A transcript of the judgment in Cowthorpe Road 1-1A Freehold Limited v Wahedally CLCC (Ch), 16 February 2016, HHJ Dight (unreported) is now available to download here.
Summary: Service of a counter-notice pursuant to s.21 of the 1993 Act by email was not valid.
Facts: On 8th April 2013 the tenants served their initial notice under section 13 of the 1993 Act under cover of a letter dated 8th April 2013. The proposed purchase price was £41,550. By paragraph 10 of the notice the tenants stated: “The address in England and Wales at which notices may be given to the nominee purchaser under Part I, Chapter II of the Act is: c/o Comptons Solicitors LLP, 90‑92 Parkway, Regents Park, London NW1 7AN.” The notice specified 15th June 2013 as the date by which the landlord must give a counter-notice under section 21. The covering letter under which the notice was served stated "We do not accept service by email."
The landlord purported to serve a counter-notice by attaching a PDF file containing a scanned copy of the signed counter‑notice to an email sent on Friday 14th June, by placing it through the solicitors’ letter box on Saturday 15th June and by first class-post. It was not disputed that the counter-notice sent by post was not received until Monday 17th June.
The claimant nominee purchaser applied for a vesting order on the terms proposed in the initial notice on the grounds that the landlord had failed to serve a counter-notice in time.
Issues: (1) Whether purported service of a counter‑notice by email is valid; (2) Was service by email on the claimant’s agents, Comptons solicitors, on 14th June 2013 valid service of the counter‑notice? (3) Was the notice in any event served by hand on 15th June 2013? (4) Is the last date for service deemed to be 17th June, when 15th June was a Saturday, in other words, a non‑working day. (5) Can the court extend time for service until the 17th June in any event?
Jonathan Upton, on behalf of the claimant, submitted: (i) service of a counter-notice by email is not possible under the 1993 Act; (ii) if service by email is permissible in principle, it was not valid on the facts of the instant case in circumstances, bearing in mind the limitation on the claimant’s agents’ authority contained within the headed notepaper which specifically states that they do not accept service by email; (iii) the evidence relied on by the landlord as showing that the counter-notice was in any event served before expiry of the time for doing so did not overcome the evidential burden which the defendant in the circumstances bears; (iv) there is no good reason and no authority for treating the day for service as Monday the 17th, where the date of Saturday the 15th had been stated as the date when time for service of the counter-notice expired; and (v) there is no power in the court to extend time for service until the Monday the 17th.
The defendant argued: (i) service by email was permissible; (ii) an employee of Comptons, “David”, had expressly stated that the firm would accept service by email and, accordingly, service by email was good service; (iii) the evidence was sufficient to establish that the counter-notice was served by hand and delivered within time; (iv) where the last date for service of the notice was a Saturday there is some sort of defect in the notice, that it does not therefore comply with the purpose for which the statute contains a provision specifying a date for service, that the court can treat that therefore, whether by rectification or otherwise, as being not a weekend date but the next working day when the office is likely to be open, namely the 17th June; and (v) the court has power to extend time.
HHJ Dight was referred to two previous county court decisions. In Stoll Construction Ltd v Kelly (Brentford CC, 3.11.00, unreported) it was held that that a notice pursuant to s.42 of the 1993 Act may not be served by fax. In Achieving Perfection Limited v Gray (Brighton CC, 18.5.15, unreported) it was held that service of a s.13 notice by email was valid. The judge was also referred to the Interpretation Act 1978 and the Law Commission Guidance on Electronic Commerce: Formal Requirements In Commercial Transactions (Dec 2001).
HHJ Dight held:
- A counter-notice (and, obiter, a s.13 notice) must be a hard copy document.
- An email does not amount to writing for the purposes of the 1993 Act.
- A copy rather than the original does not comply with the 1993 Act.
- Comptons were authorized only to accept service in physical form at the address contained at paragraph 10 of the notice. Comptons had no authority to accept service in any other way. Therefore, purported service by email could not have been valid service.
- There was no evidence to suggest that “David” was someone of sufficient standing within the firm who had the authority in any event to agree that the firm would extend their methods of receipt of documents to service by email.
- Notwithstanding the common law rules, in this case service of the counter‑notice at Comptons address on 15th June would have been good service.
- The document which it was intended to insert through the letter box on 15th June was a copy rather than the original which was in fact received by post on Monday the 17th.
- The defendant's evidence in support of the contention that it had served the document on Saturday the 15th was not sufficient to discharge the evidential burden.
- There is no power on the part of the court, whether within the Act or elsewhere, entitling it to extend time for service of the counter‑notice.
Accordingly, the counter‑notice was not validly served within the time specified pursuant to section 13(3)(g) and the claimant was entitled to acquire the freehold on the terms of acquisition proposed by the tenants in their initial notice.
The decision will be welcomed by most practitioners in this field. Solicitors put themselves at considerable risk if they agree to accept service by forms which it might be hard to monitor. One can imagine the sort of steps that the solicitors would have to take to ensure that they monitored and maintained a service for receipt of statutory notices by email, a service which in many systems are inadequate or delayed or corrupted in some way.