Specific Performance - Irish Equity

Specific Performance

• Conlon v Murray

  • Specific performance is a discretionary remedy which may be withheld in cases where the court, having regard to the conduct of the parties and all the circumstances of the case considers in its discretion that the remedy ought not to be granted.

Contracts for the sale of land

• Boyle v Lee (SC)

  • The plaintiffs sued for specific performance of a contract.

  • The defendants challenged this on the basis that A) there was no complete oral agreement and B) correspondence between the parties was not sufficient to constitute a note or memorandum as per the Statute of Frauds (Ireland) 1695.

  • Finlay CJ: the amount of a deposit is too important to have been left out of a contract for the sale of land – in this case, it was a matter to be decided later, and thus the contract had not been concluded.

  • A note or memorandum is not sufficient for the Statute of Frauds unless it directly or by very necessary implication recognises, not only the terms to be enforced, but the existence of a concluded contract between the parties.

  • McCarthy J (dissenting): Property transactions in Ireland are often conducted with a minimum of formalities – the parties had been eager to close a deal and leave the formalities to their solicitors and the courts should not try to second guess them.

  • The words 'subject to contract' render the note or memorandum insufficient for the purposes of the Statute of Frauds.

  • O'Flaherty J: With the issue of tenancy left open and the absence of an agreed completion date, there was no concluded contract.

  • Egan J: there was a concluded oral contract

• Supermacs Ireland v Katesan (SC)

  • The plaintiffs sought specific performance of a contract for the sale of land.

  • The defendants sought to have the case struck out as showing no cause of action.

  • Hardiman J: Since it is possible that there was going to be no deposit in this case, Boyle v Lee is distinguishable – it may be that, depending on the case, that a deposit need not be agreed for the contract to be concluded.

  • Geoghegan J: Finlay CJ's judgment in Boyle should be interpreted as applying to situations where the parties understood that the deposit was still to be negotiated.

  • Given the developing jurisprudence on the adequacy notes for the purpose of satisfying the statute of frauds, the case should not be struck out this stage on the grounds that two documents were required together to contitute a a memorandum for the Statute of Frauds.

• Steadman v Steadman (HL)

  • The Statute of Frauds will not apply where there are acts of part performance which were, on the balance of probabilities, referable to some contract and consistent with the contract in fact entered into.

• Mackie v Wilde (SC)

  • The plaintiff and defendant were seeking to make arrangements to limit the number of permits allocated for exploiting a fishery in respect of which they were joint owners.

  • Held that, a contract by reason of its part performance may pass from being a purely executory contract and might create equities which would justify the court in enforcing it specifically, something it would not have done if it remained executory because of the absence of writing to satisfy the statute.

  • Acts of part performance have to relate unequivocally to the actual contract, and the party benefitting from them must have been aware of them and either stood by or took a more active role in encouraging them.

  • In outline form the criteria are A) there must be a concluded oral contract, B) the plaintiff acted in such a way that showed an intention to perform the contract, C) the defendant induced such acts or stood by while they were being performed, D) it would be unconscionable and a breach of good faith to allow the defendant to rely upon the terms of the Statute of Frauds to prevent performance of the contract

  • What is required is that the acts be such that on examination of the contract which has been found to have been concluded and to which they are alleged to refer, show an intention to perform that contract.

Contracts for the sale of personal property

• Philips v Lamdin

  • It was a claim for specific performance of the purchase of a leashold interest in property.

  • Between the time of the breach of contract and the hearing of the proceedings, an item of furniture of great value was removed.

  • Held that, the appropriate solution was to grant damages and an order to reinstate the furniture – its great rarity justified this decision.

• Cohen v Roche

  • Related to a contract to sell chairs (very valuable chairs)

  • Plaintiff sought specific performance of the contract.

  • Held that, damages were an adequate remedy – having bought the chairs to make a profit, this decision was justified.

Contracts requiring supervision

• Ryan v Mutual Tontine Association

  • The lease of a block of flats contained a convenant that the lessor would ensure that there was a porter that was constantly in attendance.

  • The lessor appointed someone who was often absent and the plaintiff unsuccessfully sued for specific performance.

  • Held that, due to the need for constant supervision by the court, specific performance should not be granted.

• Posner v Scott Lewis

  • The terms of a lease between the parties contained a covenant that the defendants would employ a resident porter.

  • The porter employed ceased to be resident in the building and the plaintiffs sued for specific performance.

  • Held that, the rule is not absolute and like so many equitable rules require that there be a weighing of the circumstances – in this case the danger of repeated court applications must be weighed against the importance of protecting contractual rights.

  • Whether or not an order of specific performance will be made appears to depend on the following considerations: A) is there a sufficient definition of what has to be done in order to comply with the court order and B) will enforcing compliance involved superintendence by the court to an unacceptable degree? C) what are the respective prejudices or hardships that will be suffered by the parties if the order is made/not made.

• Co-Operative Insurance Society v Argyll Stores (HL)

  • The plaintiff landlord sought an order for specific performance requiring his anchor tenant in a shopping centre to stay open for usual business hours.

  • Held that, there is a settled practice that the court will never grant mandatory injunction requiring persons to carry on business.

  • This is because A) it is inappropriate for a business to be managed on the basis of decisions informed by the danger of a contempt of court ruling and B) contempt of court enforcement is likely to be very heavily contested with implications for party costs and court time.

  • There is however a distinction between orders to carry on activities and orders to achieve a result – the difference being the degree of precision.

  • Orders for specific performance in these cases also allow the plaintiff to unjustly enrich himself at the defendant's expense – the loss occasioned to the defendant is greater than the compensation due to the plaintiff and the defendant will pay an in-between figure to release himself from the obligation.

  • For these reasons it is a settled principle that specific performance will not be granted to compel the operation of a business except in very exceptional circumstances.

• Wolverhampton Corporation v Emmons (CA)

  • The plaintiffs sold land to the defendant subject to a covenant that he erect buildings on the land within a certain time.

  • He failed to do so, and in consideration of extra time, he agreed to erect very particular buildings, an agreement with which he also failed to comply.

  • AL Smith MR: Where there is a definite contract, where a party thereto has acquired land in consideration of an agreement to erect a building, the particulars of which have been specified and the erection of which is of particular importance to the plaintiff so that they cannot be adequately compensated by damages, then specific performance may be ordered.

  • In general the courts will not order specific performance for building works, because damages are an adequate remedy.

  • Romer LJ: Although there is a general rule against ordering specific performance in cases for buildings, but a party can avail of an exception where:

    • the particulars of the work are so far definitely ascertained in the contract that the Court can see the exact nature of the work involved.

    • the party has a substantial interest in the work being done so that he cannot be adequately compensated in damages

    • the party to do the building has acquired possession of the land in question

• Jeune v Queen's Cross Property (Ch)

  • The tenants sought an order of specific performance against a landlord for failure to comply with a covenant for maintenance of a block of flats.

  • Held that, the courts have power, which should be carefully exercised, to make an order in an appropriate case against a landlord to do some specific work under a covenant to repair.

  • Where there has been a plain breach of covenant to repair and there was no doubt as to what was required to be done to remedy the breach an order for carrying out the required work ought to be made.

• Rainbow Estates v Tokenhold (Ch)

  • The defendants were the lessees of property of which the plaintiff owned the freehold and had covenanted to keep and maintain the property in good and tenant-like repair.

  • Held that, subject to the overriding need to avoid injustice or oppression there was no constraint...