The Court of Appeal overturns the electronic service apple-cart

News - 21/02/2018

In a judgment published yesterday, The Court of Appeal has held that a Party Wall Award can be validly served by email so as to set time for an appeal running under s10(7) of the Party Wall etc Act 1996 (the 1996 Act).  While this decision is important to Party Wall surveyors and homeowners, the decision also has a wider impact, because other statutes (and many contracts) contain service provisions drafted along similar lines to s15 of the 1996 Act, which was the provision under consideration by the court.

In Knight v Goulandris [2018] EWCA Civ 237 (20 February 2018) the issue was whether the receipt by Mr Goulandris of an award of the third surveyor by email constituted service of it on him in accordance with s15 of the 1996 Act, either when it was sent to him, or when he read it the following morning.  The question of whether email service was effective was important because (as is so often the case) Mr Knight contended that Mr Goulandris’ appeal against the award had been issued out of time; the 14 day time period having expired.

The award in question was an award by the third surveyor, Mr Redler, who was asked to adjudicate on the issue of compensation payable to Mr Goulandris by Mr Knight, whose basement works had caused damage to Mr Goulandris’ property.  Mr Goulandris’ surveyor, Mr Fenton, assessed the cost of those works at £821,210.49, of which £640,000 was the cost of alternative accommodation.  Mr Redler decided that it was not necessary for Mr Goulandris and his family to move out while the works were carried out and furthermore that much of the damage pre-dated Mr Knight’s basement works.  Mr Redler made an award in the sum of £55,001.61.

Mr Redler emailed the award to both parties’ surveyors at 08:45 on 2 September 2015.  At 23:19 Mr Fenton emailed the award on to Mr Goulandris. It was common ground that Mr Goulandris did not read the emails until the following day, 3 September, and that Mr Goulandris was never sent a hard copy of the award. The appeal was filed on 17 September.

The Court of Appeal had to decide on the correct interpretation of s 15 of the 1996 Act, which says:

“(1) A notice or other document required or authorised to be served under this Act may be served on a person—

(a) by delivering it to him in person;

(b) by sending it by post to him at his usual or last-known residence or place of business in the United Kingdom; or

(c) in the case of a body corporate, by delivering it to the secretary or clerk of the body corporate at its registered or principal office or sending it by post to the secretary or clerk of that body corporate at that office.

Section 15(1A) goes on to provide for service on a recipient by email if the recipient has said that he is happy to be served by email and has not withdrawn that statement, an amendment introduced by the Party Wall etc Act 1996 (Electronic Communications) Order 2016. This was after the award at issue in this appeal was served.

The questions for the court was whether section 15 (as it stood at the date of service of the award, before the 2016 Order) should be treated as an exhaustive statement of the means by which a notice or other document can be validly served for the purposes of the 1996 Act, or whether other means (such as electronic means) were permissible.

The Court of Appeal decided that unless a statutory provision expressly excludes service by other means, the serving party is entitled to rely on service which took place by any other means, provided that it came to the attention of the receiving party. In other words, section 15 is permissive, not prescriptive; and as long as you can prove that an award or notice was in fact received, service by email is good service for the purpose of starting the clock for an appeal under section 10 (17) of the 1996 Act.

If that was the case prior to the 2016 Order, then what was the point of the 2016 Order? Arguably, because it was always possible to serve by email under the un-amended section 15 (subject to proving receipt), the 2016 Order was not necessary and possibly even ultra vires; except, possibly, to the extent that it established a deemed service process for electronic service that would not otherwise have existed.  The Court of Appeal declined to express a view on this leaving ambiguity in place of (moderate) certainty.

So can you, or should you, still use and rely on section 15(1A) to (1C) when serving by electronic means?

In our view, the safest course of action is not to rely on the amendment made by the 2006 Order because it is at least arguable that the order was ultra vires. If documents are to be served, then using the deemed service provisions of post or personal service remain the better and least risky option.

If you do want to serve by email, you will need a proof of receipt of the email. Using “read receipts” built into some email programs is an option, but often it gives the recipient the option of not sending the receipt.  An alternative may be to use a third-party providers such as DocuSign to provide proof of delivery of an email.

If you have any questions about the issues raised in this blog, please feel free to contact Matthew Hearsum, our Party Wall /Basement Extensions specialist and a Partner within our Dispute Resolution team. Matthew is contactable by telephone 01483 215 034 or by email [email protected]

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Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.