ABSOLUTE LIVING DEVELOPMENTS LIMITED v DS7 LIMITED & Ors

An application under a consent order permitting applications to enforce a settlement cannot generally be used to determine separate disputes about the continuing validity or effect of a power of attorney. Those issues require fresh proceedings, such as a Part 8 claim or an injunction application. The enforcement jurisdiction may, however, address breaches of the settlement itself, including failure to provide an executed document. Where the evidence establishes that a power of attorney was executed in the contractually required form, the court may declare that fact and order steps to obtain the original document.

The claimant company, acting through its liquidator, sought orders concerning a power of attorney executed by the respondent company under a 2018 settlement agreement and consent order. The power of attorney authorised the liquidator to execute documents transferring Empress Mill if the respondent failed to do so. The respondent had not provided a complete copy and disputed the liquidator’s continuing authority, while a prospective sale of the property created urgency.

The application was made under the consent order’s provision allowing applications to enforce the settlement without bringing a new claim. The central issue was the extent of that limited enforcement jurisdiction and whether it permitted declarations about the continuing validity of the power of attorney or an order requiring a fresh power of attorney.

1. Scope of the enforcement jurisdiction. The application could address matters directed to enforcing the settlement agreement, but the permission to apply without issuing a new claim did not permit determination of separate issues concerning circumstances arising after execution or the continuing validity of the power of attorney. A declaration that the liquidator had authority to act generally was therefore misconceived. Any attempt to restrain the sale or determine continuing authority should be made by an injunction application or, where a fresh power of attorney was required, by a Part 8 claim.
2. Production of the document. The respondent and its director were ordered to require the respondent’s solicitors, Banks Kelly, to produce to the liquidator’s solicitors all versions of the power of attorney in their possession, custody or power, or to confirm that they held none. This was properly characterised as enforcement of the settlement obligation to provide the relevant executed documentation.
3. Execution of the 2018 power of attorney. The court declared that a power of attorney in substantially the form stipulated in Annex IV to the settlement agreement had been duly and properly executed by the respondent’s director on or about 29 November 2018. The execution page, the covering email and the contractual obligation established execution in the required form, even though the complete instrument had not been supplied.
4. Mercury Tax Group. The decision in R (Mercury Tax Group Ltd) v HMRC, [2008] EWHC 2721 (Admin), did not determine the issue. It concerned a power of attorney that had not been regularly executed because the signed version was not the final version and contained unauthorised wording changes. Here, the evidence indicated proper execution of the stipulated form. The relevant Law Society guidance did not itself answer the question, which was whether the power of attorney had been executed.
5. The requested order requiring a fresh power of attorney, and the broader declaration concerning the liquidator’s authority, were not made under the enforcement provision. The court indicated that an urgent Part 8 claim could be dealt with by the same judge. Costs were reserved pending submissions.