Ener-G Holdings Plc v Philip Hormell
| Jurisdiction | England & Wales |
| Judge | The Master of the Rolls,Lord Justice Longmore,Lord Justice Gross |
| Judgment Date | 31 July 2012 |
| Neutral Citation | [2012] EWCA Civ 1059 |
| Docket Number | Case No: A3/2012/0075 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 2012 |
[2012] EWCA Civ 1059
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION, COMMERCIAL COURT
The Hon Mr Justice Burton
Claim No 2011 Folio 374
Royal Courts of Justice
Strand, London, WC2A 2LL
The Master of the Rolls
Lord Justice Longmore
and
Lord Justice Gross
Case No: A3/2012/0075
George Bompas QC (instructed by Stevens & Bolton LLP) for the Appellant
Nicholas Lavender QC (instructed by BRM Solicitors) for the Respondent
Hearing date: 4 July 2012
This appeal is brought by ENER-G Holdings Plc ('ENER-G') against an order made by Burton J, following a judgment he gave on 14 December 2011, determining preliminary issues between ENER-G and Philip Hormell. The ultimate issue on this appeal is whether the Judge was right to hold that ENER-G is precluded from pursuing a claim for nearly £2m based on alleged breaches of warranties given by Mr Hormell in an agreement dated 2 April 2008 under which he sold certain shares to ENER-G ('the Agreement'). The reason the Judge held ENER-G to be so precluded was because it failed to serve the claim form on Mr Hormell within the period specified by the Agreement.
The relevant provisions of the Agreement
By clause 6.3.3(b) of the Agreement, ENER-G, as 'the Buyer', had to give written notice ('Notice') of any breach of warranty claim to Mr Hormell, as 'the Seller', by 'the second anniversary of completion', i.e. by 2 April 2010. By clause 6.3.7(a) of the Agreement, where Notice had been given in respect of any claim,
'that claim should be deemed to have been irrevocably withdrawn and lapsed unless…proceedings in respect of that claim have been issued and served on the seller not later than the expiry of the period of twelve months after the date of that notice.'
The centrally relevant provisions of the Agreement for present purposes are clauses 13 and 14, which are concerned with service of documents under the Agreement. However, it is also right to mention clause 1.5.7, which provides that '[u]nless expressly stated to the contrary…"in writing" or "written" includes faxes but does not include emails'.
Clause 13 is headed 'Notices', and it is in these terms:
'13.1 Notice in writing
Any notice or other communication under this Agreement shall be in writing and signed by or on behalf of the party giving it.
13.3 Service
Any such notice may be served by delivering it personally or by sending it by pre-paid recorded delivery post to each party (in the case of the Buyer, marked "for the attention of directors") at or to the address referred in the Agreement or any other address in England and Wales which he or it may from time to time notify in writing to the other party.
13.3. Deemed service
Any notice delivered personally shall be deemed to be received when delivered (or if delivered otherwise than between 9.00 a.m. and 5.00 p.m. on a Business Day, at 9.00am on the next Business Day), any notice sent by pre-paid recorded delivery post shall be deemed to be received two Business Days after posting and in proving the time of despatch it shall be sufficient to show that the envelope containing such notice was properly addressed, stamped and posted.'
Clause 14 is headed 'Governing Law and Jurisdiction'. Only clause 14.2 is relevant to the present dispute; it is headed 'Proceedings' and is in these terms:
'The parties agree that the documents which start any legal proceedings relating to a dispute ("Proceedings") and any other documents required to be served in relation to those Proceedings may be served on any party in accordance with this Agreement. These documents may, however, be served in any other manner allowed by law. This clause applies to all Proceedings wherever started.'
The Facts
Having decided that it had claims against Mr Hormell for breaches of warranty, ENER-G arranged for Notice under clause 6.3.3 of its claim for breach of warranties to be served on him in two different ways.
First, a process server was instructed to deliver a Notice ('the first Notice') in an envelope addressed to Mr Hormell, to his home address, being the address referred to in the Agreement (no other address having been notified pursuant to Clause 13.2), namely Ringerlane Farm, Elmton, Worksop, Nottinghamshire ('Ringerlane'), which was a farmhouse. No one was at Ringerlane when the process server attended on the afternoon of 30 March 2010, so he was unable to obtain a reply, when he rang the bell. Accordingly, he left the envelope in the front porch on a table. Before 5.00 p.m. that afternoon, Mr Hormell found the envelope, opened it, and read the first Notice.
On the same day, 30 March 2010, an identical copy of the Notice ('the second Notice') was sent by Recorded Delivery in an envelope addressed to Mr Hormell at Ringerlane. It is common ground that this copy of the Notice was deemed received, by virtue of Clause 13.3, on 1 April 2010.
On 29 March 2011, a Claim Form ('the Claim Form') seeking damages for the alleged breaches of the warranties, with the necessary Response Pack, was taken by a process server to Ringerlane. As nobody was at home, the process server placed the Claim Form in the letter box serving the property at 4.20 p.m. As the Judge found, the documents were not in fact received by Mr Hormell until 2 April, when he emptied the letter box. Under CPR 6.14, it is common ground that this would mean that service of the Claim Form occurred on 31 March 2011.
The issues between the parties
By virtue of clauses 6.3.3. and 6.3.7(a), it is, rightly, common ground that ENER-G has to establish that (i) the Notice was served on or before 2 April 2010, and (ii) the Claim Form was served no more than one year after the Notice was served. Mr Bompas QC, on behalf of ENER-G, contends that his client can succeed on two alternative bases.
The first basis is that the first Notice was validly served, because it was 'deliver[ed] personally…. at…the [relevant] address' on 30 March 2010 under clause 13.2, as it was left at that address by an individual, namely the process server on that date. This proposition is challenged by Mr Lavender QC on behalf of Mr Hormell: he contends that the reference to 'delivering personally' in clause 13.2 means personal service, in the sense of given to the individual to be served personally, which it was not. However, if that contention is wrong, and ENER-G's interpretation is right, then it is common ground that the Claim Form was served in time, because it was delivered to the same address by a process server on 29 March 2011, and that would have been valid service as clause 14.2 permits service of the claim form to be effected, inter alia, by any manner permitted by clause 13.2.
The second basis on which Mr Bompas puts ENER-G's case is that, if ENER-G is wrong on the first point, then the only way in which a Notice can be validly served under the Agreement is in strict compliance with clause 13.2. On behalf of Mr Hormell, Mr Lavender challenges this argument on the ground that the service of the first Notice was valid even though it was not in accordance with clause 13.2. If ENER-G is correct on that issue, then the first Notice was not served and was therefore ineffective, but the second Notice was served and was therefore effective, and, on that hypothesis, it is common ground that the Claim Form was served in time, as the second Notice was deemed served on 1 April 2010, and the Claim Form was deemed served on 1 April 2011.
For completeness's sake, Mr Hormell's case is thus that the first Notice was effectively served on 30 March 2010, because, although it was not served in accordance with clause 13.2, that clause does not set out an exclusive code, and therefore the Claim Form was served too late as it was deemed to have been served on 31 March 2011 (see clause 14.2 and CPR 6.14).
Accordingly for ENER-G to win this appeal, the court must be satisfied either that 'delivering [the Notice] personally' did not require it to be handed personally to the intended recipient, or that the two methods of service set out in clause 13.2 are exclusive and no other means of service of a Notice will be effective (unless the server can invoke estoppel or the like, which does not arise here). The Judge rejected both these arguments. I shall consider them in turn.
The meaning of 'delivering it personally' in clause 13.2
The first of the two issues to be decided is whether the first Notice was 'deliver[ed]…personally…at…[Mr Hormell's] address', within clause 13.2. As explained in para 11 above, Mr Bompas, for ENER-G, contends that it was, because it was left there on 30 March 2010, by a person, namely a process server instructed by ENER-G, whereas Mr Lavender, for Mr Hormell, contends that it was not, as the relevant words required personal service of the Notice on Mr Hormell. If Mr Bompas is right, it was enough for the envelope containing the first Notice to have been left by the process server at Ringerlane on 30 March 2010, and the fact that Mr Hormell actually opened the envelope on that day is irrelevant. If Mr Lavender is right, the fact that Mr Hormell opened the envelope on 30 March 2010 is also irrelevant, as it was not handed to him.
Like the Judge, I prefer the argument advanced on behalf of Mr Hormell. First, there is the natural meaning of clause 13.2 in its context. Although in normal social parlance, 'delivering' a document 'personally' would often be understood to mean service by the sender personally, I do not consider that that is the natural...
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