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Equity & Trusts : Equitable Remedies Background/intro
?????Remedies developed at common law in equity: 1) Specific Performance 2) Injunction
* 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 o Never a guarantee you will get an equitable remedy. o 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 o Robinson v Harman (1848)
? ?? ? To get specific performance, you have to show that Damages are not adequate remedy o Adderley v Dixon (1824), Sir John Leech V-C: o '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: 1
??? ?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. 2
? ?? ? 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, but reasons for refusal to enforce spec performance are: o (1) If it would require constant supervision 3
o (2) If it would be against public policy: De Francesco v Barnum (1890): Fry LJ: courts did not wish to turn contracts of service into contracts of slavery'. o (3) If would lead to imperfections in performance: Megarry J, C.H. Giles & Co v Morris (1972). o Also court unlikely to grant an injunction (mandatory or prohibitory) if it would have the same effect as specific performance and specific performance would not be appropriate for the above reasons (Page One Records v Britton (The Troggs) (1967)).
? ?? ? Is the service irreplaceable? (SP maybe if service is irreplaceable). o Courts won't grant SP where performance requires constant supervision by the court. o Verrall v Great Yarmouth BC---SP awarded because the service was irreplaceable, C could not find any alternative premises o Re the National Front. o They want a venue for their national conference; they approach Great Yarmouth BC (Conservative at the time); they allow them to rent out a pavilion. o Tories voted out, Labour comes in. Labour don't want the National Front and cancel the contract. o They can't find anywhere else to take them, after looking for months. o So they sue Great Yarmouth BC. o Denning, HELD: grants specific performance. An extreme example---something which is irreplaceable, the venue cannot be replaced because they haven't found anywhere else to host their conference, and you can't deny, on free speech grounds, a political party a platform for their conference. C couldn't find alternative premises; and the political effects of cancelling could not be compensated in damages. o Evans v BBC and IBA (see below): re an interim mandatory injunction granted to compel Ds to screen a party political broadcast for similar reasons.
? ?? ? Is the service sufficiently well defined?
o Court must be able to determine whether D has properly complied with an order for SP, so the obligations must be welldefined. o If contractual obligations are vague, or entail a small degree of subjectivity ? no SP, as will be impossible for court to tell whether the D has performed their obligations. o Ryan v Mutual Tontine Westminster Chambers Association (1893): where court refused to award SP of a contract to be a 'porter'.
4 o CF Posner v Scott-Lewis (1937): awarded SP where the obligation was simply to 'hire' a resident porter. o The obligation to 'hire' a porter is a one-off, well-defined event. CF Ryan, an ongoing obligation to perform the duties of a porter---duties not well-defend in the contract, and would also have required regular supervision.
? So, unless it's a service which the court can guarantee performance of, very unlikely to get specific performance for a service contract
? ?? ? SUPERVISION o Courts will consider need to supervise the specific performance order. SP unlikely if performance of the contract requires supervision by the court. o Co-Op Insurance Society v Argyll Stores (Holdings) (1998), HL: o HELD: no specific performance, because it won't serve any purpose. HL overturned CA order for SP of a covenant in a shop lease which required the tenants ('magnet' tenants likely to attract other good tenants) to keep the premises open as a supermarket during usual hours of business (the shop had been closed because it was losing money). o HL: would require constant supervision by the court, no SP granted. o Ryan v Mutual Tontine Westminster Chambers Association (1893) o Posner v Scott-Lewis (1987) o Both above cases re block of flats where the porter/concierge should be doing his job. o Ryan: won't grant specific performance for the porter/concierge to do his job, because you can't supervise him the whole time. o CF Posner; does grant specific performance, because this was about the actual hiring of a concierge, which is easy to supervise whether it's done or not. o So if requires constant supervision, specific performance is less likely to be granted o Another point from Ryan [[see above, 'well-defined' point]---if too difficult to define the duties of the services, because you need to be able to draft the court order for specific performance. In Ryan, the 'duties of a resident porter' wasn't definable enough, can't draft a court order saying exactly what needs to be done
? ?? ? Subjectivity o The question of whether the services are sufficiently objective. o If the contract affords D a degree of discretion as to the performance of their obligations ? can be difficult to court
5 to determine whether they have actually carried them out. o So distinction between technical services: the obligations can be objectively defined, allowing D's performance to be assessed by the court against those objective criteria; o And artistic services (assessment of which is subjective).
? ?? ? Giles & Co v Morris (1972): o If you have a contract for personal services (eg singing, dancing) you can never get specific performance, because you can never guarantee the quality of what you'll receive. o So courts won't grant specific performance for a service where the performance is subjective, where you can't guarantee the quality of the service. o A court cannot assess whether an artist has deliberately performed their obligations badly, or simply had a bad day. So not possible to tell whether they have breached the order for SP.
??? ?As Equity will not act in vain---SP won't be awarded, because won't be able to assess whether the order for SP is breached or not.
??? ?'Court order compelling D to undertake an act or to prevent D from carrying out an act'.
??? ?Is a remedy in personam, like SP.
??? ?Available in many areas of law, commonly used in contract, tort and family law.
??? ?High Court has power to grant injunctive relied by vitue of Senior Courts Act 1981, s37(1);
??? ?and for County Court under County Courts Act 1984, s38 (as amended by Courts and Legal Services Act 1990, s3).
? ?? ? Types of injunction o Mandatory ? ordering something to be done or undone. o or Prohibitory ? restraining a person from doing something.
? ?? ? Can be granted at different stages of proceedings, and can endure for different lengths of time o Final (or perpetual): where court makes an order for an injunction at trial---doesn't mean that the injunction endures forever (it may be limited in time); rather, means that the order finally settles a dispute between the parties. o Interim (or interlocutory) (issued prior to full trial): and effective only until trial or a date specified in the order. They may even be granted before a wrong has taken place
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