Lobo v Corich & Anor

Case reference: 
[2017] EWHC 1438
Wednesday, 21 June 2017

Key terms: 
Adjudication – Charging orders – Enforcement – Service – Setting aside

The claimant employer, Mr Lobo applied for the continuation of an interim charging order over property owned by Mr Corich, the defendant contractor. The defendant sought the setting aside of the interim charging order and the order for summary judgment on which it was based.

The parties had entered into the JCT Intermediate Building Contract 2009, under which notices of breach and termination had to be hand-delivered, or sent by recorded or special delivery. Other notices were to be sent by such means as the parties agreed in writing. Subject to those provisions, clause 1.7.3 provided that notices might be "served by any effective means" and would be duly served if sent to the recipient's address stated in the contract particulars (7 Gunter Grove) or such other address he might notify, or, failing that, his last known principal business address.

The claimant sent notices of breach and termination by special delivery to 7 Gunter Grove and also hand-delivered a copy of the latter to 25 Gunter Grove, which the defendant owned and where he was registered for council tax. The defendant responded by email suggesting that another address had been specified for service and indicating that communications sent to 7 Gunter Grove would not reach him and asking that copies of any communications be sent to him by email.

The claimant began adjudication, obtained a decision in his favour, issued enforcement proceedings and later he obtained summary judgment and an interim charging order but the defendant did not play part in any proceedings. All the relevant notices and orders were sent by post or hand-delivered to 25 Gunter Grove and copies were sent electronically to all four email addresses used by the defendant. In March 2017 the defendant applied to set aside the adjudication decision, the summary judgment and the interim charging order, claiming that he had not been aware of any of them.

Stuart-Smith J rejected the defendant’s assertion that he had been unaware of adjudication, held that there had been effective service of all the relevant notices and orders and enforcement proceedings which had resulted in summary judgment being entered in favour of the claimant.

Firstly, Stuart-Smith J said that the defendant should have been aware of the proceedings and had made a conscious decision “in the case of the emails, not to open them and, in the case of the physical documents, not to look at them.” The defendant had been using the email addresses to which copies of the documents had been sent, was not new to litigation, knew the consequences of non-engagement, and should have been aware of the need to identify potential litigation when checking his emails.

Secondly, Stuart-Smith J held that the adjudication and referral notices had been effectively served. The contract did not require the referral notices to be served by hand or special delivery, they were not expressly referred to in the Contract, and there was no evidence of any separate agreement between the parties about their service. As such, the 7 Gunter Grove remained the contractual address for service, despite the contractor's post-termination assertion that he would not receive documents sent there. The 25 Gunter Grove was an effective address for service because it was the contractor's most consistent and reliable address.

Thirdly, the court held that the enforcement proceedings had been duly served as pursuant to CPR r.6.9, and because the defendant was an individual, the proper place of service was his usual or last known place of residence which was 25 Gunter Grove. The claimant had no reason to believe that the defendant was no longer residing or carrying on business at that address, so had not been obliged to take steps to ascertain that it was current or to seek an order for substituted service.

Fourthly, Stuart-Smith J held that there had been no procedural unfairness or breach of natural justice. The court held that even if the defendant's failings had been unconscious, the defendant would “have had only himself to blame for such a protracted, pervasive, serious and inexplicable failure to behave with the prudence of an intelligent and educated businessman”.

This case served a practical reminder that all parties should ensure they scrutinise all emails, correspondence and documents received. The practitioners are advised to ask the email system for a read or delivery receipt and send hard copies of correspondence by means of signed for post or confirmation of a courier delivery. In that case, practitioners can record in their decision that they are satisfied that the silent party was given an opportunity to participate.

Key contact

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Tel: +44 (0)20 7421 1986