Ener-G Holdings Plc v Hormell

Contractual notice provisions which prescribe personal delivery or recorded delivery may provide a secure method of service without being exclusive. Notice may therefore be effective through another method where the recipient actually receives it, unless the agreement clearly requires exclusive compliance. However, “delivering personally to” a party requires delivery to a person, not merely leaving documents at the party’s address or in a letter box. Strict contractual time limits remain effective in commercial agreements. Where proceedings are left at premises but are not personally received, the Civil Procedure Rules may nevertheless determine the date of service if the contract permits service in any manner allowed by law.

The claimant sought to pursue warranty claims arising from a share sale agreement. The agreement required notice of claims by the second anniversary of completion and provided that notified claims would lapse unless proceedings were issued and served within twelve months after notice.

The claimant left a notice at the defendant’s home on 30 March 2010, which the defendant read that day. It later left the claim form and particulars in a letter box on 29 March 2011. The defendant did not receive them until 2 April 2011. The preliminary issue was whether the notice and proceedings had been validly served under clauses 6.3.3, 6.3.7 and 13 of the agreement, or under the Civil Procedure Rules.

1. Construction of the notice regime. Clause 13 was not an exclusive code governing all notices. The word “may” in clause 13.2 retained its ordinary permissive meaning. The agreement contemplated other communications, including fax communications, which were not readily consistent with an exclusive clause 13 procedure.

2. Notice of claims. The notice left at the defendant’s home on 30 March 2010 was effective because the defendant found and read it that day and discussed it with his solicitor. It would be contrary to business common sense to conclude that a recipient had no notice in those circumstances merely because the contractual delivery mechanism had not been used. The claimant therefore satisfied clause 6.3.3(b) on 30 March 2010.

3. Meaning of personal delivery. Clause 13.2 required the first permitted method to be performed by delivering the notice personally to the other party at the specified address. Leaving proceedings in a letter box, without delivery to a person, did not satisfy that provision. The approach in Bottin (International) Investments Ltd v Venson Group plc [2004] EWCA Civ 1368 was materially relevant.

4. Service under the CPR. Clause 14.2 permitted service of proceedings in any other manner allowed by law. The claim form and particulars were consequently served under CPR Part 6.14 on 31 March 2011. That was outside the twelve-month period calculated from 30 March 2010.

5. The claims were therefore deemed irrevocably withdrawn and lapsed under clause 6.3.7(a).

The judgment was a first-instance determination of preliminary issues ordered by Blair J on 7 July 2011. The court held that the contractual claims had lapsed because the proceedings were served outside the agreed twelve-month period.