Gillian Craig: Notice requirements under the judicial spotlight again



Gillian Craig

The Inner House of the Court of Session has again considered the vexing issue of notice requirements, write Gillian Craig and Josh Grieveson.

Facts

The parties entered into a contract for the maintenance of solar panels on a number of the Aberdeen City Council’s buildings. In terms of the agreement, either party could terminate in the event that payment was not made within 20 days of written notice “requiring payment”.

Upon Aberdeen CC failing to make payment, OGL sent an email as follows: Please see attached statement of balances now overdue, owing to Our Generation Solar.

Regards

No more- no less. The email made no reference to giving notice, nor did it make any mention of termination. A month later, payment still not having been received, OGL then wrote to Aberdeen CC terminating the agreement with immediate effect.  A question arose as regards whether OGL were entitled to rely on their first email to terminate.

Decision

The Inner House analysed the issue under reference to the two questions posed in HOE International v Andersen (2017):

  1. Are the terms of the notice sufficient to convey the necessary information to the recipient?
  2. Has the notice been issued in accordance with the contractual procedure?

In answering the first of these questions, the court highlighted that a notice did not require “absolute clarity” (referring to the classic “get out of jail free” case of Mannai Investment Co v Eagle Star Life Assurance Co) and that no particular language needed to be used.
However, it also considered that an email which only detailed arrears and did not “require payment” in terms of the relevant clause - would not have been interpreted by a reasonable recipient as forming the basis for termination.

As for the second issue, the court found the more drastic the consequences of the notice, the greater the need for strict compliance with contractual procedure. However, the court held that the email itself was in writing (reiterating that the deemed service provisions in relation to notices served by recorded delivery post or fax etc. are not mandatory) and was sent to the defenders.

The email, therefore, complied with the technical requirements of notices - it was the content that was lacking.

Gillian Craig is a partner at MacRoberts