Lavinia Deborah Osbourne v Persons Unknown Category A & Ors

In an application concerning allegedly misappropriated non-fungible tokens, the court held that there was a realistically arguable case that NFTs are property in English law. For an interim injunction, the claimant had to show a serious issue to be tried, inadequacy of damages, and a balance of convenience favouring relief. For service out, the claimant had to establish a serious issue, a good arguable case within a Practice Direction 6B gateway, and that England and Wales was clearly the most appropriate forum. Alternative service by password-protected, unredacted documents could be permitted where it was a sensible and proportionate method. Permission to rely on expert evidence was unnecessary at this interlocutory stage where no final findings were being made.

The claimant alleged that two NFTs had been removed without consent from her cryptoasset wallet and transferred through several wallets. Earlier judgments had granted injunctions and permitted service by alternative means. The present application sought permission to re-amend the pleadings, a further interim injunction, permission for service out of the jurisdiction and by an alternative method, and permission to rely on expert evidence. The defendants did not attend or appear. The central issues were whether the amendments should be allowed, whether the injunction and service requirements were satisfied, whether password-protected documents could constitute valid alternative service, and whether permission was required for the proposed expert reports.

1. Re-amendment. Permission was granted under CPR 17.1(2)(b). The proceedings were at an early stage; the amendments reflected subsequent developments; the defendants had not engaged in the case; refusal would prejudice the claimant; and no limitation issue arose under CPR 17.4.
2. Interim injunction. The court adopted the earlier reasoning applying American Cyanamid Co v Ethicon Ltd. There was a realistically arguable case that NFTs could be treated as property, serious issues concerning constructive trust, restitution and unjust enrichment, and damages were inadequate for the claimant but adequate for the defendants. The claimant could satisfy her cross-undertaking, had acted promptly, and the balance of convenience favoured relief. The injunction was granted.
3. Service out. The court adopted the earlier analysis. The claimant established a serious issue, a good arguable case that the claims fell within gateways 15(a) and 15(c) of Practice Direction 6B 3.1, and that England and Wales was the most appropriate forum. Permission for service out was granted.
4. Alternative service. Although the proposed method was novel, service of an unredacted cover letter directing the recipient to password-protected documents was accepted as simpler than redaction and sufficiently protective of privacy. Permission was granted under CPR 6.15 and 6.27.
5. Expert evidence. Permission was not required at this stage. CPR Part 35.4 concerned experts producing Part 35 reports for trial or final hearings. The reports were nevertheless taken into account when assessing the interlocutory applications.
6. The claimant was directed to obtain and serve an approved transcript on the defendants.