A dispute over notice provisions in a contract took the parties in Ener-G Holdings plc v Hormell,  EWCA Civ 1059, to the English Court of Appeal, and deprived one of them of a £2 million claim relating to a sale of shares. Under the sale contract, Ener-G as buyer of the shares was required to notify Hormell, the seller, of a claim for breach of warranty, but the claim would lapse if Ener-G failed to serve court documents on Hormell not more than a year after notifying him of the breach. The agreement provided that notice was to be provided in writing, going on to say that it ‘may be served by delivering it personally or by sending it by pre-paid recorded delivery post’. Any notice delivered personally was deemed to be received when delivered; if sent by recorded delivery post, two days after posting.
The agreement also stated that court documents could be served in accordance with the notice provisions or ‘in any other manner allowed by law’. Ener-G realised that it had a claim for breach of warranty and notified Hormell in two ways: (1) a process server delivered a notice to his house on 30 March 2010, leaving it in the front porch because no one was home; and (2) an identical notice was sent by recorded delivery post the same day. Ener-G did not serve a court claim form on Hormell until 29 March 2011, when a process server put it through the letter-box at Hormell’s house. Hormell read the notice left at his house on the day of delivery; the notice sent by mail was deemed to have been received on 1 April 2010. Under the rules of court, service of the claim form occurred on 31 March 2011. The central issue was whether Ener-G’s claim had lapsed because it had not been served within the one-year window: Ener-G needed to establish that notice had been served on or before 2 April 2010 and that the claim form had been served no more than a year after that date.
The trial judge concluded that Ener-G’s claims failed, and a majority in the Court of Appeal agreed. Lord Neuberger of Abbotsbury MR held that delivering the notice ‘personally’ meant service on Hormell personally, not service by the server personally. The second issue was whether the methods of notice set out in the contract were permissive or exclusive: given the use of ‘may’, they were permissive. Neither the first notice nor the court claim form was delivered personally; but, given the permissive nature of the notice provisions, the first notice was nevertheless validly served on 30 March 2010 and the claim form deemed to have been served on 1 April 2011. This had the effect of putting Ener-G out of time by a day. Ener-G couldn’t rely on the second notice as retrospectively causing the first notice to have been invalidly delivered. As Gross LJ (concurring with the Master of the Rolls) said, ‘by leaving service [of the claim form] until so late in the day, the Appellant has been the author of its own misfortune’. Longmore LJ, on the other hand, while agreeing about ‘personal’ delivery, dissented on the methods of delivering notice. They were exclusive, not permissive: notice 2 was therefore good in his view, and the claim form within time.
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