Blight v Meredith & Ors

Factual and Procedural Background

This judgment concerns the Claimants' application for permission to appeal, and if granted, to appeal against an order made by District Judge Nightingale on 24th March 2011. The order required the Claimants' solicitor to complete and finalise the sale of certain shares subject to a charging order in favour of the Claimants, as part of enforcing a judgment against the Defendant. The order also discharged a third party debt order relating to the Defendant's right to draw down 25% of his pension with Canada Life, which had been sought as part of enforcement.

The shares were held by the Defendant through a broker, Savoy Investment Management Limited, which used a nominee, Pershing Securities Limited, as registered owner. The Claimants and Defendant were apparently friends. The Defendant, lacking investment qualifications, persuaded the Claimants to provide money for investment on their behalf. This investment was obtained by fraud and forgery, as determined in earlier proceedings culminating in a summary judgment against the Defendant in 2008. The solicited money included sums for shares in a listed company, Bowleven Plc, which the Defendant failed to pass on to the Claimants.

Further findings by a Chancery Division judge in 2009 confirmed the Defendant's dishonesty and fraudulent conduct. Subsequent enforcement proceedings led to orders by Deputy District Judge Parkes in 2010, including charging orders over Bowleven shares and a leasehold property interest of the Defendant. The Defendant sought deferral of the sale of shares and property, citing hopes for share price increase and tenant considerations. The Judge allowed a 30-day delay for sale of both assets.

The principal dispute concerns whether a purported transfer of shares to the Claimants constituted a “sale” within the meaning of the court order, and the enforceability of the Defendant’s right to draw down part of his pension in satisfaction of the judgment debt.

Legal Issues Presented

1. Whether the transfer of shares to the Claimants pursuant to the court order constituted a valid sale under the terms of that order.
2. Whether the court has jurisdiction to compel the Defendant to elect to draw down 25% of his pension as a means of satisfying the judgment debt.
3. Whether the orders made by District Judge Nightingale were correct and should be upheld or reversed.
4. The scope and application of equitable execution remedies, including injunctions and receivership, in enforcing judgment debts against pension rights.

Arguments of the Parties

Claimants' Arguments

• The transfer and crediting of the market value of the shares to the Claimants amounted to a sale pursuant to the court order.
• The Claimants were entitled as equitable chargees to purchase the shares, either through the market or by direct transfer, and the absence of a formal market sale did not negate the sale.
• The Defendant benefited from the transaction by avoiding commission costs, thus the objection to the form of sale was technical and without substance.
• The court has jurisdiction to order the Defendant to delegate the power to elect pension drawdown to the Claimants' solicitor to enforce the judgment.
• Even if the transaction was not a sale, the court should vary the order to validate the transfer and allow sale to the Claimants by transfer and crediting of market value.

Defendant's Arguments

• The transaction was not a sale within the meaning of the court order but a mere transfer and crediting, lacking formal sale procedures and price specification.
• The Claimants' solicitors’ use of the term “transfer” rather than “sale” indicated no sale had occurred.
• Documents such as emails and letters suggested the shares were transferred but not sold, and no subsequent sale instructions were given to the broker.
• The delay and timing of valuations and communications indicated the Claimants did not treat the transaction as a sale at the relevant times.
• The transfer to only two of three Claimants was irregular if intended as repayment of judgment debt held by all three.
• The court lacked jurisdiction to compel the Defendant to elect pension drawdown, as this election was not a debt and the court cannot mandate such an election.
• Public policy and statutory protections for pensions should prevent enforcement against pension rights in this manner.
• The District Judge’s decision below should be given deference as a matter of judicial discretion.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully analysed the nature of the transaction transferring the shares to the Claimants. It found that the transfer and crediting of market value against the judgment debt constituted a sale within the meaning of the second order, despite the Defendant’s technical objections. The court rejected reliance on subjective terminology such as “transfer” versus “sale,” emphasizing that the legal characterisation depends on objective facts. The court noted that the Claimants were entitled as equitable chargees to purchase the shares, and that the transaction avoided commission costs to the Defendant’s benefit.

The court also addressed the timing and sequencing of sales of the lease and shares, concluding that the orders did not require the lease to be sold before the shares, and that the sale of shares could proceed independently and without undue delay.

Regarding the Defendant’s pension, the court reviewed relevant authority, particularly the Privy Council’s decision in Tasarruf Mevduati Sigorta Fonu, which clarified that injunctions and receivership powers under section 37 can be ancillary to enforcement of judgments and extend to equitable assets such as pension rights. The court found that the District Judge’s refusal to compel the Defendant to elect pension drawdown was an erroneous approach based on incomplete authority.

The court held that it has jurisdiction to order the Defendant to delegate the power to elect pension drawdown to the Claimants’ solicitor, enabling enforcement of the judgment debt. The court considered this a proportionate and just remedy, avoiding the need for appointment of a receiver.

The court also exercised its discretion to vary the second order to clarify that shares and property may be sold in any order and to validate the transfer of shares by allowing sale to the Claimants by transfer and crediting of market value.

Holding and Implications

The court granted permission to appeal and REVERSED the orders of District Judge Nightingale dated 24th March 2011.

The court held that the transfer of shares to the Claimants constituted a sale within the meaning of the enforcement order. It varied the order to confirm that the shares and property may be sold in any order and that the broker may sell shares to any or all of the Claimants by transfer and crediting market value against the judgment debt.

The court further held that it has jurisdiction to compel the Defendant to delegate the power to elect pension drawdown to the Claimants’ solicitor to facilitate enforcement. This represents an important affirmation of the court’s equitable powers to enforce judgments involving pension assets, subject to statutory and policy considerations.

There were no new broader legal precedents established beyond the application and clarification of existing principles. The decision directly affects the parties by enabling effective enforcement of the judgment debt and clarifying the nature of the share transaction and pension enforcement.