Resources

Failure to deliver completion notice correctly proves very costly

A cautionary tale has emerged from the Court of Appeal this month that should have Local Authority legals double-checking their future paperwork.

The story began in 2012 in Westminster but ended in The Court of Appeal which overturned a decision of the Upper Tribunal (Lands Chamber) in the UKI (Kingsway) Limited v Westminster City Council [2017] case.

The CoA determined that the billing authority had not correctly served a completion notice addressed to “the owner” which had been left at the premises with the receptionist (an employee of the facilities management company for the building) and which had been sent on electronically to the owner.

The Court of Appeal overturned the Upper Tribunal’s reasoning that service was satisfied by the indirect transmission of information on the basis of its eventual receipt by the owner.

The decision highlights the importance that billing authorities serve completion notices properly if new buildings are to be entered in the rating list on the assumption of a deemed completion date under s.46A and schedule 4A of the Local Government Finance Act 1988.

Going into the technicalities a little, this appeal hinged on the formal validity and service of a completion notice delivered by the respondent, Westminster City Council, in respect of premises on the third to sixth floors of a building at 1 Kingsway, London WC2. The completion notice purported to bring the premises into the 2010 rating list with effect from 1 June 2012.

The appeal raised a point of the practical importance regarding the serving of completion notices and the general approach to the construction of statutory schemes which require notification to be given but do not provide a prescriptive and exhaustive code as to how to do it.

UKI owned the freehold of the building at 1 Kingsway and in January 2009 began a redevelopment of the building behind the original facade. On completion, the redeveloped building included 130,000 sq ft of office space.

In anticipation of the completion of the building, discussions took place between the rating agents acting on behalf of the appellant and the respondent, acting in its capacity as the billing authority. This related to the service of a completion notice to fix the date on which the building would be brought into the 2010 rating list.

The parties didn’t agree on the appropriate date and, on 23 February 2012, the respondent informed the agents that it intended to serve a completion notice in respect of the premises specifying a completion date of 1 June 2012. The respondent asked the agent to confirm the identity of the owner of the building but they declined to do so without first obtaining instructions from its client, which weren’t forthcoming.

The building was managed by Eco FM under a contract with the appellant. Neither Eco, nor its employees, had any authority to accept service of legal documents on behalf of the appellant. The appellant didn’t carry on business at the building and had no presence there.

On 5 March 2012, the respondent delivered a completion notice by hand to the building, specifying 1 June 2012 as the completion date. The notice was given to a receptionist employed by Eco. The completion notice was addressed to the “Owner, 1 Kingsway, London WC2B 6AN”. It didn’t identify the owner by name.

Within a week the receptionist scanned and emailed a copy of the completion notice to the appellant (whether directly or via other persons is unknown). The original hard copy was lost.

On 29 March 2012 the agent “on behalf of Eco” lodged an appeal against the completion notice, claiming that:

  1. The premises were not capable of being completed by the date shown in the notice
  2. The notice was invalid as it did not comply with the statutory requirements for such a notice
  3. The service of the completion notice was invalid because Eco was not the owner of the premises but merely the facilities management company

When, on 7 May 2013, the premises were brought into the list with a rateable value of £2.75m with effect from 5 March 2012 (subsequently corrected to 1 June 2012), the agent submitted a proposal dated 14 June 2013 on behalf of the appellant that the entry be deleted.

The proposal was not accepted by the respondent and the lengthy appeals process that finally ended in the Court of Appeal this month was set in motion.

Your Comments

Read our comments policy here

Subscribe to our newsletter