The case of Construction Partnership UK Ltd v Leek Developments Ltd provides useful practical guidance as to how you can serve notices. This can often be of crucial importance. For example, here the question for the Judge was whether service by fax of a default notice was adequate or not. If it was not, then the subsequent termination of the contract would have been invalid.
It was suggested that the notice had to be delivered to the other party and that this meant delivery by hand, which involves couriers or people making a special journey to deliver the notice. The Judge disagreed, and held that actual delivery is simply "transmission by an appropriate means so that it is actually received" and that what was important was actual receipt. Therefore a fax could constitute actual delivery provided it is received.
Leek engaged CPUK to carry out refurbishment works in Macclesfield pursuant to a JCT Intermediate Form of Contract, 1998 Edition. The Contract Administrator issued two Certificates, Certificates 15 and 16, which were not paid by Leek. On 23 December 2005, CPUK wrote by fax and post to Leek pursuant to the contract stating that Leek was in default under the contract and on 17 January 2006, CPUK served notice to determine the contract.
Leek refused to pay on the certificates and raised a counterclaim for liquidated damages. One matter which came before HHJ Gilliland QC was whether or not the determination by CPUK of the contract was valid. In other words did the notice given on 23 December 2005 comply with the requirements at Clause 7.1? Clause 7.1 stated:
"Any notice, which includes a notice of determination, shall be in writing and given by actual delivery or by special delivery or recorded delivery. If sent by special delivery or recorded delivery, the notice or further notice shall, subject to proof to the contrary, be deemed to have been received 48 hours after the date of posting, excluding Saturday and Sunday and public holidays."
On 23 December the notice was faxed and posted to the defendant. The fax was received by Leek on 23 December at approximately 8.46 a.m. This was the Friday before the Christmas break and Leek closed that day at 12 noon. No-one saw the letter until the opening of the post on the morning of 3 January 2006. This raised the point as to what was meant by 'actual delivery' in clause 7.1. Notice may be given by special delivery or recorded delivery, and if it is given by either of those latter two methods, there is then a deeming provision that the notice has been received 48 hours after the date of posting, excluding public holidays, bank holidays, and weekends.
Here it was clear that the letter which was sent in the post was not sent by special delivery or recorded delivery.
The question was whether it could be said that the notice was given by actual delivery. Did this mean that, as was suggested in court, somebody must actually go along to the recipient and hand it over? The Judge found this to be a surprising, quite unrealistic and uncommercial interpretation of the clause. It is commonplace in modern commercial practice for documents to be sent by post, and even more commonplace for documents to be sent by fax. The Judge said that a fax is clearly in writing. It also produces, when it is printed out on the recipient's machine, a document, and that it seemed to the Judge was clearly a notice in writing.
The question is, is that actual delivery? The Judge said that if it has actually been received, it has been delivered. Delivery simply means transmission by an appropriate means so that it is received, and the evidence in this case was that the fax had been actually received. There was no dispute as to that. It may not have been read when received. However that was a different matter. Once it reaches the offices of the recipient, it is then an internal matter for the recipient to organise his affairs so that things are properly dealt with.
Actual delivery means what it says. It means transmission by an appropriate means so that it is actually received. What is important is receipt, actual receipt. Having arrived at a company's offices on its fax machine it was there to be read, and if it was not read by anyone, or if it was read by somebody who did not appreciate its significance, that was a matter for which the defendant was entirely responsible. It was not and could not be the claimant's fault in any way. Accordingly you must ensure that proper procedures are in place to deal with the receipt of faxes.
A related question which the Judge did not address (because it was not relevant in this case) was whether email transmission could also constitute actual delivery. Following the logic of this judgment and also the recent decision in Bernuth Lines v High Seas Shipping, it seems likely that email too would be considered an appropriate means of transmission for the purposes of actual delivery. Therefore again you must ensure that similar procedures are in place to ensure that email messages are suitably monitored.
Finally, always check the contract. That might set out its own specific requirements for the service of notices.
This article is based on an article from the latest issue of the Fenwick Elliott Dispatch, a monthly newsletter which summarises recent key developments relating to contentious and non-contentious construction law issues. To see the current issue please visit www.fenwickelliott.co.uk.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
