Case No. CH/2011/0110.
Neutral Citation Number: [2011] EWHC 2501 (Ch)
IN THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)

Royal Courts of Justice,
Strand,
London  WC2A 2LL.

Date: Tuesday, 5th July 2011.

Before:

MR JUSTICE MORGAN
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C A L L A D I N E – S M I T H	Claimant

-   v   -

S A V E O R D E R   L T D	Respondents

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MISS GIBBONS  (instructed by Thackray Williams, Kings House, 32-40 Widmore Road, Bromley, Kent BR1 1RY)    appeared on behalf of the Claimant.

MISS WATERWORTH  (instructed by Pritchard Joyce & Hinds, St Brides House, 32 High Street, Beckenham, Kent BR3 1AY)    appeared on behalf of the Respondents.
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JUDGMENT

MR JUSTICE MORGAN:

Introduction

01	This is an appeal by the Claimant Mr Calladine-Smith from a decision of Judge Hallon sitting in the Bromley County Court.  The appeal is brought with the permission of the learned Judge.  The appeal concerns the interpretation of, and the application of, section 7 of the Interpretation Act 1978.  That section provides:

	‘Where an Act authorises or requires any document to be served by post (whether the expression ‘serve’ or the expression ‘give’ or ‘send’ or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.’

	In very brief summary, the Defendant Saveorder Ltd relies on Section 7 in support of its contention that it had served on the Claimant a counter-notice under Section 45 Leasehold Reform (Housing and Urban Development) Act 1993 (‘the 1993 Act’).  The Claimant contends that Section 7 allowed him to prove on the facts that the counter-notice had not been served on him and that on the facts he had proved that matter on the ordinary balance of probabilities.

02	In the course of this appeal it has been necessary to examine Section 7 and some of the many authorities as to its interpretation.  The parties do not agree as to the effect of those authorities.  Further, two specific points have emerged.  Both of the specific points arise out of the words ‘unless the contrary is proved’ in Section 7.  I will put in my own words the questions which have been raised in the course of argument.  First, is the ‘contrary’ the contrary of the allegation that the letter was properly addressed, prepaid and posted and no other matter (as the Defendant contends) or is the ‘contrary’ the contrary of the deeming provision that the letter in question was delivered in the ordinary course of post (as the Claimant contends)?  Secondly, in any event, does the reference to the contrary being ‘proved’ require no more than evidence which supports a finding on the balance of probabilities that the letter was not delivered (as the Claimant contends) or is there a burden on the addressee of the letter to lead positive evidence as to what happened to the letter and/or a burden on the addressee to show that the sender of the letter was aware that the letter had not been delivered (as the Defendant contends)?  

03	Miss Gibbons appears on behalf of the Claimant/Appellant and Miss Waterworth appears on behalf of the Defendant/Respondent.

The 1993 Act.

04	Before turning to the facts of the case, it is convenient to refer to the provisions of the 1993 Act.  The relevant provisions are contained in Chapter II of Part I of the 1993 Act although it is also relevant to refer to the general provision in Section 99 of that Act.  By Section 39(1), Chapter 2 has effect for the purpose of conferring on the tenant of a flat, in the circumstances mentioned in Section 39(2), the right exercisable subject to and in accordance with Chapter 2 to acquire a new lease of the flat on payment of a premium determined in accordance with Chapter 2.  There is no dispute about the fact that the Claimant has the right conferred by Section 39(1) to a new lease of a flat where he is currently the lessee.  Section 42 is headed: ‘Notice by qualifying tenant of claim to exercise right.’  Section 42(1) provides for a qualifying tenant to exercise the right to acquire a new lease of the flat by the giving of a notice of the claim under Section 42.  By Section 42(2), a notice under that Section must be given relevantly to the landlord.  By Section 42(3)(f), the tenant’s notice must specify the date by which the landlord must respond to the notice by giving a counter-notice under Section 45.  Section 45 is headed: ‘Landlord’s counter-notice.’  Section 45(1) is in these terms: ‘The landlord shall give a counter-notice under this section to the tenant by the date specified in the tenant’s Notice in pursuance of Section 42(3)(f).’

05	The 1993 Act then makes provision for what is to happen in relation to the different kinds of counter-notice that a landlord is permitted to serve.  For present purposes one can go to Section 49, which is headed: ‘Applications where a landlord fails to give counter-notice or further counter-notice.’  The relevant part of Section 49 is Section 49(1)(a) which provides that where a tenant’s notice has been given in accordance with Section 42 but (a) the landlord has failed to give the tenant a counter-notice in accordance with Section 45(1), the court may on the application of the tenant make an order determining in accordance with the proposals contained in the tenant’s notice the terms of acquisition.  Section 49(2) provides that the court shall not make an order under Section 49(1) unless it is satisfied of certain matters.  Those matters are not, as I understand it, in dispute in the present case.

06	The operation of Section 49 can be seen by reference to the decision of the Court of Appeal in Willingale v Globalgrange Ltd [2000] 2 EGLR 55.  That decision did not itself concern Chapter 2 of Part 1 of the 1993 Act.  It concerned equivalent provisions dealing with collective enfranchisement in Chapter 1 of Part 1 of the 1993 Act.  In the course of the judgment of Lord Justice May in that case there is a discussion of the operation of Section 49 and indeed an earlier authority in relation to Chapter 2 of Part 1 of the 1993 Act.  For today’s purposes it is sufficient to say that the parties are agreed that the authority of Willingale v Globalgrange Ltd applies to an application under Section 49 so that if a counter-notice has not been served in the present case by the landlord then the tenant is entitled to the relief which is spelt out in Section 49.  I need not further indicate the nature of that relief as the parties are agreed as to the form that that relief would take.

07	Finally, in relation to the 1993 Act, I need to go to Section 99 dealing with Notices.  Section 99(1) reads: ‘Any Notice required or authorised to be given under this Part (a) shall be in writing, and (b) may be sent by post.’  That is the only provision in the 1993 Act which bears upon – for today’s purposes, at any rate – the question of service of a landlord’s counter-notice under Section 45 of the 1993 Act.  

08	Before I go to the facts of this case, I ought to contrast the position under the 1993 Act with a different statutory position created by Section 23 Landlord and Tenant Act 1927.  Section 23 provides for the mode of service of certain notices and other instruments.  This section applies to the service of notices under Part 2 of the Landlord and Tenant Act 1954. Section 23 has been the subject of many decisions of the courts and it will be relevant later in this judgment to refer to one or two of those.  Section 23(1) is in these terms: ‘Any notice, request, demand or other instrument under this Act shall be in writing and may be served on the person on whom it is to be served either personally, or by leaving it for him at his last known place of abode in England or Wales, or by sending it through the post in a registered letter addressed to him there ... and in the case of a notice to a landlord the person on whom it is to be served shall include any agent of the landlord duly authorised in that behalf.’  As I have explained, Section 23 does not apply to a landlord’s counter-notice under Section 45 of the 1993 Act, but it is agreed Section 7 Interpretation Act 1978 does apply to such a Notice.

The facts.

09	The Claimant is the lessee of the flat at 2 Robbins Court, 77 Bromley Road, Beckenham Kent BR3 5PB.  On or about 16th September 2009, the Claimant prepared for service a notice under Section 42 of the 1993 Act.  The notice identified the intended recipient as the Defendant.  The notice related to the flat at 2 Robbins Court.  The Claimant identified himself and specified his address as 77 Cumberland Road, Bromley Kent BR2 0PL.  The notice then continued with the information which is appropriate to be included in such a notice.  Paragraph 9 of the notice stated that the address in England and Wales at which notices might be given to the Claimant under the statutory provisions was the address at 77 Cumberland Road.  Paragraph 10 of the notice is in these terms: ‘The date by which you must respond to this notice by giving a counter-notice under Section 45 of the 1993 Act is 25th November 2009.’  The Claimant’s Notice was served on or about the date it bore.  It is not disputed that para. 10 of the Notice effectively imposed a time limit for a counter-notice of 25th November 2009 pursuant to Section 42(3)(f) of the 1993 Act.

10	The Claimant’s notice was duly received by the Defendant.  The Defendant instructed solicitors to act for it.  Those solicitors prepared a form of counter-notice intended to be served under Section 45 of the 1993 Act.  The counter-notice which was prepared was addressed to the Claimant at 77 Cumberland Road.  It related to the flat at 2 Robbins Court.  The counter-notice admitted that the Claimant had the right to acquire a new lease of the flat but identified certain proposals made by the Claimant which it did not accept; the landlord did not accept the premium which had been proposed by the Claimant; the counter-notice sets out the difference in the figures.  The Claimant’s figure was £5900 as a suggested premium and the Defendant’s figure was £9000.  The counter-notice then stated that the Defendant did not propose or accept any further variation to the terms of the existing lease.  That counter-notice was dated 13th November 2009.  The Defendant’s solicitors also prepared a covering letter.  The covering letter had a heading referring to the flat at 2 Robbins Court.  It referred to an enclosed notice under Section 45 of the 1993 Act.  The Claimant’s name was slightly misspelt but no point has been taken on that.  The covering letter correctly identified the intended address to which the notice was to be sent as 77 Cumberland Road.

11	The Judge made findings as to what happened in relation to this counter-notice.  The solicitor who had prepared the counter-notice and who had taken further steps in relation to it gave evidence before the Judge.  The Judge expressed herself satisfied that the Defendant’s solicitor had placed the counter-notice and covering letter in an envelope; the envelope had been correctly addressed to the Claimant; the envelope had been franked so that postage was prepaid in that way; and the envelope containing the counter-notice and the covering letter was put into the post in an entirely regular way.  The Judge also made a finding as to whether the Claimant ever received that counter-notice posted in that way.  The Judge said that she was clear that the Claimant had not received the counter-notice.  So the Judge’s findings, taking into account the wording of Section 7 at this point, were to the effect that the counter-notice had been properly addressed, prepaid and posted in a letter to the Claimant and the Claimant had not received the letter with the counter-notice.

The judgment in the County Court.

12	The essential issue for the Judge in this case was whether the Defendant had established that it had served a counter-notice under Section 45.  If the counter-notice had been served then the 1993 spells out the consequence of such service and the later procedures that apply.  If a counter-notice has not been served, in particular not served by the date specified in the Section 42 notice, then the case fell within Section 49.  Counsel who appeared for the Claimant in the County Court was the same counsel who appeared on this appeal.  She took the Judge to Section 7 Interpretation Act 1978 and cited the authority of R v County of London Quarter Sessions Appeals Committee ex parte Rossi [1956] 1 QB 682.  The Claimant’s submission was in effect that because the Judge had found that the Claimant did not receive the counter-notice the Claimant had thereby proved the contrary of the suggestion that the counter-notice had been delivered in the ordinary course of post.  Therefore the Claimant submitted the counter-notice had not been received by the date specified in the tenant’s Section 42 Notice and there was no effective counter-notice.

13	The submission made on behalf of the Defendant was made by counsel who again appeared on the appeal before me.  In para. 9 of the judgment the Judge records the submission that was made to her.  The submission was to the effect that it is not enough for the Claimant to show that he did not receive the document.  In order to prove the contrary, as required by Section 7, it was necessary for the Claimant to prove that the communication was not properly addressed, prepaid and posted.  

14	The learned Judge considered the case of ex parte Rossi in some detail.  She read from the three judgments which were given by the members of the Court of Appeal in that case, setting out lengthy passages from their judgments.  She expressed her own reasons for her conclusion at paras. 14, 15 and 16 of the transcript of her decision.  I ought to read those three paragraphs as follows:

	‘14. It is clear from reading the full judgments of the Court of Appeal in Rossi that the purpose of the requirement for giving notice is a fundamental importance as to what should or should not be regarded as constituting notice, and counsel for the Defendant’s submission that the point relied on by the Claimant is obiter is therefore correct.  In the case with which I am dealing, the Notice in issue is a counter-notice not an originating process and is not a process which would result in the person to whom notice should be given finding himself guilty or made liable by an order of any tribunal without having been given fair notice of proceedings so being enabled to appear and defend them.  I am there paraphrasing the words from the early part of Lord Justice Denning’s judgment.

	15. Here the process originated by the Claimant giving notice to the Defendant.  The Defendant in order to argue for a different figure as a price for extending the lease must give a counter-notice within a specified time.  The effect of a finding that non-receipt of that counter-notice by the Claimant means that the counter-notice cannot be dealt with is not such as to prejudice him; it prejudices the Defendant.  It is the Defendant who then cannot argue for a different figure while the Claimant receives an unexpected windfall, namely, that he can require the court to set the figure as the price for extending the lease as that which he put in his Notice and in his Notice alone.  In addition to that there is the fact that a person in the Defendant’s position has no way of knowing that the counter-notice has not been received.  He has complied with the requirements of the statute to send a counter-notice properly addressed, prepaid and by post, but it would appear by the intervention of a mishap or whatever else it was, for which the Defendant is in no way responsible, he is put in the position of being unable to put his case properly before a tribunal for hearing and so a decision on the merits.

	16. It seems to me that in those circumstances it is not sufficient for the Claimant simply to prove non-receipt in order to avoid the deeming provisions of Section 7.  In my judgment, he must prove failure by the Defendant to comply with the requirements of properly addressing, prepaying and sending by post.  This the Claimant cannot do and indeed on his own evidence does not seek to do.’

	That is the end of the quotation from the judgment.

15	It seems to me that the essential ground for the Judge’s decision is that which is stated in para. 16.  She identified the burden on the Claimant as being one where, in order for him to escape the operation of Section 7 and each and every part of it, he had to show that the relevant notice had not been put in a properly-addressed envelope or that the envelope was not prepaid or that it was not posted.

The Claimant’s case on appeal.

16	On this appeal the Claimant relies on the same argument as he put before the Judge.  He says that this is a case within the second part of Section 7; the time of the alleged service of the counter-notice is relevant for the operation of Section 45 of the 1993 Act.  It is open to him, he contends, to prove that the counter-notice was not served by the last permissible date.  He relies on the Judge’s finding of fact that he did not receive the counter-notice.

The Defendant’s case on appeal.

17	The Defendant submits that the Judge was right for the reasons which she gave.  It submits that it is not open to the Claimant to prove that he did not receive the counter-notice.  The reference in Section 7 to proving the contrary is a reference to the addressee proving that the notice was not addressed to him or was not in a prepaid envelope or was not posted.  Here the Claimant does not try to do that.  The result is that the counter-notice is deemed to have been served, and what is more, it is deemed to have been served in the ordinary course of post.  The Defendant also relies on the decision of the Court of Appeal in Lex Service plc v Johns [1990] 1 EGLR 92.  This case was not relied on before the Judge.  There is no Respondent’s Notice seeking to support the Judge’s decision on an additional ground.  It seems to me clear that this point is a different point from that relied upon by the Judge and so a Respondent’s Notice ought to have been served.  Nonetheless I have allowed the Defendant to raise the question of principle which is based upon Lex Service in the course of argument so that I am able to hear what each side says about it.  The point that is made is potentially an important point and I am satisfied that both sides have been able to develop legal submissions in relation to it.  I should say at this point that counsel for the Claimant has submitted that because this point was not raised at the trial there was no examination in the course of the evidence of matters which might have been material on this point.  I will return to that subject in due course.  In summary, the Defendant relies upon the Lex Service case for the proposition that it is not sufficient simply to call evidence which supports a finding on the balance of probabilities that the letter was not delivered.  The Defendant says that more is required; there is a burden on the Claimant to lead positive evidence as to what happened to the counter-notice and/or a burden on the Claimant to show that the sender of the letter was aware that the letter had not been delivered.  The Defendant then submits that the Claimant did not discharge that higher burden.

The authorities relied upon by the Claimant.

18	The Claimant’s authorities begin with the decision of the Court of Appeal in ex parte Rossi.  That case concerned the operation of the Summary Jurisdiction (Appeals) Act 1933.  That Act and the facts of that case are very far away from the 1993 Act and the facts of the present case.  The Judge in the matter before me appears to have attached some significance to the differences between the 1933 Act in ex parte Rossi and the 1993 Act.  I do not regard the differences between those statutes as a reason for distinguishing ex parte Rossi or not applying it.  The point which arose in the 1993 statute as construed and applied by the Court of Appeal was that a certain notice had to be served on Mr Rossi.  Section 45 of the 1993 Act provides that if the landlord is to take advantage of the counter-notice provisions in the 1993 Act the landlord must serve a counter-notice on the Claimant.  So one arrives at the same point in the legal analysis in this case as was arrived at in ex parte Rossi, namely, that a notice has to be served.  That then gives rise to the question in that case as in the present case as to the operation of what is today Section 7 Interpretation Act 1978; the predecessor of that section was Section 26 Interpretation Act 1889.

19	The Court of Appeal in ex parte Rossi comprised Lord Justices Denning, Morris and Parker.  All three members of the court gave judgments.  Lord Justice Denning, at p. 692, referred to what had to be proven, and to the need to serve notice on Mr Rossi. The Lord Justice went on:

	‘This could be done by proof that a notice had been sent to him in good time by post in a registered letter which had not been returned, for it could then be assumed that it had been delivered in the ordinary course of post; see Section 26 of the Interpretation Act 1889.  But once it appeared that the letter had been returned undelivered, then it was quite plain that he had not been given notice at all of the date, time and place of the hearing.  In short, service had not been effected; and the court should not have entered upon the hearing at all.’

	Lord Justice Morris said at p. 697:

	‘Applying the provisions of Section 26 of the Interpretation Act, since no contrary intention appears from the Act of 1933, the sending of the notice to Mr Rossi was deemed to be effected by properly addressing, prepaying and posting the letter which contained the document.  Then by the concluding words of Section 26, the sending of the Notice was deemed, unless the contrary was proved, to have been effected at the time at which the letter would have been delivered in the ordinary course of post.  But here the contrary was proved.  It was proved, not merely that the letter was not delivered in the ordinary course of post but that the letter was not delivered at all.  Service cannot in this case be deemed ‘to have been effected’ at some particular time i.e. in the ordinary course of post:  service was proved not to have been effected at all.  When considering the giving of a notice of a hearing of an appeal, the element of time is clearly of importance.  The notice must be given at such time as will enable a party to be present at a hearing.  Here it was not.’

	Lord Justice Parker dealt with the matter at p. 700.  He said this:

	‘The section, it will be seen, is in two parts.  The first part provides that the dispatch of the notice or other document, in the manner laid down, shall be deemed to be service thereof.  The second part provides that unless the contrary is proved that service is effected on the day when in the ordinary course of post the document would be delivered.  This second part, therefore, concerning delivery as it does, comes into play and only comes into play in a case where under the legislation to which the section is being applied the document has to be received by a certain time.  If in such a case “the contrary is proved”, i.e. that the document was not received by that time or at all, then the position appears to be that though under the first part of the section the document is deemed to have been served, it has been proved that it was not served in time.’

20	In the many authorities which have followed and applied ex parte Rossi, reference is made to those three passages in the judgments which I have read.  It may be that there has been a preference in later cases for the way in which the matter is put by Lord Justice Parker and of the three judgments later courts have tended to regard the judgment of Lord Justice Denning as perhaps the least helpful – with respect to him – on the grounds that it may have been expressed too widely.  For present purposes there is no need to analyse possible differences between the ways the matter is expressed.  For my part, with respect, I find the greatest help in the way in which the matter is put by Lord Justice Parker, and that is the elaboration of the section which I shall endeavour to apply to the facts of this case.

21	As described in ex parte Rossi, the position is undoubtedly a slightly curious one.  If one splits the section into two parts, one gets rather different messages from the two parts.  If the court finds that the letter in question has been put in an envelope, properly addressed, prepaid and then posted, one deems the letter to have been served.  When one comes to consider the date when the letter is served, if that is a relevant question for the particular statute in question, then one can argue and find that the letter was not delivered by the cut-off date either because there is proof it was delivered late or because one finds that there is proof that the letter was not delivered at all. So although one holds for the first part of Section 7 that the letter is deemed served one is entitled to make a finding of fact on the second part of Section 7 that the letter was not served at all.  That is really very clear from the way the matter is expressed in ex parte Rossi.  It occurred to me in the course of argument that if there had not been these authorities on Section 7 one might have contemplated a different reading of the second part of Section 7.  One might have contemplated that the only contrary that could be proved would be by reference to a specific date for service later than the deemed date, but one would not be able to contend for a contention that the document had not been served at all.  Whether that speculation is worthy or not, I am quite satisfied it is not open to me to develop that further.  I am bound by the decision in ex parte Rossi.  

22	Miss Waterworth submitted that I should not follow Rossi or I should not apply it to the circumstances in this present appeal.  She submitted that I should construe Section 7 as if it were to be analysed as a single part rather than as the expression of two parts.  She did not however give me any grounds on which I could decline to follow the decision in ex parte Rossi and in particular the decision in ex parte Rossi that Section 7 has two albeit interlinked parts to it.

23	Possibly because the Judge in the County Court distinguished the ex parte Rossi case by reference to the particular statute which was considered in ex parte Rossi I have been shown on this appeal a certain number of later decisions which have applied or considered the ex parte Rossi case.  In date order those later decisions were Beer v Davis [1958] 2 QB 187; Hosier v Goodall [1962] 2 QB 401; Moody v Godstone Rural District Council [1966] 1 WLR 1085; Hewitt v Leicester City Council [1969] 1 WLR 855; Maltgrave v St Albans Rural District Council [1972] 1 WLR 1230; and Customs and Excise Commissioners v Medway Drafting and Technical Services Ltd [1989] STC 346.  Those various cases, as one would expect, have concerned different statutes.  The process has essentially involved two-stages.  The first stage is to construe the individual statute and see whether there is a requirement that a notice be served on a certain person.  If there is such a requirement then Section 7 Interpretation Act potentially applies when that notice is sent by post.  As I have indicated, there is nothing in the individual statutes considered in those cases which causes those cases to be inapplicable as containing statements of principle as to the operation of Section 7 of the 1978 Act.  I ought perhaps to single out the decision in Moody v Godstone Rural District Council.  That differs from the other cases because there the Divisional Court held that one was not concerned with the second part of Section 7, one was only concerned with the first part of Section 7.  That had the important consequence that it was not open to the addressee of the letter to attempt to prove that the letter had not been received.  It sufficed if the sender of the letter proved that the letter had been properly addressed, prepaid and posted.  The Moody case is not conclusive in the present appeal because Section 45 of the 1993 Act does have a time stipulation so that it is necessary to consider and apply the second part of Section 7.  Finally on this point I should say that it is sometimes difficult in some of the other cases to say when the second part is engaged and when it is not, but that difficulty does not arise in the appeal before me.  

24    I have now considered and expressed my views on the general points which have been made about Section 7 of the 1978 Act and the decision in ex parte Rossi.  I can now deal with the two questions which I identified at the beginning of this judgment.

The two questions.

25	The first question is whether the word ‘contrary’ refers to the contrary of the allegation that the letter was properly addressed, prepaid and posted, and no other matter, as the Defendant contends, or does it refer to the contrary of the deeming provision that the Notice in question was delivered in the ordinary course of post, as the Claimant contends.  In my judgment it is clear that the Claimant is right about the answer to that question.  First of all, and pre-eminently, that is what the wording and structure and layout of the Section clearly provides.  The reference to proving the contrary clearly goes with the second part of Section 7 and not with the first part.  Indeed that is how the section has been construed in all of the cases to which my attention has been drawn.  Furthermore, it does not make any sense for the wording to go with the first part of Section 7.  The first part of Section 7 imposes the burden of proof on the sender of the letter not the addressee of the letter.  It requires the sender to prove that the sender has properly addressed, prepaid and posted the letter.  If the sender cannot do that, then the sender cannot rely on Section 7.  If the sender can do that, then there is no need for there to be a separate inquiry into whether the addressee has proved the contrary because the sender has already proved the essential matter.  It follows that I do not accept the reasoning of the Judge in this case.  As I have described, in para. 16 of her judgment she wrongly accepted the submission for the Defendant, the submission which I have explained I am unable to accept.

26	The second question focuses on the word ‘proved’ in the phrase ‘the contrary is proved.’  As I already set out, the question is: is an addressee of the letter required only to show on the balance of probabilities that the letter was not delivered or served or received by him, or does the burden on the addressee go further?  Is it a requirement to lead positive evidence as to what happened to the letter?  Is there a burden on him to show that the sender of the letter was aware that the letter had not been delivered or served or received?  In the absence of authority and basing oneself on the statutory language alone, it seems to me quite clear that the reference to something being proved in this context is a reference to something being proved on the balance of probability.  Accordingly, if the addressee of the letter proves on the balance of probability that the letter was not served upon him then that matter has been proved and the section should be applied accordingly.  Of course it is not enough simply to assert that someone did not receive the letter; the court will consider all the evidence and make its findings by reference to the facts which are established including issues as to the credibility of witnesses.  That is the ordinary way in which a court goes about making findings of fact.

27	I have looked at the point as if it were free from authority.  In fact it is covered by authority in the shape of Chiswell v Griffon Land and Estates Ltd [1975] 1 WLR 1181.  That has been a significant case in this area of the law.  There is discussion in it of Section 23 Landlord and Tenant Act 1927 but as the judgments make clear Section 23 did not apply on the facts of that case.  The question therefore was whether the tenant, who wished to establish that it had served a notice on the landlord, could prove that fact with the assistance of Section 7 Interpretation Act 1978, or the predecessor in the 1889 Act.  The court in that case comprised Lord Justices Megaw, Orr and Roskill.  Lord Justice Orr delivered the first judgment.  He set out Section 26 of the 1889 Act at p. 1184.  He referred to the grounds of appeal at1186C.  The first ground of appeal was that the tenant, who had failed to establish that he had served a notice, claimed that the Judge was wrong to hold that the presumption in Section 26 of the 1889 Act could be displaced by a finding on a balance of probabilities that the letter had gone astray in the post.  This was a case where the County Court Judge had held that the tenant had properly addressed, prepaid and posted the letter but the Judge also held that the letter had not been received by the addressee.  The facts are therefore comparable to the facts of the present appeal.  Lord Justice Orr had no difficulty in dismissing the first ground of appeal.  He said at 1186E:

	‘There is no reason to construe the words “unless the contrary intention is proved” as imposing any heavier burden than the ordinary civil standard of proof.’

	Lord Justice Roskill agreed:  see at p. 118E.  Lord Justice Megaw dealt with this submission at p. 1189D-F:

	‘Counsel’s point, as I understand it, is that by reason of the provisions of Section 26 of the  Interpretation Act 1889 the Judge, once he had held that such a letter had been duly posted, ought to have applied the presumption of the effecting of service at the time when the letter would have been delivered in the ordinary course of post, unless the other party, to whom the Notice was required to be given, was able to prove the contrary; and to prove it so as to satisfy some standard of proof, the extent of which I am not sure that I followed, but certainly a standard of proof that was higher than a mere balance of probability.  The Judge, it is contended, erred because the standard of proof which he applied was merely the balance of probabilities.  There is nothing in any of the authorities which have been cited to us in my opinion which begins to give support to the existence of such a higher standard of proof in such circumstances.’

28	Miss Waterworth submits that the decision in Chiswell v Griffon is not the last word on the subject.  As I have indicated, her sheet anchor is the decision in Lex Service plc v Johns [1990] 1 EGLR 92.  That decision has in turn been the subject of adverse comment.  I will refer to the adverse comment in due course.  Lex Service concerned a notice under the Landlord and Tenant Act 1954.  By Section 66(4) of the 1954 Act, Section 23 Landlord and Tenant Act 1927 governed the mode of service and the making of presumptions as to service of such notices.  Section 23 has been construed in later cases, notably, C A Webber Transport Ltd v Railtrack plc [2004] 1 WLR 320 as permitting the giver of a notice to prove service by way of deemed service in a case where the giver of the notice has sent the notice through the post in a registered letter or by Recorded Delivery.  In the Lex Service case, the letter was sent by Recorded Delivery.  Therefore on the facts of that case, having regard to Section 23 of the 1927 Act and the subsequent decision in Webber, the Court of Appeal in Lex was undoubtedly right to hold that the notice had been served.  The actual decision in Lex Service is therefore clearly correct.

29	In Lex Service, the court referred to Section 23 of the 1927 Act and then referred to Section 7 of the 1978 Act.  Having looked at both sections, the court then expressed their views as to the position.  In a passage in the judgment of Lord Justice Glidewell beginning at the bottom of p. 94 of the report and continuing at p. 95 , there are comments which do appear to say that for the purpose of Section 7 Interpretation Act 1978 the addressee of the letter, if he is to avoid a finding that he has been served, must do more than simply deny the fact of service; he must adduce positive evidence to some effect.  Lord Justice Glidewell referred to positive evidence that the document had been returned to the sender or positive evidence that no one had signed for the registered letter or the Recorded Delivery letter, if that is what it had been.  The Lord Justice also referred to positive evidence that some other person had received the document and had not given it to the addressee.  Lord Justice Glidewell’s comments therefore do appear to say that in the absence of that positive evidence the addressee has not proven the contrary of deemed service.  Lord Justice Balcombe, the second and other member of the court, was more guarded.  He said at the end of his judgment that he preferred to reserve his judgment as to the particular circumstances which might amount to proving the contrary for the purposes of Section 7 Interpretation Act 1978.  However, just before he made that comment he did appear to support Lord Justice Glidewell’s ruling that it was not enough to assert non-receipt; it was not enough to raise that as a triable issue, even in a case where summary judgment was sought; something more in the way of positive evidence was required.

30	As I have indicated, the Lex Service case has been the subject of adverse comment subsequently.  In Beanby Estates Ltd v Egg Stores (Stamford Hill) Ltd [2003] 1 WLR 264, Mr Justice Neuberger (as he then was) had to consider Section 23 Landlord and Tenant Act 1927 and the decision in Lex Service.  He said this at para. 64:

	‘I must also confess to a little difficulty in understanding the reasoning of the court in Lex Service plc v Johns [1990] 1 EGLR 92 when they came to apply Section 7.  It seems to me that in the passage of the judgment of Lord Justice Glidewell at p. 95A-B he was not applying the normal civil burden of proof in relation to the question of whether the contrary is proved.  It appears to me that he was seeking to reconcile Section 23 and Section 7 in such a way that Section 23 was not absolute in its effect in relation to service by Recorded Delivery as suggested in all the authorities on this Section to which I have referred, but nonetheless affected the standard of proof imposed by Section 7 on the addressee if he wished to establish non-service.  It seems to me that such an approach to Section 7 is hard to justify in principle or in logic.’

31	The authority of Lex Service is further undermined by the decision of the Court of Appeal in C A Webber Transport Ltd v Railtrack plc [2004] 1 WLR 320.  This case did concern Section 23 of the 1927 Act.  The court considered nine earlier authorities on the application of Section 23, one of which was Lex Service.  The court spelt out  how the Lex Service decision had caused real difficulty for other courts in other cases and how it was difficult to square with the reasoning in other cases.  At para. 23 of his judgment Lord Justice Peter Gibson expressed his concerns as to the decision in Lex Service.  At para. 26 he said it was a puzzling decision.  At the end of that paragraph he said this: ‘In my judgment the Lex Service case should be treated as decided per incuriam.’  It is clear that what is being said in Webber is that Lex Service is not a reliable authority on Section 23.  Miss Waterworth submits to me that it remains a reliable – certainly a binding – authority on the operation of Section 7.

32	In these circumstances I must decide what course I am free to take and what course I should take.  Looking at the matter free from authority it is clear to me at any rate that Section 7 does not impose any standard of proof other than the usual balance of probabilities.  Further, this was decided in terms by the Court of Appeal in Chiswell v Griffon.  Lex Service appears to have been a decision not on the operation of Section 7 standing alone but in a way that is very hard to follow a decision on the combined operation of Section 23 and Section 7.  If that is the right reading of Lex Service then it is not binding on me when I come to consider, as I do, the operation of Section 7 standing alone.  It is also right to say that although Lex Service refers to Chiswell v Griffon it does not refer to the part of Chiswell v Griffon which is flatly contrary to the passages in the judgments of Lord Justice Glidewell and Lord Justice Balcombe if they are to be interpreted as Miss Waterworth says they are, as dealing with Section 7 alone.

33	In these circumstances I have come to the considered conclusion that I ought to follow the decision of the Court of Appeal in Chiswell v Griffon.  On the face of it, it is binding on me, it has not been departed from and it was not the subject of adverse comment in Lex Service. Lex Service can be explained on other grounds. The authority of Lex Service is considerably undermined by the decision in Webber v Railtrack; and in so far as Lex Service is treated as a decision on Section 7 it has been described as illogical and puzzling.  Accordingly, my interpretation of Section 7 when it uses the phrase ‘unless the contrary is proved’ is that this requires a court to make findings of fact on the balance of probabilities on all of the evidence before it.  That is what the Judge did here.  She held that the counter-notice had not been received by the Claimant.  That means that the contrary of the deeming provision was indeed proved.

34	I should add that counsel for the Claimant submitted I ought not to give effect to any contrary view because the Lex Service point was not argued before the trial judge and if the point had been raised the evidence might have been different and the findings might also have been different.  I cannot be confident as to what course the trial would have taken if this point had been in play.  However, as I had held that the point is a bad one in principle, I need not explore that matter further.

The result.

35	The result is that I find that the counter-notice was not served on the Claimant; the Defendant does not establish the rival result based upon Section 7 Interpretation Act 1978; the case therefore comes within Section 49 of the 1993 Act.  I understand that the parties are agreed as to the order which the court should make to give effect to Section 49 of that Act.

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