4. Equitable Remedies Flashcards
EQUITABLE REMEDIES
Possible causes of action (identify at start)
- Breach of contract
- Breach of copyright
- Breach of T
- Fraudulent breach of FidD
- Negligence
- Nuisance
The FINAL REMEDIES
Following FINAL REMEDIES are available:
- Specific Performance
- Final Injunction
- Rescission
- Rectification
- Account of Profits
FRem: SPECIFIC PERFORMANCE
This is a FINAL remedy. Failure to comply may result in fine or imprisonment.
Def: a court order compelling performance of positive contractual obligations. ONLY available for breach of contract.
When deciding whether to grant, court will consider (Sang Lee Investment v Wing Kwai Investment):
- lack of good faith, honesty or righteous dealing from C
- ALL of the circumstances
REQ:
- Damages must be adequate, AND
- Mutuality must exist
FRem: SP - Damages must be adequate
Established by (Adderley v Dixon). Whether damages are adequate will depend on whether contract is for goods or services.
GOODS - property must be sufficiently unique. Such as real property/land, shares not available on the market (Duncuft v Albrecht), includes private co. shares (Oughtred v IRC)
- Personal Property
- – GR: ‘ordinary articles of commerce’ are NOT sufficient (Cohen v Roche)
- – EX 1: ‘unusual beauty, rarity and distinction’ (Falcke v Gray; Phillips v Lambin; Lotus v Lamplough)
- – EX 2: in limited supply (Sky Petroleum v VIP Petroleum)
- – EX 3: Particularly valuable to C (Behnke v Bede)
SERVICES - REQs:
- Must be an irreplaceable service (Verrall v Great Yarmouth) AND/OR losses incurred by non-performance unquantifiable in monetary terms (Evans v BBC).
- Contract must not be ‘akin to slavery’ (De Francesco v Barnum).
- – This will depend on the length and how closely the parties work together (proximity).
- Quality of performance must be ascertainable (Giles v Morris), judged OBJ.
- Court supervision must NOT be required.
- – ONLY acceptable if clearly defined and not required to be constant (Co-op v Argyll cf. Capita Trust Co v Chatham Maritime J3 Developments)
NB: IMPOSSIBLE to obtain SP against employees (s.236 TULR(C)A 1992)
FRem: SP - Mutuality
GR: contract must be binding on BOTH parties, such that both parties are able to claim SP.
SP therefore not available for:
- employment contracts (s.236 TULR(C)A 1992)
- contracts with minors (Lumley v Ravenscroft)
FRem: FINAL INJUNCTION
Def: a court order requiring a party to refrain from or compelling them to carry out specific acts. Available where D MAY commit a breach of contract or where they HAVE committed a breach of T or confidence.
Will be granted to restrain the breach of a - contractual term (Lumley v Wagner; Evening Standard v Henderson), even where positive part of contract is not enforceable.
NOT available in a contract of personal service where enforcement of a - term would result in:
- award of SP, or
- situation where D can only choose between compliance with + terms of contract or no action at all.
May well be limited to what the court deems to be ‘reasonable’ in the case’s circumstances (William Robinson v Heuer).
Damages can be awarded in addition to an injunction (s50 Senior Courts Act 1981).
FRem: RESCISSION
Def: the unmaking or setting aside of a contract or deed.
- cancellation of the contract and reversion of the parties to their pre-contractual positions (the status-quo ante)
REQ:
- the contract must be voidable
The repudiating party can either do it themselves or apply to court in order to acquire a court order for rescission.
FRem: RECTIFICATION
Def: the alteration of a contract where the contract mistakenly fails to reflect the parties intentions.
- the wording of the contract is altered to reflect the contract and the contract remains valid.
REQ:
- Common mistake, OR
- Unilateral mistake and unconscionable behaviour on the part of one of the parties.
FRem: ACCOUNT OF PROFITS
Def: a court order requiring the D to surrender illegitimate profits (AG v Guardian (No. 2))
- The D must hand over any such profits.
REQ, profits must be illegitimate as a result of:
- Breach of FidD (Willaims v Barton; Boardman v Phipps)
- Bribery (AG for Hong Kong v Reid)
- Breach of confidence (AG v Guardian (No. 2) ; AG v Blake)
The INTERIM RELIEF
Before trial, the following relief may be available:
- Interim Mandatory Injunction (IMI)
- Interim Prohibitory Injunction (IPI)
- Search Order
- Freezing Order
IRem: IMI
Def: a court order requiring D to undertake a course of action.
REQ: must be a HIGH degree of assurance that, at trial, the IMI will be deemed to have been correctly granted (Shepherd Homes v Sandham; Locabail v Agroexport)
- Likelihood of being granted corresponds to likelihood of SP being granted.
- Damages are often awarded in lieu of an IMI (Wrotham Park Estate Co v Parkside Homes; Jaggard v Sawyer)
IRem: IPI
Def: a court order requiring D to refrain from a course of action.
REQ (American Cyanamid v Ethicon):
Case must concern a sufficiently serious matter
— not ‘frivolous or vexacious’ (Morning Star v Express), NB a breach of contract is auto suff.
— ‘Sufficiently serious’ is a fairly low threshold, though some prospect of success is required (Mothercare v Robson Books)
Balance of Convenience
- Court will weigh up whether it should grant the IPI based on the “adequacy of damages” by asking the following:
- – If IPI wrongly refused, will damages be adequate compensation for C and will D be able to pay? Vice versa if wrongly granted.
- Court may also consider a non-exhaustive list of factors from previous case law.
- – potential damage to a business’s goodwill (Associated Newspapers v Insert Media)
- – potential shutdown of a business (Potters-Ballotini v Weston-Baker)
- – effect on D’s investment (Catnic Components v Stressline)
- – effect on employment (Fellows and Son v Fisher)
NB: If BofCon favours neither, court will maintain STATUS QUO. Where the status quo lies will depend on the facts of the case (Shepherd Homes v Sandham). Is typically the point before D’s commission of alleged wrong, so normally this will work in favour of C (Garden Cottage Foods v MMB).
IRem: SEARCH ORDER
Def: court order permitting a C to enter D’s property in order to search for and/or seize evidence.
REQ (Anton Piller v Manufacturing Processes; Rank Film Distributors v Video Info. Centre):
- EXTREMELY strong prima facie case
- very serious potential damage/harm to C, AND
- D’s possession of evidence and a risk of its destruction (Lock v Beswick).
- – must be clear evidence that D has it and a REAL possibility that they will dispose of it, can’t just go ‘fishing’ for it.
- – Courts will consider how restrained D is in their circumstances (“fly b night video pirate” or a family man with mortgage?) (Lock v Beswick)
- Inspection must do no harm to D or their case (Anton Piller per Lord Denning)
- award of an SO must be proportionate to the threat posed by D (Lock v Beswick)
THE PROCEDURE
- Between 9:30am/5:30pm Mon/Fri
- Independent solicitor must be present, must be a female if D is a lone female.
- D or D employee must be present
- inventory must be made and confirmed by D.
- D can refuse (then held in contempt of court), allow the search and apply for variance or discharge of SO (if unsuccessful, held in CofCourt).
- Only items authorised by SO may be seized, taking of unauthorised items will result in awards of damages to D (Columbia Pictures v Robinson)
- GR: D cannot be required to divulge incriminating info (Rank Film v Video Info), UNLESS D potentially infringed IP rights (s.72 SCA; Coogan v News Group).
SOs are compatible with Art 8 ECHR, yet to be established whether can breach Art 6 ECHR.
IRem: FREEZING ORDER
Def: court order prohibiting D from removing assets from the jurisdiction. Particularly common for breaches of FidD.
Does not freeze the assets themselves, but stops D from dealing with them.
REQ (Derby v Wheldon):
- A good arguable case, must have R chance of success (Ninemia Corp v Trave), need not necessarily be >50% though.
- D must have assets within the jurisdiction, if assets are outside jurisdiction, extra-territorial FO must be applied for.
- must be a real risk of assets being dissipated/removed from the jurisdiction
- – must be a good case for this (Customs and Excise Commissioners v Anchor Food)
- – D’s character and situation will be considered.
- – Dissipation risk is assessed OBJ. (Derby v Wheldon)
EXTRA-TERRITORIAL FO
- will apply to D’s assets subject to the law of the other jurisdiction in question (Re BCCI SA (No. 9))
- only where D lacks sufficient assets in the local jurisdiction may this be applied for (Derby v Wheldon)
- Court may make allowances for D’s living (Z v A-Z and AA-LL) and business expenses (Normid Housing v Ralphs and Mansell (No. 2)) where restricting access to assets.
DEFENCES
E remedies will not be granted where D has a valid defence, these may be:
- Delay (laches)
- Conduct of C
- Acquiescence
- Undue Hardship
DELAY (LACHES)
- must be no inordinate delay in C seeking an injunction (HP Bulmer and Showerings v Bollinger). A 2 month delay has been deemd to be inordinate (Shepherd Homes v Sandham).
- claims for SP should be brought in a ‘timely manner’ (Eads v Williams)
CONDUCT OF C
- C must:
- – ‘do equity’: they must be prepared to fulfil their own obligations under a contract (Measures v Measures)
- – have ‘clean hands’: C must not have acted wrongfully themselves in relation to the claim, claim must also be brought in good faith. C will not have clean hands if they themselves are in breach of contract (Coatsworth v Johnson)
AQUIESCENCE
- where C failed to act on their legal rights, it is possible that they may be deemed to have acquiesced in D’s activity (Shaw v Applegate)
UNDUE HARDSHIP
- E remedies will not be granted where they cause D (Patel v Ali) or 3rd parties (Maythorn v Palmer) undue hardship.
