Equitable Remedies - Textbook PDF

Preview

Summary

Textbook...

Description

DECLARATIONARATIONS (C28: 757-773) Declaration: an order granted by a court that states with finality the true nature of the law or the rights, duties and interests of the applicant under it. Now a statutory remedy. Jurisdiction to grant declarations: there are very few real limits upon the power of courts to grant a declaration. Forster v Jododex Australia Pty Ltd - its jurisdiction to do so being ousted by legislation conferring an exclusive respecific performanceonsibility upon same other body. Two preliminary questions: 1. Whether it can be made in the absence of evidence/ Whether the parties can consent to the making of the order in the absence of evidence. – evidence is not required, parties can agree by consent as to the facts 2. Whether a Declaration can be made in the absence of a proper contradictor – proper contradictor is required ACCC v MSY Technology Pty Ltd - a contradictor will be present when all proper defendants have been joined and so are bound to the result. They will not cease to be contradictions merely because they consent to the proposed declarations. Three matters influence court’s decision to make a Declaration: Ainsworth v Criminal Justice Commission 1. A Declaration must be directed to the determination of legal controversies & not to resolution of abstract/ hypothetical question 2. Person seeking relief must have ‘real interest’ (standing) 3. Declaration must produce foreseeable consequence for the parties. 2. Standing  Declaration is of practical importance to the applicant – he/she had a real commercial interest in obtaining it  Genuine & legitimate interest in the matter: Milebush Properties  Public rights o When an individual seeks to raise a public right against Crown, first course of action is to approach AG – who may bring the suit in official capacity (ex officio) or in relation to rights of private individuals concerned (ex relatione)  AG has automatic standing but cannot be compelled o If AG refuses, individual may approach court directly to assert the public right – provided that they meet at least 1 of the 2 threshold tests for standing: Boyce v Paddington Borough Council (1) Where the interference with public right is such as that some private right of his is at the same time interfered with; (2) Where no private right is interfered but plaintiff, in respecific performanceect of his public right, suffers specific performanceecial damage peculiar to himself from the interference of the public right. Now second limb is extended by a broader ‘specific performanceecial interest’ test - Australia Conservation Foundation Inc v Commonwealth of Australia – standing of an organisation dedicated to environmental protection to challenge the govt decision allowing tourism development to proceed  HC→ rather than insist upon ‘specific performanceecial damage’ required from Boyce v Paddington Borough Council, court said applicant only need to show ‘specific performanceecial interest’ in the matter. Interest must be one with tangible consequence, not a mere emotional/ intellectual concern, including social/political interest, property/proprietary interest, business/economic interest.  Here, no specific performanceecial interest.  Cf. Onus v Alcoa o Aust Ltd – Ab tribe was given standing to protect their relics from interreference – tribe members had a ‘specific performanceecial interest’ in that they were custodians of the relics, which they actually used & were of cultural & specific performanceiritual imp to them. Applicants stood to suffer a palpable disadv/loss if their action failed. 3. Foreseeable consequence - utility  Must have some effect on the rights & obligation of the parties to the proceedings: ACCC v Francis Defences

 

∵ the jurisdiction to grant mere Declaration relief now comes from statute, traditional equitable defence (eg. unclean hands, laches) have arguably been eliminated However, where a Declaration is sought as ancillary to other equitable remedies, the usual equitable defence apply.

Declaration in criminal cases A court is reluctant to make declarations which impinge directly on a criminal matter, except for some specific performanceecial circumstances. Sankey v Whitlam - High Court granted declaratory relief to the effect that a subpoena in criminal proceeding were not privileged.

SPECIFIC PERFORMANCE (C29: 774-800) The common law remedy of damages for breach of contract is designed to provide monetary compensation to a plaintiff for losses resulting from a breach of contract by the defendant, the equitable remedies of specific performance and injunction are designed to force a defendant to perform his or her contractual obligation. These equitable remedies can be ordered even though a breach of contract has not yet occurred. “The trigger for the commencement of a specific performance suit will be some threat of refusal, express or at least implied, or some actual refusal, on the part of a contracting party to perform the contract in whole or part.” - Wolseley Investment Pty Ltd v Gillespie  

In personam in nature: Richard West Inverness Specific performance will be denied on jurisdictional grounds & may be refused on discretionary grounds o If refused on discretionary grounds, court can still award equitable damages o If refused on jurisdictional grounds, P is confined to recovering damages at common law for breach of contract

Jurisdictional grounds precluding an order for specific perfrmance  Binding contract for valuable consideration no specific performance if promise is not supported by valuable consideration.  Inadequacy of damages at common law no specific performance if plaintiff can be adequately compensated by an award of damages at common law. Adequacy is determined by date of order for specific performance, not date of contract. o Damages would be inadequate if damages would not give the party the compensation to which he was entitled – ie. not put him in a situation as beneficial to him as if the agreement were specifically enforced.  when specific performance can give more complete & perfect justice to plaintiff than damages. o Where there is sig difficulty in assessing the quantum of damages/ in enforcing an award of damages  damages are inadequate. o Australian courts do not see specific performance as a secondary remedy to damages. The primary obligation of a party to a contract is to perform it  ∴ ques: whether damages will provide ‘a complete remedy’. A question of fact for each case. o Contracts for sale of personalty – generally, common law damages will be adequate remedy. Contracts for the sale of shares or chattels will not be specifically enforced if substitute shares or chattels are readily available in an open market. If not, damages at common law will be inadequate and the court will have jurisdiction to specifically enforce the contract in question.  contract for the sale of chattels of unusual beauty or rarity or of special or sentimental significant to the purchaser are ones where damages at common law will usually be inadequate - Falck v Gray o Contracts involving land eg. leases– court used to grant specific performance.  Even when vendor is seeking equitable relief against a defaulting purchaser ∵ vendor wants more than receipt of money on completion of sale. Wants to be legally divested of his/her interest in the land and consequently, damages at common law would not be adequate



Cf Union Eagle Ltd – questions the traditional approach of viewing common law damages as inadequate in cases of land contracts. Privy Council→ in some circumstance, no distinction could be drawn bet land sale contracts and other commercial contracts ∵ land can also be an article of commerce. o Contracts to pay or lend money - generally, a plaintiff will be adequately compensated by an award of damages at common law.  in some circumstances, common law damages will not do justice to the plaintiff and the court will have jurisdiction to award equitable relief.  Wight v Haberdan Pty Ltd - ordered specific performance of such a contract. Damages at common law were not an adequate remedy because of the complex questions that would have arisen, the delay and expense involved, and the fact that damages would be extremely difficult, if not impossible, to assess with reasonable accuracy.  On the other hand, even of specific performance is not available because of the adequacy damages principle, in many cases a plaintiff can achieve the same practical result by pursuing his or her claim in debt. o Contracts conferring benefit on third party B suing A its A’s obligation to pay C.  A & B enter into a contract that A has to give benefit (pay a sum of money) to C. C cannot sue A on privity of contract rule ∵C has not provided consideration. If B sued, B can only get nominal damages ∵ nominal loss is the true loss B suffers. Is B adequately compensated? No  A complete and perfect justice to a promise may well require that a promisor performs his promise to pay money or transfer property to third party: Coulls v Bagot’s Executor & Trustee Co Ltd  Beswick v Beswick  Peter contracts with nephew, John. Peter was to transfer his business to John, in return John agreed to employ Peter as consultant for the rest of his life & after his death, pay Ruth (Peter’s widow) an annuity for the rest of her life. After Peter died, John refused to make payments to Ruth. Ruth, in her capacity as administratrix of Peter’s estate, brought action seeking specific performance of the obligation to pay annuity.  HofL→ Ruth. CL damages inadequate remedy to meet the justice of the case. Peter has performed his contractual obligations and all that remained to be done was for the defendant to honour his or her contractual obligations and pay money to the third part, equity would enforce the obligation as common law damages would be inadequate to meet the justice of the case. Denying equitable relief would be aiding the wrongdoer. Nb. Generally, P cannot recover damages for losses suffered by 3rd party. If P could recover damages for 3 rd party losses, then damages would be an adequate remedy & court has no jurisdiction to order specific performance. Discretional factors for refusing order for specific performance (1) Personal service contracts Equity will not enforce a contract if to do so would result in compelling the defendant to maintain a personal relationship with the plaintiff (Geys v Societe Generale, London Branch). However, courts may enforce a contract which contains an obligation to enter into a contract for personal services. Simply because a contract contains an element of personal service does not automatically mean it won’t be enforced in equity (C H Giles & Co Ltd v Morris). Can be awarded in employment contract cases where the relationship does not involve any meaningful mutual trust and confidence between employee and employer (Turner v ACSEF). ( 2)Cons t a ntc o ur ts upe r vi s i on Co nt r a c t si nwh i c hpa r t i e s ’o bl i g a t i o na r ei mp r e c i s e l yd e fine dwi l lg e ne r a l l yn otbes pe c i fic a l l ye nf o r c e d .∴ ob l i g a t i ont obee nf o r c e dmu s tb es uffic i e nt l yc e r t a i n&pr e c i s et oma k eD’ sdu t y , i nc o mpl yi n gwi t ht heSP or d e r ,c l e a r . *Co o pe r a t i v eI n s u r a nc eSoc i e t yLt dvAr g y l lSt o r e s( Ho l di ng s )Lt d P( o wn e rofas h opp i n gc e n t r e )s ou ghtSPt og e tas u pe r ma r k e tp e r f or mi t sl e a s eo bl i g a t i ont ok e e po pe r a t i n gt he s u pe r ma r k e t( g a v enot i c eo fi t si nt e nt i o nt oc l o s et h es up e r ma r k e t ) .CI Sr e q ue s t e dAr g y l lt ok e e pop e r a t i n gt h e

s u pe r ma r k e tu nt i lane ws u pe r ma r k e to pe r a t orc oul dbef o un dt ot a k eo v e rt h ep r e mi s e s . CI Ss ou gh ts p e c i fic pe r f o r ma n c eo ft hel e a s eob l i g a t i o nt oo pe r a t et hes u pe r ma r k e td ur i n gbu s i ne s sh our s . Ho f L→ noSP . Enf or c e me n toft h eobl i g a t i ont oc a r r yont h es up e r ma r k e tb us i n e s swo ul dr e q u i r ec o ns t a n t s u pe r v i s i ono ft hec o u r t . c a s e swhe r et h eo bl i g a t i o nc o nc e r n e dt he( 1)ong oi ngc ar r y i ngo nofac t i v i t i e s( obl i g a t i o nofa no n g oi n g na t u r e )( SPn o tg e ne r a l l ya wa r de d∵ t het h r e a tofr e pe a t e dl i t i g a t i ona r i s i n gf r om di s pu t e sa st owhe t he ra ta n y pa r t i c u l a rt i me , Dwa sc o mpl yi n gwi t ht heor de r )v swhe r e( 2 )ob l i g at i onr e l at e dt oa c hi e v i ngar e s ul t( SPi f r e s u l twa sde fine dwi t hs uffic i e n tpr e c i s i on∵ i two u l dmi ni mi s es ub s e q ue n twa s t e f u ll i t i g a t i o n) . s t po i n th a sbe e nc r i t i c i s e d.I ts hou l dul t i ma t e l yd e pe n dont hede gr e eofpr e c i s i ont o  Hoffma n ’ ss p e e c hon 1 wh i c ht h eobl i g a t i oni sde fin e d. r i c kS t e v e d or e sNo2–amo r efle xi bl ea p p r o a c h–g e ne r a l l ye nd or s e sHoffma nL ’ sa pp r o a c hi n  Pat Ar gy l l . Co ns t a nts u pe r v i s i onb yc o u r tb yi t s e l fi snol on g e ra ne ffe c t i v e / u s e f u lc r i t e r i o nf orr e f u s i n ga de c r e eofs pe c i ficpe r f or ma n c e .  Di a gn os t i cXRay-di s t i n gu i s h e dAr g y l lo nt hef a c t s . Te na n twa sor d e r e dt oc a r r yonbus i n e s su nt i ls uc h t i mea si tf o un da not h e rt e na n tt ot a k eont heb us i n e s s . Nb .Ac o mpr omi s e .SPwa sno tg r a n t e df ort hef u l lpe r i odo ft hel e a s e . ( 3)Vi t i a t i ngf a c t o r s Eq ui t a bl er e l i e fwi l lb er e f u s e di ft hec o n t r a c ti sa ffe c t e db yv i t i a t i n gf a c t or sd uet ot h epl a i nt i ff’ sc on duc tor a c t i on s . Th us , c on t r a c t si nd uc e db yapl a i nt i ff’ smi s r e p r e s e nt a t i o n, mi s t a ke ,du r e s s , un du ei n flu e nc e , o rt h a ta r e un c ons c i o na bl et r a n s a c t i o nswi l lno tbee n f o r c e di ne q u i t y . ( 4)Fut i l i t yori mpo s s i bi l i t y I fpe r f or ma nc eo ft hec o nt r a c two ul dbef u t i l e ,ac ou r twi l ln o tor d e rs pe c i ficp e r f or ma n c eo fi t .Thu s ,t hec ou r t ‘ wi l lno tr e a d i l ygr a ntade c r e ewhi c hwo u l di n v o l v eapo i nt l e s swa s t eo ft i meormone yb yc omp e l l i n gt hedo i n g ofa c t swh i c hc o ul dr e a di l yber e v e r s e dorwhi c hwo u l da p pa r e n t l yb e ne fitno o ne ’ . Norwi l lac ou r te nf o r c ea c on t r a c t u a lob l i g a t i ont ha ti si mpo s s i bl et op e r f o r m. ( 5)La c ko fmut ual i t y  SPno ta v a i l a bl et oPun l e s sDc oul da l s oh a v eob t a i ne dr e l i e fa g a i n s tP .  La c ko fmu t ua l i t yc a nn otber a i s e db yDi ft h er e a s o nDc a n no tg e te q ui t a b l er e l i e fa g a i ns tPi s∵ o fD’ s o wnc on du c t / d e f a ul t . Eg .i fDh a dmi s r e p r e s e n t a t i on , und uei nflue n c e , u nc on s c i ona b l ec o ndu c t , l a c h e s  c ont r ac twi t hmi nor–mi no rwi l lbeun a bl et or e c e i v ea no r d e rf o rSPa g a i n s tt heot h e rpe r s o n∵ t ha t pe r s onwi l lbeun a bl et oi ns i s tu po nh i s / h e rr i g ht sa g a i n s tt h emi nor  wh e nmus tmu t ua l i t yb ep r e s e n t ? Pr i c evSt r a n g e→ t hed a t eonwh i c ht hec ou r ti st oma k et heor de rf orSP . Th ef a c tt ha tmut ua l i t y ma yn otha v ee xi s t e da ta ne a r l i e rt i mei si r r e l e v a n t .  Ex c e pt i on:Co nt r a c t sf o rs a l eofl a n d/ i nt e r e s t si nl a ndt ha ta r er e q u i r e db yl e gi s l a t i o nt obee v i de nc e di n wr i t i n gt obee nf o r c e a b l e . I fv e n do rh a st h en e c cdo cs i gne db yt h ep ur c ha s e rbutt hep ur c ha s e rdo e sno tha v et h ewr i t t e n do cs i gne db yv e n do r ,mu t ua l i t yc l e a r l ydo e sno te x i s t .Pur c h a s e rwo u l db euna b l e ,du et ol a c kd ocs i g ne db yV, t os e e kSPa g a i n s tt h eV. Ho we v e r , i nt hi ss i t u a t i on, Vwi l lb eg r a nt e de q u i t a b l er e l i e fno t wi t hs t a ndi n gt ha t pu r c h a s e rwoul dbeuna b l et oo bt a i na no r de rf orSP . ( 6)Pl ai nt i ffi ns ubs t ant i a lbr e ac h&/no tr e ady ,wi l l i ng& a bl et ope r f o r mo wnobl i g a t i o na tt h et i met he e qu i t a b l er e l i e fi ss ou gh t .  Sub s t a n t i a lb r e a c he n a bl eot he rpa r t yt ot e r mi na t ec o nt r a c tf ort h a tb r e a c h.  Ev e ni ft hepl a i n t i ffha sc ommi t t e das ub s t a n t i a lb r e a c h,t h ep l a i nt i ffwi l lbee nt i t l e dt oe qu i t a bl er e l i e fi f o t he rpa r t yha sa ffir me dt hec on t r a c ta nde l e c t e dn ott ot e r mi n a t ei t .  Apl a i n t i ffmu s ta l s ob er e a d y , wi l l i n ga n da bl et ope r f or m hi so rh e ro wno bl i g a t i o nsb e f or eac our twi l l gr a n ta no r de ro fs pe c i ficpe r f or ma n c e . Me h me tvBe ns on  apl a i nt i ffwhowa sap ur c ha s e rofl a ndun de ra ni ns t a l me n tc ont r a c t , a n dwh o, du r i n gt hec ur r e n c yof t hec on t r a c t , wa sde c l a r e dba n kr u p t . Wh i l eaba n kr u pt , t hep l a i nt i ff, be c a us eoft h el i mi t a t i o nsi mpo s e d up onaba n kr u p tt ope r f or mac on t r a c t , wa sn otr e a d y , wi l l i n ga n da b l et op e r f o r m, a n dwo u l dt h usno t

ha v eb e e na bl et oob t a i na nor d e rf o rs p e c i ficpe r f o r ma n c eoft hec o nt r a c t . Ho we v e r ,t hep l a i nt i ff ob t a i ne dadi s c ha r g ef r omb a nkr up t c ya n d,s e e ki n ga no r d e rf o rs p e c i ficp e r f or ma n c e , wa ss u c c e s s f ul be f o r et h eHi g hCo ur t .

INJUNCTIONS (C30: 801-833) Injunctions are orders made by the courts either restraining or requiring performance of a specific act in order to give effect to the legal rights of the applicant.  Has equitable origins but now power is statutory – s 66 Supreme Court Act 1970 (NSW).  Injunctions should be expressed with precision.  Injunctions will not be ordered if there has been no violation of plaintiff’s rights (ie. where there’s no need for the injunction): Australian Broadcasting Corp v Lenah Game Meats Pty Ltd  Paton – injunction refused to a father who sought to prevent his wife having an abortion ∵ none of his rights would be violated by his wife having the abortion ∴ he had no legal right at law or equity to prevent the abortion The Exclusive and Auxiliary Jurisdictions  Equity’s exclusive juris - injunctions granted in aid of equitable rights  Equity’s auxiliary juris – injunctions granted in aid of CL rights.  P must estimate that damages at CL are inadequate remedy (1) Inadequacy of damages (same as for remedy of SP) p804  Test: “whether it is just, in all the circumstances, that a P should be confined to his remedy in damages.” Evans Marshall & Co Ltd v Bertola SA  May be inadequate if damages are difficult to assess a) Mandatory and prohibitive injunctions  Mandatory restorative injunction – compels D to repair the consequence of some wrongful act that he or she has committed. In order to obtain such an injunction the plaintiff must show that, had the wrongful act not occurred but was merely threatened, he or she would have obtained a prohibitory injunction in relation to the apprehended wrong. e.g.: a house has been built in contravention of statutory planning approval requirements, a mandatory restorative injunction will be granted requiring the defendant to demolish it, provided that the plaintiff can establish that he or she would have obtained a prohibitory injunction before the house was built, preventing the defendant from building it. * Redland Bricks Ltd v Morris Morris carried on a business as a market gardener. On adjoining land, Redland Bricks conducted a quarrying business that caused subsidence(下沉) to Morris’s land. As part of his claim against Redland Bricks, Morris sought a mandatory injunction to have the land restored to its original state. The cost of doing so was $30K, whereas the future damage to Morris, if not injunction were granted, amounted to $1500. The House of Lords declined to grant injunction. Lord Upjohn observed that, in granting mandatory injunctions, each case depended very much on its own circumstances. (1) It must be shown that there is a ‘very strong probability on the facts that grave damage will accrue to ...