SERVICE BY E-MAIL: IMPORTANT DECISION IN INTEGRAL -v- SCU FINANZ ON CPR 3.10

 

There is an important discussion of the effect of serving by e-mail by Popplewell J in the case of Integral Petroleum SA  -v- SCU Finanz SA  

[2014] EWHC 702 (Comm)

The decision relates to serving process by electronic means.  I will deal with the full implications of the case in a later post. The important observations, relating to the operation of CPR 3.10 are reproduced below. The issue in the case related to whether service of the Particulars of Claim by e-mail. The judge adopted a wide construction of CPR 3.10.

  1. Returning to the facts of the instant case, in my view the error of procedure in serving the Particulars of Claim by e-mail was a failure to comply with a rule or practice direction which falls within CPR 3.10. Accordingly under CPR 3.10(a) such service is a step which is to be treated as valid, so as to commence time running for the service of the defence, and disentitle SCU-Finaze in this case to bring itself within CPR 13.2. In reaching that conclusion I have taken into account the following considerations. 
  1. Phillips v Nussberger establishes that CPR 3.10 is to be construed as of wide effect so as to be available to be used beneficially wherever the defect has had no prejudicial effect on the other party. The instant case is a good example where such beneficial use is called for. Service by e-mail on Maitre Cohen was sufficient to bring the Particulars of Claim to his attention. He was SCU-Finanz’s chosen lawyer appointed for the purpose of receiving the document. The document reached the appropriate destination in just the same way as if it had been sent by post to the Paris address given in the acknowledgement of service which would have constituted good service. He ought reasonably to have known, as a European accepting the burden of acting for a client in English High Court proceedings, that particulars of claim required to be answered by a defence, and that in default judgment might be entered. What was effected was purported service, not merely transmission for information only (cf Asia Pacific (HK) Ltd v Hanjin Shiping Co Ltd [2005] EWHC 2443 (Comm)). 
  1. Service by e-mail is a permitted method of service under CPR 6.20, albeit that what is permitted is service in accordance with the requirements of Practice Direction 6A. The error is therefore more readily characterised as a failure to comply with a practice direction than a rule. But however characterised, the substantive defect is in using a method which English procedural law regards as a permissible method in circumstances where the formalities necessary to make it a permitted method had not been concluded. Maitre Cohen had been identified as the chosen legal representative for the Defendant and he had corresponded with the Claimant’s solicitors about when the Particulars of Claim should be served from the very e-mail address to which they were then sent. I can envisage circumstances in which purported “service” by a method which is not permitted by the rules at all is sufficiently distant from what is required by the rules as arguably to fall outside CPR 3.10. Moreover I should not be thought to be endorsing any proposition that CPR 3.10 can be used as a matter of course to circumvent service out of the jurisdiction of originating process by effecting service on a firm of solicitors or other lawyers as a matter of practical convenience without seeking an order for service by an alternative method. But I would not accept Mr Collins QC’s submission that any defect in the method of service is outside CPR 3.10. The method of service applied in this case, namely service by e-mail, is one which in the 21st century is a common and effective way of transmitting a document and one which the Rules envisage may be used, albeit with certain conditions which are set out in the practice directions. 
  1. This case is not concerned with service of originating process but service of particulars of claim. To my mind this is a significant distinction. A narrower approach to CPR3.10 is justified when it is sought to be applied to the service of originating process, because such service is what establishes in personam jurisdiction over the defendant. Phillips v Nussberger indicates that even for service of originating process the rule is to be given a wide effect, and that is so where the application of the rule affects the establishment of in personam jurisdiction in one of two competing jurisdictions. But the effect to be given to CPR 3.10 is even wider when concerned with documents which are other than those by which the proceedings are commenced. What the rules are concerned with in relation to the service of such subsequent documents is simply bringing them to the attention of the other party in circumstances in which that other party knows or should realise that a step has been taken which may have procedural consequences. This contrasts with the service of originating process which fulfils other functions: it establishes in personam jurisdiction, and it is what engages a wide range of powers in the Court, such as those under s.37 of the Senior Courts Act 1981 and under an inherent jurisdiction. CPR 3.10 is particularly apposite for treating as valid a step whose whole function is to bring a document to the attention of the opposing party where such function has been fulfilled. It prevents a triumph of form over substance 
  1. It may be said that the effect of treating service of particulars of claim as being valid is no less significant than the effect of treating service of a claim form as being valid in the context of the present application, because a failure to respond by way of defence or acknowledgement of service respectively can lead to the same consequences of judgment being entered in default without consideration of the merits. But nevertheless given that the purpose of service of documents subsequent to proceedings having been validly commenced is essentially limited to bringing their contents to the attention of the other party as a procedural step, there is in my view every reason to give CPR 3.10 very wide application so as to be capable of application where that purpose has been fulfilled.”