UKI (Kingsway) Limited v Westminster City Council

The Court of Appeal considered whether a completion notice under Schedule 4A to the Local Government Finance Act 1988 had been validly served. The key legal principles were that (i) paragraph 1 of Schedule 4A requires the billing authority to "serve" a completion notice "on the owner" of the building, (ii) paragraph 8 of Schedule 4A sets out permissive methods of service but does not exhaustively prescribe the only permissible modes, and (iii) despite the permissive wording, service is not satisfied by leaving a notice with a third party who is not authorised to accept service and thereafter relying on that third party to send an electronic copy to the owner. The court held that, in the taxing context of Schedule 4A where precise dates of service are material to appeal rights, a third party’s unauthorised onward transmission of a scanned notice did not constitute service by the billing authority on the owner and so the completion notice was not effective to determine the completion date.

The appeal arose from a completion notice dated 5 March 2012 delivered by Westminster City Council in respect of premises at 1 Kingsway, London, which purported to bring the premises into the 2010 rating list with effect from 1 June 2012. The appellant was the freehold owner; the building was managed on the owner’s behalf by a facilities management company (Eco FM). The notice was left with a receptionist employed by Eco and addressed generically to the "Owner, 1 Kingsway". A scanned copy reached the appellant by email by 12 March 2012 and an appeal was lodged. At first instance the President of the Valuation Tribunal for England held the notice invalid for defective service. The Upper Tribunal (Lands Chamber) reversed that decision and held the notice had been validly served. The appellate question before this court was whether service had in law been effected "on the owner" by the billing authority.

Nature of the appeal: an appeal by the owner against the Upper Tribunal’s decision upholding the billing authority’s contention that the completion notice had been validly served and so fixed a completion date under Schedule 4A.

Issues framed:

• whether a completion notice under Schedule 4A must be addressed to the owner by name (no appeal was pursued on this point to this court);
• whether, absent the adoption of any of the specific modes of service listed in paragraph 8 of Schedule 4A or section 233 of the Local Government Act 1972, a completion notice is nonetheless "served on the owner" if a third party (not authorised to accept service) receives the notice and subsequently communicates a scanned copy to the owner;
• whether receipt in electronic form by the owner could cure any defect in service when an unauthorised intermediary had been used.

Court’s reasoning and conclusions: the Court of Appeal accepted that paragraph 8 of Schedule 4A is permissive and does not constitute an exhaustive code of service methods. Nevertheless, construing the statutory requirement that the billing authority "shall serve" the notice "on the owner" in the context of a taxing statute that produces a deemed date for rating purposes, the court concluded that leaving a notice with an unauthorised third party in the hope it will be passed on, and relying on a later unauthorised electronic transmission, does not amount to service by the authority on the owner. The court emphasised the need for certainty as to the date of service where appeal timetables run from receipt. The Court rejected the respondent’s reliance on a broad contract-law dictum allowing indirect giving of notice (Townsend Carriers) as justifying an expansive conception of service in this statutory context. The court therefore allowed the appeal and held the completion notice had not been properly served and was ineffective to determine the completion day.

The court also noted the practical importance of the point and declined to lay down an exhaustive rule for all conceivable modes of service, leaving room for other non-statutory or agreed methods where appropriate authority or agreement exists, but drawing a clear line against unauthorised intermediary transmission in circumstances such as this.

Appeal allowed. The Court held that, although paragraph 8 of Schedule 4A is permissive as to modes of service, legal service requires delivery to the owner or to an authorised agent; leaving a completion notice with a third party not authorised to accept service, and relying upon that party’s subsequent unauthorised electronic transmission of a scanned copy to the owner, did not amount to service "on the owner" by the billing authority. Because the notice was not properly served it was ineffective to determine the completion day under Schedule 4A.

The Valuation Tribunal President (Professor Graham Zellick QC) heard the matters on 10 March 2014 and held the completion notice was not validly served, resulting in removal of the premises from the list (decision 15 April 2014). The respondent appealed to the Upper Tribunal (Lands Chamber) where Deputy President Martin Rodger QC allowed the appeal and held the notice valid ([2015] UKUT 301 (LC)). The appellant sought permission to appeal to the Court of Appeal; permission was refused by the Deputy President on 2 October 2015 but granted by Kitchin LJ on the papers on 18 December 2015. This Court heard the appeal and allowed it on 15 June 2017 ([2017] EWCA Civ 430).