Hart Investments Ltd v Fidler & Anor

Service by fax is effective only where the recipient has previously indicated in writing a willingness to accept electronic service. A fax number on a liquidator’s notepaper does not, without more, satisfy that requirement. Postal service under the Civil Procedure Rules 1998 is deemed effective by counting calendar days, including weekends.

A default judgment founded on an incorrect certificate of service or a premature request is irregular and must be set aside. It may also be set aside where the defence has a real prospect of success or there is some other good reason. An adjudicator’s referral notice served outside the strict seven-day period is invalid unless the irregularity is waived. A letter of intent which fails to record the whole contract in writing does not satisfy the statutory requirement for adjudication.

Hart Investments Ltd brought proceedings against Larchpark Limited and Fidler arising from the collapse of a flank wall during building works. Larchpark was in liquidation. Hart obtained judgment in default after serving the claim form by fax and post. Larchpark applied to set aside that judgment.

Larchpark also sought summary judgment to enforce an adjudicator’s decision awarding it £145,192.52 for work carried out after the collapse. Hart challenged the adjudicator’s jurisdiction because the referral notice was served outside the prescribed period and because the underlying letter of intent did not evidence a construction contract in writing. The court determined whether the default judgment should stand and whether the adjudicator’s decision should be enforced.

1. Default judgment. The purported fax service was invalid. Under the Civil Procedure Rules 1998, electronic service required a prior written indication that service by fax would be accepted. The liquidator’s employee was not Larchpark’s legal representative, and the fax number on the liquidator’s documents did not constitute the required indication. The court followed the approach in Molins Plc v G.D. SpA [2000] 1 WLR, 1741.
2. Service was therefore effected by post. The deemed date under CPR 6.7 was Sunday 16 July 2006, because the two-day period comprised calendar days. The court was bound by Anderton v Clwyd [2002] EWCA Civ. 933, despite the conflicting approach in Godwin v Swindon Borough Council [2001] EWCA Civ. 1478.
3. The acknowledgement of service was consequently late. Nevertheless, the default judgment was irregular because the certificate of service recorded the wrong date and the request for judgment was premature. It was therefore set aside under CPR 13.2. Alternatively, the absence of the response pack, uncertainty surrounding fax service, the procedural errors and Larchpark’s realistic defence constituted other good reasons under CPR 13.3.1(b). The defence also had a real prospect of success under CPR 13.3.1(a). The delay in applying was not fatal in the circumstances.
4. Adjudication. The referral notice was served eight days after the notice of intention to refer, contrary to paragraph 7 of the Scheme for Construction Contracts. The seven-day period was strict. It could be waived expressly or impliedly, but there was no waiver. The adjudicator had no jurisdiction before receiving a valid referral notice and could not retrospectively extend the period without consent. His decision was therefore a nullity and was not enforced.
5. The letter of intent did not evidence the whole contract in writing for the purposes of section 107(2)(c) of the Housing Grants (Construction and Regeneration) Act 1996. It left material matters, including the workscope, time, price and employer’s identity, uncertain. The court applied the reasoning in RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] 1 WLR, 2344.
6. Even if jurisdiction had existed, Larchpark’s insolvency and the mutual claims arising from the same collapse would have made it inappropriate to enter summary judgment on a temporarily binding adjudication decision. Following Bouygues UK Ltd v Dahl-Jensen UK Ltd [2000] BLR 522, the application for summary judgment was refused.