NOTICES, RECKONING OF TIME, AND APPLICATION TO THE CROWN
17.01 This chapter deals with the ‘supplementary’ provisions at ss. 115–17 of the Act and sets out the relevant case law relating to service of notices, reckoning periods of time and the applicability of the provisions of the Act to the Crown.
1. Construction contracts may contain an agreed manner of service (s. 115(1)), and if no such agreement is reached, the provisions in the Act will apply (s. 115(2)).
2. Where there is no agreed manner of service, any effective means may be used to ensure service (s. 115(3)) and, if delivered by post to the addressee’s last known principal address, this shall be treated as effectively served (s. 115(4)).
3. Parties cannot deliberately send notices to incorrect addresses and expect the notice to be effectively served: Rohde (t/a M Rohde Construction) v Markham-David (2006).1
4. Parties may, in some circumstances, be required to take reasonable steps to ascertain the last known address of the other party: Mersey Docks Property Holdings v Kilgour (2004).2
5. The notice provisions do not apply to service of documents for legal proceedings (s. 115(5)).
6. The Civil Procedure Rules in relation to service do not apply to adjudication notices: Cubitt Building & Interiors v Fleetglade Ltd (2007)).3
7. Notices and documents referred to in Part II of the Act must be in writing (s.115(6)).
8. Periods of time are to be calculated from the day following service and exclude public holidays (s. 116).
9. Construction contracts entered by the Crown (except in private capacities) must also comply with the Act (s. 117).
17.03 The service of notices is a very important part of the contractual mechanism in construction contracts. The content of the notices (such as payment, withholding, or adjudication notices) is discussed in other chapters of this book. However, the manner in which such notices are served can determine whether those notices are effective. The legislative provisions relating to such service are discussed below. There are no amendments to these sections by the 2009 Act and no relevant provisions within the original or amended Scheme for Construction Contracts (‘the Scheme’).
17.04 Section 115(1) confirms the freedom of the parties to agree the manner of service of any notice (or other document) required or authorized to be served in pursuance of a construction contract. Such agreement may be in the form of a bespoke written agreement,4 or by use of one of the many standard forms of construction contracts.5 The advantage of agreeing the manner of service for notices is that it will reduce the likelihood of disputes as to whether notices have been validly served under the contract.
17.05 A contractual notice term may be in directory or mandatory terms. A mandatory provision must be fulfilled exactly according to the letter, whereas a directory provision is satisfied if it is met in substance according to the general intent.6 Generally, the former do not prescribe a particular manner of service and may, for example, require merely ‘actual delivery’.7 Where a contract contains a mandatory term, it may specify that contractual notices are to be served in a particular way in order for service to be effective, for example by registered post, special delivery, ‘delivered personally’,8 fax, or, increasingly, by email.
17.06 Generally, technical points as to service of documents do not find favour with the courts.9 Where contractual requirements are mandatory and not permissive, the courts will insist upon strict compliance, even where there are significant adverse consequences for the non-complying party.10
17.07 If the notice relates to adjudication, it is important to consider whether there are any additional rules relating to the service of notices under the applicable adjudication rules.11
17.09 Section 115(3) permits a notice or other document to be served on a person by ‘any effective means’. This provision is very broad and it is possible that a contractual term may validly be triggered and/or an adjudication commenced without the other party even being aware of it. This is markedly different from the strict notice regime for litigation which exists under the Civil Procedure Rules 1998.12
17.10 Without restricting the breadth of permissible service ‘by any effective means’ in s. 115(3), s. 115(4) contains a deeming provision which confirms that any notice which is addressed, pre-paid, and delivered by post to the last known principal address will be treated as effectively served. The relevant address must be:
1. The addressee’s last known principal address;13 or
2. If the addressee has been carrying on a trade, profession, or business, his last known principal business address;14 or
3. If the addressee is a body corporate, the body corporate’s registered or principal office.15
17.11 Whether required by operation of the deeming provision or by the clause of the contract itself, many construction contract notices must be served to the last known principal address. Where there is an arguable case that adjudication notices have been deliberately sent to a previous residential address of the responding party, an adjudicator’s decision may not be enforced.16 This may be contrasted with cases where there is no suggestion that the claimant deliberately used the wrong address or that there was some other address known to the claimant where the documents could have been served on the defendants.17
17.12 Whilst the issue has not directly been considered in adjudication case law to date, it is possible that the courts will adopt the same approach as in Mersey Docks Property Holdings v Kilgour (2004),18 which considered the CPR 6.5.4 requirement that service be made to the ‘last known place of business’ in litigation proceedings. The TCC confirmed that the proper construction is ‘the last place of business known to the claimant’ rather than ‘the last known ascertainable place of business … known generally’. The court considered this requirement to be ‘relatively onerous’ on the claimant:
63. … since in order to acquire the requisite knowledge a party must take reasonable steps to find out at the date of service what is the current place of business or the last place from which the party carried on its business. It will be a matter of evidence whether or not a party has discharged the obligation to have the requisite knowledge at the time of service. On balance, this seems to me to be a fairer and more workable test than one which refers to an objective standard of general knowledge or ascertainability.
17.13 The question of whether a party has served an effective notice to the last notified address will be a question of fact in each case. Where a party to a construction contract is legally represented, service may be effected upon its legal representatives. However, parties should ensure that the notice is sent to a solicitor who has authority to receive the particular notice (for example a notice in relation to an adjudication).19 There may be instances in which solicitors named in the contract are the solicitors last notified for effective service, notwithstanding the fact that other solicitors had been more recently appointed.20
17.14 Any notice or other document referenced in Part II of the Act must be in writing: s. 115(6). Thus, for example, a telephone call was found not to be an effective notice to set off certain sums against the balance owing.21 It would be difficult to achieve certainty if such notices or other documents were permitted to be oral, or partly oral.
17.16 There is no requirement for a notice served in compliance with s.115 to be served also in compliance with the Civil Procedure Rules: Cubitt Building & Interiors v Fleetglade Ltd (2007).22 In that case it was argued that, because a notice of adjudication was served after 4.00 pm on a particular day, it was deemed to have been served on the following day due to the operation of CPR 6.7. The TCC recognized that the CPR ‘is a set of commonsense, practical rules that govern the service of court documents, and there may be exceptional adjudications in which it might be appropriate to have regard to its terms’; however, it rejected the applicability of this argument to the enforcement proceedings in question, stating:
35. I am unattracted to the notion that the provisions of the CPR should be incorporated into the timetable and mechanisms of the adjudication process. There is no mention of such wholesale incorporation in the 1996 Act. Indeed, s.115, which contains a number of rules relating to the service of adjudication documents, makes no reference to the CPR save to say, at sub-section 115.5, that the rules of court do apply, following the production of an adjudicator’s decision, to the service of enforcement proceedings and the like. This could therefore be said to be inconsistent with the suggestion that the CPR should be incorporated wholesale into the adjudication process: if that was the intention, s.115 would have said so. In addition, I am aware of no authority in which the point has been successfully argued. I agree … that complications could abound if the CPR was imported wholesale into the adjudication process. Take for example the present case, where the adjudicator’s decision was e-mailed on 25th November. If the CPR provisions apply, then the relevant date for the service of that decision would be 27th November, which is not a result for which either party contends.
JCT 1998 (with Contractor’s Design)
Clause 1.5: where the contract does not specifically prescribe the manner of service, any notice given or served by any effective means to any agreed address will suffice. If none, effective service will be by pre-paid post to the addressee’s last known principal business address or, where the addressee is a body corporate, to its registered or principal office.
JCT 2005 (Design & Build)
Clause 1.7.1: valid service may be made by any effective means. Where given by actual delivery or pre-paid post to the address in the contract particulars or such other address as agreed, it will be deemed to have been served. Where no address given, service is achieved by actual delivery or by pre-paid post to the party’s last known principal business address, or, if a corporation, its registered or principal office (clause 1.7.2). The contract particulars make provision for addresses for service of notices etc. in para. 1.7 which provides for fax numbers to be entered. If no details are stated, the address in each case until agreed is that shown at the commencement of the agreement.
Clause 13.1: each communication that is required by the contract must be communicated in a form that can be read, copied and recorded in the language of the contract.
Clause 13.2: a communication has effect when it is received at the last address notified by the recipient. However, if no address is notified, a communication will be effective if received at the address of the recipient stated in the contract data.
ICE 1999 (Measurement Version)
Clause 1(6): communications required to be ‘in writing’ under the contract may be hand-written, typewritten, or printed and sent by hand, post, telex, cable, fax, or other means resulting in a permanent record.
Clause 3.2: except as otherwise agreed in writing, all communications between any partnering team members shall be in writing by receipted hand delivery, recorded delivery post, fax, or (if agreed) email, in each case delivered to the address of the relevant partnering team member set out in the project partnering agreement or any joining agreement or to such other address as a partnering team member shall notify.
17.17 Table 17.1 describes some of the relevant notice clauses from the most used standard forms of construction contract.