Remedies

Question 1

What do you need to bring a claim in equity?

Answer 1

A recognisable legal or equitable right.

Question 2

Possible causes of action

Answer 2

Breach of contract
Breach of copyright
Breach of confidence
Fraudulent breach of fiduciary duty
Negligence
Nuisance

Question 3

What are the remedies?

Answer 3

Specific performance, Injunctions, rescission, rectification, account of profits, interim mandatory injunctions, interim prohibitory injunctions, search orders, freezing order

Question 4

What is specific performance?

Answer 4

A court order compelling the performance of positive contractual obligations under a contract
It is only available where there has been a breach of contract. This means there must have been a valid contract in the first place

Question 5

What 2 things does one need in order to get specific performance?

Answer 5

Damages must not be adequate and

Mutuality must exist

Question 6

Damages not adequate…

Answer 6

(Adderley v Dixon). Damages are available as of right, where as SP is only available at the court’s discretion.

Whether damages are adequate will depend on whether the contract is for goods or services

Question 7

Damages not adequate - Contracts for goods

Answer 7

The property must be sufficiently unique for damages to be inadequate

Land is sufficiently unique. A land contract must comply with s2 LP(MP)A 1989
Shares not available on the market (Duncruft v Albrecht), including private company shares (Oughtred v IRC) are sufficiently unique

Question 8

Damages not adequate - Contracts for goods - personal property

Answer 8

Generally ‘ordinary articles of commerce’ that are hard to acquire are not sufficiently unique (Cohen v Roche – antique chairs)

Question 9

Damages not adequate - Contracts for goods - personal property - 3 exceptions

Answer 9

Exception 1: Where the goods are of ‘unusual beauty, rarity & distinction’ (Falcke v Gray – Ming vase)
Ex:
King Knut’s hunting horn, truly unique (Pusey v Pusey)
Ornate door (Philips v Lamdin)
Winning race cars (Lotus v Lamplogh)

Exception 2: Where the goods are in limited supply (Sky Petroleum v VIP Petroleum – petrol, an ordinary item of commerce, became sufficiently unique due to the circumstances)

Exception 3: Where the goods are particularly valuable to the claimant (Behnke v Bede)

Question 10

Damages not adequate - contracts for services

Answer 10

The service must be:
(1) An irreplaceable service
The service must be irreplaceable (Verrall v Great Yarmouth – contract to provide a venue and no other available) or/and
The losses incurred from the non-performance must be unquantifiable in monetary terms (Evans v BBC – screening of a political broadcast enforced)
(2) The service must be clearly defined (Posner v Scott Lewis cf. Mutual Tontine)
(3) Constant court supervision must not be required (Co-op v Argyll)
The court will permit one off results but not on-going services, which will result in an indefinite series of contempt rulings (Co-op)

Question 11

Damages not adequate - contracts for services - personal services

Answer 11

(1) The court will not award SP against employees (s 236 Trade Union and Labour Relations Act 1992)
(2) They are available against contractors
Look at how the person is engaged, is it for a limited time / for a specific service
(3) They will not be awarded against contractors if:
It’s akin to a contract of slavery (De Francesco v Barnum)
This will depend on the length of the contract, how closely the parties work together (proximity) and whether the relationship has broken down
If SP can be defeated by deliberate poor performance (Giles v Morris). This is based on the principle that equity will not act in vain
Won’t be awarded where the services are artistic, as they are matters of subjective judgement and it is not possible to determine the quality of the performance

Question 12

Damages not adequate - mutuality

Answer 12

The contract must be binding on both parties so that both are able to claim SP. SP will therefore not be available for parties to:

(1) Employment contracts (s 236 TULRA 1992) or
(2) Contracts with minors (Lumley v Ravenscroft)

Question 13

Injunctions - definition and when are they available?

Answer 13

A court order requiring a party to refrain from / compelling him to do certain acts
Available where the D may commit a breach of contract or where he has committed a breach of confidence or a breach of trust

Question 14

What is a quia timet injunction?

Answer 14

person’s rights not yet infringed but infringement is threatened / fear and serious damage is likely to ensue. Quia timet injunction may prevent the breach from occurring
An injunction will be granted to restrain the breach of a negative contractual term (Lumley v Wagner), even where the positive part of the contract is not specifically enforceable, e.g. a contract of personal service

Question 15

Injunction will not be available in a contract of personal service where the enforcement of a negative term would equate to:

Answer 15

An award of specific performance
A situation where the D can only choose between compliance with the positive terms or taking no course of action at all

The injunction itself may be limited to what the court deems reasonable in the circumstances of the case (William Robinson v Heuer)
Note: damages may be awarded in addition to an injunction (s 50 Senior Courts Act 1981)

Question 16

Rescission: definition

Answer 16

Definition: the unmaking or setting aside of a contract or deed

Question 17

Rescission: effect

Answer 17

The cancellation of the contract and reversion of the parties to their pre-contractual position

Question 18

Rescission: requirement

Answer 18

The contract must be voidable

The repudiating party may either repudiate the contract himself or apply to court to obtain a court order for rescission

Question 19

Rectification: definition

Answer 19

the alteration of a contract where the contract mistakenly fails to reflect the parties’ intentions

Question 20

Rectification: effect

Answer 20

The wording of the contract is altered to reflect the changes and the contract remains valid

Question 21

Rectification: requirements

Answer 21

Common mistake, or

Unilateral mistake and unconscionable behaviour on the part of one of the parties

Question 22

Account of profits: what is it?

Answer 22

Use where the claimant has made profits as a result of a breach of confidence. Will often be used in tandem with a search order and freezing order

Definition: a court order requiring the D to surrender illegitimate profits (AG v Guardian (no 2))

Question 23

Account of profits: effect

Answer 23

The D must hand over any unauthorised profits he has made

Question 24

Account of profits: requirements

Answer 24

The profits must be illegitimate as a result of:
A breach of fiduciary duty (Williams v Barton)
Bribery (AG for HK v Reid)
A breach of confidence (AG v Guardian (no 2) v Blake)

Question 25

Interim mandatory injunctions: what is it?

Answer 25

Makes sense to do after SP because similar issues come up

Specific performance is only available at the trial stage. If there is an issue surrounding time a IMI is a better option

Definition: A pre-trial court order requiring the D to act

The court are less ready to grant mandatory injunctions and will often grant damages in lieu (Wrotham Park Estate v Parkside Homes)

Question 26

Interim Mandatory Injunction: test

Answer 26

A high degree of assurance that at trial it will appear the injunction was rightly gratned (Shepherd Homes v Sandham)

Locobail v Agroexport confirmed that the Cyanamid test does not apply to IMIs

If SP will probably be granted an IMI will also probably be granted
Sky Petroleum – timing made it unique
Evans v BBC – damages inadequate, short time

Question 27

Interim prohibitory injunction: what is it?

Answer 27

In case the court is not persuaded that an IMI should be granted it may be advisable to seek an IPI as a ‘stop gap measure’ preventing the sale of whatever the claimant was trying to enforce with an IMI. IPI require a lower degree of assurance than IMIs

Definition: a pre-trial court order requiring the D to refrain from a course of action

Question 28

Interim prohibitory injunction: guidelines

Answer 28

American Cyanamid Guidelines

(1) The case must concern a sufficiently serious matter and not be frivolous or vexatious
This is a fairly low threshold (Mothercare v Robson Books) that will not be satisfied if ‘only a moron in a hurry would think there was a serious question to be tried (Morning Star v Express Newspapers)

(2) Balance of Convenience
The court will weigh up whether it should grant the IPI based on the adequacy of damages by asking:
(a) If the IPI is wrongly refused:
Will damages be adequate compensation for the claimant? And
[Apply facts here]
Could the D afford to pay for those damages?
[Apply]
(b) If the IPI is wrongly granted:
Will damages be adequate compensation for the D, and
[Apply]
Could the claimant afford to pay those damages?
[Apply]
Note: may be able to get an IPI despite being unable to give an undertaking in damages (Allen v Jambo Holdings)

Where there is doubt about which way the balance tips the special factors can provide guidance

• The potential damage to business goodwill (Associated Newspapers v Insert Media)
• The effect on D’s business. If it would lead to shutting down a business it’s unlikely to be allowed (Potters Ballotini v Weston-Baker)
• The effect on the D’s investment (could be an investment in development, i.e. IP) (Catnic Componenets v Stressline)
• The effect on employment (Fellows and Son v Fisher)
• Will they have to lay off workers / shut down factories (American Cyanamid)

(3) If the balance of convenience favours neither party then the court will preserve the status quo ante
This is the existing state of affairs prior to the firm complaint (Garden Cottage Foods v MMB), which generally favours the claimant
The position may alter, however, if the claimant delays his application (Shepherd Homes v Sandham)

Question 29

Search orders: what are they, and reasons for entry?

Answer 29

A search order (a type of mandatory injunction) is a court order permitting a claimant (and his representatives) to enter the D’s property in order to search for and/or seize evidence. It is an interim remedy

Reasons for entry:

(1) To inspect documents or other articles (Yousif v Salama)
(2) To take custody of documents or other articles (Crest Homes v Marks)

Question 30

Search orders: guidelines

Answer 30

set out in Aton Piller v Manufacturing Processes

(1) There must be an extremely strong prima facie case
They are granted without notice so this is necessary

(2) Must show the claimant will suffer serious damage, potential or actual
Consider the need to balance the potential harm to the D by granting the search order. It involves potentially serious inroads in the D’s principled rights (Lock v Beswick) and could result in a loss of reputation. The award must, therefore, be a proportionate response

(3) Must show fair evidence that the D has the incriminating material in their possession and there is a real risk of him destroying it
It must not be a fishing expedition
In assessing the risk of destruction the court will consider the D’s character. If he has previously been dishonest (EMI v Pandit) and is akin to a ‘fly by night’ video pirate, who could disappear easily, the court will be more inclined to grant a SO than if he is a family man with a mortgage who is tied to the area (Lock v Beswick)

Question 31

Search orders: procedural issues

Answer 31

The order is applied for without notice; surprise is the essence of the order (Columbia Picture v Robinson). As such they stand at ‘the extremity of the court’s jurisdiction’ Scott J in Bhimji v Chatwani. In order to balance this the Claimant must give full and frank disclosure when applying for a SO [set out the D’s argument] and may need to give an undertaking in damages

Question 32

Search orders: safeguards

Answer 32

The safeguards are essential, as they ensure the SO is compatible with the A 8 ECHR (Chappell v UK)

Must go no further than the minimum extent necessary to achieve the purpose for which it is granted;

A detailed record of the materials should be made by the solicitor;

No material should be taken unless it is clearly covered by the terms of the order; the seizure of any unauthorised items will result in damages being paid to the D (Columbia Pictures v Robinson)

It must be carried out between 09:30 and 17:30;

D should be present;
If a female D alone, then there should be a female solicitor

The D may either:

• Refuse the search, which will result in them being held in contempt of court
• Allow the search and make an application to court for variance or discharge of the search order. If unsuccessful, he will be held in contempt of court

Question 33

Freezing order: what is it?

Answer 33

A freezing order is a type of interim prohibitory injunction, which prevents the D from dealing with their assets before trial. It freezes the person, not the assets
They are particularly common where breaches of fiduciary duty have occurred

Question 34

Freezing order: assets that can be frozen?

Answer 34

Aeroplanes (Allen v Jambo Holdings)
Ships (The Rena K)
Machinery (Rasu Maritima SA v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara)
Jewellery, Objets d’art, choses in action (a bank account) (CBS United Kingdom Ltd v Lambert)

A freezing order will commonly be accompanied by a disclosure order. This will force a bank to tell the court what assets they have; a Shapira order

Question 35

Freezing orders: guidlines for obtaining?

Answer 35

Set out in Derby v Weldon

(1) It must be a good arguable case (note names of stages not interchangeable)
The case must have a reasonably good chance of success, doesn’t necessarily need to be more than 50% (Ninemia Corporation v Trave)

(2) The D must have assets within the jurisdiction
List potential assets – house, bank account etc.
Where the D’s assets are outside the jurisdiction can apply for an extra-territorial order

(3) There must be a real risk of the assets being dissipated / removed from the jurisdiction
Objective assessment, would the reasonable man think there was a risk of dissipation (Derby & Co Ltd v Wheldon)
There must be a good arguable case the D will remove his assets (Customs and Excise Commissioners v Anchor Food)
If there is evidence of misappropriation this is good evidence that they will dissipate (JSC BTA Bank v Ablyazov)

Question 36

Freezing orders: extra-jurisdictional

Answer 36

The court may make an order having extra-territorial effect, which will apply to the D’s assets subject to the law of the jurisdiction in question (Re BCCI SA (No 9))
Will only apply where the D lacks sufficient assets in the jurisdiction (Derby v Weldon)

Question 37

Freezing orders: procedural

Answer 37

Often have to give an undertaking to pay damages for any loss caused to D; the price paid for the injunction (Practice Direction – Interim Injunctions PD 25A_
Often have to inform third parties (Law Society v Shanks)
Banks and solicitors need to know

Question 38

Freezing orders: allowances

Answer 38

The court may make allowances for the D’s living (Z v A-Z) and business expenses (Normid Housing v Ralphs and Mansell (no 2)) when restricting access to assets

Question 39

Defences: which ones are there?

Answer 39

Delay, conduct of the C, acquiescence, undue hardship

Question 40

Defences: delay

Answer 40

(Laches)

No statutory limitation period for bringing an action for SP (s 36(1) Limitation Act 1980) but unreasonable delay will defeat a claim – ‘delay defeats equity’

An inordinate delay in seeking an seeking an injunction (HP Bulmer and Showrings v Bollinger)
Unexplained delay of 4 months inordinate in Shepherd Homes v Sandham

Claims for SP should be brought in a timely manner (Eads v Williams)

Question 41

Defences: conduct of the C

Answer 41

The claimant must do equity. He must be prepared to fulfil his own responsibilities under a contract (Measures v Measures)
Must have clean hands. He must not have acted wrongfully but must have acted in good faith. He will not have clean hands where he is in breach of contract (Coatsworth v Johnson)

Question 42

Defences: acquiescence

Answer 42

Where C has failed to act on his legal rights he may be deemed to have acquiesced in D’s activity (Shaw v Applegate)

Question 43

Defences: undue hardship

Answer 43

Perhaps more weight with regard to interim injunctions
Will not be granted where they would cause undue hardship to D (Patel v Ali) or a third party (Maythorn v Palmer)
In Petal she had a leg amputated and was struggling to care for 3 children