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GDL Law Notes GDL Equity and Trusts Notes

Equitable Remedies Notes

Updated Equitable Remedies Notes

GDL Equity and Trusts Notes

GDL Equity and Trusts

Approximately 631 pages

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Equity & Trusts : Equitable Remedies

Background/intro

  • Remedies developed at common law in equity:

  1. Specific Performance

  2. Injunction

    • Mandatory

    • Prohibitory

  3. Freezing order

  4. Search order

  5. Account of Profits

  • Originally, these were only available when petitioning the courts of chancery, whilst damages was the remedy of the common law courts.

  • Judicature Act 1873: removed need for C to commence their claim in the appropriate court.

  • A remedy must support a Recognisable legal or equitable right (Day v Brownrigg (1878))

  • Discretionary remedies, not available as of right

    • Never a guarantee you will get an equitable remedy.

    • Will only be awarded where the common law remedy of damages would not adequately remedy the wrong.

(1) Specific performance

  • Common law—‘remedy of right’ = damages

    • Robinson v Harman (1848)

  • To get specific performance, you have to show that Damages are not adequate remedy

    • Adderley v Dixon (1824), Sir John Leech V-C:

    • ‘Courts of Equity decree the specific performance of contracts ... because damages at law may not in the particular case, afford a complet remedy’.

  • Specific performance is a court order: ‘Court order compelling D to perform the positive obligations under a contract’.

  • So only available for positive obligations, not for breach of negative obligations.

  • Must be a valid contract to allow specific performance remedy.

  • Full trial: It’s a final remedy, only available after the conclusion of a full trial

  • Failure to comply with an order for specific performance = a contempt of court, punishable by imprisonment or fine.

Need to distinguish contract for goods and services

Contract for goods-LAND:

  • Presumption: contract for sale of land is specifically enforceable. Because each piece of land is unique.

  • So specific performance will be ordered on a contract to buy or sell land, or to grant an estate, such as a lease, or an interest in land.

  • Although damages would be an adequate remedy for the sellor/grantor, the court treats both parties equally and so orders specific performance for either party.

  • Verrall v Great Yarmouth BC (1981)

Contract for goods—Personal property/CHATTELS

  • Spec performance only if property is unique --‘quality of uniqueness’—need to show that the property is so unique that damages would not be adequate compensation.

  • Stocks & Shares

  • Specific performance may be granted for stocks & shares not available on the market (Duncuft v Albrecht (1841)), and Neville v Wilson (1996)).

  • Very unlikely to get specific performance for publicly traded shared.

  • Goods

  • General rule: spec performance not granted for goods, as C can usually be compensated adequately in damages.

  • Unless goods are of unusual beauty/rarity/distinction (so equivalent goods are not readily available on the open market).

  • Falcke v Gray—a Ming vase, specific performance available; CF Cohen v Roche, antique chairs which were not extraordinary, and which had been purchased purely to be resold at a profit

  • Pusey v Pusey (1684):

  • A piece of property sold from one member of family to another; was purported to be a battlehorn owned by King Canut.

  • Contract is breached, court awards specific performance: that particular piece of property is completely unique, irreplaceable—grants specific performance.

  • Falcke v Gray (1859)

  • Re a Ming vase.

  • Is handmade, so by its nature is unique.

  • A lodger staying with landlady; wants to buy this vase from the landlady; he takes advantage of her not knowing its true worth. They had entered contract, she refused to give it when she discovered its true value.

  • He sued.

  • Court HELD: would normally have got specific performance, because unique property; BUT, he hadn’t come with clean hands, he had deceived her, so it wasn’t awarded, equitable remedy is discretionary.

  • Cohen v Roche (1927)

  • Antique dealer, buys 8 specific types of white chairs at an auction. Auction doesn’t give chairs. He sues for specific performance.

  • HELD: no specific performance, says that the chairs were ‘ordinary items of commerce’. The key distinction is that he only wants to buy the chairs so that he can then sell them; his only interest is not in the chairs itself, but in making a profit—which can be compensated for by damages.

  • Philips v Lamdin (1949): C purchased D’s property, only to discover that an ornate door once in the property had been removed. Court HELD: D had to take reasonable care to preserve the property and the door had to be returned.

  • The goods may be of particular value to the Claimant--Behnke v Bede Shipping co (1927)

  • C had contracted to purchase a ship which precisely met the requirements of German shipping regulations, allowing them to use it immediately without modifications; but was also available at a significant discount because of the age of the ship.

  • Court HELD: the ship, although not particularly special to others, was of ‘peculiar and practically unique value’ to the C.

  • Sky Petroleum v VIP Petroleum (1974): contracted to buy petrol; supply is cut off due to oil crisis. Can’t find a replacement, so in those specific circumstances (can’t get oil anywhere else), specific performance is granted.

Contracts of employment—can never get specific performance for employment contracts:

  • S236 Trade Union and Labour Relations (Consolidation) Act 1992 + Labour Relations (Consolidations) Act 1992

  • De Francesco v Barnum (1890)-whether too onerous, akin to ‘slavery’

  • Extreme example, but shows how reluctant courts are to make people do things they don’t want. Not going to force others to work with others who have sued them.

Contracts for services

  • Where contract is for provision of services rather than goods, often difficult to assess adequacy of damages in the same way. Can be hard to classify a service as ‘unique’ unless there really is only one person in the world who can perform it.

  • Instead, the courts tend instead to focus on whether your losses could be quantified if the service was not performed.

  • Equitable principles usually prevent enforcement. Not absolute prohibition,...

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