Have You Been Served? An Update On Valid Service Of Local Authority Completion Notices For Ratings Liability (And Beyond?)

The Supreme Court has laid down new guidance on when a business rates completion notice has been validly served in UKI (Kingsway) Ltd v. Westminster City Council [2018] UKSC 67.

Overturning the Court of Appeal, the court held that a completion notice had been validly served despite being delivered by a company not authorised to accept service which subsequently forwarded the notice, by email, to the owner.

BUSINESS RATES AND COMPLETION NOTICES

Assuming they are not entitled to any relief, an owner of newly-built or redeveloped commercial property becomes liable to pay National Non-Domestic Rates (known commonly as business rates) once that property is entered into the ratings list.

The procedure for entering a property into the ratings list is set out in Schedule 4A of the Local Government Finance Act 1988 (the LGFA 1988). In short, a local authority may serve a "completion notice" on the owner if it appears that the building has been completed or is reasonably expected to be completed within three months. The effective date of this notice then determines when liability for business rates begins to accrue.

A property owner can appeal against a completion notice on various grounds, including that the notice was not validly served.

FACTS

UKI (Kingsway) Limited (the Owner) was redeveloping premises at 1 Kingsway, London (the Property). In March 2012, Westminster City Council (the Authority) hand delivered a completion notice to the Property to take effect in June 2012.

As the Authority did not know the identity of the Owner, it addressed the notice to "Owner, 1 Kingsway, London, WC2B 6AN". It was left with the receptionist at the Property, who was not employed by the Owner, but by the Owner's agents. Importantly, the agents were not authorised to accept service and the Authority was made aware that they had not served on the Owner. The receptionist subsequently sent a scanned copy of the notice by email to the Owner. The Owner subsequently appealed the notice on the grounds it had not been validly served.

The court was asked to determine two issues:

(1) whether notice can be valid when effected indirectly (and through the hands of a third party under no authority of either party); and

(2) whether the notice was validly received in an email format.

DECISION

The court found for the Authority and held that the service was valid and that it had been received by the Owner.

Indirect service

The emphasis of the judgment was on the "causal link"...