Written Notes ON Chapter Equitable Remedies AND TWO Sample Problem Problem Questions PDF

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WRITTEN NOTES CHAPTER ‘EQUITABLE REMEDIES’ +TWO SAMPLE PROBLEM QUESTIONSEquitable Remedies (stand alone topic)(Day v Browning) Held: Equitable remedies are discretionary in nature. It depends on the state of mind of the judge. It can be refused at his power and will. It cannot be asked from the cour...

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WRITTEN NOTES CHAPTER ‘EQUITABLE REMEDIES’ + TWO SAMPLE PROBLEM QUESTIONS Equitable Remedies (stand alone topic) (Day v Browning) Held: Equitable remedies are discretionary in nature. It depends on the state of mind of the judge. It can be refused at his power and will. It cannot be asked from the court as a matter of right. We can claim a certain thin as a matter of right in common law. The remedy of specific performance: Question: What does this remedy mean? Answer: It is a court order in which the court can compel the defendant to perform 'positive obligations' under a contract. When is specific performance available? At full trial (once breach of contract has been established by the claimant) Example: A contracts with B for sale-purchase of a laptop. A pays the full payment to B but B refuses to handover the laptop. A has the remedy of specific performance but he needs to prove two things before filing the case. At common law, A has the right to file the suit for recovery of payment amount as well as damages for breach of contract. Robinson v Harman (1878) - Damages = “remedy of right is still available” When will the court use its discretion to grant SP? Adderley v Dixon (1824) – When damages are not adequate, the court can grant the remedy of specific performance meaning that the court would compel B to handover the laptop to A thereby completing the contract. Contracts for sale of property (Land / house / shop etc.) Verrall v Great Yarmouth BC (1981) – This type of case needs the element of ‘Always unique’ -This means that not every contract or sale of land would be decreed by the court as specific performance. There need to be something of great significance present within that property making it 'unique'. The judiciary then tend to decree the suit in favour of the purchaser.

Contract for sale of chattels (goods, moveable properties, e.g. paintings, pen, paper etc) (Pusey v Pusey (1684) – there was contract for sale of King Knut’s battlehorn. Held: The court granted specific performance. WHY? because this battle horn / chattel was unique as it was only one in the entire UK. The remedy of damages would not be adequate hence the only reasonable relief for the claimant would be actually getting that battle horn. - element of consideration is required. Falcke v Gray (1859) – Facts: There was a contract for sale - purchase of Ming vases (Chinese rare metal) There were only few pieces. very unique and rare items. It was difficult to get an alternative. Held: Specific performance was granted. ---- Equitable Maxims: He who seeks equity must do equity. (A purchaser cannot demand specific performance when he himself is not willing to pay the complete consideration of the item. Cohen v Roche (1927) –Facts: There was contract for sale of Antique chairs. Held: Specific performance was not granted because the claimant can get alternative chairs from the auction. It is necessary to clearly distinguish between ordinary items of commerce from the rare / unique / beautiful / ancient important things. The court awarded damages instead. Critical analysis: The facts revealed that those were antique chairs meaning that such chairs would either be left few in the world or didnot even exist more. Therefore, it would have been difficult to find such chairs in the auctions. This judgment seems not to take into account such crucial fact. Behnke v Bede Shipping Co Ltd (1927) – Contract for sale of ship. Ship that precisely met the requirements of the claimant. Difficult to find an alternative. Held: Specific performance granted. Sky Petroleum Ltd v VIP Petroleum Ltd (1974) – Facts: Contract for sale of oil. Petrol of limited supply during strike. Held: Specific performance granted. CRTICAL ANALYSIS: According to what I think , sky petroleum isn’t taken further by the courts as the D was in breach of contract because of the strike . It’d his headache to fulfil the supply of the C. So he has to arrange petrol From wherever possible . Contracts for service(s) s236, TULR(C)A 1992 – No specific performance for employment

De Francesco v Barnum 1890 Facts: T wo young children. They contracted with a person to perform at his functions. A condition was present in the contract that those children would not marry in their life and would continue to perform until their death. That the children would live alone and also not meet the relatives. Both children refused to perform. Held: Employment must not be “akin to slavery”. Specific performance would not be granted as the contractors could not be ordered to perform against their wishes. human dignity was involved. Verrall v Great Yarmouth (1981) Facts: Contract to hire the whole auditorium for a political meeting. As other auditoriums had refused to lend their services. Later on this auditorium also refused after taking the advance amount. Held: Services must be of irreplaceable nature for the particular claimant as now it would be difficult for the cliamant to find any alternate auditorium. Specific performance granted. As the auditorium was suited to the number of participants in number. Giles v Morris (1972) – Court considers following factors before granting specific performance of contract for service: 1- Are services sufficiently well defined? (Compare Ryan v Mutual Tontine (1893) / Posner v Scott-Lewis (1987)) Ryan case- Facts: Service for a poster in a building. Held: Specific performance is not available. Court declined continuous supervision. Example: A contracts with B to cook and serve food.Issues: How much food to be cooked? What type of food? When to be delivered? What should be the quality of the food? ===== Court will not grant specific performance as it requires continuous supervsision by the court which the court is always reluctant to give. Posner v Scott-Lewis [1987] 3 All ER 513 The court granted an application for specific performance of a lessor’s covenant to employ a resident porter for certain duties. The court distinguished Ryan v Mutual Tontine, where supervision of the execution of the undertaking had been required. Here neither personal services, nor a continuous series of acts, were required, but merely the execution of an agreement containing provisions for such services. Example: A contracts with B to cook Australian food for five people three times a day for continues one year and need to deliver it at ............. place at 9:am, 3pm and 10pm daily for a consideration Rs. .............. per annum. Question: Are the services well defined? Yes, the court can grant specific performance of this contract for cooking food as it doesnot require the continues supervision of the court in execution.

2- Will services require constant supervision by court? (See Cooperative Insurance v Argyll Stores (1997)) Co-Op Insurance v Argyll Stores [1997] 3 All ER 297 The defendants leased a shopping unit for 35 years and covenanted to use it as a supermarket and keep it open during the usual hours of business. The defendant gave notice to the plaintiffs of their intention to close the supermarket, which had made a substantial loss the previous trading year. The House of Lords held that a covenant in a lease of retail premises to keep open for trade during the usual hours of business was not, other than in exceptional circumstances, specifically enforceable, since it was the settled practice of the court not to make an order requiring a person to carry on a business. That practice was based on sound sense, as such an order required constant supervision, was only enforceable by the quasi-criminal procedure of punishment for contempt and might cause injustice by allowing the plaintiff to enrich himself at the defendant’s expense if the defendant was forced to run a business at a loss. We are the courts of equity not the court of criminal jurisdiction 3- Could the defendant deliberately perform badly? Equity will not act in vain – Contrast artistic/technical services - Court has devised some rules: can get specific performance for technical services. e.g. computer expert, electrician. cannot get specific performance for services which involve artistic / mix work. Court cannot assess. In fact can assess it. Everyone is unique. e.g. vase or clay pot example. It has different size, shapes, clourings, designs, paintings. Because assessing the artistic works involves the application of subjective element whether the work is done with absolute will and intention. The courts cannot go for subjective test. 4- Will claimants be required to work in close proximity? Has their relationship broken down? The courts are reluctant to exercise their power of granting specific performance. Mandatory Injunction: A court order compelling Defendant to undertake an act (i.e. positive order) Prohibitory Injunction: A court order restraining Defendant from undertaking an act (i.e. negative order) Injunctions can be: Final: Awarded at trial after case decided

Interim: Awarded pending trial (due to urgency) Interim means at the early stage - relief is given example: A is running a seasonal fruit market and juice centre. A contracts with B to provide seasonal fruits. B refuses to sen grapes in summer. Can A apply for interim mandatory injunction? ANSWER: "Suit for specific performance of contract and interim mandatory injunction" THIS is a matter of urgency - quick relief system. Interim injunctions can be granted: with notice (i.e. defendant is aware of application) without notice (i.e. order granted and then defendant is told) All injunctions are discretionary Interim mandatory injunction (“IMI”) Example: A contracts with B for sale of land. A files a suit for specific performance, mandatory injunction and prohibitory injunction against B. A also files an application for interim mandatory injunction asking the court to allow A to start construction at the very early stage. What would happen if the court allows A to start construction on the land? If at the end of the trial it is revealed that either the agreement was fake or A lost the case; would the court then order for demolishing of the building? ANSWER: IMI is not in practice in the courts because at the end the establishment of the prior property would not be possible. Why might you want an IMI? Urgency – May need action to be taken before trial (e.g. if you want specific performance at trial but it’s too urgent to wait) - See e.g. Sky Petroleum where IMI granted Shepherd Homes Ltd v Sandham (1970) ‘High degree of assurance that at trial it will appear the injunction was rightly granted and the claimant would win the case’ Locabail International Finance v Agroexport (1986) Held: Court should be reluctant to grant interim mandatory injunction unless cogent evidence is available showing the chances of winning at trial. Interim Prohibitory Injunction (“IPI”)

Example: A is threatening B to dispossess her from her property. A is continuously visiting the property and there is apprehension to B that she would be dispossessed from the property. B has a remedy to file a suit for prohibitory injunction along with an application of interim prohibitory injunction. There is a high chance that the court would grant her IPI to safe the property from being destroyed or misappropriated. A would be restricted from the visiting the property. At trial, B needs to prove that A does not have any kind of interest or link with the property. Why might you want this? E.g. to stop nuisance/breach of copyright/breach of confidence/ Urgency – To prevent (further) damage pending trial Nuisance means playing loud music at midnights, throwing garbage at your doorstep, someone has stolen your songs and now going to sell them. starting construction at midnight as there is hot weather during the day.6:10 APPLICABLE TEST FOR IPI: American Cyanamid v Ethicon (1975) (1) Serious question to be tried: Case must not be frivolous / vexatious (Morning Star v Express Newspapers (1979)) false means not according with truth or fact; incorrect. In law, frivolous litigation is the practice of starting or carrying on lawsuits that, due to their lack of legal merit, have little to no chance of being won. Vexatious litigation is legal action which is brought solely to harass or subdue an adversary. It may take the form of a primary frivolous lawsuit or may be the repetitive, burdensome, and unwarranted filing of meritless motions in a matter which is otherwise a meritorious cause of action. The "moron in a hurry" phrase was first used by Mr Justice Foster in the 1978 case Morning Star Cooperative Society v Express Newspapers Limited, in which the publishers of the Morning Star, a British Communist Party publication, sought an injunction to prevent Express Newspapers from launching a new tabloid, which was to be called the Daily Star. This was a vexatious claim so IPI was refused. Example: A is a photographer. He shoots some pictures of Model B. The pictures are in objectionable state. There arises a dispute on the payment. A threatens to publish and in fact later on published those pictures of B in his newspaper which were to be released next morning. B would file a case of IPI restricting the sale of those newspapers.

Question: Whether she would succeed or not? Answer: IPI would be granted. As the dignity of a woman is under stake. Critical analysis: IPI can be refused as well because the lady is a model herself. She had fully consented to shoot such vulgar pictures with an intention that those might be published for sale. So who could she not request the court to stop the publication when her objective of shooting such pictures is going to be fulfilled. (2) Where the Balance of Convenience lies This has two parts: - Adequacy of damages test a- If IPI is refused but claimant wins at trial, can the claimant be compensated for the pretrial losses? Can the defendant pay those damages? AND b- If IPI is granted but claimant losses at the trial, can the defendant be compensated for the pre-trial losses? Can the claimant pay those damages? ------------ Note: It depends on the facts of the case.2:33 PM - Other factors (Associated newpapers plc v insert media) Held: Damage of goodwill of business would be assessed. (Potters - Ballotini Limited) Held: Closing down business entirely. (Catnic Components Limited v Stressline) Held: Preserving substantial investment. (3) Status quo ante: This is the last resort test for IPI. (Garden Cottage Foods Limited v Milk Marketing Board) Held: What were the state of affairs before the last change? Put back the parties in a position before last act complained off. Usually status quo favors the claimant (as last act complained of is usually whatever the claimant is suing the defendant for). Only delay can defeat the equity. If the claimant has failed to bring the suit within that allotted, court will refuse to grant injunction. - Put the parties back in a position they were before.

Freezing Order

What is a freezing order? Specific type of interim prohibitory injunction – Stops defendant dealing with their assets (i.e. prevents dissipation/removal). Usually awarded pre-trial and granted without notice.

Why might you want a freezing order? To ensure defendant can pay damages at full trial. What sorts of assets might you seek a freezing order against? Aeroplanes - Allen v Jambo Holdings Ltd (1980) Ships - The Rena K (1979) Choses in action / cash / bank account /bonds / shares - CBS United Kingdom Ltd v Lambert (1983) Example: Mr. A is dealing with the movies of Mr. B. One day, Mr. B can to know that Mr. A has actually got copied some of the movies into his laptop and is going to sell it in the market to the rival company. Mr. B wants to freeze that laptop. What remedy he has? Example: Mr. A has filled a case for damages of defamation against a woman H. H has numerous properties but after the starting of suit she is going to sale out the properties. So Mr. A asks the court to freeze the properties till the final decision of the suit. Does it give the claimant rights over the assets? The Angel Bell (1981) – Personal rights only, meaning that no possession is to be given to the claimant. When will the court exercise its discretion to grant a freezing order? APPLICABLE TEST FOR FREEZING ORDER Derby & Co Ltd v Wheldon (1990) a- Threshold – Good arguable case b- Grounds for believing D has relevant assets in the jurisdiction. Can apply for extraterritorial order but will not be granted if “unduly oppressive” Re BCCI (1994) c- Real risk of dissipation / selling off the properties d- Objective assessment – Look closely at the facts for evidence to support your arguments…. e- Evidence of misappropriation (JSC BTA Bank v Ablyazov) (2009)

Question: What happens if the freezing order is granted?Claimant must an undertaking to pay the damages at the final trial. - Defendant would also be allowed the living expenses ( Z Limited case) and /or loss to business if needed (Normid Housing case) Condition: Third parties should be informed (Law Society v Shanks) e.g. clients, purchaser of that assets (Search Order) Question: What is a search order? It is a specific type of court order regarding interim mandatory injunction - Requires the defendant to give permission to the claimant to enter the premises and search for / seize any specified items. Search order is granted without notice to other party. Question: Why might you want a search order? to seek evidence to support the case at final trial. Question: When might you seek a search order? When you are concerned that the defendant will hide or destroy the evidence. e.g. documents or weapons. Question: Can the claimant make a forceful entry after obtaining search order? No - the defendant can refuse the entry but will then be liable for contempt of court. Question: When will the court exercise its discretion to grant a search order? (Anton Piller KG v Manufacturing Processes Limited) a- Threshold - extremely strong prima facie case b- Damages (actual or potential) must be very serious for claimant (similar to balance of convenience test for IPI) c- Clear evidence that defendant had incriminating evidence against him in his possession and there is a real risk of removal / destruction of that evidence - must have a clear and compelling ground for obtaining search order. (Lock International v Beswick) Held: Courts need to infer the likely destruction of evidence at the hands of defendants from the previous conduct of defendants. --- Note: If search order is not granted, then the claimant must apply for IMI. Question: What happens if the search order is granted?

Defendant can make an emergency application challenging such order. If unsuccessful, the defendant must comply with the order or else would be in contempt of court. Safeguarding Procedures for making a search:- claimant can go no further than the maximum extent necessary to achieve the purpose for which the search order was granted. - Solicitor would accompany the search order and would make a list of the materials seized.- no material would be seized unless it is clearly mentioned in the order. - Timings during which the search would be conducted : 09:30am - 05:30pmDefendant should be present- If defendant is a female, then the claimant must be accompanied by female solicitor. Chappel v UK - Issue: Whether the search is interference with the right of privacy of a person? Held: Yes, unless the safeguarding procedures are strictly complied with. Account of profits Question: What is an account of profits? A personal remedy requiring the defendant to give up 'disgorge' profits. Question: When might you seek this remedy?- breach of fiduciary duty / constructive trust (FHR v Cedar Capital) - Breach of confidence / breach of copyright- Unlikely for breach of contract as the common law remedy of damages is available Question: When this remedy is avaialble? Final remedy only as the case should be finally decided. EXAM STRUCTURE FOR SOLVING PROBLEM QUESTION ON EQUITABLE REMEDIES: 1- What is the legal cause of action? 2- What remedies will the claimant seek at final trial? 3- mention the common law remedies briefly if appropriate. 4- Then discuss any relevant equitable remedies. 5- What test does the court apply? 6- Is the claimant likely to succeed? 7- Is there any urgent need for an interim remedy? 8- what test does the court ...