Equitable Remedies Flashcards
(22 cards)
What are equitable remedies?
Discretionary remedies, available for common law or equitable wrongs.
Wolverhampton - Equity intervenes to put right defects or inadequacies in the common law, where pursuit of a CL right would be contrary to conscience.
Specific performance - nature of right and when can it be awarded (Beswick)
In personam right - against the particular defendant
Damages must be inadequate - Beswick
When are damages inadequate (so SP awarded)
Uniqueness? If I buy something so unique damages won’t compensate.
Land contracts - Every plot of land is unique, so if I buy X plot, giving me Y doesn’t suffice.
Sale of private company shares - not available on open market, so I can’t just go and buy diff shares.
Sale of goods - if ordinary goods, damages adequate but for unique items, SP available.
Penn v Lord Baltimore - In personam nature
Although dispute was based in America, C could apply for specific performance in England because the parties were in England and equity acts in personam.
Beswick v Beswick - Nephew acting unconscionably?
Uncle sold coal business to nephew, requiring money to be paid to aunt for life.
He dies, aunt cannot enforce contract as third party.
This was specifically enforceable - unconscionable breach of faith.
Co-Op v Argyll - Where will SP not be awarded?
Co-Op had lease to run shop, agreed to keep supermarket open during normal business hours.
Decided to stop trading, landlords sought specific performance.
Held: SP to compel running business is paradigm case of its disadvantages.
- Court supervision? Are the parties going to keep coming back?
- What do we have to check? Whether they are running business, how well, how many staff they send etc.
- Limitation on freedom - you are basically enforcing involuntary servitude - better to allow damages.
Tesco v Union
Tesco offered people increased pay, then wanted to take it back.
Cs sought specific performance of the contract with increased pay, Tesco argued you cannot have specific performance for employment contracts.
Held: SP may be ordered against employer WHERE otherwise just, and employer retains confidence in employee (they aren’t a bad employee or anything).
There was no breakdown in confidence here.
Damages also inadequate (would have to look at how long they would be employed by Tesco and chances of alternative employment - assessment would be prone to error)
Other factors bearing on discretion in SP cases
- Cs conduct - he who comes to equity must come with clean hands.
- Laches - delay. Has someone accepted the status of things by unduly delaying their claim.
- Would it create unnecessary hardship? Eg requiring Co-Op to run a loss-making business? Damages as a one-time award may be better here.
Injunction - where does power arise from and how do they work?
May be mandatory or prohibitive.
Also may be perpetual (final) or interim.
Senior Courts Act s37 - High Court may make an interim or final order to grant an injunction where just and convenient. May be made unconditionally or on terms and conditions the court thinks just.
When are interim injunctions awarded? Ethicon
C argued that pending trial, D should be restrained from bringing product to market, as it would result in irreparable harm even if C win at trial.
Held: Interim injunction granted - balance of convenience test - consider how adequate damages would be for each party if they were to win.
Here, damages inadequate for C even if they win. Whereas, damages would compensate D if D won.
Freezing (Mareva) Injunction
Where money is subject to a dispute, freezing injunction says the money must remain where it is, you cannot dissipate it.
Ensures integrity of the outcome of the trial.
Injunctions against persons unknown/newcomers - Wolverhampton v London
Unlawful encampments being made by Travellers - should an injunction be made against those who haven’t yet made encampments, but might? Restraining them from doing so in the future?
Held:
This was new type of injunction - made against persons unknowable at time of grant and applied potentially to anyone in the world without notice. Persons restrained also have no right or liberty to do what is prohibited.
Power to grant injunctions is unlimited, and although it must be exercised in accordance with principle, the principles evolve over time.
Equity puts right defects in CL, where CL contrary to conscience or CL remedies inadequate. It is also essentially flexible - discretionary with flexible conditions to suit any particular case.
No barrier to newcomer injunctions, however needs to be fair and just. Court guided by key principles of equity - applies where CL inadequate, equity looks to substance, equity flexible, equity not constrained by hard rules.
Must also show:
1. Compelling need for protection of rights, not adequately met by other measures available
2. Sufficient procedure to overcome potential for injustice due to lack of notice (eg advertisement for potentiallly affected people, liberty to apply to vary or discharge the order, or limits on scope of order so it is proportional
3. Full compliance with disclosure duty necessary.
Damages in lieu of injunctions - Legislation + Cases
Senior Courts Act 1981, s50
Damages may be awarded in addition to, or in substitution for, an injunction or specific performance.
Shelfer: Damages in lieu may be given:
1. Injury to plaintiff’s legal rights small
2. Capable of being estimated in money
3. Can be adequately compensated with small money payment
4. Oppressive to defendant to grant injunction
HOWEVER: Coventry v Lawrence -Courts should not fetter discretion
Jaggard v Sawyer - Oppressive injunctions
Covenant breached by building house, C brought claim to knock it down.
Held: Inj would be oppressive, Shelfer criteria met.
Rescission - what is it and when does it apply?
Setting aside a transaction.
Right to rescind makes a contract voidable until set aside.
Applies between the parties of a contract, but also where there is a gift or creation of a trust. A principal may also rescind transactions their fiduciary has entered in breach.
There needs to be some mistake for rescission to be awarded.
Great Peace shipping - no equitable jurisdiction where the contract otherwise valid at CL - only remedy is that the contract is void.
Mistake in a disposition leading to rescission - Pitt v Holt
Mrs Pitt - bad tax advice set up trust with unexpected liability. She had not acted in breach, just got wrong advice.
Held:
We don’t care about mispredictions in mistake (where party mispredicts a future event) - we care about a mistake as to a past or present matter of fact or law.
Close examination of facts needed to evaluate the injustice of leaving a mistaken disposition uncorrected - objective assessment focusing on facts.
Court should make a judgement on whether it would be unconscionable to leave it uncorrected.
Wary of allowing rescission where someone has just failed to avoid tax, but here, she was not artificial or abusive, so could rescind.
Applying Pitt - Bhaur
Here, he knew that there was a risk the scheme would fail, but took it.
He should not be allowed to enter into a tax avoidance scheme and be compensated if it goes wrong - he took the risk, liable for consequences.
Also, here it was an artificial tax avoidance scheme.
When do you lose right to rescind?
- Affirmation - if you knew you made a mistake but proceeded.
Subject to laches - lapse of time and delay are material but consider length of delay and acts done in the interval, which may affect balance of power and justice.
- Where it is not possible to ‘undo the transaction’ - putting parties into pos they were in before.
Rogge v Rogge - Third party acquires a right
Rectification - what is it and in what circumstances can you get it?
Correction of mistakes in written documents.
Two types:
- Common mistake - where doc does not accurately record agreement
- Unilateral mistake - other party is aware of mistake, or where it is a unilateral transaction (eg a will, deed of gift, trust)
Porter v Stokes - When is there common mistake, to order rectification
Where there is a prior binding contract, nature of claimant’s equity is to bring the latter document in accordance with the terms of the contract.
Where there is no prior binding right, equity remedies the unconscionability of the enforcement of a binding document, which runs counter to the clear common intention of the parties.
Here - it was obvious the strip of land was meant to be granted, it was just a failure to write it down.
National Union v Tyne - who can you bring an action against?
T company made non-binding agreement with a union, which was effected in employees’ contracts.
T accidentally put higher amount in contracts than they intended.
T argued for rectification, but asked for rectification of the agreement (which was not binding) rather than of the contracts which were.
Held: Rectification is possible for non-legally binding documents where it will have a legal effect on parties’ rights.
However, here not granted because claim brought against union, should have been brought against employees.
When can a will be rectified? AJA + Marley
If will fails to carry out testator’s instructions due to a clerical error or failure to understand his instructions, it may be rectified to carry out his intentions.
Marley v Rawlings - Husband and wife accidentally signed each other’s wills due to an admin error, meaning they were void.
Held: This was a clerical error, arose in connection with routine office work and thus it can be rectified.
