Validity of service of notice by email

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Facts

Jawaby contracted with The Interiors Group (TIG) to carry out building works at the Holborn Tower in High Holborn, London.  Payment for the works was to be made from an Escrow account and in January 2016 TIG made an application for £1,109,000 from the Escrow account.  Jawaby refused to pay on the basis that the application was not valid because it was made by email.  It was also invalid because it was incorrectly worded.

Held:

  1. The amended clause 1.7 of JCT 2011 Design and Build provided that any communication to be given by either party would be sufficiently served is sent by hand, fax or by post. This was a list of approved means, it did not follow that anything not listed was forbidden.  The Judge said she would have required clear and express words prohibiting email to find that email service was invalid.  Jawaby’s first argument to restrain payment from the Escrow account therefore failed BUT:
  2. The Judge agreed with Jawaby that the “notice” given by this email was too vague to be a proper interim application. She applied Henia v Beck [2-15] BLR 704The document relied upon as an interim application must (look like) an interim application stating the sum considered by the contractor as due at the relevant due date and it must be free from ambiguity.  In this context, the interim application should be considered in the same light as a certificate.  If there are to be potentially serious consequences from it being an interim application, it must be clear that it is what it purports to be, so that the parties know what to do about it and when.

Comment

  1. The Judge also considered whether Jawaby by its previous conduct had become estopped from challenging this email notice as drafted, and concluded that on the facts it had not.
  2. Although the Judge’s Decision on email is understandable given how ubiquitous emails are nowadays, it was still regrettable.  If such a clear clause, identifying the approved means by which a notice can be given can be treated in this way, then any other clause which purports to list categories of approved items must be similarly open to challenge if it is not qualified by a statement that the list is closed or exclusive.

For more information, contact Robert Langley on 0191 211 7957 or at [email protected].