AM Construction v The Darul Amaan Trust

An otherwise unglamorous adjudication enforcement case in the TCC has shone a light on some of the issues of serving notices under contracts.  Of particular interest to me has been the role of technology, some old, some new.  This follows on neatly from my article last year on the TfGM v Kier case in the TCC concerning notices under an NEC3 contract.

In AM Construction (AMC) v Darul Amaan Trust the Parties disputed whether a Notice of Adjudication had been properly served on AMC by the Trust.

The Parties’ contract allowed, “any notice, communication or document may be given or served by any effective means and shall be duly given or served if delivered by hand or sent by pre-paid post.”

Roger ter Haar QC, sitting as a Deputy High Court Judge, highlighted the effect of the language in this clause.  Documents by hand had to be delivered.  Those by post had to be sent.

What was delivered?

Solicitors for the Trust used a well known process serving company to deliver the notice to AMC’s registered office address.  The solicitors emailed the necessary documents to the process server with instructions for the documents to be printed and delivered by hand to AMC.  An envelope was delivered to AMC by the process server but it was disputed whether it included the notice.  AMC said that the envelope contained some documents, but no notice.  The process server provided the usual statement for his client and submitted an invoice for the work done in printing and delivering the notice.

Whose evidence is to be preferred?

The Judge therefore had to decide whether to prefer AMC’s account of events, or the Trust’s.  Ultimately he preferred AMC’s account over that of the Trust.  Why?  To keep this article brief I have summarised the arguments but the judgment has full details.

One of the directors of AMC was at home (the registered office) when the delivery was made.  She gave a witness statement that Roger ter Haar found persuasive.  The process server’s witness statement was shown to be inaccurate and therefore the Judge did not accept his version of events.

The process server said that he had called at the property at 3.00pm and had obtained no answer when he rang at the door.  He returned at 4.22pm and again says he met no response after ringing the door bell.  He said that he pushed the envelope through the letterbox.  Data from the digital doorbell did not show any attempted delivery at 3.00pm.  Video footage did show his arrival at 4.22pm and demonstrates that he did not attempt to ring the door bell before posting the envelope into the letterbox.  Data from the doorbell system also identified other discrepancies in his account.  So here, at least, technology won the day.  The Judge concluded that the evidence of the company director was to be preferred over the evidence of, “an immensely experienced process server who gave evidence of a process which would have been absolutely second nature to him.”  So her account and, crucially, the data from the door bell system were persuasive.

What do the standard forms say?

NEC4 documents in clause 13.1 require all communications to be in a form that, “can be read, copied and recorded”.  Of more relevance to 2022 is the optional requirement in clause 13.2 for the Parties to include the use of a communications system in the Scope.  If they do, that communications system becomes the only way for the Parties to communicate. 

JCT16 contracts require communications to be, “in writing”, and allow the communications to be, “sent or transmitted by electronic means”, effectively the same obligation as NEC4’s clause 13.2.  But it reserves postal delivery for more important contractual notices (1.7.4 in JCT16 SBC).

Unhelpful drafting

In recent years lawyers have preferred the JCT route in many other contracts too; electronic communications for routine communications, recorded delivery for the nasties such as termination or dispute resolution.  But this case shows the fallibility of paper communications.  Had the Trust served its notice electronically (in the hypothetical situation where it was contractually able to) there would be no doubt about its contents, that would be clear for all to see.

I’m currently working on an adjudication where the main contractor’s standard subcontract form only recognises communications (and that’s all communications, not just the nasties) are to be sent by recorded delivery post or something called a fax machine. 

I recently advised a client on a project in the UK under Scots law where the main contractor, domiciled in Germany, required any notice of adjudication to be served in person at its head office near Munich.  That presumably was to frustrate the process where possible.

What’s the answer?

It’s utter nonsense with the technology available to us that some drafters opt to restrict communications to paper format or to rely on obsolete technology that few firms have access to.  Technology exists to simplify these processes and should be specified and used.  This is not just aimed at disputes notices, but making day-to-day business more efficient too.

Where you find yourself working under a contract with specific communication requirements then either stick to them or agree a properly-concluded variation to change the requirements to something you can live with. 

AM Construction Limited v The Darul Amaan Trust [2022] EWHC 1478 (TCC)