Ener-G Holdings plc v – Hommell [2012] EWCA Civ 1059
The High Court decision was reported in Bulletin 83 covering January 2012. The facts are relatively involved and can be found in that bulletin. In essence, the requirements of a sale and purchase agreement provided that notices of claims for breach of warranty had to be given by a certain date and, additionally, proceedings had to be have been issued and served not later than 12 months after the date of the notice of claim. The notice clause was in fairly standard form and provided that:
- "any such notice may be served by delivering it personally ..."
- "A document which starts any legal 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"
The appeal concerned two points, whether notice delivered by a process server amounted to personal delivery and whether the specified methods of service were exclusive.
The Court of Appeal held that:
- "delivering personally" meant delivery to a person, not by a person. "Personally" must be a reference to the person being served, rather than the person serving the document, or otherwise delivery by a postman would count as personal service. Whilst the natural meaning might be otherwise, it was well understood in this context to mean delivery on the other party in person. The identity of the server was rarely important, whereas the identity of the recipient was usually of central importance.
- By a majority of two to one, the Court held that the method of service was permissive, so that a notice served in another manner was valid if received. The reasoning was based on the use of the word "may" rather than "shall" (used elsewhere in the notice clause) or "must". The fact that only two methods of service were specified (personal delivery and recorded delivery) did not mean that they were the only two methods intended to be used. The advantage of using one of the specified methods was that there was then a deemed delivery of service.
The second point might seem straightforward, but Lord Justice Longmore disagreed. In his view it was common sense that where the parties spelt out two methods by which a notice could be served, they did not intend that it be served in any other way. Part of the justification for his point was the provision set out above that proceedings could be served in other ways – something that was not stated in relation to the notices clause. Longmore LJ did not consider that the use of the word "may" had conclusive force. It could be construed that the parties "may" use one prescribed method of service or the other. It did not mean that a third method was permissible.
Comment
PLC takes the view that Longmore LJ's assenting view is more compelling, but that would seem to be at odds with how most people regard the words "may" in a notice clause. The lesson is that if the parties wish the specified methods of serving notice to be exclusive, they should use the word "shall" and, preferably, and make it clear that other methods of service will not be accepted.
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