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...

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