Service Of Notice: Some Postal Pitfalls
A recent decision in the Court of Session in Carmarthen
Developments v. Samuel James Pennington examines at what point
a notice can be deemed to be served and highlights how critical
surrounding circumstances can be.
The Facts
In this case, the pursuers entered into contracts with the
defender for the purchase of two plots of land. The contracts both
contained a suspensive condition, which basically concerned getting
satisfactory reports following a geotechnical survey, and outline
planning permission. The pursuers had the unilateral right to waive
the conditions or to declare them satisfied. They had to do so
within 2 years, failing which, either party could back out of the
contracts.
The pursuers obtained planning permission but the defender was
annoyed that the pursuers did not then make the contracts
unconditional and pay the sums due under the contract. Instead they
waited until the 2 year "long-stop" date. He decided that
he would back out of the contracts as soon as the long-stop date
arrived. He agreed that his lawyer would fax the letters backing
out of the contracts on Saturday 20th October 2007, although this
would not be effective until 9am on Monday 22nd October 2007.
Before he faxed the letters, his lawyer picked up the mail bag for
his firm from the sorting office of the Post Office in Jedburgh.
His lawyer had warned him that he expected the pursuers to satisfy
the conditions before this date.
Meanwhile, the pursuers' solicitors took steps to satisfy
the conditions and thus prevent the defender from backing out.
Letters were prepared by them on Thursday 18th October, were signed
the following day, after which the intention was for the letters to
be sent by fax. However, an oversight occurred which resulted in
the letters being sent out by first class post.
On the morning of 22nd October, the defender's lawyer picked
up the mail bag and then, when he got to his office, re-faxed the
letter backing out of the contracts, at 9.08am.
The crucial question arose - which party could be deemed to have
intimated first?
The Arguments
It was argued for the pursuers that the suspensive conditions
had been satisfied before the defender's withdrawal took effect
at 9am on Monday 22nd October. The reasons for this were: the
postal acceptance rule took effect from Friday 19th October 2007,
when the notices were placed in the first class mail; it was most
likely that the letter reached Jedburgh on the Saturday morning
when it was picked up by...
To continue reading
Request your trial