TAKE NOTICE: Complying with requirements for the delivery of notices

Where notice is required under a contract, the parties will typically include notice provisions specifying what form that notice must take and the agreed method by which the notice is to be delivered.

For example, a standard notice provision in a commercial contract may read something like this:

Delivery method

A notice given by one party to the other will be properly given if it is in writing and signed by the party giving the notice; and it is given either:

• by letter:
  • to the receiving party personally; or
  • posted to or left at the address of the receiving party shown on this Contract; or
  • posted to or left at the office of the receiving party’s solicitor; or
• by email:
  • to the receiving party’s email address shown in this Contract; or
  • to the receiving party’s solicitor’s email address.

It is always best practice to ensure that any notice strictly complies with a ‘black letter’ reading of the contract. Failure to comply strictly with the notice provisions in a contract may result in the notice (and subsequent actions that depended on notice first having been given) being invalid.

Nonetheless, poor drafting or events transpiring after the signing of a contract can sometimes make strict compliance with notice provisions difficult or impossible. For example, the contract may be silent on whether a particular method of giving notice (such as email) is acceptable, or the parties may have provided specific contact details for the giving of notice which are no longer current at the time that the notice is to be given.

Where strict compliance with a contractual notice provision has not been achieved (assuming that there are no legislative requirements which will usually import their own specific methods for giving notice), courts will sometimes be willing to recognise a notice as valid on the basis that the party has substantially complied with the notice requirements.

Further, where a contract is silent or ambiguous as to what is required for the delivery of notice, the courts will take a commercially sensible approach to the interpretation to the contract and may recognise a notice as valid where it achieves the objective intention of the parties to the contract.

In construing a provision of a contract relating to the delivery of notices, the court will consider factors such as:

• whether or not the contract expressly or impliedly requires strict compliance with the notice provisions;
• the commercial purpose served by the notice provision (for example, if the purpose was simply to ensure the notice comes to the recipient’s attention, that purpose may be achieved notwithstanding the notice was not given in the manner specified); and
• where relevant, the terms of the notice itself to determine how a reasonable recipient would have understood the notice.

When will ‘near enough’ be good enough?

The following are some examples of cases where a notice was held to be valid notwithstanding it:

• was not delivered strictly in compliance with the relevant notice provision; or
• was delivered in a manner not expressly recognised by the contract as valid.

Example 1 – Notice served on lawyer rather than on the party directly

In JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159, the relevant notice provision expressly required the notice to be addressed to the other party. A party purported to serve a notice under the notice provision, however it was addressed to the solicitor acting for the other party (rather than being addressed to the party personally).

The court found that the notice was valid even though it was not addressed strictly in accordance with the relevant provision because:

• the commercial purpose of the provision was to ensure that notices were directed to the attention of the relevant party through their solicitors. Accordingly, it was not necessary for that party to be ‘formally named by way of address, rather than being otherwise apparent as the intended recipient on the face of the notice’;
• it had been addressed to the party in a substantive way as it was readily apparent from the language of the notice that it was directed to the party; and
• it ‘would be highly technical and merely destructive of the parties’ bargain, if such a notice were to be treated as ineffective’, particularly in circumstances where there was no express requirement for strict compliance with the notice provision under the deed.

Example 2 – Notice served via email

In Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716, the question for the court was whether a notice given by a tenant via email was valid in circumstances where the contract simply stated that notice ‘may’ be served by being left at the party’s street address or posted to them. The contract was silent as to the giving of notice by email.

The notice was found to be valid by the court on the basis that the word “shall” is mandatory nature whereas “may” is permissive. So, the requirement for the notice to be in writing was mandatory, but the methods of service specified (leaving it at or posting it to the party’s address) were not mandatory.

Legislation and notice provisions

Although the courts have demonstrated willingness to be flexible in the interpretation of contractual provisions regarding the delivery of notices, it is critical to bear in mind that there may be legislative or other requirements outside the contract that apply to the notice being given.

These legislative provisions may impact on the willingness of a court to be flexible in considering compliance with methods of delivery and, in some cases, may override the contract wording concerning methods of delivery.

It is therefore always necessary to look beyond the contract to ensure that a notice will have its desired effect at law.

Key takeaways and tips

When issuing notices under a contract, the following steps should always be taken:

• Know your contract: It is critical to read and understand any notice requirements thoroughly. Wherever possible, any contractual notice provisions should be strictly complied with.
• Legislation: You must be aware of any legislative or other requirements that apply to the notice beyond what is required by the contract.
• Clarity in communication: Ensure notices are clear and unambiguous.
• Legal consultation: Seek advice for complex matters, or where it is not possible or practical to strictly comply with a contractual notice provision.