Costs News

10 June 2021
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High Court overturns decision to set aside default costs certificate over email error

The High Court has overturned a Senior Courts Costs Office (SCCO) decision to set aside a default costs certificate (DCC) after deciding that an emailed notice of commencement of detailed assessment proceedings was properly served.

The email was sent to a longform address which the respondent solicitors had not agreed to be served on, but it was automatically and instantly forwarded to the correct shortform address.

The decision of Mr Justice Foxton in Serbian Orthodox Church – Serbian Patriarchy v Kesar & Co [2021] EWHC 1205 (QB) followed a wasted costs order made against the Bromley-based law firm last year by Master Cook for its conduct of a claim against the church. Permission to appeal the order was rejected earlier this year.

Kesar & Co failed to file points of dispute after the notice of commencement was served and the SCCO entered a DCC.

Senior Master Gordon-Saker set it aside after accepting Kesar's argument that sending the email to the longform email address did not constitute valid service, even though it was forwarded on.

Foxton J concluded that the senior master was right, as the “natural construction” of practice direction 6A indicated that it was the "sending" of the email to the agreed address which constituted valid service.

This conclusion was also more consistent with the provisions on deemed service in the CPR, he said, adding that he was “troubled by how the provisions on obtaining default judgment would operate if there could be valid service (by reason of the on-forwarding of the communication) but, on the objective facts known to the party serving, valid service had not been effected and a truthful certificate of service could not be filed”.

However, Foxton J went on to declare under CPR 6.27 that sufficient steps had been taken to effect service, even though the argument was not raised before Master Gordon-Saker.

“I am satisfied that the appellant should be permitted to advance this argument,” he said. “The point requires no further evidence, nor would it have affected the course of the hearing below.”

Foxton J said there was "good" reason to order that the steps taken by the appellant to serve notice of commencement constituted good service.

“It is clear on the evidence that the documents to be served were sent to an email address which Kesar had used, and which was set up not to notify senders that the email was no longer in use or to direct them to a different email address, but automatically to forward the documents to the address which was in use,” he explained.

“The documents were received through the agreed mechanism for service, and, short of opening the email (which Mr Kesar did not do before the DCC was entered), it would not have been possible for Kesar to know whether the notice of commencement had reached that email box because it had been sent there directly or forwarded in accordance with the arrangements Mr Kesar had put into place.”

Further, Foxton J said the served documents not only reached the party to be served but did so by service to an email address which was set up to receive electronic service of documents. As such, it “ought to have been monitored” and, had the email been opened, “it would have been obvious this was an attempt at formal service”.

Master Gordon-Saker said that he would not have been satisfied, had the issue arisen for determination, that Kesar had shown good reason for setting the DCC aside, and Foxton J agreed.

Mr Kesar's witness statement made in support of the set-aside application said the appellant had not sought permission to serve by email.

Foxton J said the senior master was “clearly surprised” by this and described it as "a failure to be as candid as [Mr Kesar] could have been".

“The senior master clearly viewed that failure not in isolation, but against the background of the prior criticisms made of Mr Kesar's conduct of the case in Master Cook's judgments…

“I am unable to accept the submission that it was not open to the senior master, at stage three of the Denton analysis, to have regard to Mr Kesar's failure to address the issue of agreement for service in a candid way and, in particular, before confirming the absence of an agreement to accept service by email by statements of truth, to have looked at the correspondence and drawn any relevant material to the court's attention.

“Nor can I accept the submission that it was not open to the senior master, in this context, to have regard to the prior failings on Mr Kesar's part.”

Kevin Latham (instructed by Francisco Rodriguez of DWF Costs) for the appellant. Andrew Hogan instructed by the respondent.

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