Two equitable remedies: specific performance, injunction, but strong preference for damages

Two equitable remedies: specific performance, injunction, but strong preference for damages

1. 
   Specific performance = order by court to perform contract
   
2. 
   Injunction = “negative” order by court not to do something
   

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  When will the court award not just the payment of damages, but order the contract breaker to perform his side of the agreement?
  
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  Traditionally, common law courts rarely order performance. Had jurisdiction only over property.
  
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    Chancery courts (courts of equity) had jurisdiction over the person and thus had the ability to force someone to actually do something
    
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      Could lock you up for contempt of court if you disobey the order to perform
      
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    These courts of conscience developed their own rules and principles to when a remedy was and wasn’t available. Many of them still relevant today.
    
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      Generally not awarded where it infringes on the rights of a third party
      
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  Principles that govern when specific performance (exceptional remedy) will be awarded:
  
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    1. When damages will be inadequate. Must be something unique as substitute performance is not available
    
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      Too difficult to predict what those damages will be
      
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    2. He who seeks equity must do equity (the person who comes to equity must come with clean hands)
    
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      The plaintiff must be innocent of any wrongdoing
      
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    3. Must be pursued promptly. Refusal likely when request excessively delayed.
    
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    4. Will not grant performance when they will be require extensive supervision
    
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      Thus will rarely grant performance for personal services or construction
      
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    5. If it will be awarded to one side, it will be mandated upon the other
    
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      Principle of mutuality
      
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    6. If you are seeking specific performance, you cannot mitigate your losses
    
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  General rule: specific performance is always available for sale of land. Derived from English law.
  
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    Because real property is always unique
    
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    Canadian courts have deviated from that view
    
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      Unless the real-estate has some unique value it is not going to get an action of specific performance --- Semelhago v. Paramedvai (SCC, 1996)
      

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  Facts: Defendant neglected the contract to built a road and subsequent piping between two parcels of the plaintiff’s property. Not suing for damages, but for performance.
  
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  Decision: Action upheld. Defendant ordered to perform contract.
  
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  Reasoning:
  
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    Part of the selling price of the land was the agreement to do this work, makes the court sympathetic to ordering it to be carried out.
    
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    Too difficult to calculate cost of losses of breach.
    
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    Unusual because it was a building contract
    

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  Facts: Defendant pre-emptively closes the supermarket chain in a shopping complex. Plaintiff, owner of said complex, sues for performance of lease contract.
  
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  Decision: Deems damages a better way to settle this than specific performance which would merely prolong this legal battle, while damages can end litigation.
  
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  Notable mentions:
  
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    Contrast to Tanenbaum because it would require too much supervision
    

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  Facts: Defendant, actress, withdrew from her contract with plaintiff. It had positive covenants requiring her to renew the contract at the behest of the studio, and a negative covenant preventing her from working with others while contracted. Suing for injunction of her new work in the UK, and damages.
  
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  Decision: grants the injunction, no damages.
  
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  Reasoning:
  
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    Court can enforce the negative covenants through an injunction (equitable measure)
    
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      In equity because it stops a defendant from doing a specific act
      
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      Damages too difficult to calculate to be relevant
      
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    Place time limits on the injunction because they are concerned about enforcing specific performance as courts don’t order performance on contracts of personal services
    

7. 
   Time
   

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  Facts: defendant fails to sell the house he contracted to sell to the plaintiff’s cause estranged wife gets odd legal right to hold the house under the Matrimonial Homes Act. Plaintiff sues for performance and damages (which are substantial since the price of the property has risen dramatically)
  
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  Decision: Court awards only damages to the plaintiff
  
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  Reasoning:
  
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    Damages should be awarded on the difference between the contract price and the price at the time of this decree and not at the time of the delivery of contract.
    
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      Only this method can place the plaintiff in a position similar to that which would have occurred should the contract have been carried out.
      
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    Lord Cairn’s Act: if an equity court can’t award specific performance it can award damages in lieu
    

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  Court said that they knew they couldn’t get specific performance and at that point should have entered the market to mitigate losses.
  
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  Thus the date upon which damages should be determined is not the date of judgment, but the date that it became obvious that specific performance would not be attained
  

8. 
   Restitution
   

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  A realm of private law unto its own: addresses the mischief where a defendant has been enriched by a benefit that would be unreasonably or unlawfully kept
  
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  Applicable in circumstances where it would be unreasonable that the benefit would be gained by a transgressing party
  
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    Implicit within contracts of banking (Ex: Bank can take back funds mistakenly deposited in one’s bank account)
    
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  Pertinence of fiduciary relationships:
  
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    Ex: Contract of agency requires fiduciary duties, and thus restitutionary interest can be claimed on a breach
    
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  Contractual remedies: damages, specific performance, and the injunction
  
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    Law of restitution is the contrast of the law of compensation. In restitution the defendant must give up his gains to the plaintiff.
    
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  Supreme Court of Canada has enthusiastically embraced, and vigorously reaffirmed, the existence of restitution as an independent source of civil obligation, resting on the principle of avoidance of unjust enrichment.
  

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  Facts: Spy case. British double-agent escapes to Russia from where he writes a book published in England. Can the crown take his profits?
  
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  Decision: Restitutionary interest can be taken by AG from publisher
  
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  Reasoning by Birkenhead:
  
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    Tries to say that he is awarding restitutionary damages. Calls it an account of profits.
    
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      Restitution only justified in the case law in extraordinary circumstances
      
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    The confidentiality agreement undertaken by intelligence officers is described as a contract creating fiduciary obligation that has been violated
    
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  Dissent: worries of consequences of applying this precedent to the commercial sphere
  

2. 
   The kinds of promises legally enforced