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Supreme Court approves indirect electronic service of statutory notice

Service of a statutory notice may be effective where the recipient receives the notice in electronic format through an unauthorised third party.

That was the Supreme Court's decision today in UKI (Kingsway) Limited v Westminster City Council.

Service will be valid where the party serving the notice caused it actually to be received by the intended recipient.

Although decided in the context of a business rates completion notice, this principle will apply to any statutory notice provisions which do not exhaustively set out the valid methods of service which apply in a particular case.

The decision widens significantly the scope of what will constitute valid service of a statutory notice.

Background

A property must be entered in the rating list before it is liable for business rates. The completion notice procedure under the Local Government Finance Act 1988 allows a new or redeveloped building to be brought into the rating list where the works have reached or are nearing completion, provided a completion notice has been validly served. The owner or occupier then becomes liable for business rates from the deemed completion date specified in the notice.

Facts

UKI Kingsway Limited ("UKI") owned a building (1 Kingsway) which it was redeveloping. The building was being managed by Eco FM ("Eco"), under a contract with UKI. Eco had no authority to accept service on UKI’s behalf.

Westminster City Council (the "Council") delivered a completion notice by hand to the building, addressed to “Owner, 1 Kingsway, London WC2B 6AN”. It was given to a receptionist employed by Eco, who scanned and emailed a copy of the notice to UKI. UKI received the email with the scanned copy notice.

UKI appealed against the completion notice, arguing that the service of the notice was invalid because it was not served on UKI, but on the receptionist for Eco.

The case made its way up to the Court of Appeal, which considered the completion notice to be invalid. The Council appealed to the Supreme Court.

Issues and decision

The Supreme Court had to determine whether the completion notice was validly served on the date it was received by UKI, in circumstances where:

  1. it was not delivered directly but passed through the hands of Eco’s receptionist, who was not authorised for that purpose by either party; and
  2. it was received in electronic, rather than paper form.

The Council argued that, so long as the notice reached UKI, it was immaterial how this occurred. UKI, on the other hand, relied on the reasoning of the Court of Appeal that the notice had to be served by the Council on UKI and that service on Eco's receptionist who later passed the notice on to UKI did not satisfy that test. 

According to the Supreme Court, the correct test to be adopted was whether the Council caused the notice to be received by UKI. This required a sufficient causal connection between the actions of the Council and the receipt of the notice by UKI. Although Eco's receptionist was not under the control of the Council, her actions in sending the notice to UKI were exactly what would be expected of a responsible employee of a building management company. This was a natural consequence of the Council's actions and the Council had therefore caused the service of the notice.

The Supreme Court held that there was no reason to distinguish between email communication for the service of a notice and other forms such as fax, which had already been established as valid methods.

Implications

Although the context of this case was service of a business rates completion notice, the Supreme Court's decision will have broader implications. 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 correctly addressed but incorrectly delivered to the wrong building, where the helpful neighbour takes it 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.

Contributor: Matt Battensby 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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