Worksheet 4 Specific Performance Definition An order of the court which compels a party to execute a contract according to the precise

e terms agreed upon or substantially so that justice will be done between the parties under the circumstances. Valid Contract Breach of contract is the cause of action underlying specific performance. The essential elements of a contract therefore must be established. Specific performance will not be ordered unless there is a subsisting contract enforceable at law. Consideration For the purposes of specific performance, it is not enough that a contract is enforceable merely by virtue of it being made under seal. An example is a Deed of Gift. There must be consideration. Jeffreys v Jeffreys Although a contract may be legally binding without valuable consideration, equity will not enforce such a contract (This goes back to the maxim Equity will not assist a volunteer- someone who gets something for nothing) Consideration must be sufficient so that the conscience of the court is not offended. (Remember consideration need be sufficient but not adequate) Mountford v Scott P and D entered into an agreement which included a provision for an option for P to purchase Ds house for consideration of 1. D purported to withdraw his offer. Held: P was entitled to specific performance of the contract. The offer was irrevocable even though the consideration for it might be viewed as a token payment. (inadequacy of consideration is not a ground for resisting specific performance) Clark v Malpas The inadequacy of consideration is relevant to the issue of undue influence and unfairness. Specific performance was not ordered in this case. Apart from inadequacy, it involved purchase of property from the sick man shortly before his death and at undervalue and under circumstances of great precipitation and without proper protection. V was a poor, eccentric, weak minded and illiterate man.

Re Land Equity just like Common Law requires a note or memorandum in writing as proof of land related contracts. In its absence, Equity will enforce specific performance pursuant to the equitable doctrine of part performance. Valid Contract and Terms- Equity will not act in vain In order to obtain an order for specific performance, the contract in question must be sufficiently certain so that the precise act to be done is ascertainable. D must be able to comply with the order. Joseph v National Magazine Co. Ltd. P, an expert in jade, submitted an article to the defendant magazine. The D altered the article considerably. P then refused to consent to its publication and brought an action against D when the same declined to publish the article with corrections. The court found, as a matter of contract, that P was entitled to have the article printed as he had written it. Specific performance was not granted as the exact terms of the contract/article were never agreed on. Damages were awarded on the basis of a lost opportunity on the part of P to enhance his reputation as an expert on jade. Barrow v Chappell Co. Ltd. Specific performance was ordered in respect of publication of a piece of music because it had been composed and performed on a few occasions before the agreement was made. There was certainty as to the piece of music. Lumley v Ravenscroft Equity followed the common law in this case. Specific performance was not ordered as one of the parties was a minor and therefore under a disability at law. Cooperative Insurance Society Ltd. v Argyll Stores Ltd. Equity will generally not enforce a contract which requires constant supervision. CIS owned the freehold to a shopping centre and let Argyll the anchor unit as a supermarket with a covenant to keep open the premises for retail trade. The supermarket was making a loss and Argyll closed despite protest from CIS. CIS sued for specific performance. TJ refused, CIS appealed and CA granted specific performance due to Argylls difficulty in proving loss and unmitigated commercial cynicism on Argylls part. HOL allowed Argylls appeal and held that damages were a more suitable remedy after considering inter alia that wasteful litigation over compliance could result.

Specific Performance- An Action in Personam The court may order compliance by D even though the subject matter of the contract is outside its jurisdiction. Penn v Lord Baltimore Both P and B were granted land in the USA but disagreed as to boundaries. They agreed to arbitration but B backed out. P brought action in the UK for specific performance to have B submit to arbitration. Could UK court make such a decree regarding land in the US? Specific performance granted. B was in the UK so it didnt matter where the subject matter of the dispute was located. Re Hawthorne Specific Performance- A Discretionary Order This order is granted if the court finds on equitable grounds that monetary damages would not adequately compensate P for his loss. Harnett v Yielding A party by order cannot be required to do an act which he is not legally authorised to do. Specific performance is commonly ordered in: Real Property matters Unique Personal Property: Cohen v Roche The court refused specific performance to a buyer of Hepplewhite chairs on the ground that they were ordinary articles of commerce and of no special value or interest. * The buyer was contracting with a view to resale and personal use. Sky Petroleum v VIP Petroleum D had a long-term contract to supply large quantities of petrol for P's stations. D purported to terminate the contract for an alleged breach of its terms by P. P sought an injunction to prevent D from withholding petrol. The petroleum market was in an unusual state and P had little prospect of finding an alternative supply. Held: An injunction would be granted to order specific performance of a contract to sell unascertained goods in the cases where damages would not provide a sufficient remedy and issued an injunction because petrol was so exceptionally scarce that P had no other source of supply.

New Brunswick v Canada Railway The court will not usually grant specific performance with regard to personal chattels because in the majority of cases the remedy at law is sufficient. (Eg where they are sufficiently available at a sufficiently definite price) * This applies to shares and annuities unless the shares are unavailable. Unjust Enrichment: Where there is a provision in a contract conferring a benefit on a 3 rd party, and where the award of damages to P is insufficient to enable P to confer the material benefit of the subject matter on the 3rd party as well as on P, the court will order specific performance. Beswick v Beswick A nephew promised his Uncle to pay an annuity to his Aunt in consideration of the Uncle transferring the goodwill of the business to him. The Aunt was not a party to the contract. The court held that it could be specifically enforced by the Uncle's personal representative (the Aunt) against the nephew. Damages would have been purely nominal as the promisee or his estate had suffered no loss. The nephew would have been unjustly enriched by being allowed to retain the entire benefit of the uncle's performance without performing his own promise. Plaintiff Worse Off Contractual Terms: Where a contract expressly provides for specific performance in the event of default, it is still in the courts discretion. A contract cannot usurp it. Warner Bros. Pictures v Nelson D, an actress, agreed (1) to act for P and, at the same time, (2) not to act or sing for anybody else for two years without P's written consent, and (3) no other employment could be taken up during this period without P's consent. It was held that D could be restrained by injunction from breaking the second undertaking. She would not be forced to act for the plaintiff because she could earn a living by doing other work. Building Contracts Specific performance is not usually ordered in this case as damages may be an adequate remedy if another builder can be engaged to do the work. Other reasons are that building contracts may not specify the work to be done with sufficient certainty and grant of an order of specific performance may require constant supervision by the court.

Specific performance may be ordered where there are definite works and particulars are clearly specified and damages cannot adequately compensate due to the importance of the contract to P. Wolverhampton Corp. v Emmons P acquired land for an improvement scheme and sold part of it to D, who covenanted to demolish existing houses and build new ones. The demolition was carried out and plans for new houses approved. D then refused to continue. It was held that specific performance would be ordered since D's obligations were precisely defined by the plans, and damages would be inadequate because D had possession of the site, and P could not get the work done by employing another contractor. Factors Considered by the Court in Granting Specific Performance Ps Conduct (He who comes to equity must come with clean hands) Jones v Lipman D contracted to sell his land. He changed his mind, and formed a company of which he was owner and director, transferred the land to the company, and refused to complete. P sought relief. Held: Specific performance is available against a contracting vendor who has it in his power to compel another person to convey the property in question. An order for specific performance was made against both the director and the company. The company could not escape from or divest itself of its knowledge gained through the director. The company was "A creature of [the controlling director], a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity."- Russell J. *The unconscionable conduct of P must have a direct relationship with the relief sought. Mere moral depravity is not the basis for denying relief. Specific performance will be refused where undue hardship will result to D which is unjust or unfair in the circumstances. Patel v Ali V and her husband were co-owners of the house they contracted to sell in 1979. The husband's bankruptcy caused delay in completion. After the contract V got bone cancer, had a leg amputated and later gave birth to her second and third children. P obtained specific performance, against which V appealed on grounds of hardship. She spoke little English and relied on friends and relatives for help, hence it would be hardship to leave the house and move away. It was held that the court could in a proper case refuse specific performance on the grounds of hardship subsequent to the contract, even if not caused by P and not related to the subject matter. On the facts, there would be hardship amounting to injustice, therefore damages were awarded.

Tamplin v James If D enters a contract on the basis of a mistake that was not induced by P, specific performance will be awarded against D if no hardship amounting to injustice would be inflicted on D by holding him to the contract. Cases of unfairness This is deemed to exist where P obtained rights by reason of a position of advantage. It would be unjust to grant him specific performance. Ds drunkenness, senility, illness, emotional dependence and illiteracy are examples. Clark v Malpas D purchased property from a poor, weak minded, illiterate, sick man shortly before his death at an undervalue and under circumstances of great precipitation and without proper protection. P, the heir of V was able to have the conveyance cancelled. Johnson v Buttress An elderly man who was illiterate, recently widowed and heavily dependent on D for advice and comfort gave a cottage to D. On his death, P sought to have the grant rescinded on grounds of undue influence and was successful. Futility of Performance (Equity will not act in vain) *This operates as a defence against an order of specific performance where the performance sought is impossible or futile. Titanic Quarter Ltd. v Neil Rowe D entered into a contract with P to purchase property pursuant to which he paid a deposit. In light of the economic crisis, the property was worth less than the contracted purchase price. D also lost his job and was unable to secure financing to complete the purchase. P sought specific performance for D to complete. Specific Performance was denied on the ground of impossibility of performance by D. He was unemployed and had no significant assets. Inadequacy of Legal Remedy Specific Performance will be denied where money adequately compensates P for his loss. In making this determination, the court considers:

Subject matter of the contract Pusey v Pusey In this case specific performance was granted for the transfer of an ancient horn given by the family by the Danish King Canute. The horn had more than sentimental value. It signified conveyance of certain realty. ** In the case of shares in a private limited company, specific performance is not usually granted as damages are usually just as good as delivery when calculated based on market price and with that sum, P may be able to purchase the same quantity of like shares. Damages difficult to estimate Ball v Coggs A contract was entered into by the parties wherein they agreed that D would pay P a certain annual sum for life and another sum for every 800 weight of brass wire manufactured during Ps life. Damages were held to be inadequate where it is to be calculated by conjecture and to compel P to take them would be to compel him to sell the annual provision during his life for which he had contracted at a conjecture price. Adderly v Dixon Per Sir John Leech VC -a Court of Equity decrees performance of a contract for land, not because of the real nature of the land, but because damages at law, which must be calculated upon the general money value of the land, may not be a complete remedy to the purchaser, to whom the land may have a peculiar and special value.

Damages nominal Beswick v Beswick B agreed to transfer his business to his nephew on condition that he pay an annuity to his aunt for the rest of her life. B died and D refused to do so. P (aunt as personal representative of B) sued for specific performance which was granted as the Court found that any damages would be nominal and D would have received all the property. Contracts of Personal Service These are only enforced by specific performance in exceptional circumstances. Otherwise, they are not. Ryan v Tortine Westminster Chambers Association Here there was a lease that provided that the lessors should provide a porter who was to be constantly in attendance. Specific performance was not granted on the ground that personal services were required.

Posner v Scott-Lewis Specific performance was granted here for a lessors covenant to employ a resident porter for certain duties. The court distinguished this case from Ryan v Tortine finding that neither personal service nor a continuous series of acts were required but merely execution of an agreement containing provisions for such services. Lumley v Wagner D contracted to sing for P in his theatre for 3 months, at the same time not singing elsewhere during this time without Ps consent. A third party offered D a large sum of money to sing for him. The Court held that it had no power to make D sing or encourage her to sing at Ps theatre. However, it could persuade her to do so by preventing her singing elsewhere by injunction. Contracts Requiring Constant Supervision As a general rule, equity will not order acts that it cannot supervise. Ryan v Tortine Westminster Chambers Association Here the Court found that the breach would need constant supervision if it were to be performed in specie and would therefore only sound in damages. C.H. Giles & Co. Ltd v Morris The court found that difficulties of supervision were a narrow consideration. Performance would normally be secured by Ds realisation that he was liable to contempt for failure to obey and therefore in practice there would be little need for the court to supervise. Posner v Scott-Lewis The facts here are similar to those of Ryan. The Court however granted specific performance against a landlord for the appointment of a resident porter pursuant to a covenant to carry out certain duties at a block of flats. Distinction: In this case there was a sufficient definition of what had to be done in order to comply with the order. Wolverhampton v Emmons P acquired land for an improvement scheme and sold part of it to D who covenanted to demolish existing houses and build new ones. Demolition was done and plans for the new ones approved. D then refused to continue. The Court granted specific performance as Ds obligations were previously defined by the plans and damages would be inadequate because D had possession of the site and P could not get the work done by employing another contractor. Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd Specific performance was refused in this case as it required D to carry on a business which would require constant supervision.

Lack of Mutuality Equity will not compel one party to perform his obligations in accordance with the terms of the contract unless the same could be done regarding the other party Price v Strange The critical time for mutuality to be present is at the date on which the court is to make the order for specific performance. The fact that it may not have existed earlier is irrelevant. Defences to Specific Performance Mistake and misrepresentation A contract, despite being valid at law may be set aside in equity if on its terms the court considers it just to do so. Solle v Butcher P was Ds tenant. Prior to deciding to rent, they assumed that the property did not come under the Rent Restriction Act which required landlords to give notice if they wanted to charge more than 140. On this assumption rent was set at 250. P later discovered that the maximum rent was 140 and sought to recover overpaid rent. The Court held that the common mistake was one of fact and not operative in law but in equity which rendered the contract voidable and not void. The contract was set aside on suitable terms. Great Peace Shipping Ltd v Tsavliris Salvage International Ltd This case held that there is no equitable jurisdiction to set aside a contract which is not void at common law. A contract will be void at common law where it is entered into on a common assumption about the existence of a certain state of affairs, no warranty by either party that the state of affairs exists and the non-existence of the state of affairs is not attributable to the fault of either party. In addition it must be shown either that the contract is incapable of literal performance or, if it is capable of literal performance, performance of the contract would be essentially different from the performance which the parties contemplated. Malins v Freeman An estate was purchased at an auction and D bid under a mistake as to the lot put up for sale. Specific performance was refused although the mistake was entirely Ds fault and not in any way caused by the P. The reasoning of the court here was that it could exercise its discretion to avoid hardship to D and it will not be active in assisting one party who always has his remedy in damages to take advantage of the mistake of the other so as to involve him in serious and unforeseen consequences.
**This position was abandoned in the next case in the interest of preventing fraud and certainty.

Tamplin v James D placed the highest bid for property under an error as to its true extent. Specific performance was ordered against him to complete the purchase. Per Baggalay LJ: Where there has been no misrepresentation and no ambiguity in the terms of the contract, D cannot be allowed to evade performance by the simple statement that he has made a mistake. Conduct of the Claimant (Clean hands) ** Earlier cases can be used Walsh v Lonsdale A person holding property under an agreement for a lease is not entitled to a decree of specific performance if he himself is in breach of one of the covenants. Mountford v Scott Specific performance will not be granted where P took advantage of Ds illiteracy where he was not separately supervised. Laches or Delay Specific performance may be granted after the contractual date for performance has passed. Easton v Brown A delay of eight years in seeking to enforce the a decree of specific performance was no bar where Ds former wife and children had remained in occupation and P had been legally advised that it would be difficult to remove them. P had an explanation for the delay and had acted reasonably. Unreasonable delay in seeking specific performance: Lazard Bros.& Co. Ltd v Fairfield Property Co.(Mayfair) Ltd Here a contract was entered into in 1975. P issued a writ for specific performance in 1977. In ordering specific performance, Megarry VC said that if specific performance was to be regarded as a prize, to be awarded by equity to the zealous and denied to the indolent, then P should fail. But whatever might have been the position over a century ago that was the wrong approach today. If between P and D it was just that P should obtain the remedy, the court ought not to withhold it merely because P is guilty of delay. There was no ground here on which delay could properly be said to be bar to a decree of specific performance. Watts v Assets Co. Ltd This case supports the position that delay defeats equity. Remember though that the Courts decision is dependent on the facts- equity is flexible. In this case, 20 years had elapsed before P brought the action.

Per Lord Halsbury: The result that ought to follow from the absence of evidence which has been the fault of those who are the pursuers here -- that is to say, they have lain by upon their supposed rights all this time, during which time witnesses have died and the means of explanation have disappeared also to an extent which, to my mind, renders it impossible, or at all events extremely inexpedient as a matter of law and administration, to allow these things to be ripped up at this distance of time, when both the opportunities of explanation have gone by and when witnesses have passed away." Public Policy Considerations Specific performance will not be granted where to do so would be contrary to public policy. Wroth v Tyler D, the owner of a matrimonial home, entered into a contract to sell with vacant possession. Before completion, his wife registered a charge under the Matrimonial Homes Act 1967. P sued for specific performance, and failed on two grounds. D could only carry out his obligation by obtaining a court order terminating the wifes right of occupation, and this would depend on the discretion of the court. To grant a decree would compel D to embark on difficult and uncertain litigation. He had attempted to obtain the wifes consent by all reasonable means short of litigation, and it would be most undesirable to require D to take proceedings against his wife, especially where they were still living together. Nor could the P get specific performance subject to the wifes right of occupation. D and daughter would remain liable to eviction by P, and the family would be split up. Verral v Great Yarmouth Borough Council D granted a licence to the National Front (P) to hold its annual conference. Before the conference began, D revoked the licence. P sought specific performance of the licence. This was awarded. Damages would not be an adequate remedy. Freedom of speech was at stake. P was entitled to the freedoms of speech and of assembly provided they were exercised peaceably. Specific Performance and Third Parties For the benefit of the third party Beswick v Beswick The third party, due to operation of the doctrine of privity of contract cannot sue for specific performance. In this case, the aunt was able to get specific performance not as the beneficiary but as the personal representative of her husband against the nephew.

The case of annuities Adderly v Dixon and Beswick v Beswick The court found that leaving P to proceed at law and to get damages at once for all the breaches that might occur during the joint lives of Pand D, would, in effect, be altering the entire nature of the contract. It would be compelling P to accept a certain sum, a sum to be ascertained by the conjecture of a jury as to what was the value of the annuity. This would be most unreasonable and unjust.