Lecture Notes - Equitable Remedy of Specific Performance PDF

Preview

Summary

Lecture notes regarding the equitable remedy of specific performance. Sets out general rules, exceptions and relevant considerations in deciding whether to grant or refuse an order of specific performance....

Description

Equity 2 2021

Specific Performance Nature of the Remedy Specific Performance is an order of the court that compels a defendant to do something that he/she has promised to do in a binding contract. It is an equitable, discretionary remedy that originated in the Court of Chancery and it operates in personam (against the person). Traditionally, specific performance is deemed an exceptional remedy, ordered by the court where the remedy of damages at common law proves to be inadequate. (i)

General Principles and Guiding Maxims

In exercising its discretion, the court is guided by general, equitable principles, reflected in the maxims of equity, such as, ‘equity does not act in vain’, ‘he who comes to equity must come with clean hands’, and ‘he who seeks equity must do equity’ etc. (ii)

Preconditions

There can be no specific performance of an agreement unless it is in the form of a binding contract, but the award of specific performance does not depend on a pre-existing breach of contract and may be made in circumstances where there can be no recovery of damages at common law (Marks v Lilley [1959] 1 WLR 749). (iii)

Effect

Where specific performance is awarded, it is the provisions of the order and not the contract which regulate how the obligations must be carried out. Failure to comply is a contempt of court. An order for specific performance is a final order of the court.

Granting or Refusing the Remedy (A Selection of Relevant Considerations)

1.

Adequacy of Damages

(i) Contracts for the sale or other disposition of interests in land Specific performance is almost always granted but note the need to comply with Law of Property (Miscellaneous Provisions) Act 1989. See generally, P Davies, “Being Specific about Specific Performance” [2018] Conv 324. 1

Equity 2 2021

(ii)

Contracts for the sale of personalty

Cohen v Roche [1927] 1 KB 169 per McCardie J: “ordinary articles of commerce and of no special value or interest” (a set of Hepplewhite chairs) Behnke v Bede Shipping Co [1927] 1 KB 649 (sale of a ship) Falcke v Gray (1859) 4 Drew 651 (2 china jars considered articles of unusual beauty) Note: Sale of Goods Act, s.52 enables the court to order specific performance of contracts for the sale of ‘specific or ascertained goods’, i.e. goods identified and agreed by the parties when the contract is entered into. (iii) Transient Interests Verrall v Great Yarmouth Borough Council [1981] QB 202 (contractual licence) (iv) Contracts to pay money Beswick v Beswick [1968] AC 58 per Lord Upjohn: “justice demands that [the promisor] pay the price and this can only be done in the circumstances by equitable relief”.

2.

Constant Supervision

(i)

Principles and Practice

Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116 Posner v Scott-Lewis [1987] Ch 25 per Mervyn Davies J: “(a) Is there a sufficient definition of what has to be done in order to comply with the order? (b) Will enforcing compliance involve superintendence by the court to an unacceptable degree? (c) What are the respective prejudices and hardships that will be suffered by the parties if the order is made or not made”. Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 See A Tettenborn, “Absolving the Undeserving: Shopping Centres, Specific Performance and the Law of Contract [1998] Conv 23 Zinc Cobham 1 Ltd (In Administration) v Adda Hotels [2018] EWHC 1025 (Ch) (ii)

The Construction Cases 2

Equity 2 2021

Wolverhampton Corporation v Emmons [1901] 1 KB 515 at 525 per Romer LJ: “It has, I think, for some time been held that in order to bring himself within that exception, a plaintiff must establish three things. The first is that the building work, of which he seeks to enforce the performance, is defined by the contract, that is to say, that the particulars of the work are so far definitely ascertained that the court can sufficiently see what is the exact nature of the work of which it is asked to order the performance. The second is that the plaintiff has a substantial interest in having the contract performed, which is of such nature that he cannot adequately be compensated for breach of the contract by damages. The third is that the defendant has by the contract obtained possession of land on which the work is contracted to be done”. Carpenters Estates v Davies [1940] Ch 160 Airport Industrial GP Ltd v Heathrow Airport Ltd [2015] EWHC 3753 (specific performance of a contract for building works, requiring a party to take action (build a car part) before the deadline for performance of contractual obligations) (iii)

Enforcement of Leasehold Covenants

Jeune v Queens Cross Properties Ltd [1974] Ch 97 “I cannot myself see any reason in principle, why, in an appropriate case, an order should not be made against a landlord to do some specific work pursuant to his covenant to repair. Obviously, it is a jurisdiction which should be carefully exercised. But in a case such as the present where there has been a plain breach of a covenant to repair and there is no doubt at all what is required to be done to remedy the breach, I cannot see why an order for specific performance should not be made” (per Pennycuick VC at 101). Landlord and Tenant Act 1985, s.17(1) “In proceedings in which a tenant of a dwelling alleges a breach on the part of his landlord of a repairing covenant relating to any part of the premises in which the dwelling is comprised, the court may order specific performance of the covenant whether or not the breach relates to a part of the premises let to the tenant and notwithstanding any equitable rule restricting the scope of the remedy, whether on the basis of a lack of mutuality or otherwise”. Rainbow Estates Ltd v Tokenhold Ltd [1999] Ch 64 at 72 per Lawrence Collins QC: “a modern law of remedies requires specific performance of a tenant's repairing covenant to be available in appropriate circumstances, and there are no constraints of principle or binding authority against the availability of the remedy. First, even if want of mutuality were any longer a decisive factor (which it is not) the availability of the remedy against the tenant would restore mutuality as against the landlord. Second, the problems of defining the work and the need for supervision can be overcome by ensuring that there is

3

Equity 2 2021 sufficient definition of what has to be done in order to comply with the order of the court”. “Subject to the overriding need to avoid injustice or oppression, the remedy should be available when damages are not an adequate remedy or, in the more modern formulation, when specific performance is the appropriate remedy. This will be particularly important if there is substantial difficulty in the way of the landlord effecting repairs: the landlord may not have a right of access to the property to effect necessary repairs, since (in the absence of contrary agreement) a landlord has no right to enter the premises, and the condition of the premises may be deteriorating” (at 73). See also M Pawlowski [2016] L & T Review 236 (breach of a tenant’s repairing covenant; landlord’s remedy of specific performance) Blue Manchester Ltd v North West Ground Rents Ltd [2019] EWHC 142 (TCC).

3.

Performance of Personal Services

Giles v Morris [1972] 1 WLR 307 at 309 per Megarry J: “The reasons why the court is reluctant to decree specific performance of a contract for personal services (and I would regard it as a strong reluctance rather than a rule) are, I think, more complex and more firmly bottomed on human nature. If a singer contracts to sing, there could no doubt be proceedings for committal if, ordered to sing, the singer remains obstinately dumb. But if instead the singer sang flat, or sharp, or too fast, or too slowly, or too loudly or too quietly, or resorted to a dozen of the manifestations of temperament traditionally associated with some singers, the threat of committal would reveal itself as a most unsatisfactory weapon: for who could say whether the imperfections of performance were natural or self-induced? To make an order with such possibilities of evasion would be vain”. Hill v C.A. Parsons & Co Ltd [1972] Ch 305 at 323 per Stamp LJ: The court, “will not exercise i ts discretion where the order will be nugatory, uncertain or as a practical matter impossible to enforce. Nowhere could the consideration be more compelling than where an employee asks for an order on his employer to continue to employ him”. Francesco v Barnum (1890) 45 Ch D 430 at 438 per Fry LJ: “the courts are bound to be jealous lest they should turn contracts of service into contracts of slavery”. Ashworth v Royal National Theatre [2014] EWHC 1176 (QB) at [50] per Cranston J: “There is clearly an absence of personal confidence on the part of the National Theatre. In addition the claimants themselves would be affected by knowing that the National Theatre does not want them and believes that the play is better without them”.

4

Equity 2 2021

4.

Hardship

Warmington v Miller [1973] QB 877 Patel v Ali [1984] Ch 283 at 288 per Goulding J “The important and true principle, in my view, is that only in extraordinary and persuasive circumstances can hardship supply an excuse for resisting performance of a contract for the sale of immovable property”. Matila Ltd v Lisheen Properties Ltd [2010] EWHC 1832 (Ch) See A Dowling, “Vendor’s Application for Specific Performance” [2011] Conv 208.

5.

Illegality and Public Policy

Wroth v Tyler [1974] Ch 30 “Where the outcome of any litigation depends upon disputed facts, difficult questions of law, or the exercise of a discretionary jurisdiction, then I think the court would be slow to make a decree of specific performance against the vendor which would require him to undertake such litigation” (at 50 per Megarry J).

6.

Lack of Mutuality

Flight v Bolland (1828) 4 Russ 298 Price v Strange [1978] Ch 337 at 367 per Buckley LJ: “The time at which the mutual availability of specific performance and its importance must be considered is, in my opinion, the time of judgment, and the principle to be applied can I think be stated simply as follows: the court will not compel a defendant to perform his obligations specifically if it cannot at the same time ensure that any unperformed obligations of the plaintiff will be specifically performed, unless, perhaps, damages would be an adequate remedy to the defendant for any default on the plaintiff's part”.

7.

Delay

Lazard Bros v Fairfield Property Co (1977) 121 SJ 793 Williams v Greatrex [1957] 1 WLR 31 Easton v Brown [1981] 3 All ER

5

Equity 2 2021

8.

Mistake or Misrepresentation

Webster v Cecil (1861) 30 Beav 62 (vendor’s error in circumstances where the error was acknowledged and obvious – no specific performance where the purchaser sought to exploit those circumstances) Tamplin v James (1880) 15 Ch D 215 (purchaser’s unilateral mistake solely attributable to his negligence – specific performance ordered)

6...