Greenclose v National Westminster Bank plc: Difference between revisions

A fine example of that old legal maxim ''[[anus matronae parvae malas leges faciunt]]'': Little old ladies (and, in this case, aggrieved Welsh hotel owners) make bad law, {{casenote|Greenclose|National Westminster Bank plc}} ([https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2014/1156.html&query=(title:(+greenclose+)) judgment]) opines on the apparently harmless {{isdaprov|Notices}} Section (Section {{isdaprov|12}}) of the {{1992ma}}. In particular, it considers the meaning of “[[electronic messaging system]]” and, saucily, finds that it does not include [[email]].

Let me say that again, in case you missed it: in the eyes of the common law as articulated by [[Andrews J]], '''[[email]] does not count as an “[[electronic messaging system]]”'''.

{{box|“In 1992, email was not in common use and thus the reference to “[[electronic messaging system]]” is unlikely to have been intended to include it.”}}

The court does not seem to have heard any evidence on this point. A cursory glance at Wikipedia would suggest this is wildly wrong: the SMTP protocol, over which email is still transferred today, was published in 1982. It is true that the ''expression'' “email” didn’t enter the lexicon until 1993 – ''but that is consistent with nascent email being treated as a kind of [[electronic messaging system]]''.

{{box|{{ISDA Master Agreement 2002 12}}}}

The intellectual endeavour here is interesting: Firstly, to deduce the meaning of the agreement, the court looked at ''the intentions of the person who drafted the form of {{1992ma}}, and not those of the parties who negotiated this actual agreement''. Here’s the point: ''ISDA was not a party to the contract''. It may have been agreed on ISDA's 1992 form, but it was signed in 2006, by which stage “[[email]]” was widely known and understood.  

And why, in 2006, would parties deliberately include all [[electronic messaging system]]s ''except'' [[email]], especially since email is the only system vaguely answering the description of an “[[electronic messaging system]]” than a hotel owner in Wales would be likely to have?

The court also needed also to draw a peculiar, narrow meaning of the word “system” to rule that while [[email]] may be a means of communicating electronic messages, it is not a “system”. [[SWIFT]], thought the court, is a messaging system. [[SMTP]] over the [[Internet]] it thought, is not. You have to squint really hard and hold your head in a funny way to follow that logic. Hotel owners in Wales ''can’t'' communicate by [[SWIFT]]. Whether or not they had modern email in mind, the drafters of the {{1992ma}} certainly weren’t contemplating Welsh hoteliers.

What’s oddest about this is that the court needed to make ''none'' of these assertions to find NatWest’s attempted service invalid, because ''Greenclose hadn’t specified an email address in the ISDA {{isdaprov|Schedule}} in any case''. Simply put, ''there was no agreed email address to which NatWest could send Greenclose a message'', however you construe Section {{isdaprov|12}}. Therefore, valid communication by email “under Section {{isdaprov|12}}” ''wasn’t possible''. Case closed.

(The court was also exercised mightily about whether a non-conforming notification, even if in fact effective, would count for the purposes of exercising options under the {{isdama}}. Here again it chose the path less travelled, in construing the statement “any notice or other communication ''may'' be given in any manner described below” to mean it may ''only'' be given in that manner.  

Which raises a subsidiary question: what if the court had found that a notice, though non-compliant, had, in actual fact, been delivered to the recipient? Would the court still follow substance over form and disallow the claim?  

And what would the court have found if [[Greenclose]] ''had'' specified an email address? That he was wrong to do so, because that wasn’t an identifier of a valid “[[electronic messaging system]]”?

 

Questions that won’t be answered for now, as NatWest has not appealed the decision.