingsway) contested the validity of the notice, which specified a completion date of 1 June 2012.
But Westminster, which issued the notice, maintained that it was valid because the receptionist, acting as “agent”, scanned the completion notice and e-mailed it to the owner.
Allowing Westminster’s appeal, Lord Carnwath said that the means of service prescribed by the statute are “not exclusive”, and that the real issue was whether the council caused the notice to be received by UKI.
He said it was “unnecessary and unrealistic” to introduce the concept of agency into this “simple sequence of events”, finding that the receptionist “did no more than would reasonably be expected of a responsible employee”, by passing on the notice to the person to whom it was addressed.
Rejecting UKI’s argument that the receptionist was not under the control of the council, he said “causation does not necessarily depend on control”, offering the example of a notice correctly addressed, but mistakenly delivered to a neighbouring address and then passed on by the occupant to the intended recipient.
He said: “I see no reason why that should not be treated as effective service under ordinary principles of causation, even though the friendly neighbour was not under the control of either party.”
He added that arguments about possible uncertainty are not persuasive, since “some uncertainty in this respect is inherent in the legislation, in which neither the methods of service, nor the dates of service in different circumstances, are exhaustively defined”.
Offering advice for future situations, he said: “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. If it chooses a non-statutory method it must bear that risk.”
In addition, he confirmed that there was no good reason for distinguishing transmission by fax, long held to be valid, from transmission by email as in this case.
Matthew Forrest, partner at law firm TLT, said that the Supreme Court’s decision will have broader implications beyond the arena of business rates. He said: “It widens the scope of valid service in the case of any statutory notice scheme which does not expressly provide exhaustive details as to how notice should be given.
“Service of a notice will be valid in many more circumstances than if the Supreme Court had decided the other way. Countless other sets of circumstances can be imagined in which service will now be valid. For example, a notice delivered to the wrong building where the helpful neighbour takes the notice next door to the intended recipient.
“As such, the decision will be welcomed by local authorities and others intending to serve statutory notices. However, those parties should certainly not seek to rely on the principles of this case. Although ultimately effective, the method of service attempted by the council in this case was far from ideal.
“Those serving notices would be better advised to consider carefully in advance their chosen method of service to avoid having to rely on ‘indirect’ service, as happened here. In particular, the server may benefit from statutory provisions deeming service to be effective where a particular method is used, irrespective of whether it is ultimately received or not.”
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