A 'Miss Is As Good As A Mile' When It Comes To Contractual Notice Provisions

This publication considers the recent case of Ener-G Holdings Plc v Hormell [2012] EWCA Civ 1059. The key issue in the case was whether the claimant had complied with a requirement, under a share purchase agreement, to issue proceedings for breach of warranty within 12 months of notifying the defendant of its claim. Clauses of this nature are not unusual in commercial contracts and, as this case shows, failure to comply with them is likely to result in a claim being time-barred.

BACKGROUND FACTS

By an agreement dated 2 April 2008 (the Agreement), the defendant sold shares in a company to the claimant. Under the terms of the Agreement, the claimant was required to notify the defendant of any claim for breach of warranty no later than the second anniversary of the date of completion (i.e. by 2 April 2010) and to issue proceedings within 12 months of providing such notice. Failure to comply with this obligation would result in the claim being "deemed to have been irrevocably withdrawn and lapsed."

With a view to bringing a claim worth nearly £2m, the claimant sent two identical notices to the defendant on 30 March 2010. The first (the First Notice) was delivered to the defendant's home address by a process server. As the defendant was not in, the process server left the First Notice in the porch and the defendant found it later that day. The second notice (the Second Notice) was sent by recorded delivery to the defendant's home address. On 29 March 2011 a claim form (the Claim Form) was delivered by a process server to the defendant's address. Again, nobody was at home and the process server left the Claim Form in the letter box at the property.

THE DISPUTE

The dates on which the notices and the Claim Form were sent and received were undisputed. The dispute turned on whether the notices had been served in a manner permitted by the Agreement and, if so, when deemed service of the notices and the Claim Form took place; the key issue being whether deemed service of the Claim Form took place within twelve months of the claimant notifying the defendant of its claim.

The Agreement contained the following service provisions:

"13.2 Service

Any... notice may be served by delivering it personally or by sending it by pre-paid recorded delivery post to each party...at or to the address referred in the Agreement....

(emphasis added)

13.3 Deemed service

Any notice delivered personally shall be deemed to be received when delivered...any notice sent by...