Other Remedies Flashcards
Specific Performance and Injunctions
- Equitable remedy: discretionary to equity maxims e.g. delay
- An order of specific performance obliges a party to a contract to perform his or her duties under that contract
- A party is already required to perform his duties under a contract by virtue of the agreement itself, but refusing to comply with an order of specific performance is a refusal to obey a court order. Leaves the guilty party liable to be attached and committed for contempt of court
Adequacy of Damages
- Specific performance will not be awarded where the plaintiff already has an adequate remedy at common law, i.e. damages.
- Damages will rarely be considered an adequate remedy in circumstances where the subject-matter of the contract is unique. This would be the case in contracts for the sale of land: here, specific performance is the usual remedy
Sky Petroleum v VIP Petroleum [1974] 1 All ER 954,
- Are damages adequate in a scenario where goods which are ordinarily readily available may suddenly become scarce? No. Can’t take damages and buy elsewhere. Deeper issue
- In the present case, suppliers of petrol under a contract were refusing to continue to supply.
- An interlocutory injunction was granted against the supplier.
- There was an on-going oil crisis which meant
that the purchaser under the contract could not obtain supplied of petrol from alternative sources. He was in danger of being forced out of business if he could not get petrol supplies from the seller here. - Accordingly, damages were not an adequate remedy
Contracts Requiring Constant Supervision: Not usually SP. Ryan v. Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116
- The courts are averse to ordering specific performance where such an order would require constant supervision by the courts.
- Lease contained a term giving the tenant a right to have a resident porter constantly in attendance at a block of flats
- SP refused, performance of this term as it was an on-going obligation which would involve repeated and potentially unceasing applications to the court if difficulties arose
Posner v. Scott-Lewis [1986] 3 All ER 513: Contrary to Ryan
- Landlord of a block of flats was under an obligation to employ a resident porter to keep the communal areas clean, collect rubbish from the flats and maintain the central heating and boilers.
- The landlord duly employed someone to perform
these tasks, but he was not actually “resident”. - Did order SP, gave landlord 2 months to find a resident porter, if the landlord had not obeyed the
order within two months, the tenants could simply initiate enforcement proceedings.
Contracts for Personal Services: SP not usually awarded
- Contracts for personal services will rarely be the subject of specific performance.
- Courts are reluctant to intrude on personal relationships by compelling persons to work
together who would otherwise be unwilling to do so. - Nature of the relationship is difficult. Soccer play to play for a particular team, etc. Very difficult to enforce. Play for team, but they play badly. Not a breach of contract, or is it? Large grey area.
- This general rule extends to contracts of employment, partnership, apprenticeship, and so on
- Courts got around this. Said that, you have a contract with a particular say, theatre. Refusing to perform the contract. Contract for PS, difficult to award SP. But, instead, we will issue an injunction to prevent you working in any other theatre. Really, coercive measure.
Lumley v. Wagner (1852) 1 De GM & G 604
- An opera diva - one Mademoiselle Johanna Wagner - had contracted to sing at the plaintiff’s Her Majesty’s Theatre (and nowhere else without prior permission) for two nights a week for three
months. - She was then offered a better rate by the manager of Covent Garden opera house and promptly broke her contract with Mr Lumley in order to be able to sing there instead.
- The court refused to decree specific performance of the contract between Mlle Wagner and Mr Lumley, but it granted an injunction preventing her from singing elsewhere.
- Of course, the result of this injunction would be to create a strong incentive for the defendant to perform her obligations under the original contract
Discretion
Specific performance (or an injunction) cannot be
requested as of right. It is a discretionary remedy. On the other hand, discretion is never exercised arbitrarily or capriciously, and certain principles have developed to guide the exercise of judicial discretion here. Factors affecting the decision whether to grant specific performance include:
i) Delay in seeking specific performance (laches).
ii) Whether the party seeking specific performance is
himself/herself prepared to perform his/her side of the bargain.
iii) The benefit of specific performance to one party
weighed against cost of performance to the other party.
iv) Hardship, Patel v Ali [1984]
v) Consideration. The maxim “equity will not assist a
volunteer” leads to the conclusion that specific
performance will generally not be granted of a contract merely under seal without consideration (or with purely nominal consideration).
vi) Whether or not there has been misconduct on the party of the party claiming specific performance: “one who comes into equity must come with clean hands”.
vii) Whether or not mutuality exists. This means that if X’s obligation under the contract is such that it cannot be specifically enforced, then Y’s obligation equally will not be the subject of an order of specific performance. [Price v Strange 1977]
Patel v. Ali [1984] 1 All ER 978
- Mrs Ali contracted to sell her house to Mr Patel at
a time when she had one child and was in good health. - She spoke poor English. Through the fault of neither party, completion was delayed. By the time the court had to consider whether specific performance should be granted in favour of Mr Patel, Mrs Ali had had two more children and cancer had required the amputation of her leg.
She claimed that specific performance would require her to move and her poor English, together with
her disability, made her very much reliant on the
assistance of friends and relatives living close by the
home she had contracted to sell. - Goulding J exercised his discretion not to order specific performance, subject to Mrs Ali paying into court a sum of money ensuring Mr Patel would receive his damages, once calculated. Specific performance here would inflict a “hardship
amounting to injustice”
Rectification
- Rectification is an equitable remedy.
- Where parties are agreed on the terms of a contract but, by mistake, record them incorrectly in a subsequent written document, the court may rectify the error (and order specific performance of the
rectified agreement). - The remedy of rectification is considered an exception to the parol evidence rule: oral
evidence may be admitted to establish the error in the written instrument. - There are 4 basic criteria to be satisfied before rectification can be sought:
i) a concluded prior agreement must have been in
existence, upon which the subsequent written
(erroneous) document was based;
ii) the written document must fail to register that which was actually agreed by the parties;
iii) the written document must fail to register the common intention of the parties;
iv) it must be equitable to grant the remedy. If third parties have accrued rights based on the written document, for example, rectification may be refused.
Clark notes, “[t]he remedy of rectification is not
dispensed liberally to litigants” and “the onus resting upon the party seeking rectification is a heavy one, for that person must adduce convincing proof, manifested in some outward expression of accord, which shows that the common continuing intention of both parties was in favour of the term
omitted from the written document.
Rescission
- Rescission has already been examined at various stages in this course. To recap, it is an equitable remedy, the effect of which is to unstitch a contract, putting the parties back into the positions which they occupied before the contract was entered into. It is not a general remedy, i.e. it is not a remedy
which can be sought in all cases of breach of contract. - Rescission is available only in a limited number of
circumstances, such as mistake, misrepresentation, duress or undue influence. Reference should be made to the particular lecture notes covering these doctrines to see how rescission operates in practice in an individual case.
Kiely v Delaney [2008] IEHC 69
- Where a contract for the sale of land was entered
into by the parties on the mistaken belief that a right of way (which was important for access) was included. - In fact, the right of way had been sold in a previous sale of a strip of land.
- Although the purchaser still wished to take the land
with the defect, the vendor wished to rescind. - MacMenamin J pointed out that a vendor is not entitled to rescind capriciously or arbitrarily and he went on to state that imprudence or recklessness on the part of one party to a contract may go so far as to bar that party from rescinding where he otherwise would be entitled so to do.
- MacMenamin J stated: “I do not consider that the authorities fully establish that ordinary imprudence on the part of a vendor’s solicitor would be sufficient to prevent rescission. But what occurred here must be seen as a preparedness on the part of the vendor’s solicitor to take a calculated risk
when there were significant warning signs to the
contrary. I think this fell well short of what would be
considered ordinary prudent conveyancing practice.
This was compounded by the statements made by the auctioneer prior to bidding. All these circumstances, taken together, justify a finding of a very high degree of imprudence sufficient on the facts to constitute a bar to rescission (at para.63). - An appeal against the decision of MacMenamin J in Kiely was dismissed by the Supreme Court: [2012] IESC 41.
