Council wins Supreme Court battle with ratepayer over service of completion notice

The Supreme Court has ruled in favour of Westminster City Council in a dispute over whether a completion notice in relation to a redevelopment was validly served on a ratepayer.

The background to the case of UKI (Kingsway) Limited (Respondent) v Westminster City Council (Appellant) [2018] UKSC 67 was that in January 2009, UKI began the redevelopment of a building at 1 Kingsway. [What follows is based on the court's press summary]

In February 2012, Westminster informed UKI’s agents that it intended to serve a completion notice specifying a completion date of 1 June 2012.

The building was being managed by Eco FM, under a contract with UKI, but Eco had no authority to accept service on UKI’s behalf.

On 5 March 2012, the council delivered a completion notice by hand to the building, specifying 1 June 2012 as the completion date. It was addressed to “Owner, 1 Kingsway, London WC2B 6AN”.

The notice was given to a receptionist employed by Eco, who scanned and emailed a copy of the notice to UKI, which received it by no later than 12 March 2012.

On 29 March 2012, an appeal was lodged by UKI’s agents against the completion notice, “on behalf of Eco”, on the grounds that the service of the notice was invalid because it was not served on UKI but on the receptionist for Eco.

On 7 May 2013, the premises were brought into the rating list with effect from 1 June 2012. UKI proposed that the entry be deleted due to invalid service, but this was not accepted by the valuation officer.

The Valuation Tribunal allowed UKI’s appeal against the completion notice and the inclusion of the premises in the rating list. The Upper Tribunal reversed that decision, but it was re-instated by the Court of Appeal.

The issue for the Supreme Court is whether the completion notice was validly served on the date it was received by UKI, in circumstances where:

(i) 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

(ii) it was received in electronic, rather than paper form.

The Supreme Court unanimously allowed the appeal and restored the order of the Upper Tribunal.

Lord Carnwath gave the lead judgment. On the issue of indirect service, the judge said the means of service prescribed by the statute were not exclusive. Under ordinary principles the real issue was whether the council caused the notice to be received by UKI.

Regarding the interposition of a third party, in the form of the Eco receptionist, it was unnecessary and unrealistic to introduce concepts of agency or statutory delegation, Lord Carnwath said.

As the Upper Tribunal observed, the Eco receptionist did no more than would reasonably be expected of a responsible employee in that position. It was the natural consequence of the council’s actions.

Lord Carnwath said causation did not depend on control. For example, if a notice was correctly addressed, but mistakenly delivered to a neighbour who passed it on to the intended recipient, there was no reason why that should not be treated as effective service under ordinary principles of causation, even though that neighbour was not under the control of either party.

The judge said that arguments about possible uncertainty were not persuasive, since some uncertainty in this respect was inherent in the legislation, in which neither the methods of service nor the dates of service in different circumstances were exhaustively defined.

Where the date of service was critical, a billing authority might choose a statutory method of service that eliminated or minimised the risk of invalidity by failure to specify the correct date of service. If it chose a non-statutory method, it must bear that risk. The risk of prejudice to the building owner was limited, as outside the statutory methods service depended on actual receipt by the intended recipient, the judge said.

In relation to electronic communication, Lord Carnwath noted that before the enactment of the Electronic Communications Act 2000, the state of the law was such that service by fax was valid.

There was no good reason for distinguishing transmission by fax from transmission by email as in this case, he said. Parliament must be taken to have legislated against that background.

The judge said UKI had not been able to indicate any provision of the 2000 Act that expressly or impliedly restricted the previous law, nor an overall inconsistency sufficient to overcome the general presumption that Parliament does not intend to change the common law.

The purpose of the 2000 Act and Orders made under it was to provide a clear and certain basis for the routine use of electronic methods by authorities, Lord Carnwath said. That purpose was not undermined by a conclusion that under general principles, and on the particular facts of this case, the notice was successfully served by email. Therefore, the property was correctly brought into the rating list with effect from 1 June 2012.