John Michael Gee & Anor v The Estate of John Richard Gee & Anor

A court may address an alleged breach of its order within the existing proceedings where the order remains enforceable and the court can fashion effective relief. A separate claim is not required merely because a third party may also have procured the breach. An implied liberty to apply enables the beneficiary of an order to complain of non-performance and seek directions or remedial orders, even where the order contains no express liberty to apply. Delay will not bar relief absent significant prejudice. Where factual and legal issues concerning loss and a third party’s responsibility remain unresolved, the appropriate course is an inquiry with directions for statements of case and, where necessary, disclosure.

The claimant had succeeded in proprietary estoppel proceedings concerning the family farming business. An order made on 14 February 2019 required the first defendant to use reasonable endeavours to procure an assignment of the tenancy of St Frideswide’s Farm to the company, or alternatively to seek succession, and prohibited him from taking steps to prevent the company continuing to farm the land.

The first defendant later surrendered the tenancy through the second defendant, acting under a lasting power of attorney. The claimant alleged breach by the first defendant and liability of the second defendant for procuring that breach. The application sought joinder of the company, specific disclosure, an inquiry and further directions. The central issues were whether a breach had occurred, whether the matters could be dealt with in the existing proceedings, and whether delay or the second defendant’s agency status created a procedural or substantive bar.

1. The surrender of the tenancy was a deliberate step which prevented the company from continuing to farm the land and therefore breached the order. The pre-existing prohibition in the lease did not displace the separate obligation imposed by the court’s order.

2. Where a person subject to an order has failed to comply, the court may grant further relief in the original proceedings. This includes enforcement or substituted-performance orders, injunctions, receivership and an inquiry. A separate claim is not required. The fact that procuring a breach of an order may constitute an independent tort, as discussed in Lakatamia Shipping Co Ltd v Su [2021] EWHC 1907 (Comm), is not exhaustive. The absence of a penal notice removes the committal jurisdiction but does not make the conduct lawful.

3. The principle in Said v Butt [1920] 3 KB 497 may require consideration where an agent acts in the principal’s best interests, but it does not necessarily apply where the agent acts in bad faith, for another’s interests or without knowledge of the legal breach. Those questions were suitable for determination in the inquiry.

4. The court rejected the contention that the absence of express liberty to apply required a fresh claim. Although Chandless-Chandless v Nicholson [1942] 2 KB 321 was confined to relief from forfeiture, the more general reasoning in Fritz v Hobson (1880) 14 Ch D 542 supported an implied liberty to apply where necessary to address non-performance and changed circumstances.

5. Delay of about one year did not bar relief. Significant prejudice could be relevant, but the defendants’ asserted belief that the proceedings had ended was not significant prejudice. The court ordered an inquiry into loss and the second defendant’s responsibility, joined the company and adjourned the disclosure application pending statements of case.

The judgment was a first-instance decision on an application in proceedings arising from:

• High Court — the original proprietary estoppel judgment, [2018] EWHC 1393 (Ch).
• High Court — an earlier enforcement application, [2020] EWHC 1842 (Ch).
• High Court — the present application, determined by HHJ Paul Matthews sitting as a High Court judge.