Gee v Gee & Anor

Where an order directs a party to transfer property and separately requires steps to minimise tax, the transfer obligation is not conditional on those tax steps unless the order clearly says so or conditionality is necessary by implication. A party’s honest but incorrect construction of an order may amount to neglecting to comply with it for the purposes of Senior Courts Act 1981, section 39. The court may then nominate another person to execute the required document. Company records remain the company’s property, but they may be moved or produced where necessary to resolve a dispute. Loss caused by breach of an order is distinct from costs and cannot be quantified through costs assessment.

The claimant had succeeded in a proprietary estoppel claim concerning a family farm. Birss J’s order required the second defendant to transfer shares in a family company and an interest in land, and required the parties to make claims for holdover relief with the intention of minimising tax. The defendants’ applications for permission to appeal and to reopen the appeal had been refused.

The second defendant withheld the stock transfer form until the claimant signed a holdover-relief claim. The claimant applied for an order requiring delivery of the form, authorisation for another person to execute it under section 39 of the Senior Courts Act 1981, and orders concerning the company’s books.

1. Construction of the order. The obligation to transfer 12,480 shares was not conditional on the claimant first signing a holdover-relief claim. The order contained no conditional language, and no implication of conditionality was necessary. Although a tax claim could not logically be made until the transaction occurred, that did not create a prior obligation to sign and deliver a form where the order contained no such obligation.
2. The valuation point supported that conclusion. The value of non-business assets had to be assessed by reference to the transaction date, although a valuation might be arranged for a date shortly in the future. The claimant also had a substantial incentive to seek relief because he was required to bear 52% of any tax liability. The obligation to minimise tax pointed towards making a claim before tax became payable, but it did not make the share transfer conditional upon that claim.
3. Section 39. The words “neglects or refuses to comply with the judgment or order” in subsection (1)(a) were jurisdictional. A person who, even in good faith, relied on an incorrect construction of the order had neglected to comply with it. The jurisdictional threshold was therefore satisfied, without any finding that the second defendant had deliberately obstructed compliance.
4. The second defendant was ordered to deliver a fully executed stock transfer form within seven days. Failing delivery, Pamela Humphrey was authorised under section 39 to execute it on his behalf.
5. The company’s books belonged to the company, but the requirement to keep the register of members at the registered office was not absolute. The company’s non-joinder was irrelevant because the obligation to register the transfer fell on the directors. No immediate order concerning the books was made, but the claimant was given liberty to apply without a fresh application notice if registration proved difficult.
6. The application concerned breach of the share-transfer obligation, not the land-transfer obligation. Damages for breach of an order could not be proved or quantified through costs assessment; a damages claim was distinct and might require an inquiry.

The judgment records that permission to appeal from the earlier order was refused by the Court of Appeal on 24 May 2019, and that a further application to reopen the appeal was refused on 14 January 2020. This court treated the order dated 14 February 2019 as definitive and determined compliance with it.