Specific Performance
Short Description
Equity...
Description
Specific Performance Definition When a court directs a party to perform the obligation imposed on it by the contract; It is a remedy which compels the execution of a contract which requires some definite thing to be done before the transaction is completed; The parties’ rights are settled and defined in the manner intended; A party to a contract is generally compelled to perform what he has agreed to do when damages may not be an adequate remedy the decree of specific performance may be refused.
Applicable Law
Wong Kup Sing v Jeram Rubber Estate Ltd
The P entered into an agreement with the D to buy from him a rubber estate within a period of time clearly stipulated. The P failed to buy within stipulated time and requested extension, on 6 occassion which were given to him. However, the P still failed to buy at that day. Later, the D refused to sell and consequently the P claimed SP. Held: the D should give a reasonable notice of their intention to abandon the contract if the balance of the purchase money was not paid. However, the P proves a continuous readiness and willingness to perform the contract from the date of the contract until the date of hearing. Therefore, SP ordered.
Yeo Long Seng v Lucky Park (Pte) Ltd
Section 11 – 29 of Specific Relief Act
Court refused to grant SP as damages could provide an adequate remedy.
General Principle
Langen and Wind v Bell
1. Discretionary remedy
In Malaysia, Section 21 of SPA deals with the discretion of the court to decree specific performance. SP may be decreed by a court solely at its discretion, except in cases where clear cut provision deprives the court of this discretion. The court exercise their discretion to grant or refuse a decree of SP mainly in cases involving delay, hardship, mistake or conduct of the Plaintiff.
The purchaser brought a specific performance action for the sale of shares, under a contract whereby the purchase price could not be ascertained for about two years after the agreed date for the transfer of share. The court had regard to the equitable principle that an unpaid vendor is entitle to a lien on the subject matter of the sale, refused to grant an order for specific performance except in a form which would effectively safeguards the equitable lien.
2. It is remedy ‘in personam’
Acts in personam, where it was against the individual defendant not his property. Court will order SP of a contract for the sale of land which may be located in a foreign country but whose owner is within court’s jurisdiction; or the court may order for the administration of the assets abroad if the executor’s are within the court’s jurisdiction.
Penn v Lord Baltimore
Where the plaintiffs and defendant entered into a written agreement fixing the boundaries of Pennsylvania and Maryland, the former of which belonged to the plaintiffs and the latter to the defendant. The plaintiffs sued the defendant in England to have the agreement specifically performed, and one of the objections takes by the defendant was to the jurisdiction of the court. This objection was overruled by Lord Hardwicke on the ground that decreed specific performance of an English agreement relating to the boundaries between Pennsylvania and Maryland, despite the inability of the court to enforce its remedy in rem. SP of an agreement was decreed, even though the subject matter was not in England but in North America
Richard West Partners (Inverness) Ltd v Dick
Specific performance was decreed of a contract for sale of land outside the jurisdiction against a defendant within it. Although the land was not within the jurisdiction, the defendant was, and the court would hold him in contempt unless he complied.
3. Damages not adequate remedy
In general, equity does not intervene if the remedy of law is adequate. The usual remedy at law for breach of contract is damages, for failure to return to return a chattel to its owner, it is damages for detinue. Damages has been regarded as inadequate to put the plaintiff in the same position as if the contract had been formed (or the property return to him) by the defendant in a number of different areas.
Section 11(1)(c) “Specific performance of any contract may, in the discretion of the court, be in enforced, where the act agreed to be done in such that pecuniary compensation for its non performance would not afford a relief”.
Illustrations (a) A contract with B to sell him a house for $1000. B is entitled to a decree directing A to convey the house to him, he paying the purchase money. (b) A contracts to sell to B contracts to buy a certain number of railway shares of particular description. A refuses to complete the sale. B may compel A specifically to perform this agreement, for the shares are limited in number and not always to be had in the market and their possession carries with it the status of share holder which cannot otherwise be procured. (c) A contract with B to paint a picture for B who agrees to pay therefore$1000. The picture is painted. B is entitled to have it delivered to him on payment or tender of $1000.
Section 11(2) Raises a presumption that “the breach of a contract to transfer immovable property
cannot be adequately relieved by compensation in money, unless the contrary is proved”. Similarly, it is presumed that the breach of contract to transfer movable property can be thus relieved.”
Gan Realty Sdn Bhd v Nocholas
The defendant negotiated with the plaintiff the sale of their respective shares on the Oriented Bank of Malaya Berhad. The terms and conditions of the agreement were confirmed in the letter. The plaintiff had reason to believe that the defendants were about to dispose of their shares in the bank and they obtained injunctions restraining the defendants from parting with their shares. The plaintiff claimed specific performance of the agreement. If the loss can easily be quantified in money, the court will not grant SP.
Duncuft v Albrecht
The court decreed specific performance of an agreement for the sale of railway shares which are limited in number and not always to be had in the open market. But the shares in question are such that they can easily obtained from the open market, so that the loss can easily be quantified in money, the court will not grant specific performance of the contract.
H.A. Securities Sdn.Bhd V Ng Kong Yeam
in 1988, Roxy had proposed a right issued of 135646 shares at RM1 each plaintiff and the defendant entered into two memorandum of understanding (MOU), whereby the plaintiff deposited with the defendant two and a half million shares (fully paid) in Roxy Co. in exchange for a payment of RM5 million by the defendant. It was agreed that if the proposed rights issue was cancelled, the plaintiff could claim back the said 2 ½ million shares on payment of RM5 Million by the defendant. It was agreed that if the proposed
rights issue was cancelled, the plaintiff could claim back the said 2 ½ million shares on payment of RM 5 million to the defendant. The right issued was aborted. A year elapsed, and then only the plaintiff claimed back the shares after paying RM 5 Million, but before the defendant had already sold out the shares. The plaintiff is now claiming specific performance of the agreement. The defendant says that four month after the cancellation of rights issued they wrote to the plaintiff but he did not respond for any apparent reason. No explanation was given. It was held to the KL High Court; “Why did not the plaintiff respond to that letter at all? No valid explanation had been forthcoming and the only conclusion is that they were either waiting for the price to go up or they had then decided not to exercise their option to demand the return of the shares. The defendant had acted strictly as required. RM 5 Million was at stake and stoke shares are a volatile commodity. In these circumstances, the plaintiff surely cannot now ask for specific performance because; (a) The shares were freely available in the open market, unlike the decision in Gan Realty Sdn. Bhd. V Nicholas (1969) 2 MLJ 110. (b) Damages would be an adequate remedy as decided in Yeo Long Seng v. Lucky Park Pt. LTD (c) The plaintiff had ignored the defendants letter for one year (d) Of the fact that the shares had actually been sold before the plaintiff’s delayed decision to demand...” S.11(2) – Presumption o 1. Court always presume transaction of immovable property is always inadequate damages unless can prove otherwise (Df must prove)
o 2. Movable Property transaction always adequate damages unless prove otherwise (Pf must prove)
4. Damages may be awarded in substitution for or in addition to specific performance General Principle: ‘once the specific performance had been given, it does not mean that the plaintiff does not get for the other compensation.
Section 13 of SRA Section 14 of SRA
Damages may be awarded for apart unperformed
give necessary written consent and to execute Power of Attorney in favor of the plaintiff or its nominee for the purpose of execution of charges and financier’s documents to finance the development project. The Joint Venture project went on without any hitch until the demised of the deceased. The defendants being the heirs of the deceased had refused to honour their obligations under the said Agreements. Upon the death of the deceased, the defendant was adamant and refused to cooperate with the plaintiffs to execute the new power of Attorney. For that reasons, the plaintiffs could not developed the Lands within 6 month as stated under the said Agreements. The court held that, after take into consideration on the fact of the circumstances, the court allows the plaintiff’s claim with cost.
Ibrahim bin Saidin v Hitam bin Ali
Section 18 of SRA Section 19 of SRA
SP even where damages are agreed upon
5. Specific Performance unaffected by waiver Allen v El Nasr Export
Binaan Sentosa Sdn Bhd Plaintiff files the Writ of Summons and Statement of Claim against the defendant claiming for specific performance and the other consequential relief. In this case, plaintiff enters a Joint Venture Agreement and Supplementary Agreement with Che Soda bin Che Hassan (the deceased) for the purpose to develop two of land. Pursuant to the said agreement, a Power of Attorney was executed by the decease in favor of the plaintiff to act, conduct and managed all the deceased’s affairs in relation to the land. The deceased too had received a consideration of RM 30, 500.00 from the plaintiff in respect of the joint venture project. It was the term of the said Agreements that the deceased to deliver the Lands free from encumbrances, to
“The principle by waiver is simply where, if one party, by his conduct, leads another to believe that the strict rights arising under the contract will not be insisted on, intending that the other should act on that belief, and he does act on it, then he first party will not afterwards be allowed to insist on the strict legal rights when it would be inequitable for him to do so.
Plasticmoda Societa Per Azioni v Davidsons (Manchester)
There must be no consideration moving for him who benefits by the waiver. There may be no detriment to him by acting on it. There may be nothing in writing. Nevertheless, the one who waives his strict rights cannot afterwards insist on them. His strict right cannot at any
rate suspended so long as the waiver lasts. He may on occasion be able to revert to his strict legal right for the future by giving reasonable notice in that behalf, or otherwise making it plain by his conduct that he will thereafter insist on them.
Plenitude Holdings v Tan Sri Khoo
Held: A court of equity enforces SP of a contract affecting land because it acts upon the equities contract and not upon the contract itself.
6. Only Positive contracts may be specifically performed Section 55
Hafsham v. Zenab
When Privy Council emphasized that the basis of specific performance is a valid contract in which one party must have given adequate consideration to the other party. A gratuitous agreement is not liable to be specifically performed.
Section 17 Section 24
7. Considerations of “hardship” and expiry of “limitation period” may not necessarily defeat SP
In general, specific performance may be refused in the discretion of the court where a decree would cause unnecessarily hardship to either of the parties, or to third party. In adequacy of price is not standing by itself , a ground for refusing specific performance, but it may be evidence of
other factors, such as fraud or undue influence, which would render enforcement inequitable. Civil Proceeding = 6 years In rem property=12 years
Patel v Ali
The vendor and her husband were co owners of a house which were co own of a house which they contracted to sell in 1979. The husband bankruptcy caused a long delay in completion for which neither the vendor had a leg amputated. She later gave birth to her second and third children. The purchaser obtained an order for specific performance against the vendor appealed on the ground of hardship. She spoke little English and relied on help from nearby friends and relatives, hence it would be hardship to leave the house and move away. Goulding J held that the court in a proper case could refuse specific performance on the ground of hardship subsequent to the contract, even if not caused by the plaintiff and not related to the subject matter. On the facts, there would be hardship amounting to injustice, therefore the appropriate remedy was damages.
Haji Osman Bin Abu Bakar v. Saiyed Noor Bin Saiyed Mahmud R.M Venkatachalam Chettiar v. N.K.R. Arunasalam Chettiar 8. SP dependant on an option is unaffected if the option is not exercised strictly in the prescribed manner. Kau Nia Enterprise Ltd v Teck Wah Corporation
The fact that by an option in writing given on June 10, 1980, the defendants for the sum of
$5000 gave the plaintiff an option to purchase a property in Singapore with vacant possession and at the price of $720 000.00. Completion of the sale and purchase was to take place on November 10, 1980. The option was exercisable at or before 4 p.m on July 30, 1980. The acceptance was prescribed. The plaintiffs had to sign at the foot of the option at the portion entitled “Acceptance Copy” and deliver it duty signed together with the balance of the 10% of the purchase price at or before the time aforesaid. The plaintiff did not exercise the option in the mode prescribed. Instead, they handed to the defendants and the defendants accepted two cheques aggregating the sum of $67 000 which together with the option fee amounted to 10% of the purchase price. Held: that “ although the Plaintiff did not exercise the option in the manner and within the time prescribe, I am satisfied that defendants had waived these terms and had in truth and in fact accepted the plaintiffs’ belated and altered mode of converting the option into a conclude contract. This is conclusive evidence by letter dated July 31, 1980 and written by the defendant. The letter acknowledge the receipt of the two cheques, one of which was for $5000 and the other for $62 000 which was postdated to August 23, 1980. It made reference to the option fee. The defendants “confirmed the sale” to the plaintiffs. By saying “you have already exercised the said sale” they meant or must be taken to mean that the plaintiffs had been deemed by the defendants to have duly exercised the option. The letter even went on to provide for interest to be charged if the postdated cheque was not only honoured on presentation. The letter was accepted by the plaintiffs. On 8 September 1980 the plaintiffs requested the defendants to encash the postdated cheque. The defendants did. Completion of the sale and purchase was delayed. On 6 December 1980 the defendants’ solicitors
stated that the transfer had been executed by the defendants. They asked for a firm date for the completion. Up to this stage, it is clear that every act of the defendants was in affirmation that the agreement for sale and purchase was concluded and the actions of the defendants were steps taken by them towards the completion of the sale. On 21 January 1981 the defendants took an extraordinary step. They wrote to their mortgagee bank to auction the property. It was calculated to deprive the plaintiffs of the property. It was stated by counsel on both sides that the property was by then about $1.6m. The defendants should not be allowed to renege on their contract just because the property market was rising. The plaintiffs gave notice of completion. The defendants could not give vacant possession of the property. The encroachments mentioned earlier in this judgment were still there. The plaintiffs insisted on completion notwithstanding the encroachments. As evidenced by the letter dated 3 April 1981 and written by the plaintiffs’ solicitors, both parties agreed price to meet the cost and expense of removing the encroachments. No agreement was reached on the amount of the abatement. As the defendants failed to complete the sale notwithstanding repeated notices from the plaintiffs, these proceedings were commenced from specific performance and for an appropriate abatement of the price in view of the encroachments. On behalf of the defendants, it was argued that the option, not having been exercised in the mode and within the time prescribed, had lapsed. It was also argued that the letter of 31 July 1980 was not a sufficient memorandum, as it allegedly did not contain the essential terms. The first contention is not consistent with the plain words and tenor of the defendants’ letter of 31 July 1980, the effect of which I had already dealt with. It is so clear and unambiguous. This is one case where happily the contemporaneous documents are such that
they conclusively demonstrate the conclusion of a contract in writing.
9. SP may claim and granted even before the time of performance has arrived. General Rule = the party to the contract can seek for specific performance if they can foresee that the other party could perform the obligation when the time arrived. Eg: B enters into contract selling of the goods with C. B realize that C could not perform its obligation on the contract at the time what was promised. So in this circumstance, B can seek for specific performance on the grounds of anticipatory breach
Leeds Industrial Cooperative Society Ltd. V Slack
Held: “so far, as specific performance is concerned, they must always be cases where there has been an anticipatory breach”.
Khatijabai Jiwa Hasham v Zenab
Facts: a contract signed by the defendant for the sale by her to the plaintiff of a 2 acre plot of land in Nairobi, provided inter alia, for
payment of a deposit immediately and the balance of the purchase price on presentation of documents of title to be executed by both parties within 6 months from the date of the contract. The defendant then repudiate the contract and tore it up within a few minutes of signing it on the ground that she had never agreed to sell the whole 2 acres but only an area of half an acres. Only July 2, 1954, some weeks before the last day for competition, August 19, the plaintiff instituted proceeding claiming specific performance of the contract of February, 19. The defendant contended inter alia, that the plaintiff was issued prematurely, and that the plaintiff should have waited until there had been a failure to perform the contract within the period fixed hereby, notwithstanding that she had previously intimated her refusal to do so. Held: The plaintiff was entitled to an order of specific performance. The fallacy of the defendant’s contention consisted in equating the right to sue for specific performance with a cause of action at law. In equity all that was required was to show circumstances which would justify in the intervention by a court of equity. The order of specific performance often fell into two parts, the first being of a declaratory nature and the second containing consequential direction. The court would not, of course, compel a party to perform his contract before the contract date arrived, and would give relief from any order in the event of an intervening circumstance frustrating the contract.
10. Possibility of compliance is must (Observance to the order is a must)
Equitable remedies will never issue unless the court can ensure that they will be observed. As equity does not act in vain, specific performance will be decreed only where the defendant is in a position to comply with the order.
Jones v Lipman
Facts: defendant entered into a contract to sell some land to the plaintiff, and then sought to avoid specific performance by selling the land to a company acquired by him solely for this purpose and controlled by him. While specific performance would not normally be ordered against a vendor who no longer owned the property, here the defendant was still in the position to complete the contract, because as Russel J said that the company was ‘the creature of the vendor, a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity. This specific performance was decreed against the vendor and the company.
performance, wholly or partly, of a trust, the specific performance of any contract may, in the discretion of the court, be enforced. Eg: A holds certain stock in trust for B. A wrongfully disposes of the stock. The law creates an obligation on A to restore the same quantity of stock to B, and B may enforce specific performance of this obligation
Section 11(1)(b)
Any contract may be specifically enforced when there is no standard for ascertaining the actual damage caused by the non performance of the act agreed to be done Eg: A agrees to buy and B agrees to sell a picture by a dead painter and two rare China vases. A may compel B specifically to perform this contract, for there is no standard for ascertaining the actual damage which would be caused by its non performance.
Section 11(1)(c)
Specific Performance under SRA 1950 1. Contract can be specifically enforced wholly Specific relief may be ordered for contract for land whereby each piece of land is regarded as unique , contract for the sale of stock and shares which cannot be bought in open market, and contract of sale of chattels which are especially rare or of a particular manner.
Section 11(1)(a) Contains four situations which specific performance may be specifically enforced. When the act agreed to be done is in the
Specific performance of any contract may, in the discretion of the court, be enforced where the act agreed to be done is such that pecuniary compensations for its non performance would not afford adequate relief. Eg: A contracts with B to paint a picture for B who agrees to pay therefore $1000. The picture is painted. B is entitled to have it delivered to him on payment or tender of the $1000
Section 11(1)(d)
The specific performance may also be enforced when it is probable that pecuniary compensation cannot be given for the nonperformance of the act agreed to be done A transfer without endorsement, but for valuable consideration, a promissory note to B. A becomes insolvent, and C is appointed his assignee. B may
compel C to endorse the note, for C has succeeded to A’s liabilities and a decree for pecuniary compensation for not endorsing the note would be fruitless
Section 11(2)
Raises a presumption that “the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, unless the contrary is proved.” Similarly, it is presumed that “the breach of a contract to transfer movable property can be thus relieved.
Loh Koon Moy & Anor. v. Zaibun SA binti Syed Ahmad Facts: The first appellant had agreed to buy a piece of land from the respondent, the administratix of an estate. An order of court had been given empowering the respondent to sell the land. The learned trial judge found in favour of the appellant but found that there was an oral agreement enabling the respondent to pay damages for breach. He therefore gave damages in favour of the appellant. However, the learned judge refused to order specific performance because of the damages available through the oral agreement. The appellant appealed. Issue: Whether, if an alternative remedy is available, a specific performance can be granted. Principle: Specific Performance is an equitable remedy for breach of contract; an alternative when money damages, the usual legal remedy; is inadequate Judgment: In accordance with sections 18 and 19 of the Specific Relief Act 1950 provides for a prayer of compensation and though a sum be named
in default is willing to pay the same, a contract may be enforced by an order for specific performance. The learned judge followed the judgement of the Privy Council in the case of Oxford & Ors. v. Provand & Anor. whereby the Lordships declared that the court may exercise a discretion in granting or withholding a decree of specific performance taking into account the circumstances of the case, conduct of the parties and their interests under the contract. Furthermore, section 11(2) Specific Relief Act 1950 has provided that, in favour of a contract to sell land, the court shall presume that monetary compensation is not adequate to relief the breach of contract to transfer immovable property. Moreover, in the court’s view, there was an element of public policy which operates in favour of an order of specific performance in this case. Based on the findings of the court stated above, the appeal is allowed. The administratix was ordered to specifically perform the agreement to sell by executing proper and valid transfers of the lands in question upon payment of the full purchase money and a further order that if she defaults, the Senior Assistant Registrar be empowered to execute the relevant documents on her behalf. The respondent had not in any way rebutted the presumprtion raised in S.11(2)
Hoh Ah Kim v. Paya Trubong Estate Sdn. Bhd. Facts: The plaintiffs are the executors of the estate of Liew Yeong Choy, deceased, who entered into an agreement in writing, dated 19 February 1972 with the managing director of the defendant company whereby the deceased
agreed to buy and the defendant company agreed to sell a portion of its land to the extent of about 15 acres. Upon the execution of the agreement, the deceased paid the sum of $18,000. Clause 1, spells out the terms of the agreement for sale. Clause 2, states that the defendants shall from time to time keep the deceased informed about the Penang government's option. Correspondence passed between the defendants and the deceased. The defendants indicated to the deceased that he could buy the land at $7,000 per acre, not at the old price of $4,000. Eventually on 20 January 1980, the defendants' solicitors wrote to the plaintiffs' solicitors refunding the sum of $18,000 which purported to discharge the defendants from the said agreement, thus giving rise to the present proceedings by the plaintiffs for specific performance or damages for breach of contract. Issues: Whether the agreement for sale enforceable at law so that the plaintiff can claim for specific performance.
and acquiescence as pleaded in para 10 of the defence, there is clear evidence from the correspondence and the defendant DW1 that the parties were at all times negotiating for specific performance of the said agreement. In fact, the defendants through their solicitors impliedly gave the deceased a false hope of furnishing a detailed agreement to be executed between the parties. This was followed by the negotiations about the price.
Principle: In granting the specific performance, court will take into account all the circumstances in that case then identified whether the deceased deserve for the damages only or damages and specific performance.
Mohamed v Ho Wai
Judgment: In an action for specific performance of an agreement for sale of land, Section 9(1) of the Limitation Act 1953 will apply. In the present case, the alleged breach occurred on 20 January 1980. Therefore time began to run from that date. Even if the right of action accrued from the expiry of the 'option' on 10 July 1973, the plaintiffs were still within the 12year period from 24 May 1980, when the plaintiffs filed their statement of claim. The plaintiff’s action is not statute barred. Besides, the agreement for sale is not void ab initio for uncertainty but enforceable at law. In addition, on the defence of laches
The court is therefore satisfied that the defence of laches and acquiescence cannot succeed. Then, the court did not grant specific performance but awarded compensation for breach of the agreement. It is fair and reasonable to assess compensation on the basis of $4,000 per acre which is the purchase price originally agreed between the parties. The defendants were ordered to pay the plaintiffs the sum of $60,000 as compensation. They must also refund the sum of $18,000 which was paid as deposit and the costs of the action to the plaintiffs. Facts: Plaintiff prayed for specific performance of an agreement to grant a monthly tenancy. The plaintiff’s uncle obtained a monthly tenancy of the premises in question in1929. After more than twenty years of peaceful enjoyment of this tenancy, the plaintiff’s uncle had to vacate the premises when in 1951 the Menteri Besar ordered the vacation of the whole area. In 1957, when the area was made a “white area”, plaintiff’s uncle applied to the proper authorities for reoccupation of the premises and this permission was given to him a year later. However, the owner of the premises entered into possession of the premises because plaintiff’s uncle did neither inform the owner of his vacation, nor about his whereabouts, nor paid rent, giving an impression of abandonment. In the meantime, the plaintiff became a partner in his uncle’s business and started proceedings against the defendant.
Issue: Whether the Court will grant specific performance in the case of executed contract. Principle: It is an elementary principle of equity that specific performance will only be granted in the discretion of the Court in the case of executory contracts. Judgment: The plaintiff prays for specific performance of the agreement dated 12th September 1929, which had been fulfilled, in other words, its an executed and not an executory contract. An “executed contract” is one which is already fulfilled. Meanwhile, “executory contract” is a contract where it remains to be carried into effect. It is an elementary principle of equity that specific performance will only be granted in the discretion of the Court in the case of executory contracts. Section 11 of the Specific Relief Act 1950 lays down the conditions under which the discretionary powers are exercisable which is, executor contracts. Following the case of J.M. Abdul Kadir v Shaw Bros , the court would not grant specific performance for the monthly tenancy. The more suitable remedy for the plaintiff is in section 7 and section 8 of the Specific Performance Act 1950. Accordingly the plaintiff fails and the action is dismissed with costs. SP through interlocutory mandatory injunction.
Section 20
This section laid down the situations whereby the contracts are not specifically enforceable. They are: a) A contract for the non performance of which the compensation in money is an adequate relief Eg: A contracts to sell and B contracts to buy, $10,000 in the four per cent loan of the City of Penang. b) A contract for personal service will or volition. Eg: A, an author, contracts with B a publisher, to complete a literary work, B cannot enforce specific performance of these contract.
Lumley v Wagner Ms.Wagner, a wellknown opera star, agreed with Lumley to sing in a particular theater during the period of the contract, and not sing for anyone else. She however, agreed to sing for another person in contravention of her contract with Lumley, who successfully obtained an injunction to restrain her from singing for anyone else during the period of contract. It is to be noted that SP of the promise to sing was neither asked for nor was enforceable. Because it is well established that there is no SP of contracts which are personal and involve rendering of personal services.
Sivaperuman v Heah Seok Yeong Realty Sdn Bhd Tinta Press v BIMB 2. Contract cannot specifically enforced
be
c) An uncertain contract Eg: A, the owner of a refreshmentroom, contracts with B to give him accommodation there for the sale of his goods and to furnish
him with the necessary appliances. A refuses to perform his contract. The case is one for compensation and not for specific performance, the amount and nature of the accommodation and appliances being undefined. A misdescription of the property agreed to be sold in the contract document make the contract unenforceable. But when a misdescription is a trivial nature, then the purchaser who contracted to buy cannot allowed to repudiate on account of his triviality which is no way affects the value or utility of the property. However, where misdescription is of a serious nature, then SP is refused on the ground that the purchaser cannot be compelled to purchase something which is substantially different from what he contracted to buy. d) A contract which is in nature revocable Eg: A and B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, either A or B might at once dissolve the partnership. e) A contract made by the trustee either in excess of their powers or in breach of their trust. Eg: Two trustees, A and B, empoered to sell trust property worth $10,000, contract to sell it to C for $3000. The contract is so disadvantageous as to be a
breach of trust. C cannot enforce its specific performance. f) A contract made by or on behalf of a corporation or public company created for special purposes, or by the promoters of the company, which is in excess of its power. Eg: A company existing for the sole purpose of making a railway contracts for the purchase of a piece of land for the purpose of erecting a cotton mill thereon. This contract cannot be specifically enforced. g) A contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date. Eg: A contracts to let for twenty one years to B the right to use such part of a certain railway made by A as was upon N’s land, and that B should have a right of running carriages over the whole line on certain terms, and might require A to supply the necessary enginepower, and that A should during the term keeping the whole railway in good repair. Specific performance of this contract must be refused to B. h) A contract of which a material part of the subject matter supposed by both parties to exist, has, before it has been made, ceased to exist. Eg: A contracts to pay an annuity to B for the lives of C and D. It turns out that, at the date of the contract, C, though
supposed by A and B to be alive, was dead; the contract cannot be specifically performed.
Scope of Section 20
The situation which a contract may not be specifically enforceable are not exhaustive Even if the contract is not covered by the section, the court may still order against its SP. Eg of contract which cannot be specifically enforced: o Illegal and immoral contract, agreements without consideration Contracts Lacking Mutuality Equity will not permit a party to enforce a party to enforce a contract which the other part could not have enforced against him.
Flight v Bolland
An infant who entered into bilateral contract with an adult, filed a bill through his next friend for its SP. The bill was dismissed. The principle of mutuality in contracts admits of many exceptions like; i. A similar contract procured by the fraud or misrepresentation of one of the parties may be enforced against him, although not by him. ii.A contract between an infant and an adult may be enforced against the adult after the infant comes of age, although no decree could be made against the plaintiff.
Mir Sarwarjan v Fakhruddin
Held: a contract which can only be enforced at the option of one party cannot be specifically enforced.
3. For whom Contract cannot be specifically enforced
Section 23 Section 20(1)(e) – Contract by Trustee in breach of trust cannot be enforced Chun Peng Chee v Cho Yew Fai Facts: The defendants are the present trustee of Sin Sze Si Sze Ya Temple. In January 1945 an agreement was entered into between the plaintiff and the then surviving trustees of the Temple, for the sale of a shophouse belonging to the Temple for which the purchaseprice was fixed and has been paid. The plaintiff, subsequent to the agreement was permitted to collect the rent from the tenant of the shophouse and did so until December 1,1950, when as a result of a latter, the tenant paid rent to the trustee which he had previously done before the date of the agreement. Held: S 20(e) of the specific relief ordinance 1950 contract by trustees in breach of trust cannot been forced. S 2(g) of the contract ordinance an agreement not enforceable by law is said to be void S 66 of the contract ordinance when a contract become void, any person who has received any advantage under such contract is bound to restore it to the person from whom he received it. The agreement cannot be enforced and the defendants must repay to the plaintiff the amount which the surviving trustees received from him.
4. For whom contracts cannot be specifically enforced except with a variation
Section 25
Section 25 of the Specific Relief Act 1950 highlights ‘fraud’ as a ground on the basis of which specific performance may be refused. Specific performance is dependent on a complete and definite contract. Thus, a contract cannot be specifically enforced if it is suffering from illegality, uncertainty, fraud, undue influence, mistake, misrepresentation or lack of consent. A contract which lacks in any of the three essentials of proposal, acceptance or consideration is also not enforceable. Similarly, varied and vague contracts where the meaning may not be ascertained cannot be enforced.
R paid off the A debt to C & arranged with the solicitor whereby by the said solicitor no longer looked upon the A for the payment. The A despite this agreement refuse to transfer the said land to the R. It was contended that: 1) The contract was unfair 2) No proof of fulfillment 3) Was no proof that the R was able n willing toperform the contract 4) There was undue delay on the part of R 5) Payment to C was a condition precedent Held: The A had received in the fullest measure all that he bargained for and the court should not exercise the powers under S.21 In view of the evidence, the second ground must fail 7. No SP of part of contract
Section 16 Exception: Section 1315 5. Against whom contract cannot be specifically enforced
Section 27
Specific performance of a contract cannot be enforced against a party in case: o If the consideration to be received by him is so grossly inadequate/ couple with other circumstances evidence of fraud./ undue influence o If assent was obtained by the misrep ,concealment, circumvention/ unfair practices o If assent was given under the influence of mistake of fact, misapprehension/ surprise
Tan Meng San v Lom Kim Swee
A agreed to transfer a land to the R inconsideration of the R settling the A debt to C &paying the A solicitor his fee.
Defences
i. Ineffective Contract
A contract cannot be enforced if there is illegality, uncertainty, fraud, undue influence, mistake, misrep or laps of consent. A contract which lacks in proposal, acceptance or consideration is also not enforceable
Section 25
Highlight fraud which specific performance may be refused.
was refused although the mistake was due to entirely to the defendant’s fault and not in any way caused by the vendor; and the defendant waited until the auction was over before declaring the mistake.
Craddock Bros v Hunt
Basically, where the mistake is in the written record of the contract, the plaintiff may obtain rectification and specific performance in the same action.
Section 27 (a)
Mere in adequate is not a defense unless fraud is evidence
iii. Unfair Advantage Section 21(2)(a) Polygram Records Sdn bhd v The Search
ii. Misrepresentation, Mistake of fact Section 27 Specific performance cannot be enforced which obtained by misrep, concealment, mistake n etc. D not allowed to resist specific performance by alleging his own fault or mistake. (Duke of Beaufort v Neeld) However if the court feel it would involve hardship, it may refuse to order specific performance. P may obtain rectification & specific performance if a mistake is detect.
Watkin v WatsonSmith
“no specific performance where elderly vendor offered bungalow for sale at 2,950 by mistake, intending 29, 500. There was no contract.”
Malins v Freeman
Where an estate was purchased at an auction and the defendant bid under a mistake as to the lot put up for sale. Specific performance
iv. Delay
Generally in equity time is not held to be of the essence of a contract, thus specific performance may be decreed although the contractual date for performance has passed. Failure to complete on the contractual date may, however render the delaying party liable to damages for breach of contract. The fact that time is not of the essence in equity does not negative a breach of contract in such a case. It means that the breach does not amount to a repudiation of the contract. Thus the delaying party, although liable to damages, does not lose the right to seek specific performance, nor will he forfeit his deposit, provided he is ready to complete within a reasonable time.
v) Hardship Section 36(1), (2) Limitation Act 1980 England No statutory period of limitation to bar claims of specific performance, except ´unreasonable delay: Delay become irrelevant if: The P has taken possession under the contract He is seeking specific performance to get the legal title of the property Delay become relevant: the contract itself is disputed, and not its formalization
Section 6(1)(a) of Limitation Act 1953 Actions founded on a contract which naturally includes specific performance shall not be brought after the expiration of six years from the date in which the cause of action accrued.
Section 22
Exempts trust properties from period of limitation
Section 21 (2) (b)
The court might refuse to grant specific performance where the performanc would involve some hardship on the D which he did not foresee.
Patel v Ali
The vendor and her husband were coowner of a house which they contracted to sell in 1979. The husband’s bankruptcy caused a long delay in completion, for which neither the vendor had a leg amputated. She later gave birth to her second and third children. The purchaser obtained an order for specific performance against which the vendor appealed on the ground of hardship. She spoke little English, and relied on help from nearby friends and relatives, hence it would be a hardship to leave the house and move away. Held: Hardship may be define as one which the D could not foresee at the time to entering the contract. The court has to take the relative view of the hardship to P and D before ordering and refusing specific performance.
Section 23
Nothing in this act shall effect any equitable jurisdiction to refuse relief on the ground of acquiescene.
Venkatachalam v Arumasalam
It may well be that the performance of his contract would involve some hardship on the estate of the vendor which the vendor did not foresee. There are hardships on both sides: If the vendor estate is held to his bargain, there will be hardship in the sense that as a result of circumstances beyond anyone control the bargain. If it is not performed it will be at least a commensurate hardship on the P to be deprived of the fruit of their bargain
vi) Defect in Title
A purchase cannot be compelled to take a bad title, where the defect in title is due to reason: misdescription of property in the contract of sale Land being burdened with respective covenants Vendor having no title the purchaser may rescind the contract, unless the vendor removes the defect in title
Section 24 of SRA
A contract for the sale or letting of property, whether movable or immovable, cannot be specifically enforced in favour of a vendor or lessor who: knowing himself not to have any title to his property thought he entered into the contract believing that he had a good title to the property Previous to entering into the contract has made a settlement of the subject matter
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