Specific Performance

Insight | May 2017

Specific Performance
Image: ‘The Contract’ by Fritz Wagner

Under the law of contract there are times when two parties can no longer honour their agreement and at which point one of them is left wanting. In some instances the award of monetary damages is enough to provide remedy, however there are also those where the loss is irreplaceable. On those occasions the court can legally impose a duty on those no longer willing (or seemingly able) to perform the task they originally contracted to undertake. While in certain cases the source of non-performance can also stem from frustration the criteria here is one of general breakdown of communication or even unresolvable conflict that while perhaps entirely warranted on the part of the negator, leaves the claimant with no other option than to sue.

Once agreed upon, an order for specific performance will comprise two elements (i) declaration of the order and (ii) provision of consequential detections to that effect. It is also important to note that where a contractual breach is only anticipated the court can still require specific performance or provide injunctive measures, as was outlined by Lord Tucker in Hasham v Zenab:

“In equity all that is required is to show circumstances which will justify the intervention by a court of equity. The purchaser has an equitable interest in the land and could get an injunction to prevent the vendor disposing of the property.”

On this occasion the potential vendor immediately tore up a signed contract for sale of land after learning that the acreage was greater in the conveyance than as she had orally agreed. The language barrier between the two parties thus prevented clear understanding of what was at stake; and so left with a collapsed purchase the buyer sought specific performance prior to the completion date, upon which the court pondered its feasibility before dismissing the claim upon grounds of falsified evidence on both sides.

A positive example of specific performance can however be found in Rosesilver v Paton where a purchaser entered into a contract to acquire residential property, after which the vendor argued that the terms of the agreement relied on reimbursement of the part-purchase payments upon winning their two pending litigation cases, therefore the intention to sell was implied at the outset. Having examined the inconsistency of the vendor’s argument the judge dismissed additional claims of fiduciary breach and undue influence on a lack of cohesive evidence before ruling that the sale must now be completed. When reaching summary judgement Mann J concluded:

“I do not consider that Mr Paton has advanced a sufficiently clear and plausible case for saying that there was any form of binding (in any sense) arrangement, contemporaneously with the contract and its variation, which would restrict or restrain the enforcement of the contract.”

There are of course a number of factors that can hinder the ability to undertake a contract of engagement and these can range from disability and illness, personal conflict, mistrust based upon recent behaviour and costly supervision to enforce the performance. Likewise a failure to seek remedy for a protracted period can also work against a claimant as the negator could claim estoppel under the doctrine of laches. Ultimately though the choice to pursue specific performance will always run with an attached risk of further complications, as the inherent trust between contracting parties will have been irreversibly eroded once litigation commences; therefore financial damages should never be ruled out unless all other options have been exhausted.

Borman v Griffith

English Property Law

Borman v Griffith
Image: ‘Pathway of Life’ by Connie Tom

Implication by way of contract, is argued in a case involving the conflict of interests between two tenants and a perhaps disorganised and rushed grant of occupancy by the landlord.

In a time immediately before the Law of Property Act 1925, a landowner sought to let out a part of his estate for a determined period. Under the terms of the lease there was at the time, a gravelled road that passed by the tenant’s rented property named ‘The Gardens’, while leading to the door of the main estate property named ‘The Hall’.

At the time the tenant began his residence, there was also an unfinished bridleway that allowed for access to the rear of the Gardens, albeit given no mention within the contract, nor any reliable evidence that use of the drive had been orally agreed between the two parties. During this period, and shortly after taking occupancy of the Gardens, the Hall was leased to another occupier, with no issues arising between them.

A few years afterwards, this same tenant vacated the Hall, and so the landowner let it out to another party for a fixed period, after which the occupier of the Gardens continued to use the gravelled drive as a means of access to the front of his property, as he had since his lease began. Two years after taking up residency, the defendant in this case erected a wire fence to prevent the claimant and tenant of the Gardens from using the gravelled drive as a means of access, hence resulting in litigation.

Relying upon the wording of s.62(1) of the 1925 Act, and the fact that there had never been any other suitable means of access to his home, the claimant argued that an easement by way of implication had been granted by the landlord. When considered by the court, the facts determined that there was a clear difference between the granting of a lease and the conveyance of interest in land or property; and that in this instance the former applied.

There was however, the principle that under the terms of the contract there could be argued, an obligation to undertake full performance of the rights bestowed the claimant, where unless the contract provides specific exclusion of a right of way between two sharing tenants, the gravelled drive afforded both users equal powers to enforce their rights. It was on these grounds that the judge endorsed the action and awarded accordingly, while holding that:

“[A] grantor of property, in circumstances where an obvious, i.e., visible and made road is necessary for the reasonable enjoyment of the property by the grantee, must be taken prima facie to have intended to grant a right to use it.”