09/05/2016

Informal step in English proceedings allowed a European Enforcement Order to be made

Chachani Misti v (1) Hostplanet Ltd & (2) Finn Grimpe [2016] EWHC 983 (Ch), decided on 29 April 2016, should be carefully noted by defendants seeking to avoid enforcement of a judgment.  It also demonstrates the potential difficulties in obtaining a European Enforcement Order (“EEO”) if service has been by email.

The Claimant had a judgment in default (in a copyright infringement claim) against the Defendants for US$100,000.

The Claimant sought to use the EEO process under Regulation 805/2004 to obtain a relatively speedy enforcement of the judgment against the Second Defendant (Mr Grimpe, said to be the individual behind the corporate First Defendant).

The EEO procedure is, however, available only in some situations; notably where judgments have been obtained in “uncontested claims” as defined in Article 3.

Where, as in this case, a judgment is said to be “uncontested” under Art 1(a)(b) or (c) because the defendant has not participated in proceedings (as opposed to having expressly agreed to the judgment), Chapter III of the Regulation sets out additional requirements to be met before an EEO can be granted.  These are safeguards to ensure that, before the judgment is enforced by the simplified EEO process, the defendant has had a proper opportunity to defend the claim.

The EEO regime procedural safeguards were a problem for the Claimant.

The Claimant did not know where the Second Defendant was physically located.  As a result, it had served the claim form starting proceedings by email (with retrospective permission, presumably under CPR 6.15 on which, see Alex Thompson’s post).  Although this was good service for the purposes of the English judgment in default, it was not enough for the Regulation.

The Regulation does allow for service by electronic means but in limited circumstances. Unless a claimant receives “an acknowledgement of receipt including the date of receipt … signed and returned by the debtor” (Article 13(1)(d)), the claimant must satisfy Article 14.  This requires that: (1) the debtor has expressly accepted electronic service in advance and (2) service is attested by an automatic confirmation of delivery (Article 14(1)(f)).  Even if these requirements are met, a claimant cannot rely on Article 14 if “the debtor’s address is not known with certainty” (Article 14(2)).

In this case, it was not suggested that Article 13(1)(d) was satisfied.  The judge also held that Article 14(2) was not satisfied.  He held (having regard to the French, Spanish and German versions of the Regulation) that Article 14(2) required the Claimant to know “with certainty” the physical address (not just the email address of the defendant).  As noted already, the Claimant did not know this.

The question then was, could the non-compliance with the minimum standards for service (Articles 13, 14) be “cured” under Article 18(2)?

The English court concluded that it could.  Article 18(2) requires it to be “proved by the conduct of the debtor in the court proceedings that he has personally received the document to be served in sufficient time to arrange for his defence.”

The court’s conclusion rests on a six word email from the Second Defendant.

On 8 December 2015, the Claimant had sent the claim form by email asking the Second Defendant for an address for service.  The Second Defendant replied on the same day, “Just send the documents by e-mail.”   (The email of 8 December 2015 appears retrospectively to have been deemed good service.)

The court concluded that the Defendant’s response was “obviously ‘conduct'” and that because the Second Defendant was aware of the proceedings (having just been provided with the claim form), his “response was therefore made in the context of those proceedings and for their purposes.”

The judge then held that, for Article 18(2) to have any effect in the context of default judgment, it “must be construed as extending to conduct in the proceedings going wider than formal steps.”  Accordingly, the Second Defendant’s email satisfied Article 18(2).

Finally, the judge held that he was satisfied that the Second Defendant had sufficient time to prepare his defence.   As a result, the failure to comply with Article 13 or 14 was cured.  There being no other impediment in his view, the judge granted the application and the EEO was made.

Comment

In this case, the EEO was granted because of the short email from the Defendant.

If faced with a defendant who does not respond at all, however, service by email is unlikely to be enough to allow an EEO to be made.  A successful application under CPR 6.15 to permit service by email may, therefore, have its downsides.

Defendants who receive documents by email should also think twice before responding.  If the intention is not to defend the claim, providing no response at all will make it much less likely that an EEO can be obtained.