A significant case in relation to the service of documents has reached the Supreme Court, where Westminster City Council is challenging a ruling that a completion notice handed to a receptionist was not properly served, and therefore did not trigger inclusion of a newly built office in the rating list.
Lady Hale, Lord Kerr, Lord Carnwath, Lord Lloyd-Jones and Lord Kitchin are being asked to decide the validity of the service of the completion notice under Schedule 4A of the Local Government Finance Act 1988 by the appellant on the respondent.
The case, which has flip-flopped though the appeals system, raises 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.
Roger Cohen, partner at Bryan Cave Leighton Paisner LLP, explained: “Completion notices are vital to councils with rates to bill and collect. The valid service of a notice is required to ensure that rates are paid on new and structurally altered buildings once they are complete.
“The Supreme Court has the opportunity to make a practical difference for councils by providing clear guidance as to what constitutes good service. Asset managers and rating surveyors will be hoping for clarity so that they can give owners the best advice.”
“The task for the Supreme Court is to choose an approach that sets the bar at the right level, making the system fair to all.”
Throughout this dispute, UKI (Kingsway) Ltd – the owner of floors 3-6 of No 1 Kingsway, WC2 – has contested the validity of the notice, which specified a completion date of 1 June 2012.
But Westminster City Council, which issued the notice, says that it was valid, because the receptionist, acting as “agent”, scanned the completion notice and e-mailed it to the owner.
The Supreme Court has the opportunity to make a practical difference for councils by providing clear guidance as to what constitutes good service
In March 2015, the completion notice addressed to “the owner”, without specifying who that was, was delivered by hand to the property itself, not the owner’s registered property. The notice was left with the receptionist, who was employed by a facilities management company – not the owner – and who had no authority to accept the document on behalf of the owner.
The document was scanned and then lost. The facilities management company e-mailed the scan to the owner.
When UKI Kingsway initially challenged the validity of the notice at the Valuation Tribunal of England & Wales, the president of the tribunal found in its favour, ruling that the completion notice had not been served on the owner of the building. However, on appeal, the Upper Tribunal (Lands Chamber) found that the eventual receipt of the notice amounted to good service.
Then, in the Court of Appeal last year, Lady Justice Gloster ruled in favour of UKI Kingsway that the notice had not been properly served.
The statute requires that the “billing authority shall serve” the notice “on the owner on the building”, and that didn’t happen in this case, she found.
She said: “For the billing authority merely to leave the notice with a third party, not authorised to accept service of the notice on the owner’s behalf, or, indeed, to effect the service on the authority’s behalf, in the hope, or with the intention, that the notice will somehow be brought to the attention of the owner, and where a copy of the notice or its contents are in fact subsequently communicated to the owner by the third party does not, on any natural or normal usage of the words ‘serve’ and ‘on’ constitute ‘service’ on ‘the owner’ ‘by the authority’.”
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