Chachani Misti y Pichu Pichu SRL v Hostplanet Ltd & Anor

This is an application by the Judgment Creditor, Chachani Misti y Pichu Pichu SRL, for a European Enforcement Order (“EEO”) pursuant to Regulation (EC) No 805/2004 (“the Regulation”) in respect of the order of Nugee J of 8 March 2016. That order was made on an application by notice dated 5 February 2016 for judgment in default of acknowledgement of service. The judge inter alia ordered the two Defendants to pay US$100,000 by way of damages for copyright infringement and related wrongs. The claim in which the application arose was commenced by claim form dated 1 December 2015. The main thrust of the claim was that the Defendants had infringed the Judgment Creditor’s (ie Claimant’s) copyright in certain software by making it available to consumers on various websites hosted by the First Defendant.

The evidence in this case is contained principally in the affidavit of Paul Anthony Abbott dated 5 February 2016, although also in the claim form and particulars of claim verified by statement of truth. The First Defendant is a company incorporated in the UK. The Second Defendant is an individual alleged to be behind the First Defendant. The Second Defendant could not be found, but there were email and other electronic addresses which were said to constitute ways of contacting him. On 5 January 2016 I made an order confirming service of the proceedings on the Second Defendant by email on 8 December 2015 at a particular mail address, and providing for such service in the future. The Second Defendant was later served at that email address with that order, with the Judgment Creditor’s application for judgment in default, and the order of 8 March 2016.

Other events set out in the evidence and relied on by the Judgment Creditor in the present application are the following:

The Judgment Creditor seeks an EEO only as against the Second Defendant. The application was made in the usual way, on paper in the first instance, received by the court on 6 April 2016. Having considered it, I asked the solicitors, by letter dated 11 April 2016, to explain in writing how the claim was “uncontested” within the Regulation. The solicitors responded with a detailed letter dated 21 April 2016, which I also considered. However, I was still not satisfied that an EEO was possible in this case, and so I invited the solicitors to attend court and explain in person. Mr Paul Abbott of the Judgment Creditor’s solicitors attended and addressed me on 28 April 2016. I am grateful to him for his helpful submissions. I said I would put my decision in writing. This is that decision, together with the reasons for it.

The EEO was instituted on 21 January 2005 by the Regulation (as now amended by the Commission Regulation (EC) No 1869/2005 and the Regulation (EC) No 1003/2008) as a means of speeding up the cross-border enforcement of judgments in so-called ‘uncontested’ cases. It does this by dispensing with the need for any intermediate measures (the so-called ‘exequatur’) to be taken before enforcement of an order is carried out in a different member state from that of origin. So it is intended as an exception to the normal EU rules on the cross-border enforcement of judgments.

Article 3(1) of the Regulation provides that the Regulation applies to inter alia judgments on ‘uncontested’ claims, and then sets out what are uncontested claims for the purposes of the EEO system. The Claimant relies on Art 3(1)(b), which provides:

“… A claim shall be regarded as uncontested if … (b) the debtor has never objected to it, in compliance with the relevant procedural requirements under the law of the Member State of origin, in the course of the court proceedings…”

In the present case the Second Defendant has never in the course of the English proceedings objected in the ways provided, ie by filing an acknowledgment of service indicating an intention to contest the proceedings, or by filing and serving a defence, as required by the Civil Procedure Rules. So this is an ‘uncontested’ claim within Art 3(1)(b).

However, Art 12(1), in Chapter III, provides that

“A judgment on a claim that is uncontested within the meaning of Article 3(1)(b) or (c) can be certified as a European Enforcement Order only if the court proceedings in the Member State of origin met the procedural requirements as set out in this Chapter.”

Chapter III consists of Arts 12-19. Art 13 deals with service with proof of receipt by the debtor. That is not applicable here. Art 14 however deals with service without proof of service by the debtor. The Judgment Creditor might have sought to rely on Art 14(1)(f), which provides that:

“Service of the document instituting the proceedings or an equivalent document and any summons to a court hearing on the debtor may also have been effected by one of the following methods: … (f) electronic means attested by an automatic confirmation of delivery provided that the debtor has expressly accepted the method of service in advance.”

Here there may be a question of fact as to how far the Second Defendant “expressly accepted” the service of the claim form by email “in advance”. More significantly, however, Art 14(2) provides that “service under paragraph 1 is not admissible if the debtor’s address is not known with certainty”. There is obviously a question as to the degree of certainty required by these words. This term is not further defined or explained. But, more importantly, the word “address”, at least in English, is not entirely free from ambiguity. Until the advent of email, “address” was a physical idea. A person’s address was a physical place where you could find him or her, and where the postman would deliver the mail.

But an email address has nothing physical about it. Versions of the Regulation in other European languages use different words. The French has “adresse”, the Italian “indirizzo”, the Spanish “domicilio” and the German “Anschrift”. (I cite these because they are the only other European languages which I understand sufficiently for the purpose.) The French and the Italian contain a similar ambiguity, although sometimes the word “email” or “mail” is used on its own. But the Spanish and German words are not used for email addresses, only physical ones.

There do not appear to be any English cases on the EEO. Mr Abbott for the Judgment Creditor very properly referred me to G v de Visser [2013] QB 168, a decision of the European Court of Justice. That case concerned the availability of the EEO procedure where service of the proceedings concerned on the defendant had been effected, in accordance with the national law (which was German), by putting a notice on a bulletin board at the courthouse.

The European Court of Justice, in that case, said this:

“61 By the second part of its third question, the national court wishes to know, in essence, whether European Union law must be interpreted as precluding certification as an European enforcement order within the meaning of Regulation No 805/2004 of a judgment by default issued against a defendant whose address is unknown.

62 A judgment by default is indeed one of the enforcement titles within the meaning of article 3 of that Regulation which may be certified as an European enforcement order. As recital (6) in the Preamble to Regulation No 805/2004 states, the absence of objections from the debtor as stipulated in article 3(1)(b) of that Regulation can take the shape of default of appearance at a court hearing or of failure to comply with an invitation by the court to give written notice of an intention to defend the case.

63 Nevertheless, under article 14(2) of that Regulation, ‘for the purposes of this Regulation, service under paragraph 1 is not admissible if the debtor's address is not known with certainty’.

64 It is therefore apparent from the very wording of Regulation No 805/2004 that a judgment by default issued in circumstances where it is impossible to ascertain the domicile of the defendant cannot be certified as an European enforcement order. That conclusion also follows from an analysis of the objectives and scheme of that Regulation. The Regulation institutes a derogation from the common system of recognition of judgments, the conditions of which are, as a matter of principle, to be interpreted strictly.”

(Of course, this is the English version of the judgment. I have not been able to check other versions to see if there is any help to be gained from the use of equivalent words in other languages.)

But from this I conclude that in Art 14(2) the concept of the debtor’s address is a reference to the physical place where he is based. As the European Court of Justice noted, this is highly material, because the Regulation is concerned with persons who are already connected with Europe, and this Regulation derogates from the existing common system of recognition of judgments (the Brussels Regulations).

However, on the material before the court, I have no idea where the Second Defendant is based. All that the Judgment Creditor, and thus the Court has, is an email address, the top-level domain name of which refers to Luxembourg. But that does not mean that the Second Defendant is based in Luxembourg. He could be based anywhere in the world. So service under Art 14(1) is not possible in this case. Art 15 (Service on the debtor’s representative) does not apply either.

So the Judgment Creditor has been driven to rely on Art 18, which in some circumstances cures non-compliance with the procedural requirements in this Chapter. The relevant provision is Art 18(2):

“If the proceedings in the Member state of origin did not comply with the procedural requirements as set out in Article 13 or Article 14, such non-compliance shall be cured if it is 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 his defence.”

The Judgment Creditor relies on this provision, although it accepts that the address of the debtor is unknown. It is clear from the evidence before the court that the debtor did receive the relevant documents, the claim form on 8 December 2015, and the particulars of claim (and response pack) and the application notice for permission to serve by email on 10 December 2015. The hearing before Nugee J took place on 8 March 2016, when the judge made the order sought to be made the subject of the EEO. In my judgment the Second Defendant therefore had sufficient time to arrange his defence.

The problem is that Art 18(2) places a restriction on how the necessary facts for the application of Art 18(2) are to be proved in a particular case. Instead of providing simply that “such non-compliance shall be cured if it is proved that he has personally received the document to be served in sufficient time to arrange his defence”, or even that it is proved by the debtor’s own conduct (whatever it is), such proof is specifically required to be “by the conduct of the debtor in the court proceedings”. This is very narrow.

But, with one possible exception, which I discuss below, none of the matters relied on by the Judgment Creditor to prove receipt of the documents amounts to “conduct by the debtor in the court proceedings”. On its face this provision would seem to be concerned with the case of the debtor who takes some step in the proceedings (eg to obtain documents or information, or to challenge the jurisdiction), thereby showing that he has received the documents and is aware of those proceedings. That has not happened in this case. The Second Defendant has on the contrary declined to take any formal steps in the proceedings.

In the de Visser case, the European court of Justice held that the EEO procedure was not available to the creditor. Here, the Judgment Creditor distinguishes that case, because there it was assumed that the debtor was not aware of the claim, whereas in the present case it is clear that the debtor was so aware. The European Court of Justice said (at [30]):

“According to the national court,it is necessary to assume that, at [the date of the order concerned], [the debtor] was not aware of the proceedings commenced before it.”

The Judgment Creditor says that the ratio of the decision is to be found in para [66]:

“As is clear from para 57 of the present judgment, the defendant, by opposing, in accordance with article 34(2) of Regulation No 44/2001, recognition of the judgment issued against him, will have the opportunity to ensure respect for his rights of defence. That guarantee would, however, be lacking if, in circumstances such as those of the main proceedings, a judgment by default issued against a defendant who was unaware of the proceedings was certified as an European enforcement order.”

I am afraid that I disagree. What is said there is just one example of a wider principle. That wider principle is set out in the third ruling of the European Court of Justice at the end of the judgment:

“3.

European Union law must be interpreted as precluding certification as an European enforcement order, within the meaning of Parliament and Council Regulation (EC) No 805/2004 of 21 April 2004 creating an European enforcement order for uncontested claims, of a judgment by default issued against a defendant whose address is unknown” (emphasis supplied).

It does not therefore depend on whether the debtor is aware of the proceedings or not. It depends on whether the debtor’s address (in the sense of physical base) is unknown. And in the present case it is. The Judgment Creditor says, rightly, that the European Court of Justice in the de Visser case was not dealing with Art 18(2) at all. I agree that, where Art 18(2) applies, the problem described by the European Court of Justice may disappear. The question is whether it does so in this case.

EU law here is deliberately restrictive. As noted earlier, there is already a system on mutual enforcement of judgments (the various Brussels Regulations). The EEO is a shorter, simpler process, restricted to a small subset of all such judgments. What the European Court of Justice has said in the de Visser case is that, if the debtor does not co-operate, and you cannot show where the debtor is based, then (subject only to art 18(2)) you cannot use the EEO, but have to fall back on the Brussels Regulations.

In the present case, I asked Mr Abbott how the Judgment Creditor would be worse off if the Regulation did not apply and the Judgment Creditor had to rely on the Brussels Regulations. He agreed that it would make no difference if the Second Defendant was never located, or if he was located but proved to have no resources with which to satisfy the judgment. However, if the Second Defendant was located and had assets, an EEO would avoid the need for the exequatur stage altogether, thus saving significant costs in translating all the documents and in instructing local lawyers to deal with the necessary procedure. The Judgment Creditor would be able to proceed directly to execute the order under the local procedures.

As mentioned above, in considering whether art 18(2) applies, the Judgment Creditor relies on the email exchange with the Second Defendant on 8 December 2015, to which I have already referred. On 8 December 2015, Mr Abbott sent an email to the Second Defendant at the email address for him, attaching the claim form and asking for an address for service. The Second Defendant replied the same day, saying simply “Just send the documents by e-mail”. Mr Abbott says that this satisfies art 18(2). The test is whether it is proved by the conduct of the Second Defendant in the court proceedings that he has personally received the document to be served in sufficient time to arrange his defence.

The email response “Just send the documents by e-mail” was obviously ‘conduct’ of the Second Defendant. It was done in response to an enquiry on behalf of the Judgment Creditor when serving the Claim Form as to where other documents should be served. The fact that the Claim Form had just been received by the Second Defendant means that the Second Defendant was aware of the existence of the proceedings. The Second Defendant’s response was therefore made in the context of those proceedings and for their purposes.

It is clear from recital (6) of the EEO Regulation, confirmed by the de Visser decision at [62], that a failure to appear or give any notice of intention to defend the case, which of course led to the default judgment obtained in the present case, can amount to an absence of objections making the claim uncontested within art 3(1)(b). In such a case, there will be no formal steps taken by the debtor. The de Visser case, at [62], accordingly makes clear that a default judgment is a judgment capable of being the subject of an EEO. So, if art 18(2) is to have any effect in the case of a default judgment, it must be construed as extending to conduct in the proceedings going wider than formal steps. In my judgment the email response by the Second Defendant, although not a step formally or procedurally required in the proceedings, nonetheless constituted conduct in the court proceedings for the purposes of art 18(2).

Moreover, I am satisfied that that conduct proves that the Second Defendant received the claim form in sufficient time to prepare his defence. The result is that the failure to comply with the procedural requirements of Chapter III is cured, and art 12(1) is no impediment to an EEO being issued in respect of the judgment of 8 March 2016 on the uncontested claim in this case.

I add that the English rules of procedure, the Civil Procedure Rules 1998, provide that, whenever a default judgment of the kind obtained in this case has been given, the defendant is able to apply for a review of the judgment under Part 13 of those rules. In some cases the court must set aside the judgment (r 13.2). In others the court may do so (r 13.3), if the defendant has a real (meaning a not unreal or illusory) prospect of successfully defending the claim, or it appears that there is some other good reason why the default judgment should be set aside or varied, or the defendant should be allowed to defend the claim. Hence, in my judgment, art 19 of the Regulation, requiring minimum standards for review in exceptional cases) is no impediment in the present case either.

In the result, the application is therefore granted, and the EEO will be made.