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Oxford Law Citator

Part VIII Remedies For Default, 29 Specific Performance and Other Equitable Remedies

From: Contract Law in Practice

Neil Andrews

Content type:: Book content

Product:: International Commercial Law [ICML]

Published in print:: 27 May 2021

ISBN:: 9780192897947

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Subject(s):: Breach of contract — Performance of contract — Remedies for breach of contract — Damages — Contract and transfer of title

(p. 700) 29 Specific Performance and Other Equitable Remedies

Specific Performance: General Features

Nature.¹

29.01 Specific performance is a mandatory final injunction granted to enforce a contractual obligation. The main field in which specific performance regularly operates is contracts for consideration concerning the grant of interests in land. Another regular context is contracts for consideration for the sale of shares in private companies. In both situations it is evident that damages are not an adequate remedy. The leading case is Co-operative Insurance Society v Argyll Stores (Holdings) Ltd (1998), which is examined at [29.12].² As set out in detail at [29.56], breach of any type of injunction involves contempt of court and the wrongdoer is then liable to be fined, imprisoned (up to two years), and suffer seizure of assets (known as ‘sequestration’). Injunctions, including specific performance, are not available as of right, but are discretionary. Nevertheless, the train of decisions makes it possible to predict with confidence when such relief is available.

The Promisee Has Supplied Consideration.

29.02 Consideration must be shown by the claimant seeking specific performance³ (unless the claimant is suing as a third party claimant under the Contracts (Rights of Third Parties) Act 1999 [9.46]). The requirement that specific performance is confined to promises supported by consideration is a long-standing feature of Equity (‘Equity does not assist a volunteer’). This rule can be defended on the basis that the unusually coercive nature of the remedy, sanctioned by contempt of court powers, should be reserved for bargains. It is not a sufficient counterargument that consideration’s (p. 701) ‘adequacy’ in this context, as in others, will not be assessed. In any event, it is submitted that the better approach would be for Equity to withhold specific performance if the relevant consideration is merely nominal, that is, token, so that the promise is in essence a gratuitous undertaking. Furthermore, it is likely that many arrangements have been made on the understanding that a bare covenant is not remedied by specific performance. And so, it is submitted that the current law should not be disturbed.

Common Law Remedies Inadequate.

29.03 Specific performance is a residual remedy in the sense that it will not apply if a Common Law money remedy (debt or damages) is adequate on the relevant facts.⁴ An example of the residual or ‘White Knight’ intervention of specific performance is Beswick v Beswick (1968)⁵ (also on that case [9.22]). In that case the House of Lords granted specific performance, at the suit of the promisee’s representative (the earlier promisee had died so that his position was now occupied by the person administering his estate). Consideration had been provided (a coal-merchant business had been transferred to the promisor). Debt was unavailable because the promise to pay a stream of periodic sums was targeted at the third party, and so it would be inappropriate for the promisee to be able to intercept these sums (this was also the basis of the decision in Re Schebsman (1944) [9.38], where the deceased promisee was now represented by his trustee in bankruptcy, but the Court of Appeal held that he could not intercept pension payments which the promisor was content to pay to the promisee’s nominated beneficiaries). Returning to Beswick v Beswick, damages at the suit of the promisee would probably have been nominal on these facts, because the estate had suffered no personal loss. And so in Beswick v Beswick specific performance was the only remedy which would work so as to achieve precise enforcement of the contemplated regular payments to the third party.

Factors.

29.04 Specific performance, like all injunctions, is not available as of right. The range of factors is broad. Various factors regulate this remedy’s availability, and these will now be noted individually.⁶

(1) the applicant’s conduct must not have been unmeritorious (‘lack of clean hands’);
(2) the remedy can be barred by delay or acquiescence;⁷
(3) vagueness, imprecision, or uncertainty: that is, whether the relevant obligation is sufficiently clear:⁸ ‘the court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact, so that in carrying out an order he can give his contractors the proper instructions;
(p. 702) (4) the court must consider whether the order would be ‘excessive and disproportionate’;⁹
(5) hardship: in Patel v Ali (1984) the learned judge, hesitantly, refused to order specific performance against a non-business house vendor who, since the contract’s formation, had lost a leg; this disability made it necessary or convenient for her to remain in the same vicinity so that others could care for her;¹⁰ but the courts should be slow to accede to less convincing ‘sob stories’;¹¹
(6) there can be no specific performance of contracts for personal services, including employment contracts;¹²
(7) the court will not order specific performance where this would be futile;¹³ but the mere fact that precise performance of the relevant obligation has ceased to be possible does not preclude the court from ordering the next-best form of satisfaction; and so in Liberty Mercian Ltd v Cuddy Civil Engineering Ltd (2014), where a party had failed to supply a performance bond, and it had now become commercially impossible for it to do so, Ramsey J ordered a payment into court as a substitute form of protection for the claimant;¹⁴
(8) specific performance was refused where the claimant had employed the element of surprise in circumstances not consistent with ‘good faith’;¹⁵
(9) ‘continuing supervision’, that is, whether the tribunal might be asked to monitor compliance to an unacceptable degree;
(10) ‘mutuality’, that is, whether the other party will be exposed to an unfair risk of default by the applicant;¹⁶
(11) nor will this remedy be awarded to compel transfers of goods unless the subject matter is ‘unique’ or at least remarkably special;
(12) arguments concerning human rights, notably freedom of expression; in Ashworth v Royal National Theatre (2014)¹⁷ Cranston J took such matters into account but ultimately refused to order specific performance to compel the National Theatre to reinstate a band of five into the production of ‘War Horse’ (the case was heard pre-trial so that technically the order would be for a mandatory injunction, but in substance this involves specific performance). The theatre had decided to excise the live band and instead to use recorded music. The brief section of the play in which the band had come on stage had been altered. Although the band and the theatre had not irretrievably fallen out, a mandatory re-engagement would probably engender ill-feeling or at least have a ‘destabilizing impact’. On this point the judge commented:¹⁸ ‘production of a play necessarily entails close co-operation between (p. 703) … actors and those directing and producing’. The theatre was also entitled to respect under Article 10 of the European Convention on Human Rights (1950) (incorporated by the Human Rights Act 1998) for its ‘freedom of expression’, that is, artistic freedom or autonomy.¹⁹ Furthermore, damages would be an adequate remedy on these facts.²⁰ Cranston J noted that, although the starting point is that employers would not be ordered to re-engage employees,²¹ exceptional facts might produce the opposite result.²² But Cranston J held²³ that the present case fell well short of such exceptional circumstances: ‘it is a standard case where, on a traditional analysis, loss of confidence is the primary block to [a mandatory order]’.

Specific Performance and Chattels.

29.05 Specific performance is not awarded to compel transfers of chattels unless they are special, indeed ‘unique’.²⁴ Reported cases have produced an eclectic collection.²⁵

29.06 The general refusal to order specific performance of agreements for the transfer of movable property is reasonable. This is because the subject-matter is generic or fungible, and hence easily substituted. Unless the subject-matter is ‘unique’, the disappointed buyer is confined to his remedy in damages, and this is so even if he can show a convincing ‘sentimental attachment’ to the relevant chattel. However, Burrows finds this too rigid, suggesting that the ‘consumer surplus’ factor [28.68] might be borne in mind here.²⁶ Accordingly, the duty to mitigate requires the disappointed purchaser of a chattel to re-enter the market and find a substitute supplier. This duty to find a substitute applies not only where the subject-matter is not supplied, or will be supplied late, but includes the situation where the relevant goods are used by the claimant but they prove defective so that replacement is a reasonable response (eg in the leading decision on the mitigation doctrine, British Westinghouse Electric v Underground Electric Railways Co of London Ltd (1912) [28.258]).

29.07 The position concerning specific performance and chattels was examined, in a careful judgment, by Phillips LJ, sitting in the Commercial Court, in VTB Commodities Trading DAC v JSC Antipinsky Refinery (2020). The following propositions emerge from that important discussion:²⁷ (i) section 52 of the Sale of Goods Act 1979 confines specific performance (p. 704) to goods which are ‘specific’ (viz., in existence and identified at the date of formation) or ‘ascertained’ (viz., identifiable at the date of formation), and even then such an award is exceptional because damages is the primary remedy; (ii) exceptionally specific performance might be awarded even though goods are not ‘specific’ or ‘ascertained’, an example being the Sky Petroleum case noted in the next paragraph of this text; the rationale for the reluctance to grant equitable orders in context (ii) is that this will confer on the successful applicant priority as between competing prospective transferees,²⁸ and (at least in some situations) practical difficulties will arise in identifying the subject-matter.²⁹ Phillips LJ concluded in the VTB Commodities case that the facts fell within context (ii), but there was no special reason to grant specific performance.

29.08 Even fungibles can sometimes become alarmingly scarce. In circumstances of relative scarcity, or famine, the courts might be persuaded to grant exceptional specific relief. And thus, in Sky Petroleum Ltd v VIP Petroleum Ltd (1974)³⁰ Goulding J recognized that exceptional market conditions can render damages an inadequate remedy for default even in the supply of a commodity (wholesale petrol). As a result of steps taken by the OPEC cartel during the 1970s ‘oil crisis’, wholesale petrol supplies had become scarce. Unless it gained the present remedy, the claimant would have been forced out of business. Goulding J awarded an interim injunction, equivalent to specific performance, to compel an oil supplier to deliver petrol to a retailer. These goods were neither ‘specific’ nor ‘ascertained’ for the purpose of section 52 of the Sale of Goods Act 1979, it having been held in Re Wait (1927)³¹ that specific performance should only be exceptionally available outside the limits of that provision.³²

29.09 A similarly pragmatic approach was adopted in a tort case by Megarry V-C in Howard E Perry & Co v British Railways Board (1980).³³ In that case industrial action in support of a steel strike had led to steel belonging to the claimant owner being withheld by BR, the carrier. The steel was lying in various sidings. The court was asked to make an order by injunction for the goods to be delivered up. The order was granted, the judge commenting that damages were not an adequate remedy on the facts. Steel had become extremely scarce because of this nationwide industrial action.³⁴

29.10 Similarly, there are decisions in which the courts have granted orders to compel delivery of goods in contexts where supply is crucial to a commercial party’s economic interest and the parties are (at least for a time) locked into a relationship.³⁵

(p. 705) 29.11 The following case seems to be an aberration. In Société des Industries Metallurgiques SA v Bronx Engineering Co Ltd (1975)³⁶ the Court of Appeal held that damages would be adequate when a seller refused to supply machinery, even though it would take almost a year for an alternative manufacturer to supply the claimant. Burrows convincingly contends that ‘commercial uniqueness’ should lead to specific performance if ‘an accurate assessment of the claimant’s losses is so difficult that [he] is likely to be incorrectly compensated’.³⁷

Specific Performance: Expansion Resisted in the Co-operative Insurance Case (1998)

No Specific Performance to Run a Business.

29.12 In Co-operative Insurance Services v Argyll Stores Ltd (1998)³⁸ the House of Lords held that an award of damages was the only relief available on the facts of this case. The House of Lords confirmed (reversing a curiously aberrant majority decision in the Court of Appeal) that specific performance is unavailable to compel a tenant to run a business even though it has covenanted so to do. This coercive remedy is restricted: Common Law money remedies must be inadequate (on the residual nature of specific performance see [29.03]).

29.13 The Co-operative Insurance case concerned a lease for a supermarket site in a Sheffield shopping mall. The thirty-five-year lease, granted in 1979, included a clause that the tenant would continue trading for the same period (a so-called keep open clause). The relevant clause stated: ‘[The tenant will] keep the demised premises open for retail trade during the usual hours of business in the locality [and it will keep] the display windows properly dressed in a suitable manner in keeping with a good class parade of shops.’ Another clause required the tenant to offer a ‘full range of grocery provisions’.

29.14 In 1994 the tenancy still had more than nineteen years to run, but the defendant supermarket chain handed back the keys to the landlord. The defendant had made a loss of £70,000 in the previous year. The claimant landlord sought specific performance to force the defendant to trade at this site until 2014, or until it sub-let or assigned to another supermarket company.

29.15 The House of Lords held that the relevant clause was insufficiently precise.³⁹ And, in any event, specific performance could not be granted to compel a party to run a business, otherwise, the courts will become embroiled in a litany of minor complaints and counter-arguments.

(p. 706) 29.16 Lord Hoffmann noted (i) the residual status of the equitable remedy of specific performance, (ii) the nature of the ‘constant supervision’ problem, and (iii) the danger of oppression.

29.17 As for (i), Lord Hoffmann said:⁴⁰ ‘Specific performance is traditionally regarded in English law as an exceptional remedy, as opposed to the Common Law damages to which a successful plaintiff is entitled as of right’.

29.18 As for (2), Lord Hoffmann said:⁴¹ ‘[One must] distinguish between orders which require a defendant to carry on an activity, such as running a business over a more or less extended period of time, and orders which require him to achieve a result [such as, building contracts and repairing covenants]’.

29.19 As for (3), Lord Hoffmann said:⁴² ‘[The court should not] deliver over the defendants to the plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may possibly make’.

29.20 Lord Hoffmann’s speech is a mine of important background information. He confirmed⁴³ the traditional view that specific performance is inappropriate to compel defendants to run businesses at particular locations His speech is a compelling affirmation of the residual status of this coercive remedy.⁴⁴

29.21 The House of Lords in the Co-operative Insurance case unanimously reversed an aberrant decision by the Court of Appeal. In its majority decision the Court of Appeal had badly erred by granting specific performance to compel a commercial tenant to keep running its business for a further nineteen years. This would have required the supermarket to resume selling at the relevant site. The Court of Appeal’s approach ran counter to settled market assumptions, traceable to the nineteenth century; furthermore, the Court of Appeal appears to have overreacted to its perception that the tenant had behaved in a disreputable and reprehensible fashion.

29.22 The House of Lords’ refusal in the Co-operative Insurance case to allow specific performance to overflow its customary banks seems quite justified. One commentator had inaccurately predicted that Beswick v Beswick (1968) [9.22] might have heralded major expansion of specific performance.⁴⁵

Specific Performance is a Residual Remedy.

29.23 Apart from agreements to transfer land (where specific performance is the primary remedy), English law is right to confine this remedy to a residual role, for four main reasons.

29.24 First, specific performance is a heavy-handed remedy, sanctioned by contempt of court powers. It should be narrowly confined, otherwise it threatens to become a remedial sledgehammer.

(p. 707) 29.25 Secondly, the mitigation principle [28.231] requires that, in general, an innocent party should be required to act straightaway in order to reduce or even eliminate his loss, and he should not be at liberty to wait for the court to order the guilty party to perform.⁴⁶

29.26 Thirdly, Lord Hoffmann noted⁴⁷ that an order to compel someone to carry on a business at a loss ‘cannot be in the public interest’ because ‘it is not only a waste of resources but yokes the parties together in a continuing hostile relationship’, whereas damages would allow the parties to ‘go their separate ways and the wounds of conflict can heal’.

29.27 Finally, the parties can insert liquidated damages clauses or require payment of a deposit to apply leverage to induce performance: on agreed protection of this type: Cavendish Square Holdings BV v Makdessi (2015) [27.69].

No Specific Performance to Compel Tenant to Run Hotel Business in Precise Compliance with Specified ‘Operating Standards: Adequacy of Damages, etc.

29.28 In Zinc Cobham 1 Ltd v Adda Hotels (2018)⁴⁸ Andrew Hochhauser QC upheld a Master’s decision to strike out a claim for specific performance the upshot of which would have been the need to incur circa £100 million to fit out the hotels so that they complied with ‘Operating Standards’. Those specifications, contained in the leases of ten houses, were applicable where, as here, the hotels were branded as ‘Hilton’ hotels. And he cited⁴⁹ Cavendish Square Holding EV v Makdessi (2015), where Lord Neuberger had said:⁵⁰

… specific performance of contractual obligations should ordinarily be refused where damages would be an adequate remedy. This is because the minimum condition for an order of specific performance is that the innocent party should have a legitimate interest extending beyond pecuniary compensation for the breach. The paradigm case is the purchase of land or certain chattels such as ships, which the law recognizes as unique.

Specific Performance to Require Expensive Repair of Unsatisfactory Exterior of Skyscraper.

29.29 In Blue Manchester Ltd v North West Ground Rents Ltd (2019)⁵¹ the judge ordered specific performance to require the landlord of a forty-seven-storey building in Manchester (‘Beetham Tower’) to refit glass external walls. This was necessary, first, so that they would not present a safety hazard; secondly, so that the temporary repair, already made, would cease to be unattractive and a superior but expensive repair could be carried out. The decision contains a wide-ranging assessment of numerous factors and counter-arguments.

Injunctions: General Features

29.30 A final or interim injunction⁵² can be awarded either to prevent the anticipated breach, or to reverse a breach which has begun or occurred, or to compel compliance with a positive (p. 708) duty to perform. A final order to compel performance of a positive obligation is known as ‘specific performance’ [29.01]. Injunctions (interim or final) can be awarded to prevent a party from breaching a ‘negative’ promise, that is, an undertaking not to do something. But no such injunction will be granted if its indirect effect would be to coerce a person into performing a contract for personal services or to remain in a relationship of mutual trust and confidence with the applicant. A party who fails to comply with an injunction will be in contempt of court [29.56]. A party who breaches a formal ‘undertaking’ given by that party to the court in substitution for a formal injunctive order will also be in contempt of court.

29.31 An injunction is appropriate when the contractual obligation breached is a promise not to do something, that is, a ‘negative obligation’.⁵³ Although the court retains a discretion to decline to grant an injunction in these circumstances, and instead to award damages, the courts lean in favour of an injunction as the presumptively appropriate remedy in this situation. This is because the defendant is not being asked to work nor to incur expenditure. He or she is instead being asked to respect an undertaking voluntarily made whereby a commitment was made to curb his or her liberty to act. Burrows supports the tendency to lean in favour of the injunction where the breach is of a negative obligation.⁵⁴ But, as Gee persuasively notes, there should be no mechanical award of an injunction in respect of a negative undertaking.⁵⁵

29.32 On the dramatic facts of Araci v Fallon (2011)⁵⁶ the Court of Appeal granted an injunction with only hours to spare in order to prevent the defendant jockey from breaching his contract to ride only for the claimant in British horse-races during the relevant season. The defendant was now proposing to ride a rival’s horse in the Epsom Derby later that day. This was not an application for specific performance to compel the defendant to ride for the claimant, which would have run up against the clear rule that such an order will not be granted to compel the carrying out of a contract for personal services (and, in any event, the claimant had found a different rider for this race for his horse). Instead the injunction sought was prohibitory: ‘you shall not ride for the rival this afternoon’. Jackson and Elias LJJ considered such an injunction to be the appropriate relief on these facts.

29.33 Araci v Fallon is consistent with the general rule that injunctions are readily awarded to prevent a defendant breaching a ‘negative’ promise, that is, an undertaking not to do something. And thus an injunction is the primary remedy to enforce restrictive covenants requiring landowners to desist from using the premises for specified purposes (eg ‘the owner will not use, or allow these premised to be used, for the purpose of selling intoxicating liquor’). In such a case, one view is that an injunction is not subject to the restriction (which governs specific performance) that damages would be an inadequate remedy.⁵⁷ The essence of the decision is expressed by Jackson LJ as follows:⁵⁸

(p. 709)

… Where the defendant is proposing to act in clear breach of a negative covenant, in other words to do something which he has promised not to do, there must be special circumstances (for example, restraint of trade contrary to public policy) before the court will exercise its discretion to refuse an injunction.

29.34 The Araci case was applied in Priyanka Shipping Ltd v Glory Bulk Carriers Pte Ltd (2019)⁵⁹ where the judge identified the following principles governing injunctions to uphold negative obligations:⁶⁰

[91] The principles to be derived from these authorities are … : (i) Negative covenants will ordinarily, although not invariably, be enforced by injunction. (ii) It is not a precondition to enforcement by injunction that the party seeking an injunction should prove that it would otherwise suffer damage. (iii) An injunction is none the less an equitable, and therefore a discretionary, remedy (I do not consider that the fact that in clause 19 the Buyer ‘guaranteed’ that the Vessel would not be traded further, a point relied upon by the Seller, changes the position in this regard). (iv) So far as the exercise of discretion is concerned, there may be cases where the circumstances are such that the grant of an injunction would be unconscionable (Colman J in Insurance Co v Lloyd’s Syndicate [1995] 1 Lloyd’s Rep 272) or oppressive (Elias LJ in Araci v Fallon [2011] EWCA Civ 668, [2011] LLR 440), and in such circumstances an injunction should be refused. Whilst a mechanistic approach should not be followed, inconvenience or hardship to the defendant is, however, not enough; (v) The burden lies on the party bound by the negative covenant to show why the ordinary rule should not apply, i e, why the covenant should not be enforced by injunction.

29.35 As for the position where the indirect effect of an injunction will be to yoke the defendant to a contract for continuing personal services or to a relationship of mutual trust and confidence, see [29.41].

‘Undoing’ Injunction.

29.36 Different factors will come into play where the breach has already occurred. In such a context the issue is whether it is appropriate to apply the court’s coercive machinery so as to reverse or undo, for example demolish, the fruit of the defendant’s breach.⁶¹

29.37 ‘Undoing’ can include the situation where the breach has involved the defaulting party entering into relations with a third party. For example, in SDI Retail Services Ltd v The Rangers Football Club Ltd (2018)⁶² Teare J awarded an injunction preventing the defendant from proceeding with a contract (between the defendant and a third party) which the defendant had entered in breach of an agreement between the claimant and the defendant. The defendant had agreed not to deal with third parties without first giving the claimant the chance to match terms proposed by third parties for the sale of ‘replica’ football shirts. But the defendant had steamed ahead in breach of that. Teare J in SDI Retail Services Ltd v The Rangers Football Club Ltd (2018) deduced⁶³ from the case law, including the Araci case (on which (p. 710) see the preceding discussion), the principle that a prohibitory injunction to enforce a negative undertaking is prima facie to be granted, except where it will be unjust or oppressive. Damages would not be an adequate remedy, and the court in its discretion would grant the order even though this would work to the prejudice of the third party concerned. Hence the terminology of an ‘undoing injunction’.

Relevance of Exclusion or Limitation or Liquidated Damages Clauses.

29.38 The Court of Appeal in AB v CD (2014) held that clauses limiting or excluding damages or quantifying for breach do not oust the court’s capacity to award interim or final injunctive relief.⁶⁴ Otherwise, a guilty party might cynically treat the relevant clause (a damages cap, or exclusion clause, or a liquidated damages clause) as conferring immunity from liability to perform the primary obligation of the contract. The proposition that injunctions (including specific performance) are unavailable ‘unless damages are inadequate’ is not to be applied mechanically.

‘Quia Timet’ Injunction to Forestall Anticipated Breach of Contract.

29.39 This topic is noted at [24.47], in the context of anticipatory breach.⁶⁵

Other Factors Relevant to the Discretion Whether to Grant an Injunction.

29.40 It is submitted that the following factors are relevant in the context of injunctions (they have been mentioned during examination of the cognate equitable remedy of specific performance at [29.04]):

(1) the applicant’s conduct must not have been unmeritorious (‘lack of clean hands’);
(2) the remedy can be barred by delay or acquiescence;
(3) vagueness, imprecision, or uncertainty: that is, whether the relevant obligation is sufficiently clear;
(4) whether the order would be ‘excessive and disproportionate’;
(5) hardship;
(6) just as there can be no specific performance of contracts for personal services, including employment contracts, so an injunction cannot be granted if it would indirectly involve such compulsion;
(7) the court will not make a coercive order where this would be futile;
(8) freedom of expression.⁶⁶

(p. 711) Injunctions: No Indirect Compulsion of Contracts Involving Personal Services or Trust and Confidence

Proposition.

29.41 An injunction will be withheld if its indirect effect will be to compel the defendant to perform a contract for personal services or to remain in a relationship of mutual trust and confidence with the claimant.⁶⁷

Qualification: Defendant a Company.

29.42 But, as explained in the text below, in LauritzenCool AB v Lady Navigation Inc (2005)⁶⁸ the Court of Appeal held that the Warren v Mendy principle, which seeks to protect a human being from oppressive coercive legal interference, has no application if the defendant is not a human being but a company.

Leading Case.

29.43 In Warren v Mendy (1989)⁶⁹ the claimant, a boxing manager, was seeking an injunction to restrain the defendant, a rival manager, from luring Benn, a talented young boxer, away from the claimant (the ‘economic torts’ protect the claimant’s interest in restraining a third party from inducing breach of a contract, or from interfering with its performance). But Benn and the claimant had enjoyed happier days together. The Court of Appeal held that an injunction should not be granted against the rival manager, otherwise Benn, the contracting party, would be indirectly compelled to continue to serve under the claimant’s management.

29.44 Nourse LJ noted:⁷⁰ ‘that the human necessity of maintaining the skill or talent may practically bind the servant to the contract, compelling him to perform it’. Therefore, the court must have:⁷¹ ‘a realistic regard for the … the psychological and material, and sometimes the physical, need of the servant to maintain the skill or talent. The longer the term for which an injunction is sought, the more readily will compulsion be inferred.’ This was because Benn, as a highly paid boxer, in a notoriously short sporting career, did not have the practical choice of ‘stacking supermarket shelves’ as an alternative source of income.

29.45 Nourse LJ added:⁷²

the court ought not to enforce the performance of the negative obligations if their enforcement will effectively compel the servant to perform his positive obligations under the contract. Compulsion is a question to be decided on the facts of each case, with a realistic regard for the probable reaction of an injunction on the psychological and material, and sometimes the physical, need of the servant to maintain the skill or talent. … An injunction will less readily be granted where there are obligations of mutual trust and confidence, more especially where the servant’s trust in the master may have been betrayed or his confidence in him has genuinely gone.

(p. 712) 29.46 In Warren v Mendy Nourse LJ⁷³ examined the following four cases.

29.47 (1) In Lumley v Wagner (1852) Lord St Leonards LC upheld on appeal a decision to grant an injunction restraining an opera singer, for the remaining two months of a three months contractual period from singing for a rival impresario, in breach of her express negative undertaking not to sing for a rival during this period.⁷⁴

29.48 (2) In Whitwood Chemical Co v Hardman (1891)⁷⁵ the Court of Appeal held that no injunction should be granted to enforce the defendant’s express negative undertaking, and so require the defendant to concentrate all his employment energies and time on the plaintiff company, as he had agreed. There were still over four years of employment to run.

29.49 Although it was said in the Whitwood case⁷⁶ that an injunction will be granted to restrain a contractual party only if the contract contains an express promise not to undertake the relevant activity, it has since become settled that the court can grant an injunction to enforce an implicit undertaking to desist from something. As Gee notes, promises that X shall be done can include an implicit promise that Y will not be done instead of X, and an injunction to prevent the contracting party from doing Y can be awarded.⁷⁷ Burrows concurs.⁷⁸ But Chitty contends, on the basis of the Whitwood case, that in the case of a contract for personal services, as distinct from other types of contractual undertaking, there remains a need to find an express negative undertaking if an injunction is to be granted.⁷⁹ It is submitted that Burrows is correct to dismiss the positive/negative distinction here as a ‘red herring’.⁸⁰ Instead the courts should be willing to find a negative undertaking, where this is the correct construction, even in respect of a contract for personal services, for example, where the undertaking is to work in a certain activity for the claimant employer or enterprise during a specified period. On construction that positive promise might be held to connote and thus co-exist with a promise not to work in the relevant sphere of activity for a third party during the relevant period. If so, the injunctive jurisdiction becomes available. But the further issue arises whether on the facts an injunction will be appropriate. That decision will include reference to the question whether the injunction will have the effect of indirectly compelling the defendant to remain actively engaged with the claimant.

29.50 (3) In Warner Bros Pictures Inc v Nelson (1938)⁸¹ Branson J granted an injunction against the actress, Bette Davis, for three years from 1936. Nourse LJ in Warren v Mendy (1989) doubted this decision. But it should be noted that the English injunction granted by Branson J was expressed (see end of judgment) to be territorially restricted to England and Wales.⁸²

(p. 713) 29.51 (4) In Page One Records Ltd v Britton (1968)⁸³ Stamp J refused an injunction to require a pop group, The Troggs, to stay loyal to their manager, with whom they had fallen out. The contract was for five years. Stamp J noted the need for mutual confidence in such a close working relationship.

Judicial Survey of the Warren v Mendy Line of Cases.

29.52 The Mendy case and the underlying principles were reviewed by the Court of Appeal in Sunrise Brokers LLP v Michael William Rodgers (2014).⁸⁴ The points made in that case are, first, that the issue whether a period of restraint will operate indirectly to compel the defendant to remain in employment, etc, with the claimant is a matter of practicality to be assessed on the facts:⁸⁵ ‘What is required is a realistic evaluation of whether the pressures operating on the employee in the particular case are in truth liable to compel him to return to work for the employer’.

29.53 Secondly, the length of the period is especially important, and (as Underhill LJ hinted in the Sunrise case) the courts will not uphold a period exceeding two years and in fact the tolerable period might be a period of less than six months. Underhill LJ said:⁸⁶

In Warren v Mendy (see [1989] 1 WLR 853, 865–6) Nourse LJ … declined to define precisely where the line between short-term and long-term should be drawn, beyond noting that the longest period for which such a restraint seems to have been imposed in the cases preceding Warner Brothers Pictures Inc v Nelson [1937] 1 KB 209, which the Court in practice disapproved, was twenty weeks; and that the two-year restraint sought in Warren v Mendy itself was too long.

Indirect Compulsion of Companies is Not Objectionable.

29.54 In LauritzenCool AB v Lady Navigation Inc (2005)⁸⁷ the Court of Appeal held that the principle against indirect compulsion (recognized in the Warren v Mendy line of cases) does not apply if the defendant is a company (or other non-natural person, such as a public entity or (perhaps) a significant partnership). And so, it was held in the LauritzenCool case (2005) that it was legitimate to issue an injunction to prevent a company from removing its two ships from the charterer.

29.55 Much of the ground for the decision in that 2005 case had been prepared by the Court of Appeal in Regent International Hotels (UK) Ltd v Pageguide Ltd (1985), which also involved a corporate defendant.⁸⁸ The Court of Appeal in the LauritzenCool case (2005) quoted copiously from the Regent International Hotels case (1985), where Ackner LJ had contrasted a personal relationship between a pop group and a manager (where an injunction would be inappropriate)⁸⁹ and the commercial context of a company’s undertaking to manage a hotel. In the latter context, an injunction would be appropriate, and that relief was granted on the facts of the Regent International Hotel case itself.

(p. 714) Contempt of Court Sanctions for Non-Compliance with Specific Performance or Injunctions

Governing Principles.

29.56 Someone (a ‘contemnor’) will be guilty of contempt of court if he breaches an injunction (including an order for specific performance) addressed to him.⁹⁰

29.57 It is also a contempt to fail to honour an undertaking made to the court by a litigant (whether expressly or impliedly, under well-established rules). A party who disobeys an injunction will be guilty of contempt even if he later persuades the court to set aside the relevant order or injunction.⁹¹

29.58 A company is in contempt of court if it breaches an order because of the conduct of its employee. This is so even if the company expressly prohibited such conduct. It is enough that the employee’s conduct took place within the course of his employment.⁹² Where a company is subject to the court’s jurisdiction, the Court of Appeal in Dar Al Arkan Real Estate Development Co v Refai (2014) held that the company’s officers can be made subject to committal proceedings even though they are out of the jurisdiction.⁹³

29.59 The Supreme Court in JSC BTA Bank v Ablyazov (No 14) (2018)⁹⁴ held that the tort of conspiracy to harm by unlawful means can arise when a respondent and a non-party are in contempt of court. This enables the claimant to seek damages as compensation for the events constituting the contempt. In the Court of Appeal (this point did not receive comment in the Supreme Court, which simply affirmed the Court of Appeal’s recognition of the cause of action), Sales LJ had added that the non-party co-conspirator will be liable only if guilty of deliberate misconduct in counselling, procuring, or assisting in the commission of the relevant contempt.⁹⁵

29.60 If the non-party is merely careless in acting contrary to an injunction of which it has received notice, the contempt process is available to sanction the non-party but, as the House of Lords held in Customs & Excise Commissioners v Barclays Bank plc (2006),⁹⁶ the non-party owes no additional tortious duty towards the party protected by the relevant injunction. This case concerned a freezing injunction. The non-party was a bank. The bank held the debtor’s main assets. The bank had carelessly ignored the term of the freezing order, which had been notified to it. The loss, unsuccessfully claimed in the tort of negligence against the non-party bank, was suffered by the creditor who had succeeded in obtaining the freezing order.

Contempt of Court: Procedural Aspects.

29.61 A contemnor can be committed (ie become subject to committal proceedings) for contempt of court.⁹⁷ Civil contempt is classified as a quasi-criminal wrong.⁹⁸

(p. 715) 29.62 The standard of proof is ‘beyond reasonable doubt’ rather than the lower civil standard of proof ‘on the balance of probabilities’.⁹⁹

Sequestration.

29.63 The court can order ‘sequestration’ of the contemnor’s assets.¹⁰⁰ This involves ‘sequestrators’ (officers of the court, often appointed specially for the particular case) seizing the contemnor’s property, including land, and (if necessary) eventually selling it.¹⁰¹

29.64 The operative part of Form 71 for this purpose states that the sequestrators are authorized:

(1) to enter upon and take possession of all the real and personal estate of the defendant (name), (2) to collect, receive and take into your hands the rents and profits of his real estate and all his personal estate, and (3) keep the same under sequestration in your hands until the defendant (name) shall comply with the order dated (date) and clear his contempt and the court make other order to the contrary.

Imprisonment or Fines.

29.65 A person found guilty of contempt can (also) be fined or imprisoned for up to two years.¹⁰² There is also a duty to release a contemnor who has served half of a term of less than twelve months.¹⁰³

29.66 As for sentencing, the courts have articulated a range of factors: (i) whether the contemnor has ‘contumaciously’ flouted the law;¹⁰⁴ (ii) whether it has become evident that he will not accept the court’s authority; (iii) the contemnor has already received adequate punishment; (iv) or he has ‘purged’ his contempt;¹⁰⁵ (v) whether his conduct or omission was deliberate or negligent.¹⁰⁶

Account of Profits Consequent on Breach of Contract

Proposition.¹⁰⁷

29.67 The guilty party might exceptionally be ordered to ‘disgorge’ in favour of the other party (‘account for’) a gain made as a result of a bare breach of contract, even if the innocent party has not suffered substantial loss. Such a disgorgement of all gains was established in the now isolated House of Lords case, in a most peculiar context, in Attorney-General v Blake (2001).¹⁰⁸ But it is apparent both from the text of the leading speech, given by Lord Nicholls, and from the subsequent experience in the courts, that this is quite exceptional relief for breach of contract. Lord Nicholls said that the remedy of an account should be granted only if all four of the following (mostly opaque) criteria are satisfied: first, (p. 716) the claimant can show a legitimate interest; secondly, all other remedies are inadequate; thirdly, the court in its discretion regards this as an appropriate response to the breach; and, fourthly, the gain is attributable to that breach.¹⁰⁹ Burrows construes the decision as turning on the elements of (i) deliberate, cynical breach and (ii) the inadequacy of compensatory relief.¹¹⁰

Unfruitful Reception.

29.68 Pre-Blake case law had thrown up at least one example of injustice. This was Surrey County Council v Bredero Homes (1993), where the relevant obligation imposed a restriction on development of a building site, but this did not constitute a proprietary right in favour of the promisee.¹¹¹ Under the pre-Blake law, there was no scope in such a case to award an account of profits.¹¹² But the possibility now exists to award an account in such a situation, subject to the four criteria listed in the preceding paragraph.

29.69 The Blake case has produced no deluge, indeed hardly a drop of consequence. An isolated application is Morritt V-C’s pre-trial decision in Esso Petroleum Ltd v Niad Ltd (2001).¹¹³ The judge there decided not to strike out a claim for an account of profits made by a petrol retailer in breach of the supplier’s contractual requirement that retailers should reduce pump prices to match local competitors’ prices. The decision to allow this claim to proceed in this commercial context is unconvincing. However, because this was not a final decision on the merits at trial, the decision has little, if any, binding effect. Other courts have emphasized the exceptional context in which the Blake case was decided.¹¹⁴ Burrows contends that the Blake doctrine might generate more successful claims.¹¹⁵

Leading Case in Detail.

29.70 The House of Lords in Attorney-General v Blake (2001) introduced the remedy of an account of profits for a simple breach of contract, without the claimant being able to show that the contractual breach involved either (i) infringement of a proprietary right, such as breach of a restrictive covenant to which claimant and defendant were party, or (ii) breach of a fiduciary duty (eg certain types of breach of contract by agents).¹¹⁶

29.71 In Attorney-General v Blake (2001),¹¹⁷ royalties were intercepted by the UK Government, following publication of his memoirs. Blake had been a double-agent. Such a publication involved breach of Blake’s life-long contractual obligation to maintain confidentiality. No other remedy was available. Compensatory damages were not available because the Crown had suffered no measurable or recognized loss. An injunction was not available because the publication had already taken place. The successful claim for disgorgement or interception (p. 717) of royalties claim smacked of the stable-door being closed after the horse had bolted. Lord Hobhouse impressively dissented.

29.72 In greater detail, Blake, having been convicted in the 1960s of espionage, had been imprisoned in England.¹¹⁸ But he escaped to Moscow, where he eventually published his memoirs. The UK Government wanted to prevent the spy’s London publisher from sending a second royalty cheque to the author in Russia (the first had already arrived). The House of Lords held that an ‘equitable account’ can be awarded against a party in breach in order to ‘strip’ him of a profit made at the claimant’s expense, that is, as a result of a breach of contract. An injunction was granted to compel the publisher to pay the royalty sum to the Crown, Blake’s employer before he had been dismissed for treachery.

29.73 In Attorney-General v Blake Lord Nicholls (for the majority) presented a sustained analytical discussion,¹¹⁹ concluding:¹²⁰

An account of profits will be appropriate only in exceptional circumstances. Normally the remedies of damages, specific performance and injunction, coupled with the characterization of some contractual obligations as fiduciary, will provide an adequate response to a breach of contract. It will be only in exceptional cases, where those remedies are inadequate, that any question of accounting for profits will arise. No fixed rules can be prescribed. The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which relief is being sought. A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest¹²¹ in preventing the defendant’s profit-making activity and, hence, in depriving him of his profit.

29.74 Lord Hobhouse, the only dissentient, was correct in predicting that the present sally into uncharted waters would not, and should not, be regularly repeated, and he concluded:¹²²

… the exceptional facts of this case have been critical to its decision. The policy which is being enforced is that which requires Blake to be punished by depriving him of any benefit from anything connected with his past deplorable criminal conduct. Your Lordships consider that this policy can be given effect to without a departure from principle. I must venture to disagree.

Declarations

29.75 The discretionary remedy of a declaration¹²³ enables the court to state definitively the facts and legal result in favour of the victorious party. This is a non-coercive remedy, in the sense that there is no enforcement consequent upon the declaration (unlike a judgment for (p. 718) debt, damages, specific performance, or an injunction). Sometimes, the bare declaration is enough, so that this might be the only relief sought.

29.76 The remedy need not be invoked in response to a breach. Instead it can be sought to determine whether an agreement has arisen, or is valid, or remains operative, or to determine its contents, their effects, whether breach has occurred (or that it has not occurred), etc. For example, in Lock v Bell (1931), a vendor obtained a declaration that the deposit of £120 on the sale of a public house had been forfeited validly.¹²⁴

29.77 In Patten v Burke Publishing Co Ltd (1991), a writer, now proposing to deal with publisher B, sought a declaration that he could safely do so because he was no longer contractually committed to write for publisher A.¹²⁵

29.78 Another example is that a declaration was sought and obtained that a deed was void for duress as to person in Barton v Armstrong (1976)¹²⁶ [13.26].

29.79 A further example is Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd (2020)¹²⁷ [16.73] where the Supreme Court rejected a lessor’s application for a declaration that the covenant it had given was void under the restraint of trade doctrine. The court instead held that the covenant was not contrary to public policy.

29.80 So-called negative declarations (applications to gain a binding declaration that the claimant is not legally liable to the other party) are often sought in English civil proceedings as a tactic to preclude proceedings by a defendant against a claimant in another jurisdiction.¹²⁸

29.81 As noted at [27.17], Birss J in Zavarco plc v Nasir (2020) held¹²⁹ that a declaratory judgment does not operate, by way of merger, to prevent the debt from being sued upon in later proceedings. Nor, on the facts, was the Henderson v Henderson doctrine of abuse of process made out; on that doctrine see references at [2.67].

29.82 Finally, it should be noted that, where no substantial loss has resulted, or substantial damages have not been claimed, an award of ‘nominal damages’ is functionally equivalent to a declaration that ‘there has been a bare breach’.

‘Stays’ Upon Legal Proceedings

29.83 This is a decision by the court to place proceedings in suspense, until the ‘stay’ is lifted.¹³⁰ A ‘stay’ is sometimes a contractual remedy, in the sense that it can be a judicial response (p. 719) to a breach of contract.¹³¹ It is appropriate to include examination of the remedy of a ‘stay’ within this chapter even though this judicial response is not equitable in the historical sense. Discretion is the hallmark of equitable remedies, and this feature is shared by a ‘stay’, which is not applied automatically but is intrinsically discretionary, unlike Common Law money remedies which are available ‘as of right’.

29.84 For example, in Cable & Wireless plc v IBM United Kingdom Ltd (2002) Colman J upheld an agreement by two commercial parties whereby: (i) they agreed to negotiate disputes; (ii) they further agreed thereafter, if necessary, to conduct a mediated negotiation; and (iii) an aggrieved party could, if necessary, finally resort to formal litigation. One party had jumped straight from stage (i) to stage (iii). The judge held that failure by one party to proceed to stage (ii) involved a breach. The ‘remedy’ was to issue a stay of the High Court proceedings brought at stage (iii), prematurely on these facts, in breach of the dispute-resolution agreement.¹³² But this is a discretionary matter. As Colman J noted, no stay will be granted if the court perceives that remitting the parties to mediation would be pointless, on the facts of the case.

29.85 But the court can go further and, rather than stay proceedings, dismiss a claim, where such a final disposal of the matter is appropriate. That was Ormrod J’s conclusion in Snelling v John Snelling Ltd (1973).¹³³ Here three brothers (C, X, and Y) had agreed (‘the promise’) that they would not sue their family company to recover sums to which they were otherwise entitled. C, the claimant, broke rank and sued the company. The other two brothers, X and Y, were joined as parties to the proceedings. Ormrod J held that X and Y could, as promisees, invoke the promise for the defendant company’s protection. And rather than grant a mere stay the appropriate final relief was to dismiss outright the claim. Although the old Common Law privity doctrine governed the position at the date of this case [9.35], nowadays the third party could be protected under the 1999 Act [9.46]).(p. 720)

Footnotes:

¹ On specific performance, see the monographs cited at Bibliography, Part II, section (39); see also literature cited, ibid, section (23) (Injunctions), and section (35) (Remedies for Breach); see also for comment and theory: D Friedmann, ‘Economic Aspects of Damages and Specific Performance Compared’ in D Saidov and R Cunnington (eds), Contract Damages: Domestic and International Perspectives (Hart Publishing 2008) ch 2; A Kronman, ‘Specific Performance’ (1978) 45 Univ Chi L Rev 351; P Saprai, ‘The Principle against Self-Enslavement in Contract Law’ (2009) 25 JCL 26; G Schwartz, ‘The Case for Specific Performance’ (1979) 89 Yale LJ 271; SA Smith, ‘Performance, Punishment and the Nature of Contractual Obligation’ (1997) 60 MLR 360; SM Waddams, ‘The Choice of Remedy for Breach of Contract’ in J Beatson and D Friedmann (eds), Good Faith and Fault in Contract Law (OUP 1995) 471 (compelling defence of the residual role of coercive specific relief); for comparative sources: Comparative Discussion: J Smits, D Haas, and G Hesen (eds), Specific Performance in Contract Law: National and Other Perspectives (Intersentia Publishing 2008); GH Treitel, Remedies for Breach of Contract: A Comparative Account (OUP 1988) (see also ibid, at 63 ff for a comparative discussion concerning the Common Law); E Yorio, Contract Enforcement: Specific Performance and Injunctions (Aspen Publishing 1989); on the nineteenth-century history of this topic, M Lobban, in W Cornish and others, The Oxford History of the Laws of England, vol. XII, 1820–1914: Private Law (OUP 2010) 548 ff.

² [1998] AC 1 (HL); noted, GH Jones [1997] CLJ 488. Other notable modern decisions include: Rainbow Estates Ltd v Tokenhold Ltd [1999] Ch 64, 68 to 74 (Lawrence Collins QC); Beswick v Beswick [1968] AC 58 (HL); Price v Strange [1978] Ch 337 (CA); Tito v Waddell (No 2) [1977] Ch 106, 321–28 (Megarry V-C); Verrall v Great Yarmouth DC [1980] 1 All ER 839 (CA); Posner v Scott-Lewis [1987] Ch 25 (Mervyn-Davies J); noted, GH Jones [1987] CLJ 21.

³ For criticism of this requirement—AS Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs (4th edn, OUP 2019) 429.

⁴ Burrows, Remedies (2019) 402–15.

⁵ [1968] AC 58.

⁶ Burrows, Remedies (2019) 415–35.

⁷ P & O Nedlloyd BV v Arab Metals Co [2006] EWCA Civ 1717, [2007] 1 WLR 2288; Heath v Heath [2009] EWHC 1908 (Ch), [2010] FSR 610 at [27] ff; ‘Limitation of Actions’ (Law Commission Report No 270, 2001) 2.97–2.99; Andrews on Civil Processes (2nd edn, Intersentia Publishing 2019) 8.123; for an injunction case where laches barred relief, Legends Live Ltd v Craig Harrison [2016] EWHC (QB) 1938, [2017] IRLR 59 at [104] ff (Edis J) (delay in enforcing employment restrictive covenant timed to cause harm to claimant’s competitor).

⁸ Co-operative Insurance Society v Argyll Stores (Holdings) Ltd [1998] AC 1, 14 (HL) (Lord Hoffmann), quoting Lord Upjohn in Morris v Redland Bricks Ltd [1970] AC 652, 666 (HL); in 118 Data Resource Ltd v IDS Data Services Ltd [2014] EWHC 3629 at [24] (David Halpern QC) a contractual right to enter premises was insufficiently clear to permit specific performance to be awarded by summary judgment under CPR Part 24; similarly, in SSL International plc v TTK LIG Ltd [2011] EWCA Civ 1170, [2012] 1 WLR 1842 at [87] to [95], the Court of Appeal refused a mandatory injunction for the supply of goods because of lack of precision in its identification.

⁹ Arden LJ in Newman v Framewood Manor Management Co Ltd [2012] EWCA Civ 159, [2012] 2 EGLR 45.

¹⁰ [1984] Ch 283 (Goulding J).

¹¹ GH Jones and W Goodhart, Specific Performance (2nd edn, Butterworths Publishing 1996) 117 ff; Law Commission (Abortive and Draft) Contract Code (1972) (Giuffre Publishing 1993), Article 408.

¹² On this major limitation, and collecting the case law, Burrows, Remedies (2019) 419–26; see also sub-paragraph (12) of text below; and see [29.41] on injunctions and the indirect personal compulsion.

¹³ Jones and Goodhart, Specific Performance, 54–56; Chitty on Contracts (HG Beale gen ed, 33rd edn, Sweet and Maxwell 2018) 27-047.

¹⁴ [2014] EWHC 3584 (TCC), [2015] Bus LR D3.

¹⁵ Walters v Morgan (1861) 3 De GF & J 718, 724; 45 ER 1056, 1059 (Lord Campbell LC) (lack of ‘good faith’ in the procuring of a long extension of a lease by the tenant).

¹⁶ Price v Strange [1978] Ch 337 (CA).

¹⁷ [2014] EWHC 1176, [2014] 4 All ER 238.

¹⁸ ibid, at [23]; see also [24].

¹⁹ ibid, at [27], noting s 12(1) and (4), Human Rights Act 1998.

²⁰ ibid, at [31].

²¹ ibid, at [19] to [22], and citing Lord Wilson in Geys v Société Générale, London Branch [2012] UKSC 63, [2013] 1 AC 523 at [77].

²² As in one or two cases where the court has compelled employers to take back employees in special circumstances: [2014] EWHC 1176 at [21] to [23], notably Powell v Brent LBC [1988] ICR 176 (CA); on this open issue, Lord Wilson in Geys v Société Générale, London Branch [2012] UKSC 63, [2013] 1 AC 523 at [77].

²³ [2014] EWHC 1176, [2014] 4 All ER 238 at [23].

²⁴ For example, Princess Diana’s wedding dress, or Bobby Moore’s World Cup winner’s medal; generally, Jones and Goodhart, Specific Performance, 143–54.

²⁵ (i) unusual china jars; (ii) stones from old Westminster Bridge; (iii) an Adam-style door; (iv) a ‘practically unique’ ship: respectively, (i) Falcke v Gray (1859) 4 Drew 651; (ii) Thorn v Public Works Commissioners (1863) 32 Beav 490; (iii) Phillips v Lamdin [1949] 2 KB 33, 41 (Croom-Johnson J); (iv) Behnke v Bede Shipping Co Ltd [1927] 1 KB 649 (Wright J); this test was not satisfied in ‘The Stena Nautica’ (No 2) [1982] 2 Lloyd’s Rep 336 (Parker J); compare the wide dictum of Browne-Wilkinson V-C in Bristol Airport plc v Powdrill [1990] Ch 744, 759 CA, where it was held that the lease of an aircraft should be specifically enforceable, the judge considering that every aircraft is unique. But the ship cases were not cited.

²⁶ Burrows, Remedies (2019) 406.

²⁷ [2020] EWHC 72 (Comm), [2020] 1 WLR 1227 at [68] to [83], notably at [74], [77], [81] to [83]; see also Benjamin’s Sale of Goods (MG Bridge ed, 11th edn, Sweet and Maxwell 2020) ch 17, section 6(c); and literature cited at fn 740 therein.

²⁸ Re Wait [1927] 1 Ch 606 (CA).

²⁹ SSL International plc v TTK LIG Ltd [2011] EWCA Civ 1170, [2012] 1 WLR 1842 at [87] to [95] (Stanley Burnton LJ), notably [89] to [92], concerning insufficiently identified or identifiable condoms to be manufactured in India for export to the UK.

³⁰ [1974] 1 WLR 576, 578–79.

³¹ [1927] 1 Ch 606 (CA).

³² Generally, see Treitel, [1966] JBL 211, Burrows, Remedies (2019) 403–07.

³³ [1980] ICR 743.

³⁴ See the passage (ibid, at 751) commencing, ‘in normal times, the steel here in dispute might indeed be in this category [of a fungible]; but these times are not normal, and at present steel is obtainable on the market only with great difficulty, if at all’.

³⁵ Thames Valley Power Ltd v Total Gas & Power Ltd [2005] EWHC 2208 (Comm); (2006) 22 Const LJ 591, [2006] 1 Lloyd’s Rep 441 at [63] (Christopher Clarke J) (supply of gas under long-term contract, where the order was named as specific performance); R Halson, Contract Law (2nd edn, Pearson Publishing 2012) 444–5, noting Land Rover Group Ltd v UPF (UK) Ltd [2002] EWHC 3183, [2003] BCLC 222 (mandatory injunction against insolvent company to compel supply, until trial, of Land Rover parts); a similar order was made in Aston Martin Lagonda Ltd v Automobile Industrial Partnerships Ltd (Birmingham, High Court, 2009, unreported).

³⁶ [1975] 1 Lloyd’s Rep 465.

³⁷ Burrows, Remedies (2019) 406.

³⁸ [1998] AC 1 (HL) (Lord Hoffmann, giving the sole reasoned speech, Lords Browne-Wilkinson, Slynn, Clyde, Hope, agreeing); ‘keep open’ covenants: these are specifically enforced in Scotland: but D Campbell and R Halson, in L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives (CUP 2014) ch 12, contend that the English position is preferable; examining, notably at 471–19, among many Scottish decisions, Retail Parks Investments Ltd v The Royal Bank of Scotland (No 2) [1996] SC 227 (IH Ex Div); Highland & Universal Properties Ltd v Safeway Properties Ltd 2000 SLT 297 (IH); Co-operative Insurance Society Ltd v Halfords Ltd (No 2) 1999 SLT 697 (OH); D Pearce, ‘Remedies for Breach of a Keep-Open Covenant’ (2008) 24 JCL 199; and see Lord Hope, ‘Specific Implement and Specific Performance: Are They Really Much the Same?’ in S Degeling, J Edelman, and J Goudkamp (eds), Contract in Commercial Law (Thomson Reuters 2016) ch 14.

³⁹ [1998] AC 1, 17 (HL).

⁴⁰ ibid, 11.

⁴¹ ibid, 40; but Burrows doubts this suggested distinction: Burrows, Remedies (2019) 415–19; and he is critical of the entire ‘constant supervision’ bar, contending that the courts have exaggerated the extent to which specific performance would create a drain on scarce judicial resources.

⁴² [1998] AC 1, 15, quoting Lord Westbury LC in Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & S 263, 273.

⁴³ [1998] AC 1, 11–12 (HL).

⁴⁴ ibid, 13–19.

⁴⁵ FH Lawson, Remedies of English Law (2nd edn, Penguin Books 1980) 223.

⁴⁶ Friedmann, ‘Economic Aspects of Damages and Specific Performance Compared’ in Saidov and Cunnington (eds), Contract Damages: Domestic and International Perspectives, ch 2, at 86 ff.

⁴⁷ [1998] AC 1, 15–16.

⁴⁸ [2018] EWHC 1025 (Ch), [2018] L & TR 36; his main reasons are to be found at [48] sub-para (3).

⁴⁹ ibid, at [43].

⁵⁰ [2015] UKSC 67, [2016] AC 1172 at [30].

⁵¹ [2019] EWHC 142, [2019] L & TR 13; 182 Con LR 59 at [107] to [113] (Stephen Davies QC).

⁵² On injunctions, see the monographs cited at Bibliography, Part II, section (23); see also literature cited, ibid, section (39) (Specific Performance), and section (35) (Remedies for Breach).

⁵³ On negative undertakings and injunctions, besides the Araci case (2011), examined in the text below, see Doherty v Allman (1878) 3 App Cas 709, 720 (HL) (Lord Cairns LC); Attorney-General v Barker [1990] 3 All ER 257, 262 (Nourse J); Insurance Company v Lloyd’s Syndicate [1994] CLC 1303, 1309–10 (Colman J).

⁵⁴ Burrows, Remedies (2019) 454–56.

⁵⁵ S Gee, Commercial Injunctions (7th edn, Sweet and Maxwell 2020) 2-011 to 2-013, cogently explaining the need to qualify the peremptory statement of Lord Cairns LC in Doherty v Allmann (1878) 3 App Cas 709, 719–720 (HL): ‘if there had been a negative covenant, I apprehend, according to well-settled practice, a Court of Equity would have had no discretion to exercise’.

⁵⁶ [2011] EWCA Civ 668, [2011] LLR 440, notably, at [33] to [39], [42], [48], [53], [61], [65], [66] (Jackson LJ), [69] to [74] (Elias LJ).

⁵⁷ ibid, at [70] (Elias LJ).

⁵⁸ ibid, at [39].

⁵⁹ [2019] EWHC 2804 (Comm), [2019] 1 WLR 6677 at [58] to [134] (David Edwards QC).

⁶⁰ ibid, at [91].

⁶¹ Chitty (2018) 27-077.

⁶² [2018] EWHC 2772 at [43], [55] to [65].

⁶³ ibid, at [47] to [53], and notably [50] and [60] (Teare J), considering the following authorities on this issue: Lord Cairns LC in Doherty v Allman (1878) 3 App Cas 708, 720 (HL); Colman J in Insurance Co v Lloyd’s Syndicate [1995] 1 Lloyd’s Rep 272, 277, Araci v Fallon [2011] EWCA Civ 668, [2011] LLR 440 at [61]; and on the prohibitory/mandatory distinction, Lord Hoffmann’s comment in National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] UKPC 16, [2009] 1 WLR 1405 at [20], that ‘arguments over whether the injunction should be classified as prohibitive or mandatory are barren’: see Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670, 680 (CA); and on the discretion to ‘undo’ that which has been done in contravention of the relevant obligation, Wakeham v Wood (1982) 43 P & CR 40, 43–44 (CA) (Waller LJ); Sharp v Harrison [1922] 1 Ch 502, 510 (Astbury J).

⁶⁴ [2014] EWCA Civ 229, [2014] 3 All ER 667, [2014] 2 All ER (Comm) 242, [2014] CP Rep 27, [2014] BLR 313, notably at [25] to [30] (Underhill LJ); noted, PG Turner [2014] CLJ 493; following Mance LJ in Bath & NE Somerset DC v Mowlem plc [2004] EWCA 722, [2004] BLR 153 at [15]. The AB v CD case was taken into account by Teare J in SDI Retail Services Ltd v The Rangers FC Ltd [2018] EWHC 2772 at [56].

⁶⁵ Discussing the dicta in Berkeley Community Villages Ltd v Pullen ([2007] EWHC 1330 (Ch.), [2007] NPC 71 at [142] (Morgan J), and in Duval v 11–13 Randolph Crescent Ltd [2018] EWCA Civ 2298, [2019] Ch 357 at [26] and [33], where the court indicated that the grant of an injunction, although not sought before the Court of Appeal, might be a possible remedy against proposed breach in a similar context; but the court noted that the injunction would not be automatically available (ibid, at [33]). The decision was affirmed [2020] UKSC 18, [2020] 2 WLR 1167.

⁶⁶ In Mionis v Democratic Press SA [2017] EWCA Civ 1194, [2018] QB 662 at [102] to [105] (injunction to prevent disclosure of information in breach of a settlement agreement; although s 12 of the Human Rights Act 1998 directs regard to freedom of expression, the court will be slow to withhold enforcement by injunction of a breach of a settlement).

⁶⁷ The line of cases was examined carefully by Nourse LJ in Warren v Mendy [1989] 1 WLR 853 (CA).

⁶⁸ [2005] EWCA Civ 579, [2006] 1 WLR 3686.

⁶⁹ [1989] 1 WLR 853 (CA).

⁷⁰ ibid, 857.

⁷¹ ibid, 867.

⁷² ibid.

⁷³ ibid, 860 ff; also noting Nichols Advanced Vehicle Systems Inc v De Angelis (unreported) 21 December 1979 (Oliver J).

⁷⁴ 1(852) 1 De GM & G 604.

⁷⁵ [1891] 2 Ch 416 (CA).

⁷⁶ ibid, 426–8 (Lindley LJ), 429-431 (Kay LJ).

⁷⁷ Gee, Commercial Injunctions (2020) 2-111, citing English and Australian authority on this point.

⁷⁸ Burrows, Remedies (2019) 457.

⁷⁹ Chitty (2018) 27-088 and 27-089.

⁸⁰ Burrows, Remedies (2019) 457.

⁸¹ [1937] I KB 209.

⁸² [1989] 1 WLR 853, 865 (CA).

⁸³ [1968] 1 WLR 157, 165.

⁸⁴ [2014] EWCA Civ 1373, [2015] ICR 272, [2015] IRLR 57 (Underhill LJ, giving the main judgment; Longmore and Gloster LJJ).

⁸⁵ ibid, at [32] (Underhill LJ).

⁸⁶ ibid, at [34] (Underhill LJ).

⁸⁷ [2005] EWCA Civ 579, [2006] 1 WLR 3686 at [30]; Mance LJ’s conclusion is at [32] and [33]; and see Chitty (2018) 27-085.

⁸⁸ The Times, 13 May 1985.

⁸⁹ Page One Record Ltd v Britton [1968] 1 WLR 157.

⁹⁰ CPR Part 81; PD (81); Arlidge, Eady and Smith on Contempt (5th edn, Sweet and Maxwell, 2017); Andrews on Civil Processes, 17.37 ff.

⁹¹ Motorola Credit Corporation v Uzan (No 2) [2003] EWCA Civ 752, [2004] 1 WLR 113 at [148] to [156], considered in Raja v Van Hoogstraten [2004] EWCA Civ 968, [2004] 4 All ER 793; Isaacs v Robertson [1985] AC 97 (PC); Bhimji v Chatwani [1991] 1 WLR 989; Wardle Fabrics Ltd v Myristis (G) Ltd [1984] FSR 263.

⁹² Re Supply of Ready Mixed Concrete (No 2) [1995] 1 AC 456 (HL).

⁹³ [2014] EWCA Civ 715, [2015] 1 WLR 135,

⁹⁴ [2018] UKSC 19, [2020] AC 727.

⁹⁵ [2017] EWCA Civ 40, [2018] QB 853 at [56] (Sales LJ).

⁹⁶ [2006] UKHL 28, [2007] 1 AC 181.

⁹⁷ CPR Part 81.

⁹⁸ Director of the Serious Fraud Office v B [2012] EWCA Crim 67, [2012] 1 WLR 3170; for the sequel, Director of the Serious Fraud Office v B (No 2) [2012] EWCA Crim 901, [2012] 1 WLR 3188.

⁹⁹ Z Bank v D1 [1974] 1 Lloyd’s Rep 656, 660 (Colman J).

¹⁰⁰ CPR 81.19–81.27.

¹⁰¹ Richardson v Richardson [1989] Fam 95, 101–2; Mir v Mir [1992] Fam 79.

¹⁰² Harris v Harris [2001] EWCA Civ 1645, [2002] Fam 253 at [12] to [14]; where s 14(1), Contempt of Court Act 1981 was noted, for this purpose.

¹⁰³ Section 45(3), Criminal Justice Act 1991.

¹⁰⁴ Bhimji v Chatwani [1991] 1 WLR 989; X v Y [1988] 2 All ER 648, 666; Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31; Bell v Tuohy [2002] EWCA Civ 423, [2002] 3 All ER 975 at [60] to [66].

¹⁰⁵ Re Barrell Enterprises [1973] 1 WLR 19 (CA).

¹⁰⁶ Guildford BC v Valler, The Times 15 October 1993 (CA).

¹⁰⁷ The literature is collected at the Bibliography, Part II, section (35), sub-section B.

¹⁰⁸ [2001] 1 AC 268 (HL). For details on the factual background to the Blake case, AWB Simpson, ‘A Decision Per Incuriam’ (2009) 125 LQR 433.

¹⁰⁹ [2001] 1 AC 268, 285 (HL).

¹¹⁰ Burrows, Remedies (2019) 359.

¹¹¹ [1993] 1 WLR 1361 (CA).

¹¹² An influential intervention, in the wake of Surrey County Council v Bredero (see preceding fn), was made by PBH Birks (1993) 109 LQR 518, 520–21

¹¹³ [2001] EWHC 458 (Ch) (because of the case’s isolated status, it is summarized in Chitty (2018) 26-066 and 26-122; and in McGregor on Damages (J Edelman, S Colton, and J Varuhas eds, 20th edn, Sweet and Maxwell 2018) 15-021; 15-028).

¹¹⁴ Vercoe v Rutland Fund Management [2010] EWHC 424 (Ch) at [340] and [341] (Sales J); Experience Hendrix LLC v PPX Enterprises Inc [2003] EWCA Civ 323, [2003] 1 All ER (Comm) 830.

¹¹⁵ Burrows, Remedies (2019) 357-9.

¹¹⁶ Walsh v Shanahan [2013] EWCA Civ 411, [2013] 2 P & CR DG7, where an agent misused confidential information, but an account was held to be disproportionate; and see Calvert v William Hill Credit Ltd [2008] EWCA Civ 1427, [2009] Ch 330 at [53]; J Edelman, ‘When Do Fiduciary Duties Arise?’ (2010) 126 LQR 302.

¹¹⁷ [2001] 1 AC 268 (HL).

¹¹⁸ For factual details, Simpson, ‘A Decision Per Incuriam’.

¹¹⁹ [2001] 1 AC 268, 283–89.

¹²⁰ ibid, 285.

¹²¹ S Rowan, ‘The “Legitimate Interest in Performance” in the Law on Penalties’ [2019] CLJ 148, discussing ‘legitimate interest(s)’ in this context (notably, at 161–164) and in other contractual contexts.

¹²² [2001] 1 AC 268, 289.

¹²³ The literature is cited at the Bibliography, Part II, section (13).

¹²⁴ [1931] 1 Ch 35 (Maugham J).

¹²⁵ [1991] 1 WLR 541.

¹²⁶ [1976] AC 104, 120 letter G (PC) (Lord Cross); compare the dissentients’ characterization of the relief as an ‘action … to set aside’ the deed, 121, letter C (Lords Wilberforce and Simon).

¹²⁷ [2020] UKSC 36, [2020] 3 WLR 521.

¹²⁸ Dicey, Morris and Collins on the Conflicts of Laws (15th edn, Sweet and Maxwell 2012), 12-1048 ff.

¹²⁹ Zavarco plc v Nasir [No 2] [2020] EWHC 629 (Ch), [2020] 3 WLR 98.

¹³⁰ Section 49(3), Senior Court Act 1981 acknowledges the court’s inherent power to issue a stay; the technique is used in a range of situations; for example, to suspend English court proceedings in order to give effect to an arbitration agreement nominating a foreign seat, as required by s 9, Arbitration Act 1996 (on this topic, Dicey, Morris and Collins on the Conflicts of Laws, 16-1066 ff, and Andrews on Civil Processes, 34-08 to 34-16; or in accordance with the forum non conveniens doctrine (on which, Dicey, Morris and Collins on the Conflicts of Laws at 12-007 ff).

¹³¹ Conversely, when an exclusive jurisdiction clause nominates England, but related proceedings are on foot in another jurisdiction, the court might even so stay the English proceedings: Nomura International plc v Banca Monte dei Paschi Di Siena Spa [2013] EWHC 3187 (Comm), [2014] 1 WLR 1584 at [16], [17], [80] to [83] (Eder J).

¹³² [2002] 2 All ER (Comm) 1041.

¹³³ [1973] QB 87, 99 (Ormrod J).

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