#4632 - Remedies - GDL Equity and Trusts

Following equitable remedies:

1. Specific performance

2. Injunctive relief

3. Rescission

4. Rectification

5. Account

Originally only available through Courts of Chancery and damages only through common law courts

Common Law Procedure Act 1854: granted common law courts power to grant equitable remedies

Chancery Amendment Act 1858 (now see s50 Senior Courts Act 1981) - gives Courts of Chancery power to award damages in lieu of equitable remedies

Judicature Act 1873: removed the need for claimant to commence claim in the appropriate court

• Equitable remedies not available as a right – discretion of the courts – exercised on certain settled principles

• Will only be granted where common law remedy would not remedy the wrong adequately

• Court will take into account equitable principles - maxims

Specific Performance

• Requiring a party to carry out his obligations under a contract – can only be sought in respect of positive obligations (negative can seek injunction)

• Failure to comply: contempt of court – punishable by fine/imprisonment

Damages not adequate

• Only granted where damages is not adequate remedy

Adderley v Dixon

Not a distinction btw realty and personalty – but because damages may not be a complete remedy

• Land: ‘damages at law…may not be a complete remedy to the purchaser to whom the land may have a peculiar and special value’

• Sale of stock/goods: ‘damages at law, calculated upon the market price of the stock or goods contracted for, inasmuch as with the damages, he may purchase the same quality of the like stocks or goods’

Land (realty), including leases:

• Unique and therefore SP will be ordered on a contract to sell, buy or grant an estate

• Even though damages would be adequate for the seller/granter – court teats both parties equally so orders SP for either party

Personal Property (pure personalty)

• Not usually unique so SP won’t normally be granted

If however – the item is unique or identical replacement cannot be obtained – SP can be awarded:

1. Stocks and shares not available on the market: Duncuft v Albrecht. Such as where they are in a private company – e.g. Oughtred v IRC; Neville v Wilson

2. Articles of unusual beauty, rarity and distinction – peculiar value to the claimant; Falcke v Gray (Ming vase); Phillips v Lamdin (C purchased property and then found ornate door had been removed)

Contracts for service

• Difficult to assess adequacy of damages in the same way – hard to classify a service as ‘unique’ – unless there is only 1 person who can perform it – tend to focus on whether losses could be quantified if service isn’t performed

  • E.g. SP of an agreement to provide premises for a National Front annual conference – Verall v Great Yarmouth Borough Council – C could not find replacement and political effects of cancelltion couldn’t be quantified

  • Evans v BBC and IBA – interim mandatory injunction granted to compel defendants to screen a party political broadcast for similar reasons

Supervision

• SP wont be awarded if performance of the contract requires constant supervision by the court

• Co-operative Insurance v Argyll Stores: covenant to keep the premises open as a supermarket – Lord Hoffmann – ongoing activities – may require ‘indefinite series of rulings’ by the court to ensure order was carried out

  • Only means of enforcement was the quasi-criminal procedure of punishment for contempt

Contracts for personal services

• S236 Trade Union and Labour relations (Consolidation) Act 1992 – no court shall compel an employee to do any work by way of (a) an order for specific performance or (b) an injunction restraining a breach or threatened breach

• Cases other than employment where a contract is for services - equitable principles usually prevent SP – but no absolute prohibition

Reasons for refusal to enforce:

1. Would require constant supervision – c.f. Ryan v Mutual Tontine Westminster Chambers Association and Posner v Scott-Lewis

• Is the contract adequately/clearly defined for the court to supervise it

• Ryan – landlords covenant in a lease to provide porter services – the only way they could supervise is to be there 24 hours a day

• Posner – much easier to supervise – turn up on one occasion and see if it has been carried out

2. Vs. public policy – De Francessco v Barnum – Fry LJ said the courts did not wish to ‘turn contracts of service into contracts of slavery’

3. If it would lead to imperfections in performance – Megarry J in C.H. Giles & Co. ltd v Morris

• Example of the opera singer

• Court very reluctant to give qualitative assessments - especially difficult in artistic pursuits – very subjective

• Court also unlikely to grant an injunction (either mandatory or prohibitory) if it would have the same effect as SP – Page One Records Ltd v Britton (t/a The Troggs)

Mutuality

• Availability of specific performance to both parties to a contract relating to land even though damages would be adequate for the seller

• Mutuality also requires that if specific performance is not available to one party then it cannot be available to the other:

1. As specific performance will not be awarded vs. a minor – he cannot obtain such an order himself – Lumley v Ravenscroft

2. As a person will not be ordered to carry out an employment contract; he cannot obtain specific performance vs. the employer

Mistake

• Although a contract is only rarely declared void for mistake – a court can sometimes refuse to order the mistaken party to carry out the contract – leaving the remedy of damages for the other party

“Clean hands”

• You must come to court with clean hands when trying to obtain SP – cannot obtain an equitable remedy if you have acted unconscionably

• Claimant must have performed, or be willing to perform at the proper time, all his own obligations under the contract - e.g. Coatsworth v Johnson – where SP of a contract to grant a lease was refused as the tenant was In breach of the lease’s requirement to cultivate the farm in a ‘good and husband like manner’

Delay or Laches

• No statutory limitation period for SP action (s36(1) Limitation Act 1980); but unreasonable delay will defeat a claim – ‘delay defeats equity’ – Eads v Williams

• What amounts to unreasonable delay depends on the circumstances of the case – e.g delay will be excused where purchaser of land seeking legal title is already in possession of the land

Hardship

• SP will be refused if it will cause unnecessary hardship to one party or to a 3^rd party

• Refused in Patel v Ali – where one year after the contract the purchaser issued a writ for SP and three years later sought summary judgement – meanwhile the D, Mrs Ali, had contracted bone cancer and had her leg amputated

• The fact that an order may require a seller to accept a sale price below market rate would not itself count as hardship but may if combined with other factors

Injunctive Relief

• Injunction – order of the court requiring a person to refrain from doing a particular act or – to do a particular act

• Like SP = it is a remedy in personam

• Widely available in many areas of law – contract, tort and family

• High Court has power to grant injunctive relief by virtue of s37 (1) of the Senior Courts Act 1981 – similar power for the County Court under s38 County Courts Act 1984 (amended by s3 Courts and Legal Services Act 1990)

Rights to be protected

• Only to protect a recognisable legal or equitable right

• Day v Brownrigg – C refused an injunction which sought to restrain his neighbour from calling his house Ashford Lodge (same as the C’s house) – no legal or equitable right had been infringed so no remedy could be granted

• Paton v Trustees of British Pregnancy Advisory Service – husband could not get injunction to prevent his wife from having an abortion

Types of injunction

1. Prohibitory : restraining a person from doing something

2. Mandatory: ordering something to be done or undone

• Can be granted at different stages of the proceedings and may endure for differing lengths of time:

1. Final (or perpetual) – where the court makes an order for an injunction at trial - doesn’t last forever but finally settles dispute btw the parties

2. Interim (or interlocutory): issued prior to the full trial taking place and is effective only until trial or a date specified in the order

They can also be granted with or without notice

1. With notice: usually where a party applies for an interim injunction, notice is given to the other party so that both can present evidence and arguments for and vs. the granting of the order at the hearing – used to be called inter partes (btw the parties)

2. Without notice: if extremely urgent and if there is a need for secrecy (e.g. a Search Order or a Freezing Order) – pay apply for an injunction w/o notice – only the applicant appears at the hearing of the application and the other party is not notified – used to be called ex parte (of the one part) – ordinary interim injunctions w/o notice are rare and the case must be overwhelming on the merits – Bates v Lord Halisham of St Marleybone

• If a persons rights have not yet been infringed but an infringement is threatened or feared and serious damage is likely to ensure – they may apply for a quia timet (because he or she fears) injunction – not a separate category – but indicates that the injunction is sought before the injunction

Timeline:

• Threatened breach: apply for quia timet injunction to try to prevent breach (could be mandatory or prohibitory and without notice if sufficiently serious/urgent)

• Breach occurs

• Issue claim for breach. Claim for will expain the breach, outline the evidence and apply for final remedies – usually damages, SP, perpetual injunctions etc.

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