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(p. 549) 19. Equitable remedies 

(p. 549) 19. Equitable remedies
Chapter:
(p. 549) 19. Equitable remedies
Author(s):

Richard Clements

and Ademola Abass

DOI:
10.1093/he/9780198726241.003.0019
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Learning objectives

This chapter will help you to:

  • understand that the courts’ powers to grant equitable remedies are discretionary

  • understand that equitable remedies vary from case to case and there is no one size fits all

  • distinguish the principles governing the grant of general and specific injunctions

  • understand the principles governing the grant and refusal of specific performance

  • understand that all equitable remedies are in personam and can be granted in respect of property outside the jurisdiction of the court.

(p. 550) Introduction

One of the abiding characteristics of equity is its ability to act in personam, that is, to bind the conscience of the wrongdoer. Unlike common law remedies—which are rigid and attach specifically to the property subject of dispute—equitable remedies are flexible and do not need to attach to the objects of litigation. In fact, equitable remedies can be granted in respect of items or defendants located outside the jurisdiction of the court making the order. However, extra-territorial injunctions would not normally be granted in respect of land outside the UK, and are subject to some limitations such as the feasibility of enforcing the order overseas, absence of any contrary local rules overseas, and that service of the judgment can be effected.

Carron Iron Co v Maclaran (1855) 5 HL Cas 416


Cranworth LC said at 436–7:


… the court acts in personam, and will not suffer anyone within its reach to do what is contrary to its notion of equity, merely because the act to be done may be, in point of locality, beyond its jurisdiction.

There are several remedies available in equity to a party who has been wronged in law or against whom some legal or equitable wrong is threatened. This is because ‘equity does not suffer a wrong without a remedy’. Equitable remedies range from orders made by the court of equity (now the High Court) exercising equitable jurisdiction mandating someone, usually the defendant, to do or refrain from doing some act (injunctions), to decrees made by the court compelling a party to perform a contract (specific performance) in whole or in part. Our focus in this chapter is to consider some very important remedies that are available to anybody who approaches the court of equity. In particular, we discuss two most important equitable remedies, namely injunctions and specific performance.

Key Point


Equitable remedies can be granted where property is outside the court’s jurisdiction.

19.1 Injunctions

Injunction is one of the oldest remedies of equity and also one of the most popular and most flexible. Although injunction has existed almost for as long as equity itself and used to be granted by the Court of Chancery before such powers were conferred on common law courts later in the development of equity, the statutory authority to grant injunctive relief is now enshrined in the English Supreme Court Act 1981.

According to s. 37(1) of the Act:

the High Court may by order (whether interlocutory or final) grant an injunction … in all cases in which it appears just and convenient to do so.

(p. 551) 19.1.1 Injunctions are discretionary

As with most equitable remedies, injunctions are granted not as of right to applicants, but by the discretion of the court. But note that injunctions are not a remedy that the court may grant indiscriminately. The court must have reference to precedents, common sense, and justice.

Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] 1 Ch 149

Evershed MR at 181, said of discretionary power of the court:


It is, I think, well established that, if A proves that his proprietary rights are being wrongfully interfered with by B, and that B intends to continue his wrong, then A is prima facie entitled to an injunction, and he will be deprived of that remedy only if special circumstances exist, including the circumstance that damages are inadequate remedy for the wrong that he has suffered.

Medow v Medow (1878) 9 ChD 89

Jessel MR at 93, states that injunctions are ‘not by the caprice of the judge, but according to sufficient legal reasons or settled principles’.

Sears, Roebuck & Co v Camp 124 NJ Eq 403 (E & A 1938)

Justice Heher aptly set out the broad extent of equity’s power to remedy a wrong.

At 411–12:


Equitable remedies are distinguished for their flexibility, their unlimited variety, their adaptability to circumstances, and the natural rules which govern their use. There is in fact no limit to their variety and application; the court of equity has the power of devising its remedy and shaping it so as to fit the changing circumstances of every case and the complex relations of all the parties.

19.1.2 Against whom can injunctive orders be made?

The classical rule was stated in Iveson v Harris (1802) 7 Ves 251, by Lord Eldon at 257: ‘you cannot have an injunction except against a party to the suit’. This view has drastically changed in modern times due to developments in European Union legal systems and also due to the proactiveness of courts.

Venables v News Group Newspaper Ltd [2001] All ER 908

Dame Elizabeth Butler-Sloss at 908:


[I]n light of the implementation of the 1998 Act, we are entering a new era, and a requirement that the courts act in a way which is compatible with the convention, and have regard to European jurisprudence, adds a new dimension to those principles.

(p. 552)

Injunctions are now regarded as capable of being granted contra mundum, that is, against the world.

Bloomsbury Publishing Group plc v News Group Newspaper [2003] EWHC 1087


… the person or persons who have offered the publishers of The Sun, The Daily Mail and The Daily Mirror newspapers a copy of the book Harry Potter and the Order of the Phoenix by JK Rowling or any part thereof and the person or persons who has or have physical possession of a copy of the said book or any part thereof without the consent of the claimants.

Key Point

Injunctions can be granted against the whole world.

19.2 Types of injunction

Broadly speaking, injunctions are of two types: interim (formerly known as interlocutory injunctions) and perpetual (alternatively called final injunctions, see later for detailed explanation). Interim injunctions are granted by the court to enable parties to a suit to maintain the status quo until the court has heard the merits of the case fully. A final injunction does what it says: it determines finally the rights and obligations of parties and hence can only be granted following the full hearing of the case by the court.

But before we consider the specific types of injunctions, let us first examine certain principles that apply to all types of injunctions.

19.2.1 Requirements for the grant of injunctions

To protect legal rights

As a general rule, the court will only grant injunctions to protect a legal or equitable right. Thus injunctions are not whimsically granted or granted simply to fill a vacuum left by law.

Holmes v Millage [1893] 1 QB 551

Lindley LJ at 555:


It is an old mistake to suppose that, because there is no effectual remedy at law, there must be one in equity.

Note that actual infringement on legal or equitable right is not necessary: a mere threat of infringement suffices.

South Carolina Insurance v Assurance Maastchappij [1986] 3 All ER 487

Lord Brandon said:


[T]he effect of these authorities, so far as is material to the present case, can be summarised by saying that the power of the High Court to grant an injunction is subject to two (p. 553) exceptions … (1) is when one party to an action can show that the other party has either invaded, or threatens to invade, a legal or equitable right of the former for the enforcement of which the latter is amenable to the jurisdiction of the court.

Thus, where a claimant fails to establish a right or a threat to it, no injunction will be granted.

Day v Brownrigg (1878) 10 ChD 294

The plaintiff brought an action in respect of their house which, according to them, had been called ‘Ashford Lodge’ for a period of 60 years and that the adjoining house had been called ‘Ashford Villa’ for some 40 years. Problems started when the defendant decided to change their house name to ‘Ashford Lodge’. The plaintiff sought an injunction to restrain action on the ground that allowing the renaming of the house was inconvenient and could cause their own house to lose value.

HELD: Per James LJ at 305:


… this court can only interfere where there is an invasion of a legal or equitable right. No such legal or equitable right exists.

Paton v Trustees of British Pregnancy Advisory Service [1979] QB 276

The claimant, a husband, sought an injunction to prevent his wife from committing an abortion. Did pregnancy constitute such a right that equitable remedy of injunction applied?

HELD: Sir George Baker P at 281:


… the husband had no legal right enforceable in law or in equity to stop his wife having this abortion or to stop the doctors from carrying out the abortion.

Key Points

  • • An applicant for an injunctive relief must establish that he or she has a legal or equitable right in the issue concerned.

  • • However, such right could exist only in terms of potential or real threat to them.

19.2.2 Is there any limit to the court’s jurisdiction to grant injunctions?

This is an important question because originally only the Court of Chancery could grant injunctions and in respect of specific issues as already seen in Chapter 1 ‘The birth of equity and trusts’ dealing with the historical development of equity. However, following a series of legal developments, common law courts of old began to grant injunctions alongside the Chancery. As we know from Chapter 1, the 1873–5 Judicature Acts fused the jurisdictions of courts of equity and the common law, at least as far as the grant of injunctions is concerned. But this then raises the question what kind of injunctions can these courts grant thereafter? Are they confined to granting the same type of injunctions they could grant before the Judicature Acts was enacted, or can they now grant injunctions in respect of much wider issues? (p. 554)

There are two sides to the debate. One view is that s. 25(8) of the Judicature Act extended the scope of injunctions that the High Court might now grant by virtue of s. 37 of the 1981 Supreme Court Act. The other view denies such an interpretation. Let us now consider these views.

The narrow view

Cummins v Perkins [1899] 1 Ch 16

Lindley and Chitty JJ argued that the High Court could not grant injunctions in respect of issues the old court of equity or common law court could not.

North London Rly Co v Great Northern Western Rly Co (1883) 11 QB 30

Brett LJ at 36:


If no court had the power of issuing an injunction before the Judicature Act, no part of the High Court has power to issue such an injunction.

The House of Lords approved this classical view in Gouriet v Union of Post Office Workers [1978] HL 541, where their Lordships held that the Judicature Act did no more than simply fuse the procedures of the two courts with no consequences whatsoever to their jurisdictions.

However, more recent case law tends to favour a more liberal interpretation of s. 37 of the 1981 Supreme Court Act powers conferred on courts to grant injunctions over the narrow more rigid common law practice.

The broad view

Chief Constable of Kent v V [1983] QB 34

Lord Denning MR at 42:


The section as it now stands plainly confers a new and extensive jurisdiction … It is far wider than anything that had been known in our courts before.

Bayer AG v Winter [1986] 1 WLR 497

Fox LJ at 502:


… Bearing in mind we are exercising a jurisdiction which is statutory and which is expressed in terms of considerable width, it seems to me that the court should not shrink, if it is of opinion that an injunction is necessary for the proper protection of a party to the action, from granting relief, notwithstanding it may, in its terms, be of a novel character.

(p. 555) North London Rly Co v Great Northern Western Rly Co (1883) 11 QB 30

Cotton LJ at 40:


where there is a legal right which was, independently of the [Judicature Act], capable of being enforced either at law or in equity, then whatever may have been the previous practice, the High Court may interfere by injunction in protection of that right.

Parker v Camden London Borough Council [1985] 2 All ER 141

Lord Donaldson at 141:


For my part I do not accept the pre-Judicature practices of the Court of Chancery or any other court should still rule us from their graves … As I see the matter the jurisdiction, as a jurisdiction, is quite general and, in terms, unlimited. Nevertheless it has to be exercised judicially and with due regard to authorities which are binding on the court.

Two years after Parker’s case, the House of Lords continued this liberal approach.

South Carolina Insurance v Assurantie Maatschappij [1986] 3 All ER 487

Lord Goff at 487:


I am reluctant to accept the proposition that the power to grant injunctions is restricted to certain exclusive categories.

For an interesting article on the impact of language on equitable remedies, see Dennis Kurzon ‘A Whorfian View of Equitable Remedies: A Chapter in the Semiotics of English Legal Development’ (1995) VIII(23) International Journal of Semiotic Law 155.

Key Point

Lord Donaldson did not deny that the practice before the Judicature Act limited the courts to certain types of injunctions. His position was that there was no reason why such restrictive practice should still continue in the post Judicature Act era.

thinking points

  • In the light of recent case law, do you think that the South Carolina case should become the correct interpretation of the extent of courts’ powers to grant injunction?

  • Do you think that there is any real need to have one specific view of the effect of the Judicature Act with respect to the scope of the court’s jurisdiction to grant injunctions, or should the issue be left to courts to determine depending on the circumstances of the individual cases before them?

  • Injunctions are a powerful equitable remedy which the courts have used for centuries. They are used very cautiously and only after a careful consideration of the right of plaintiff and defendants. It is because injunctions have serious consequences for parties against whom they are granted that the courts are usually reluctant to widen the scope of their use. However, the fact that the social milieu of (p. 556) the modern world is different to the one that prevailed a century ago means that injunctions, like any other equitable remedies, must adapt to new situations. Several jurisdictions, including the UK, have recently extended the perimeters of such well-known injunctions such as Anton Piller orders to suit the modern exigencies. See Jeff Berryman ‘Recent Developments in the Law of Equitable Remedies’ (2002) 33 Victoria University of Wellington L Rev 51; Fionnghuala Cuncannon ‘The Case for Specific Performance as the Primary Remedy for Breach of Contract in New Zealand’ (2004) 35 Victoria University of Wellington L Rev 657.

19.3 Principles guiding the grant of injunctions

There are several principles applicable generally to the grant of injunctions, although some particular principles govern the grant of specific types of injunctions. For example, the principles governing the grant of interlocutory injunctions are different from those applicable to perpetual (final) injunctions, just as different principles apply to whether an injunctive relief is to be granted with notice or ex parte (without notice to the defendant). We first consider the general principles which apply to the grant of injunctions regardless of what type of injunction is sought.

19.3.1 Inappropriateness of legal remedies such as damages

London and Blackwell Rly Co v Cross (1886) 31 ChD 354

Lindley LJ at 369:


The very first principle of injunction law is that prima facie injunctions cannot be obtained to restrain actionable wrongs, for which damages are the proper remedy.

Thus, where legal remedies are not appropriate it is up to the court to intervene by ordering injunctive relief.

AG v Sheffield Gas Consumers Co (1853) 3 De GM & G 304

Turner LJ at 321:


Whether this is a case in which the law is so inadequate that the court ought to interfere, having regard to the legal remedy, the right and consequence of the court’s interference.

This principle suggests that the court will first have to consider whether common law remedies are adequate before entertaining the application for an injunctive order. But the court does not have to award damages, even if these are adequate, where an injunction will be more appropriate: Beswick v Beswick [1968] AC 58. This may be in order to prevent the culprit from (p. 557) continuing the offending act after paying damages (see Stevens v Chown (1901) 1 Ch 894), or to prevent what is generally regarded as a situation in which the defendant is able to ‘purchase’ the right to commit a wrong through damages. We shall discuss the issue of award of injunctions in lieu of damages more fully later.

19.3.2 Past and future conduct of claimants

As we discussed in Chapter 2 ‘Maxims of equity’, equity runs on a series of maxims. Two of these maxims which are very important are that ‘he who comes to equity must come with clean hands’ and ‘he who seeks equity must do equity’. As explained in Chapter 2, the first deals with the past conduct of the claimant who seeks equity, while the second relates to the future conduct of the claimant. Thus a claimant whose previous conduct has been tarnished by an impropriety may be denied an injunctive relief by the court just as a claimant who refuses to do equity or undertake certain obligations (in respect of the future) to alleviate the plight of the defendant, were the application for injunction to succeed, may be declined by the court.

Past conduct

Cross v Cross [1983] 4 FLR 235

Following a break-up of marriage between a couple and a divorce proceeding, issues arose as to payment of maintenance and mortgage on the matrimonial property. The husband, responsible for the mortgage payment, and the wife, responsible for paying rates, both defaulted. The husband eventually divested his interest in the house in full settlement of his obligation towards the mortgage in the mistaken belief that his ex-wife and son were still living in the matrimonial home. It turned out that the wife had moved out to live with her new husband as at the date the previous husband divested himself of his interest. The ex-husband reversed his decision. His ex-wife brought an application for specific performance of that agreement. The court looked at the conduct of both parties up to the proceedings and, on balance, refused the wife’s application.

Wood J:


He who comes to equity must come with clean hands and any conduct of the plaintiff, which would make a grant of specific performance inequitable, can prove a bar.

As we said in Chapter 2, it must be noted that the court is here concerned not with the general conduct of the claimant but with any such specific conduct that may affect his application.

Dering v Earl of Winchelsea (1787) 1 Cox 318

Sir Edward Dering, the Earl of Winchelsea, was of a general bad character, which included encouraging his brother to gamble with government money.

Eyre LCB:


… a man must come into a court of equity with clean hands; but when this is said, it does not mean a general depravity; it must have an immediate and necessary relation to the equity sued for, it must be a depravity in a legal as well as a moral sense.

(p. 558) Future conduct

Chappell v Times Newspapers (1975) 2 All ER 233

(See full facts in Chapter 2.)

HELD:


… in seeking an equitable remedy the plaintiffs had to be prepared to do equity, and by refusing to give an undertaking not to disrupt newspaper production they were in effect telling the employers that they must keep to their part of the contract even though the plaintiffs were not themselves ready or willing to keep to theirs. Accordingly, even though the plaintiffs might not have been in breach of their individual contracts of employment, they were not entitled to the equitable relief claimed in the interlocutory application and the appeal would fail. [Emphasis added.]

Key Point


The court is not concerned with the general conduct of the claimant but with his conduct that relates to his application.

Neesom v Clarkson (1845) 4 Hare 97

Wigram VC at 101:


…  where a litigant requires the assistance of a court of equity to enforce his claim, he can be made to submit to conditions.

thinking points

Do you think it is always possible for the court to separate the specific from the general conduct of a claimant, and is there any persuasive reason why the court could not look into the general conduct of a claimant to determine his application? As we observed in Chapter 2, courts are more concerned with the specific conduct of a claimant for equitable remedy vis-à-vis the defendant in deciding whether or not to grant the order. This principle was laid down in the Highwayman (Everet v Williams, Ex 1725 9 LQR 197), where the court dismissed with costs a case brought by a robber who filed a bill in equity to compel his partner to account for a sum of money, and cited the lawyers who brought the case for contempt of the court. See FP ‘The Highwayman’s Case (Everet v Williams)’ (1893) 9(35) LQR 197.

19.3.3 Futility of an order

Where it will be futile to grant an injunction or where, once granted, it will be impossible to execute an injunctive order, the court will not normally grant the application. This is in consonance with the maxim ‘equity does not act in vain’. Thus, where, for instance, it will be impossible for the court to compel the defendant to undo what he has already done—which gave rise to the claimant’s action—the court may refuse an injunctive order.

Evans v Manchester, Sheffield and Lincolnshire Rly Co [1887] ChD 626

The court refused to grant an injunction to prevent the future subsidizing of a canal. (p. 559)

Kekewich J at 639:


I think it would be wrong to enjoin a company or an individual from permitting that to be done which is really beyond his control … in the sense that he cannot by any precaution or by any works with reasonable certainty … comply with the order sought.

AG v Observer Ltd [1990] 1 AC 109

In breach of his duty of confidentiality, a former member of the British security services published confidential information in his memoirs. The memoirs became the subject matter of litigation in Australia and were subsequently published in America. Two British newspapers published material derived from the memoirs, but not disclosed in open court in Australia. The Crown sought permanent injunctions to restrain the first two newspapers from commenting on and reporting the contents of the memoirs.

HELD: Inter alia, that the injunction sought by the Crown in respect of future information was too wide and too vague. The court saw no reason in maintaining an injunction restraining some newspapers from publishing Peter Wright’s Memoirs—Spycatcher—which had been published worldwide.

19.4 When would the courts award damages instead of injunction?

As said earlier, injunctions will only be granted where, amongst other reasons, any remedy is either inadequate or inappropriate. This means that, under certain circumstances, the courts will refuse injunctions following consideration of the suitability of damages.

Some writers argue that the circumstances in which the court will award damages instead of injunctions include those situations where, prior to the Chancery Amendment Act 1858 (otherwise known as Lord Cairns’s Act), they could easily award damages and no more. Others argue that the courts are now able to award damages regardless of whether they could have done so prior to Lord Cairns’s Act. However, what should concern us here are the principles governing when the court could award damages in lieu of injunctions irrespective of whether the court is operating before or after Lord Cairns’s Act, as no one has argued yet that different principles attach to the different generations of courts. (For more reading on this issue, see Philip Pettit Equity and the Law of Trusts (9th edn, London: Butterworths, 2001) 552–4.) Section 2 of the Chancery Amendment Act empowers the court to award damages ‘in all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction’.

19.4.1 Principles applicable to the grant of damages in lieu of injunctions

The court has a discretion, following Lord Cairns’s Act, on whether to award damages in lieu of injunction, just as it has a discretion, following the Judicature Act, to grant injunctions or award common law damages. However, to grant damages in lieu of injunctions, it is essential that the court determines the existence of certain principles. These principles were laid down by Smith LJ.

(p. 560) Shelfer v City of London Electric Co [1895] 1 Ch 287

At 323:


  1. (1) where the injury to the claimant is not substantial

  2. (2) where the wrong suffered by the claimant can be quantified in monetary terms

  3. (3) where monetary compensation will be enough remedy

  4. (4) where it would be oppressive to the defendant to grant an injunction.

But this does not mean that once these conditions exist the courts have no choice but to award damages.

Lindley LJ at 316:


Ever since Lord Cairns’s Act was passed the Court of Chancery has repudiated the notion that it ought to allow a wrong to continue simply because the wrongdoer is able and willing to pay for the injury he may inflict.

Thus, the rationale for awarding damages in lieu of injunction is not to provide the affluent defendant with unlimited ammunition to purchase the right to wrong another.

Slack v Leeds Industrial Co-Operative Society Ltd [1924] 2 Ch 475

Lord Summer at 872:


For my part … I doubt, as Sir George Jessel doubted, whether it is complete justice to allow the big man, with his big building and his enhanced rateable value and his improvement of the neighbourhood, to have his way, and to solace the little man for his darkened and stuffy little house by giving him a cheque he does not ask for.

The four rules established by Smith LJ were an expression of his own opinion and, as such, they are susceptible to change or different interpretations and assessments.

Fishenden v Higgs and Hill Ltd (1935) 153 LT 128

Hanworth MR stated that the rules set ‘the high water mark of what might be called definite rules’.

Maugham LJ at 144: Although Smith’s rules might have been accepted as valid they are ‘not universal or even sound rules in all cases of injury to light’.

Jaggard v Sawyer [1995] 2 All ER 189

The plaintiff with her husband bought a house in 1980 in a development area, subject to a covenant not to be binding on successive owners, not to use any part of the unbuilt land other than as a private garden and to keep the relevant section of roadway in good repair. In 1987 the defendants purchased a house at the opposite end of the cul-de-sac from the plaintiff’s property. They decided to build another property on a plot which would have infringed the covenant and inconvenienced the plaintiff’s own property. The plaintiff brought an action for injunction to restrain the proposed use of the new plot, but only after (p. 561) construction had commenced and advanced despite her being aware of the defendant’s plan to do so.

The judge found that although the proposed user of the land resulting from the construction of No 5A would involve breach of the covenant and a continuing trespass, the defendants had acted openly and in good faith, and through inexperience had not appreciated the problem of the covenant, that the plaintiff had failed to seek interlocutory relief, that the trespass itself would involve only light traffic over the plaintiff’s section of the roadway, and that if an injunction were granted No 5A would have no access route. In those circumstances the judge refused to grant the injunction sought because it would be oppressive to the defendants, and instead held that the plaintiff should be awarded damages in lieu under s. 50 of the Supreme Court Act 1981.

On appeal the Court of Appeal confirmed the award of damages. Millett LJ applied Smith’s rules without criticism or qualifications, commenting that ‘Laid down just 100 years ago, AL Smith LJ’s test has stood the test of time’ (at 287). The Court of Appeal’s decision was based on the fact that the outcome of a particular case usually depends on the application of the fourth of Smith’s rules—that is, that damages would be granted in lieu of injunction where it would be oppressive to the defendant to grant an injunction.

However, in Kennaway v Thompson [1981] QB 88, although the Court of Appeal affirmed the approach in Jaggard v Sawyer, stating that ‘[t]he principles enunciated in Shelfer’s case, which is binding on us, have been applied time and time again over the past 85 years’, it granted an injunction, despite the fact that the court of first instance had awarded damages, to restrict a nuisance of noise generated by a motor boat race. The Court of Appeal’s decision was on the basis that none of the first three rules set down by Smith LJ was fulfilled.

Key Point

Even where a defendant is able to prove that the injury he has caused or, in some cases, intends to cause the claimant is not substantial, remediable financially, and that granting the injunction will be unfair to him, the court could still grant the injunction. This will be so if, for instance, on the balance of everything, the court is of the opinion that it serves the interest of justice and equity to do that.

As shown above, AL Smith LJ’s rules are just guiding principles to aid the court in its discretion to know whether or not to award damages instead of injunction. So much depends on facts and circumstances of individual cases. But as Pettit correctly noted (Equity and the Law of Trusts at 557):

… most of the cases in which an injunction has been refused and damages awarded are cases where the plaintiff has sought a mandatory injunction to pull down a building which infringes his right to light or which has been built in breach of a restrictive covenant. In such cases the court is faced with a fait accompli and to grant an injunction would subject the defendant to a loss out of all proportion to that which would be suffered by the plaintiff if it were refused.

It is thus clear that the socio-economic costs of granting an injunction—usually, in this scenario, one that would compel the defendant to destroy an already completed project such as a house—play a crucial role in the courts exercising their discretion.

Wrotham Park Estate Co v Parkside Homes Ltd [1974] 2 All ER 321

The purchaser of some plots of land covenanted with the seller and his assigns the owner for the time being of Wrotham Park Estate that he and his successors in title would not develop (p. 562) the land for building purposes except in accordance with a plan approved by the seller. The defendants began, at some point, to start developing these lands in contravention of the covenant. The plaintiff, the successors in title to the original sellers, brought an action for a grant of an injunction to restrain further development of the land and to have the houses already built pulled down. The application was refused.

HELD: Brightman J at 337:


The erection of the houses, whether one likes it or not, is a fait accompli, and the houses are now the homes of people. I accept that this fait accompli is reversible and could be undone. But I cannot close my eyes to the fact that the houses now exist. It would in my opinion, be an unpardonable waste of much needed houses to direct that they be pulled down and I have never had a moment’s doubt during the hearing of this case that such an order ought to be refused.

This can be contrasted, however, with the next case.

Jaggard v Sawyer [1995] 2 All ER 189

The defendant built a house in a manner that landlocked the claimant so that the latter’s access to his own property would require the claimant to trespass on a private road. In an action for an injunction, the court followed Wrotham Park and awarded the claimant damages in lieu of the injunction sought.

HELD: The plaintiff was awarded damages to the tune of what the defendant would have paid for a right of way, had he constructed the house in accordance with proper processes.

Measure of damages

If the court will award damages in lieu of an injunction, what is the relevant date for calculating the measure of damages to be awarded? Is it damages as would have compensated the plaintiff at the time when the action is brought or when the judgment would have been rendered?

Johnson v Agnew [1980] AC 367

Lord Wilberforce at 896:


In cases where a breach of a contract of sale has occurred, and the innocent party reasonably continues to try to have the contract completed, it would appear to be more logical and just rather than tie him to the date of the original breach, to assess damages as at the date when (otherwise than by his default) the contract is lost.

In the Wrotham Park case, damages were awarded in accordance with the sum the plaintiff might have expected as reasonable for relaxing the covenant in favour of the defendant.

Key Point

It does not automatically follow that because damages are appropriate the court will refuse injunctions. If damages will become a means of purchasing the power continuously to infringe a claimant’s right, then an injunction will be ordered notwithstanding the adequacy or appropriateness of damages in that case.

Let us now move to consideration of interlocutory injunctions.

(p. 563) 19.4.2 Principles guiding the grant of interim injunctions

As said earlier on, injunctions are of various types, even if generally they are either prohibitory (restraining the doing of an act) or mandatory (compelling the doing of an act). In specific terms, injunctions can be interim (granted for a short time) or quia timet (granted prospectively to prevent a breach from occurring). Even then, in the category of interim injunctions, some injunctions can be of specific use, such as to prevent the removal of assets from a jurisdiction where the defendant is being a subject of the dispute (freezing injunctions), and some injunctions could also be granted to prevent the removal of vital materials for evidence from the defendant’s premises (search order).

But whatever the different varieties of interim injunctions, all of them are subject to the same principles which we now consider.

The old regime and the test of ‘prima facie’ case

Prior to 1975—the date that American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 was decided—the golden principle was that an applicant for the grant of an interim injunction must show that he had a prima facie case in the court.

American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504

Lord Diplock at 406:


It was to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunctions.

The new regime and the test of ‘not frivolous or vexatious’ case

This case related to an action brought by a company (Cyanamid) which registered a patent in the UK for the use as absorbable surgical sutures of filaments made of a particular kind of chain polymer known as ‘a polyhydroxyacetic ester’ (PHAE). At that date, the absorbable sutures commonly in use were made from catgut. A rival company (Ethicon) was the main supplier of catgut sutures in the UK. Cyanamid introduced its patented product in 1970 and by 1973 had captured some 15 per cent of the UK market for absorbable surgical sutures. In order to meet the competition from Cyanamid, Ethicon proposed to introduce its own artificial suture (XLG). The chemical substance of PHAE was a homopolymer, whereas the substance from which XLG was made was a copolymer. Cyanamid brought an action for a quia timet injunction to restrain the defendant from introducing its product onto the UK market.

Although the patent judge held that Cyanamid had proved a prima facie case and was so entitled, the Court of Appeal reversed the order. On appeal to the House of Lords, it was held as follows.

HELD:

… all that was necessary was that the court should be satisfied that the claim was not frivolous or vexatious, i.e. that there was a serious question to be tried.

According to the American Cyanamid case, in determining whether to grant an interim injunction the court should adopt the following approach:

  1. 1. That the claimant can show that there is a serious issue to be tried. (p. 564)

  2. 2. That the court considers where the balance of convenience lies.The important things to consider here are:

    1. (i) the court’s ability to quantify likely damages;

    2. (ii) the sufficiency of the claimant’s cross-undertaking in damages (if the defendant is successful at trial); and

    3. (iii) the sufficiency of the defendant’s financial resources to compensate the claimant (if the claimant is successful at trial).

  3. 3. If there is no imbalance, then the status quo is preserved.

Key Point

An applicant for an interim injunction no longer needs to show that he has a ‘prima facie’ case before he can bring an application. What he has to show now is that his case against the defendant is neither frivolous nor vexatious.

The rationale for the new principles governing the grant of interim injunctions was laid out.

Lord Diplock at 396:

When an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the plaintiff’s legal rights is made on contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesis the existence of the right or the violation of it, or both, is uncertain and will remain uncertain until final judgment is given in the action … the object of interlocutory injunction is to protect the plaintiff against injury by violations of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial.

Lord Diplock went on to substitute the ‘prima facie’ test of the old order for a new ‘frivolous or vexatious’ test. Thus, an applicant for an interim injunction is no more required to prove that he has a prima facie case; all he has to show is that his substantive action is not frivolous or vexatious. Lord Diplock thought in American Cyanamid that in reality, there was no understanding amongst the law lords to insist on a prima facie test as a condition for granting interim injunctions.

19.4.3 What does ‘frivolous or vexatious’ mean in this context?

Mothercare Ltd v Robson Books Ltd [1979] FSR 466

Megarry VC said these terms could lead to confusion. He ruled that the phrases simply mean that the plaintiff can show there is ‘a real prospect of succeeding in his claim to a permanent injunction at the trial’.

One slight problem with American Cyanamid was that the House of Lords, in laying down the new test, did not refer to its decision in JT Stratford & Sons v Lindley [1965] AC 269, a case which was decided ten years before American Cyanamid. In JT Stratford, the House of Lords had ruled that a claimant could only be entitled to an interim injunction upon proof of a prima facie case in his favour.

Some attempts have been made to limit the effect of the American Cyanamid test. In Hoffmann-La Roche & Co AG v Secretary of State and Industry [1975] AC 295, Laddie J went back to the old test of a ‘prima facie’ case. However, Laddie J’s approach was not regarded (p. 565) as rejecting the new test as laid down by Lord Diplock, but rather serving as a reminder for the background to the Cyanamid principle, which is that the test is not meant to be exclusive.

Series 5 Software Ltd v Philip Clarke and others [1996] FSR 273

In this case involving confidential business information and trade secrets, Laddie J attempted to resuscitate the prima facie criterion by stating that the court should also consider the relative strength of parties’ cases in deciding whether or not to grant an interim injunction. It must be noted, however, that later his decision has not been followed and cases have not, so far, referred to the judgment.

Barnsley Brewery Co Ltd v RBNB [1997] FSR 462

Robert Walker J:


… that the application for interlocutory injunctions cannot be mini trials of disputed issues of facts and that the court has to do the best it can on a provisional basis, with the relatively modest aim of reducing so far as possible an unjust result.

But notwithstanding these bold attempts, most courts now adopt the ‘frivolous or vexatious test’.

It must be stated that, although the ‘frivolous or vexatious’ test is the main test that determines whether an application for interlocutory injunctions can be made, there are other principles, according to Lord Diplock, that the court must consider in order to decide whether or not to grant the application. According to Lord Diplock, there are six such principles, which we now consider.

However, in recent cases dealing with pharmaceuticals, courts have attempted to clarify some of the test laid down in American Cyanamid. One such criterion is the question of damages.

In SmithKline Beecham plc v Generics UK Ltd (Patents Court) [2002] 25(1) IPD 25005 and SmithKline Beecham plc v Apotex Europe Ltd (Patents Court and Court of Appeal) [2003] WL 1202563, both relating to GB patent number 2 297 550, and both relating to a patent concerning specific salt of the selective serotonin re-uptake inhibitor paroxetine, the court had to determine the balance of convenience between the parties. In SmithKline Beecham plc v Generics UK Ltd, the plaintiff had become aware of the defendant’s intention to launch their own generic paroxetine product, which they claimed infringed claim 3 of the ‘550 patent relating to paroxetine hydrochloride anhydrate’. In an application filed for interim injunction, Jacob J, in determining the question of where the balance of convenience lay, had to consider the adequacy/quantifiability of damages. In his judgment, Jacob J said that:


… as between the two, I will put it this way, the claimant’s damage is more unquantifiable than that of the defendant’s, but both are unquantifiable. There are degrees of unquantifiability, just as there are degrees of infinity.

Jacob J reaffirmed his view in SmithKline Beecham plc v Apotex Europe Ltd, of virtually similar facts. The judge stated:


I remain of the same opinion as I was in the Generics case. Where litigation is bound to ensue if the defendant introduces his product, he can avoid all the problems of an interlocutory injunction if he clears the way first. That is what the procedures for revocation and declaration for non-infringement are for.

(p. 566)

In July 2010 the Supreme Court of Papua New Guinea, in the Ramu Nico case, had to find a balance of convenience in a suit brought by some landowners against Ramu Nico’s attempt to construct a deep sea tailings placement (DSTP) system which the applicants for an interim injunction claimed posed serious environmental hazards. In confirming the decision of the lower court to grant the order, the Supreme Court held that ‘the potential environment harm far outweighs the lifting of the injunction’. (See Julia Daia Bore, ‘Ramu fails to lift interim injunction on tailings disposal’, available at: <http://www.minesandcommunities.org/article.php?a=10262>.)

19.4.4 American Cyanamid’s six guiding principles for granting interim injunctions

  1. 1. The governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage (see 511).

Pettit has rightly considered this principle to be a ‘restatement of the established rule that a claimant should not be granted an interim injunction unless he is able to show that if it was not granted, he would suffer irreparable damage’. Consequently, the damage done or threatened must be substantial and unquantifiable in monetary terms.

Express Newspaper Ltd v Keys [1980] IRLR 247

On the basis of an unlawful proposal by a trade union to induce the claimant’s employees to break their contracts by participating in a political strike, the claimant was held entitled to an injunction on the basis that it would be difficult to calculate its loss.

  1. 2. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff’s undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason on this ground to refuse an interlocutory injunction.

This principle was applied in Chancellor Masters and Scholars of Oxford University v Pergamon (1977) 121 Sol Jo 758, where the court granted an interlocutory injunction to restrain the defendant from projecting Pergamon Press’s Dictionary of Perfect Spelling as though it was one of the claimant’s dictionaries by featuring the word ‘Oxford’ in the title. The court held that to deny an injunction in this case would amount to great but unascertainable damage to the claimant and that the defendants would be sufficiently covered by the claimant’s financial undertaking towards them if the defendants were, on the final case, successful.

  1. 3. Where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, then the question of the balance of convenience arises. It would (p. 567) be unwise even to attempt to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.

The principle of balance of convenience has proved to be controversial. In Francome v Mirror Group Newspapers Ltd [1984] 2 All ER 408 and in AG v Barker [1990] 3 All ER 257, Donaldson MR commented to the effect that the principle of balance of convenience is ‘an unfortunate expression’. The judge also stated that the court should be concerned with justice, not balance of convenience.

The problem is that some judges do not think it is possible to achieve a real determination of ‘balance of convenience’ without somehow prejudging the substantive case.

Fellowes & Son v Fisher [1976] QB 122

Browne LJ at 138:


I cannot see how the ‘balance of convenience’ can be fairly or reasonably considered without taking some account as a factor of the relative strength of the parties’ cases, but the House of Lords seems to have held that this is only the last resort.

Cayne v Global Natural Resources plc [1984] 1 All ER 225

May LJ at 225:


… that the balance of convenience reads more like the ‘balance of the risk of doing injustice’.

  1. 4. Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark on a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.

This principle seeks to ensure that all circumstances of the defendant are taken into consideration before deciding whether or not to grant an injunction against him. The rationale here is to determine whether he stands to suffer any harm by a mere postponement of the date he wishes to commence an act he normally does engage in.

In European Dynamics SA v HM Treasury [2009] EWHC 3419 (TCC), a tenderer who had not been successful for a bid for work with a contracting authority brought an action for an interim injunction against the authority on the basis that its tender had not been fairly treated.

In deciding whether or not to grant injunction, the court held that the balance of convenience favoured the discharge of the without notice injunction for the following reasons:

  • There would be substantial prejudice to the contracting authority, as the existing frameworks were due to expire and customers were waiting for the new frameworks to be in place—customers would go elsewhere to get the services they required if they had to wait for new frameworks to be put in place. (p. 568)

  • The earliest date for a full trial of the dispute between the parties was at least six months away. This delay could result in irreparable harm to the contracting authority’s reputation.

  • There was no obvious or clear evidence that the unsuccessful tenderer would lose market share or would not be able to seek other work to replace what it might have secured had it been successful.

  • If the unsuccessful tenderer succeeded on liability, damages would be an adequate remedy.

  • If an injunction was granted for as long as six months, there was a real risk that the whole tender process would have to be re-run and—given the knowledge acquired by the unsuccessful tenderer—it might be necessary to exclude the unsuccessful tenderer and indeed others who tendered on the basis that there would not and could not be equality of opportunity in the new tender process.

For a commentary on this case, see Christopher Hill, Steve Abraham, and Donald Warnock ‘United Kingdom: Public Procurement, Interim Injunctions And Framework Agreements’, 25 August 2010, available at: <http://www.mondaq.com/article.asp?articleid=106776>.

  1. 5. Save in the simplest cases, the decision to grant or to refuse an interlocutory injunction will cause to whichever party is unsuccessful on the application some disadvantages which his ultimate success at the trial may show he ought to have been spared, and the disadvantages may be such that the recovery of damages to which he would then be entitled, either in the action or under the plaintiff’s undertaking, would not be sufficient to compensate him fully for all of them. The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; and if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party’s case as revealed by the affidavit evidence adduced on the hearing of the application.

  2. 6. If the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party’s case as revealed by the affidavit evidence adduced on the hearing of the application. This, however, should be done only where it is apparent on the facts disclosed by evidence as to which there is no credible dispute that the strength of one party’s case is disproportionate to that of the other party. The court is not justified in embarking on anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either party’s case.

However, apart from the above, it has been held that other special factors also exist on the basis for deciding whether to grant interim injunctions.

American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504

Lord Diplock:


I would reiterate that, in addition to those to which I have referred, there may be many other special factors to be taken into consideration in the particular circumstances of individual cases. The instant appeal affords one example of this.

Bryanston Finance Ltd v de Vries (No 2) [1976] Ch 63

The plaintiff brought an action for an injunctive order to restrain the defendant from bringing an application for a winding-up of a company. The facts do not fall under any of the six (p. 569) principles, so Buckley LJ held that this amounted to a special factor that the injunction sought by the claimant was to restrain the commencement of a proceeding limine.

There is ongoing academic debate about the exact impact of the special factor which is not relevant to us. (For a full discussion, see Pettit at 575ff.) See further Cambridge Nutrition v BBC [1990] 3 All ER 529.

19.4.5 Limits or exceptions to American Cyanamid principles

Not applicable to applications for mandatory orders

In general, the Cyanamid principles concern mainly the grant of prohibitory injunctions on an interim basis. Thus, it is extremely rare for the court to grant an application for a mandatory order for, as the court said in Gale v Abbott [1862] 10 WR 748: ‘the court would not compel a man to do so serious a thing as to undo what he had done except at a hearing’.

Absence of difficult questions of law

American Cyanamid does not apply to all applications for interim injunctions. For instance, it will not apply where there is no difficult question of law or issue of evidence to decide.

Hubbard v Pitt [1976] QB 142

The case concerned an action brought by the applicant to prevent the defendant from picketing its offices following an organized campaign by the defendant to compel the applicant to comply with the defendant’s guidelines for conducting property transactions such as property development in the area. The application was granted.

Stamp LJ at 185:


There are no circumstances in which the existence of special factors would take a case out of the general rule that it is not necessary for an interlocutory injunction to make out a prima facie case. The existence of special factors is only relevant in considering whether the balance of convenience justifies the grant of an injunction.

Restriction of the freedom of speech under the Human Rights Act 1998

The obligations created under the Human Rights Act 1998 with regard to freedom of expression in particular limit the application of the Cyanamid principles. Under s. 13 of the Act, ‘No relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to be able to establish that publication should not be allowed.’ Although there is already a high test of ‘serious question to be tried’ imposed by the Cyanamid principles, the obligation laid down in the Human Rights Act 1998 raises the threshold much higher, especially in cases against the media as already noted by Lord Phillips in Douglas v Hello! [2005] ECWA Civ 595 at 258.

The full implication of this new threshold was confronted in Cream Holding v Banerjee [2004] 4 All ER 617. Here, following the termination of her appointment as an employee of a Liverpool nightclub, Ms Banerjee copied the files of the company and made them available to two (p. 570) Merseyside newspapers. Cream Holdings, the company which ran the club, applied for a restraining order. The House of Lords, however, said that they had not shown that they were more likely than not to succeed at trial if the publication was to be prevented.

Despite the fact that the interpretation adopted in Cream Holdings by the House of Lords, in construing the word ‘likely’ in s. 12(3) of the Human Rights Act 1998, suggests that the court would require applicants for interim injunctions in media cases to prove a very high likelihood of success at trial, Lord Nicholls cautioned against the assumption that ‘likely’ in that section invariably means ‘more likely than not’. His Lordship urged an avoidance of turning such a test into a universal standard and rather commended a case-by-case approach (see particularly at 624ff of that case).

Libel cases

Whereas s. 12(3) of the Human Rights Act 1998 has now affected the test laid down in American Cyanamid concerning a ‘serious law question’, the position of libel suits, however, remains as before. In other words, the higher threshold laid down in Cream Holdings does not apply to libel suits.

In Martha Green v Associated Newspapers, the claimant applied to restrain the publication of an allegedly defamatory article. Relying on the Cream Holdings principle, she claimed that she was more likely than not to succeed at the full trial. However, Brookes LJ rejected this. The judge distinguished between the instant case and Cream Holdings on the ground that while the latter concerned a question of confidential information, the article being restrained from publication in Martha Greene only related to defamation. According to the judge, the two do not weigh equally. As even Lord Nicholls stated in Cream Holdings, ‘confidentiality once breached, is lost for ever’ (at 624).

19.5 Specific interim injunctions

There are several types of interim injunctions in existence. There are some, however, that attract specific comments because they emerged more recently and constitute, in the words of Lord Denning, ‘the greatest piece of judicial law reform in my time’ or, according to Donaldson LJ, ‘Law’s two nuclear weapons’. These two injunctions are the freezing injunctions (formerly called Mareva injunctions) and search orders (previously known as Anton Piller orders).

19.5.1 Freezing injunctions: freezing the assets of the defendant

Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213

The claimants brought an action for injunction ex parte (without notice to the defendant) to prevent the defendants from removing from their banks in London moneys which the claimants hoped would be used to satisfy a judgment against the defendants. The claim was in respect of unpaid hire and damages for repudiation of a charterparty.

(p. 571) The law before the Mareva case

Before the Mareva case was brought, the law prevailing in England with regard to how a defendant to a suit can deal with his money, was as stated in Lister & Co v Stubbs (1890) 45 ChD 1. The law was that nothing empowered a person to obtain an injunction which restrains another from dissipating his money or removing it out of jurisdiction of a court hearing a suit against him. So, if A sues B in England for payment of some sum to him (A), while the case is being heard A cannot take out an injunction to stop B who, fearing that he might lose the case and hence be made to pay A from his money in banks in London or other parts of England, decides to use his money quickly or remit it to foreign banks. Such a move is bad faith but not illegal under the Lister v Stubbs rule.

In Mareva, Donaldson LJ recognized this rule but nevertheless granted an injunction, although only lasting until a certain hour of that day. The defendants appealed.

The issue appealed revolved around how the court would reconcile the ancient rule in Lister v Stubbs entitling a defendant to deal with his money howsoever he pleased and the imperativeness of ensuring that the judgment that the claimant might get against the defendant is not frustrated by lack of means to compensate him.

Mareva Compania Naviera SA v International Bulkcarriers SA at 215 (Lord Denning MR):

In my opinion that principle applies to a creditor who has a right to be paid the debt owing to him, even before he has established his right by getting judgment for it. If it appears that the debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment, the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets. It seems to me that this is a proper case for the exercise of this jurisdiction.

In coming to this conclusion, Lord Denning did not throw away Lister v Stubbs lightly. Rather, he relied on the wide discretionary power granted to courts by s. 45 of the Supreme Court of Judicature (Consolidation) Act 1925, which repeats s. 25(8) of the Judicature Act 1873.

A mandamus or an injunction may be granted or a receiver appointed by an interlocutory order of the court in all cases in which it shall appear to the court to be just or convenient … 

It must be noted that Lord Denning had already started this move before Mareva when, in Nippon Yusen Kaisha v Karageorgis [1975] 3 All ER 282, his Lordship held that a freezing order could be granted on the basis of s. 37(1) of the Supreme Court Act 1981, entitling the High Court to grant an injunction in all circumstances in which it appears it is just to do so.

19.5.2 Principles guiding the grant of freezing injunctions

Although freezing injunctions are a type of interlocutory injunction—and hence, subjected to the same principles applicable to all interlocutory injunctions—there are some specific principles that apply to the injunction.

In Third Chandris Shipping Corpn v Unimarine SA, Lord Denning set out the guidelines for granting freezing injunction as follows:

(p. 572) Third Chandris Shipping Corpn v Unimarine SA [1979] QB 645

Lord Denning MR:


Much as I am in favour of the Mareva injunction, it must not be stretched too far lest it be endangered. In endeavouring to set out some guidelines, I have had recourse to the practice of many other countries which have been put before us. They have been most helpful. These are the points which those who apply for it should bear in mind:

  1. (i) The plaintiff should make full and frank disclosure of all matters in his knowledge which are material for the judge to know: see Negocios del Mar SA v Doric Shipping Corporation SA (The Assios) [1979] 1 Lloyd’s Rep 331.

  2. (ii) The plaintiff should give particulars of his claim against the defendant, stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the defendant.

  3. (iii) The plaintiff should give some grounds for believing that the defendant has assets here … In most cases the plaintiff will not know the extent of the assets. He will only have indications of them. The existence of a bank account in England is enough, whether it is in overdraft or not.

  4. (iv) The plaintiff should give some grounds for believing that there is a risk of the assets being removed before the judgment or award is satisfied. The mere fact that the defendant is abroad is not by itself sufficient. No one would wish any reputable foreign company to be plagued with a Mareva injunction simply because it has agreed to London arbitration. But there are some foreign companies whose structure invites comment. We often see in this court a corporation which is registered in a country where the company law is so loose that nothing is known about it—where it does no work and has no officers and no assets. Nothing can be found out about the membership, or its control, or its assets, or the charges on them. Judgment cannot be enforced against it. There is no reciprocal enforcement of judgments. It is nothing more than a name grasped from the air, as elusive as the Cheshire Cat. In such cases the very fact of incorporation there gives some ground for believing there is a risk that, if judgment or an award is obtained, it may go unsatisfied. Such registration of such companies may carry many advantages to the individuals who control them, but they may suffer the disadvantage of having a Mareva injunction granted against them. The giving of security for a debt is a small price to pay for the convenience of such a registration. Security would certainly be required in New York. So also it may be in London. Other grounds may be shown for believing there is a risk. But some such should be shown.

  5. (v) The plaintiff must, of course, give an undertaking in damages—in case he fails in his claim or the injunction turns out to be unjustified. In a suitable case this should be supported by a bond or security: and the injunction only granted on it being given, or undertaken to be given.

Assets in foreign lands

In Siskina (Cargo owners) v Distos Cia Naviera SA (The Siskina) [1977] HL 542, it was held that whereas the court could generally grant a freezing injunction, it could not do so unless a substantive action existed in respect of which the court had jurisdiction. Consequently, where a claimant brought an action for injunction in a foreign court, in a country where the defendant had no assets, the court would not be able to grant such an order since there would be no way of satisfying the judgment.

However, s. 28 of the Civil Jurisdiction and Judgments Act 1982 has removed the bar and now courts are able to grant an interim order—including freezing injunctions—in any case in aid of substantive relief wherever the proceeding is taking place.

(p. 573) Latest developments in freezing injunctions: Mareva by letter and Mareva principles applied to arrest warrants of ships

From 2005, two important developments have occurred in relation to Mareva injunctions. These are (i) the emergence of a new method of granting Mareva injunctions in very complex fraud cases, and (ii) the application of the Mareva principles to arrest of ships.

Mareva by letter

As was explained recently by one commentator:

In cases where the victim of fraud is dealing with a dishonest obligor with the propensity to transfer and conceal assets, the time taken to prepare and finalize a set of pleadings to ground a series of urgent ex parte asset-freezing applications to courts in what might be numerous foreign jurisdictions may well turn out to be time spent in vain. There is a risk that by the time a number of freezing orders are made, the subject property may no longer be in the location originally identified. The very fact that ill-gotten property is located within a foreign jurisdiction necessitates the retention of local counsel.

(See Martin S Kenney ‘The Mareva by Letter: Destroying a Banker’s Defence of Good Faith’, International Law Office, available at: <http://www.internationallawoffice.com/Newsletters/detail.aspx?g=78cc0260-e7a7-4969-97d9-7e9671b1244f>.)

In order to prevent the kind of situation described, a new process has emerged, which is granting Mareva by letter. As Kenney explains:

This involves placing a third-party guardian or holder of assets, such as a bank, on notice that those assets are imposed with a constructive trust in favour of someone other than the party who the guardian or holder has previously been led to believe is the true owner. In cases where a victim of fraud has information to the effect that targeted funds or assets are about to be transferred to another location where it might be impossible to gain access to them, an immediate and informal (or de facto) freeze of the assets may be effected by issuing a letter to the third-party asset holder in question, informing it of the true origin or beneficial ownership of the targeted funds or assets, and advising it of its potential accessory liability in the event of any transfer or disposal of the assets in question.

Quite clearly, this informal process involves a high-risk strategy and, as such, a claimant who wishes to pursue this route must show the following:

[S]ufficient proof should be provided to the third-party holder of assets to provide comfort that the conclusion being urged upon it as to the origin or provenance of the assets is in fact a reasonable one to be drawn in the circumstances.

Applying Mareva principles to arrest warrants against ships.

Hansen v Trinity, The (2007) BCSC 225

The plaintiffs contracted with the defendants to build a steel-hulled sailboat in return for which they would pay $600,000. Upon delivery the plaintiffs had paid $316,000, but discovered that the hull weld plates were so inferior as to constitute a fundamental breach of the contract by the defendant. The plaintiff claimed for the return of the $316,000 paid under the contract on grounds of unjust enrichment, negligence, breach of contractual duty of good faith, and promissory estoppel. Previously, on 9 August 2005, the plaintiffs had made an application for a Mareva injunction on the same matter and for the same amount. That application was dismissed by Macaulay J on the basis that there was no evidence that (p. 574) the defendants were contractually bound to build to ABS standard or that there was any failure to meet that standard which rendered the vessels unseaworthy. Thus the plaintiffs had failed to establish a strong prima facie case of fundamental breach such as was required for the granting of a Mareva injunction.

Subsequently, the plaintiffs made the application for the arrest warrant. The defendants claim that there was a failure to make full and frank disclosure in the application because the plaintiffs did not disclose that there had been an application for a Mareva injunction which had been denied and the reasons for that denial. The defendants claimed that full disclosure was required because the arrest application was without notice to the defendants. The plaintiff denied this and argued that disclosure and without notice requirements did not apply to arrest warrants of ships.

The British Columbia Supreme Court held that:


because the opposing party does not have the opportunity to respond or explain, there must be an obligation on the applicant to make full and frank disclosure. The plaintiffs in the present case had failed to meet this standard of disclosure and accordingly the warrant was set aside.

thinking points

Do you think that extending the scope of application of Mareva principles weakens the basis of the order? Freezing orders are a special class of orders which operate to deny parties to a suit their legal entitlement to their assets without any judgment being entered against them at the relevant time. To that extent, it is an order to be cautiously applied, and as Lord Denning MR stated in the Third Chandris Shipping Corpn v Unimarine SA case, ‘it must not be stretched too far lest it be endangered’. But this caution should not be regarded as authorizing a blanket ban on sensible extension of the Mareva scope as evolving circumstances and exigencies of the modern commercial world necessitate. What is important is for a court to ensure that in granting a freezing order by letter or in applying the Mareva principles to arrest of ships, it is satisfied by evidence of the need to so act and act expeditiously.

19.6 Search order

19.6.1 The old law

The old law concerning searching a defendant’s premises for incriminating or evidential materials was laid down in Entick v Carrington (1765) 2 Wils 275, that no court has any power to enter into a man’s property to search, by means of a search warrant, in order to see if there are documents which might incriminate him in a proceeding on libel, copyright, or any other infringements.

19.6.2 The new law: the Anton Piller case

Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55

The plaintiffs were foreign manufacturers who owned the copyright in the design of a high-frequency converter used to supply computers. They learnt that the defendants, their English agents, were planning to supply rival manufacturers with information belonging to the plaintiffs (p. 575) which would enable their rivals to produce a similar product. The plaintiffs wished to restrain the defendants from infringing the copyright, using confidential information, or making copies of their machines, but they were afraid that the defendants, if notified, would take steps to destroy the documents or would send them out of the jurisdiction so that there would be none in existence by the time the action reached the stage of discovery of documents. The plaintiffs accordingly made an ex parte application for an order requiring the defendants to permit the plaintiffs to enter the defendants’ premises in order to inspect, remove, or make copies of documents belonging to the plaintiffs.

HELD: The court had an inherent jurisdiction to make such an order ex parte, but should exercise it only in an extreme case where there was grave danger of property being smuggled away or of vital evidence being destroyed. The plaintiff had to show that it was essential so that justice could be done between the parties and when it would do no real harm to the defendant or his case. The order was not, however, a search warrant authorizing a plaintiff to enter a defendant’s premises against his will, but an order on the defendant in personam to permit the plaintiff’s entry or be in peril of proceedings for contempt of court. In the instant case, there was sufficient justification for making the order on an undertaking by the plaintiffs in damages.

19.6.3 The rationale of search order distinguished from Entick v Carrington

Lord Denning MR explained the rationale of search order:

Let me say at once that no court in this land has any power to issue a search warrant to enter a man’s house so as to see if there are papers or documents there which are of an incriminating nature, whether libels or infringements of copyright or anything else of the kind. No constable or bailiff can knock at the door and demand entry so as to inspect papers or documents. The householder can shut the door in his face and say, ‘Get out’. That was established in the leading case of Entick v Carrington. None of us would wish to whittle down that principle in the slightest. But the order sought in this case is not a search warrant. It does not authorise the plaintiffs’ solicitors or anyone else to enter the defendants’ premises against their will. It does not authorise the breaking down of any doors, nor the slipping in by a back door, nor getting in by an open door or window. It only authorises entry and inspection by the permission of the defendants.

Although the search order derived its name from the case that eventually popularized it, the new rule which it developed had been introduced a year earlier by EMI Ltd v Pandit [1975] 1 All ER 418.

EMI Ltd v Pandit [1975] 1 All ER 418

The plaintiffs, who owned the copyright in certain sound recordings of Indian music, brought an action against the defendant for infringement of copyright and passing off. Accordingly it applied ex parte for an order under RSC Ord 29 r 2(1) and (2), that such persons as might be duly authorized by the plaintiffs be at liberty forthwith to enter the defendant’s premises between specified hours for the following purposes: inspecting and photographing pre-recorded tapes and other infringing material, and invoices, bills, and other documents and correspondence which were relevant to the action; removing infringing articles, and inspecting, photographing, and testing typewriters, since the plaintiffs suspected that the typewriter which had been used to carry out the alleged forgery was one belonging to the defendant which might still be on the premises. The plaintiffs were apprehensive that if they (p. 576) served notice on the defendant of the application, as required by RSC Ord 29 r 2(5), he would destroy or remove from the premises all relevant documents and articles and that the plaintiff would be effectively debarred from obtaining further relief in the action.

HELD: (1) the court had jurisdiction to make an order giving the plaintiff substantially the relief which it claimed. Such an order would only be made on an ex parte application in exceptional circumstances where it plainly appeared that justice required the intervention of the court in that, in default of such an order, the plaintiffs might be substantially deprived of a remedy. The order would only be granted on terms which safeguarded the defendant, as far as possible, and which narrowed the relief so far as it might otherwise cause harm to the defendant; (2) in the circumstances an order giving substantially the relief claimed would be made on the ex parte application, since the plaintiffs had established that if notice of the application were given to the defendant it would almost certainly result in the immediate destruction of the articles and information to which it was entitled and which it sought. The order would, however, be in the form of a mandatory injunction requiring the defendant to allow the plaintiff to enter premises occupied or used by the defendant between reasonable hours to inspect, identify, and photograph infringing material and other articles to which it was entitled, to remove infringing copies, and to inspect and test all typewriters and photographic machines.

The law has now incorporated Anton Piller situations:

Civil Procedure Act, s. 7



  1. (1) The court may make an order under this section for the purpose of securing, in the case of any existing or proposed proceedings in the court—

    1. (a) the preservation of evidence which is or may be relevant, or

    2. (b) the preservation of property which is or may be the subject-matter of the proceedings or as to which any question arises or may arise in the proceedings.

  2. (2) A person who is, or appears to the court likely to be, a party to proceedings in the court may make an application for such an order.

  3. (3) Such an order may direct any person to permit any person described in the order, or secure that any person so described is permitted—

    1. (a) to enter premises in England and Wales, and

    2. (b) while on the premises, to take in accordance with the terms of the order any of the following steps.

  4. (4) Those steps are—

    1. (a) to carry out a search for or inspection of anything described in the order, and

    2. (b) to make or obtain a copy, photograph, sample or other record of anything so described.

  5. (5) The order may also direct the person concerned—

    1. (a) to provide any person described in the order, or secure that any person so described is provided, with any information or article described in the order, and

    2. (b) to allow any person described in the order, or secure that any person so described is allowed, to retain for safe keeping anything described in the order.

  6. (6) An order under this section is to have effect subject to such conditions as are specified in the order.

Key Point

A search order is not a search warrant and, therefore, does not violate the rule in Entick v Carrington.

This statutory provision not only describes the order, but also lays down the steps that the applicant must take to implement the order.

(p. 577) 19.6.4 Guidelines for granting search order

Ormrod LJ in the Anton Piller case stated three conditions that must be established before granting Anton Piller orders:

There are three essential pre-conditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the plaintiff. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made.

Lock International v Beswick [1989] 1 WLR 1268

Hoffmann LJ:


Not everyone who is misusing confidential information will destroy documents in the face of a court order requiring him to preserve them.

19.6.5 Safeguards to protect the defendants

Lord Denning laid down certain safeguards for protecting a defendant in a search order suit.

  1. 1. ‘The plaintiffs must get the defendants’ permission. But it does do this: it brings pressure on the defendants to give permission. It does more. It actually orders them to give permission—with, I suppose, the result that if they do not give permission, they are guilty of contempt of court.’

  2. 2. ‘The plaintiffs must act with due circumspection. On the service of it, the plaintiffs should be attended by their solicitor, who is an officer of the court. They should give the defendants an opportunity of considering it and of consulting their own solicitor. If the defendants wish to apply to discharge the order as having been improperly obtained, they must be allowed to do so. If the defendants refused permission to enter or to inspect, the plaintiffs must not force their way in. They must accept that refusal, and bring it to the notice of the court afterwards, if need be on application to commit.’

Other guidelines include that:

  1. 1. the claimant must give an undertaking in damages, as applicable to all cases of injunctions;

  2. 2. the claimant must make full disclosure of facts concerning the case, otherwise an Anton Piller order will be refused and, if already granted, will be discharged accordingly as held in Guess? Inc v Lee Seck Mon [1987] FSR 125, where an Anton Piller order was discharged for lack of full disclosure; and

  3. 3. there can be no Anton Piller order if it would result in the defendants incriminating themselves, as was held by the House of Lords in Rank Film Distribution Ltd v Video Information Centre [1982] AC 380.

The principle that the defendant would not be compelled to disclose materials that will incriminate him has now been incorporated by s. 7(7) of the Civil Procedure Act. Although s. 7 generally gives the court powers to grant Anton Piller orders, subsection (7) states:

This section does not affect any right of a person to refuse to do anything on the ground that to do so might tend to expose him or his spouse to proceedings for an offence or for the recovery of a penalty.

(p. 578)

Due to what Scott LJ considered to be excessive use of Anton Piller orders in its first few years—mainly between 1974 and 1986—his Lordship decided to supply a raft of new guidelines for the grant of the order. This was in Columbia Picture Industries Inc v Robinson [1987] Ch 38.

  1. 1. It is essential that a detailed record of the material taken should be made by a solicitor who executes an Anton Piller order before the material is removed from the respondent’s premises.

  2. 2. When an Anton Piller order is executed no material should be taken from the respondent’s premises by the executing solicitor unless it is clearly covered by the terms of the order. In particular, it is unacceptable that the respondent be procured by the executing solicitor to give consent to additional material being removed.

  3. 3. It is inappropriate for seized material the ownership of which is in dispute, such as alleged pirate tapes, to be retained by the plaintiff’s solicitor pending trial. Although the solicitor is an officer of the court, the main role of the solicitor for the plaintiff is to act for the plaintiff.

  4. 4. The nature of an Anton Piller order requires that an affidavit in support of the application for the order ought to err on the side of excessive disclosure because, in the case of material which falls into the area of possible relevance, the judge and not the plaintiff’s solicitor should be the judge of relevance.

New development in Anton Piller orders: The ‘rolling’ order

In Canada, it is now possible to obtain a ‘rolling’ Anton Piller order to restrain not only a specific infringement, but a continuous one (hence ‘rolling’). The aim of this type of Anton Piller order is to restrain not only known persons who might infringe legal rights of others (especially copyrights), but specifically applicable to unknown infringers such as itinerants who hawk CDs and other types of music albums on the street. It is because the defendants of the rolling Anton Piller orders are not identifiable at the time of the order that the common appellation ‘John and Jane Doe’ is attached to such orders by the court. As explained by a Canadian commentator:

The genesis of the rolling order appears to have been a number of Anton Piller orders executed against known itinerant street and flea market vendors. These orders were brought by known trademark and copyright holders against defendants who had pirated video, CD and software, as well as jewellery, clothing and other apparel. The affidavit evidence offered in support provided specific details of infringement. After a number of site-specific Anton Piller orders were granted, these were then used as evidence to support new affidavit evidence from private investigators alleging widespread infringement occurring in many flea market locations across Canada. Because the plaintiff could not identify the defendants in advance, the appellation John and Jane Doe appeared on the style of cause. By the 1990s approximately 50 of these rolling orders were operating within the country at any one time, and each may have attracted several hundred defendants to the proceeding.

(See Jeff Berryman ‘Thirty Years After: Anton Piller Orders and the Supreme and Federal Courts of Canada’ (2007) 2(3) J of International Commercial Law and Technology 128.)

In addition to the usual criteria for granting the Anton Piller order, the Federal Court of Canada in Netbored Inc v Avery Holdings Inc 2005 FC 1405 added two new criteria:

  1. 1. that the execution of the order would not harm the defendant or its case;

  2. 2. the interests of justice would not be brought into disrepute.

(p. 579) Vinod Chopra Films Private Limited et al v John Doe 2010 FC 387

Hughes J had to review a ‘rolling’ Anton Piller order granted by the Federal Court of Canada in a copyright infringement case to an Indian film production company and its Canadian licensee against various unnamed persons who (according to the claim) ‘deal in counterfeit video recordings’. His Lordship set aside the order with costs to the defendant, on the basis that the evidence that the plaintiffs had relied upon in seeking the order was ‘insufficient, careless and misleading’.

Hughes J’s decision in this case is an affirmation of the Canadian Supreme Court’s leading judgment on Anton Piller.

Celanese Canada Inc v Murray Demolition Corp 2006 SCC 36 (CanLII), 2006 SCC 36, [2006] 2 SCR 189

Binnie J, delivering the unanimous decision for the court, stated at paras 1 and 28 to 32 that:


[a]n Anton Piller order bears an uncomfortable resemblance to a private search warrant. No notice is given to the party against whom it is issued. Indeed, defendants usually first learn of them when they are served and executed, without having had an opportunity to challenge them or the evidence on which they were granted. The defendant may have no idea a claim is even pending. The order is not placed in the hands of a public authority for execution, but authorizes a private party to insist on entrance to the premises of its opponent to conduct a surprise search, the purpose of which is to seize and preserve evidence to further its claim in a private dispute. The only justification for such an extraordinary remedy is that the plaintiff has a strong prima facie case and can demonstrate that on the facts, absent such an order, there is a real possibility relevant evidence will be destroyed or otherwise made to disappear. The protection of the party against whom an Anton Piller order is issued ought to be threefold: a carefully drawn order which identifies the material to be seized and sets out safeguards to deal, amongst other things, with privileged documents; a vigilant court-appointed supervising solicitor who is independent of the parties; and a sense of responsible self-restraint on the part of those executing the order. [Emphasis added.]

Key Points

  • • It is important that the consent of the defendant is sought, although there is pressure to accept.

  • • The items to be removed must relate specifically to the suit before the court and not be of general nature.

  • • Defendants do not have to surrender materials that may incriminate them.

thinking points

To what extent can you distinguish between a search order and a search warrant? Consider Lord Denning’s statement that a search order ‘may seem to be a search warrant in disguise’ when answering this question. There is a remarkable similarity between a search warrant and an Anton Piller order. Both of them involve searching someone’s premises for evidence. However, we must always remember that whereas with search warrants there is no need to obtain the consent of the owner of the premises, an Anton Piller order requires this, although it is not expected that consent will be denied lest the party (p. 580) concerned may be cited for contempt of the court. Also, unlike the normal search warrant, Anton Piller orders are usually executed by private parties (usually working for the plaintiff) and not public authorities. All these points are alluded to by the Canadian Supreme Court in the Celanese Canada Inc case. See also John E Simpson ‘“Rolling” Anton Piller Order Set Aside: “John Doe” Action Dismissed Vinod Chopra Films Private Limited et al v John Doe 2010 FC 387 (Hughes J)’, available at: <http://www.bereskinparr.com/Doc/id34/?srch=anton%20piller>.

19.7 Specific performance

Specific performance is another equitable remedy that is based on the discretion of the court. It is granted mainly due to the inadequacy of the common law remedy of damages to breach of contract, although the court must order ‘specific performance …  only when it can by that means do more perfect and complete justice’, as Lord Selborne said in Wilson v Northampton and Banbury Junctions Rly Co (1874) 9 Ch App 279.

Specific performance is, like all equitable remedies, an action in personam and, as such, can be granted in respect of lands outside the UK.

Penn v Lord Baltimore (1750) 1 Ves Sen 444

The plaintiff and the defendant by an agreement reciting that controversies had arisen between them concerning the boundaries of their lands abroad, agreed that a particular line should be the boundary and that commissioners should delimit the boundary within a certain limited time which had expired before the suit was brought; the agreement provided for conveyances from the one party to the other accordingly. In a suit for specific performance of the agreement it was held as follows.

HELD: The agreement could be specifically performed even though the land was outside the court’s jurisdiction.

The court may sometimes grant specific performance of a contract and then make a separate order for a freezing injunction restraining the defendant from dealing with all or part of the purchase money. However, the court could combine the two remedies in a single order.

Seven Seas Properties Ltd v Al Essa [1989] 1 All ER 164

The plaintiff agreed to purchase a leasehold property from the defendants for £1.435 million and on the same day contracted to sell the property to a sub-purchaser for £1.635 million. Both contracts provided for completion on the same day. The defendants failed to complete on time and the sub-purchaser rescinded its contract on the day notice to complete expired. The sub-purchaser later brought an action against the plaintiff claiming over £600,000 damages for breach of contract. The plaintiff brought an action against the defendants seeking specific performance and applied for an inquiry as to damages and an order that £650,000, representing the sub-purchaser’s claim and the plaintiff’s costs in defending that claim, be retained in an account in the joint names of the parties’ solicitors and not paid out to the defendants when the specific performance order was enforced. The master made the order sought. The defendants appealed against that part of the order preventing the £650,000 (p. 581) from being paid out to them, contending that the court had no jurisdiction to include such a provision in an order for specific performance, and that in any event the amount to be retained was excessive.

HELD: Hoffmann J at 166:


Since in an appropriate case the court could, when making an order for specific performance, make a separate Mareva injunction restraining the vendor from dealing with the purchase money, it was convenient to combine the two orders into one. The master had therefore had jurisdiction to include the retention order in the specific performance order.

Key Points

  • • Specific performance is discretionary and normally awarded where damages will be inappropriate to remedy the breach of a contract.

  • • Specific performance can be awarded in respect of property outside the jurisdiction of the court.

19.8 On what grounds may the court refuse specific performance?

19.8.1 Contract relating to personalty

Unless a contract relates to a contract of land, as a general rule, specific performance will not be granted. Thus, where contracts relate to money per se, save in exceptional circumstances, specific performance will not be decreed. Even where land is involved, the breach of such contracts must not be remediable by damages alone for specific performance to apply.

Fountain Forestry Ltd v Edwards [1975] Ch 1

Following the death of a man, his widow and son agreed to sell his property to the plaintiff. The son, pretending to sign on behalf of the two, signed the agreement which was declined by the widow. The plaintiffs brought proceedings for specific performance contending that the contract was binding on the deceased’s estate since one of two or more personal representatives was entitled to enter into a contract for the sale of an asset so as to bind the estate without the consent of the other personal representative or representatives.

HELD: On the assumption that, by virtue of s. 2 of the Administration of Estates Act 1925, one of two executors had power to enter into a contract binding on the deceased’s estate to sell freehold land, and that an administrator had the same power of disposition as an executor, nonetheless the plaintiffs were not entitled to specific performance, since the son had not bound himself to sell the property without the concurrence of the widow but had bound the estate on the assumption, which he warranted to be correct, that he had authority to sign as agent for her. That assumption having been falsified there was no contract to be enforced; all that could be sued on was the warranty of authority given by the son. (p. 582)

But where the items involved were of rarity, even if damages could have been enough, the court may grant specific performance.

Falcke v Gray (1859) 4 Drew 651

The case involved a contract to sell two China jars of considerable value.

HELD: A court of equity will entertain a bill for specific performance of a contract for sale of a valuable chattel where adequate compensation cannot be obtained at law; but in a case where it was proved that the price was greatly inadequate, and the purchaser knew it to be so, the court, under the circumstances, refused to decree specific performance, and dismissed the bill, although it would not have given relief to a vendor seeking to set aside the contract.

The same will apply if there is a contract to sell a ‘right’ to someone exclusively.

Erskine MacDonald Ltd v Eyles [1920] E 415

A writer entered into a written agreement with the plaintiff, a publisher, to publish over a stipulated period of time her works exclusively. They also agreed that the defendant would not allow any other publisher to publish any other variant of her work during the period. In breach of the agreement the writer entered into an agreement with another publisher, the defendant, to publish her work. In an action by the plaintiffs to restrain both defendants from publishing it was held as follows.

HELD: (1) The agreement was not a contract of personal service but was a contract by Mrs E to sell the products of her labour or industry, of which the court would grant specific performance by restraining her from disposing of the novel in breach of her agreement with the plaintiffs.

19.8.2 Contracts requiring constant supervision by the court

Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116

The facts concern the lease of a residential flat subject to a covenant by which it was agreed and declared by and between the parties to the lease that the premises were let subject to the regulations made by the lessors with respect to the duties of the resident porter, which were set forth in a schedule thereto. The lessors appointed a resident porter who, due to another job, absented himself from the work. The lessee brought an action against the lessors for breach of the covenant.

HELD: The court could not grant specific performance in this case to prevent continuance of the breach of the covenant.

However, there has been an attempt to reconceptualize the whole issue of constant supervision by the court so that it seems no longer invariably true that once an order could require the court to supervise, the court will automatically decline to grant it.

(p. 583) Tito v Waddell (No 2) [1977] Ch 106

The Banabans brought two actions arising from the mining of phosphate by the British Phosphate Commissioners on Ocean Island, known to the indigenous inhabitants as Banaba. The first claim was by Banaban landowners for specific performance of the contractual obligation to replant certain land with trees or shrubs or, alternatively, damages. They also claimed damages for the wrongful removal of sand and the destruction of the ground.

HELD: Megarry VC at 321:


[T]he real question is whether there is sufficient definition of what has to be done to comply with the order of the court. That definition may be provided by the contract itself, or it may be supplied by the terms of the order, in which case there is sufficient support by implication or otherwise in the terms of the proposed order.

This more liberal approach was followed in Posner v Scott-Lewis [1987] Ch 25.

Posner v Scott-Lewis [1987] Ch 25

The plaintiffs were tenants in a block of flats owned by the defendant landlords. Each plaintiff held his tenancy on the terms of a written lease which contained in cl 3(11) a covenant by the defendants to employ a resident porter to keep the communal areas clean, to be responsible for the central heating and boilers, and to collect rubbish from the flats. In 1985 the then resident porter left the defendants’ employment but by arrangement with the defendants continued to carry out on a part-time basis the duties specified in cl 3(11). The plaintiffs sought specific performance of the covenant in cl 3(11) compelling the defendants to employ a porter who was resident, contending that the porter’s duties were being carried out inadequately.

HELD: Mervyn Davies J at 36: In the circumstances it was open to the court to consider the making of an order for specific performance. The making of such an order depended on whether there was sufficient definition of what had to be done by way of compliance with the court’s order, whether enforcing compliance would involve superintendence by the court to an unacceptable degree, and the amount of prejudice and hardship that would be suffered by the respective parties if the order was made.

19.8.3 Contracts to carry on a business or any comparable series of activities

Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1

The defendants were granted the lease of the largest unit in a shopping centre. At the time they were granted the lease, it was anticipated that they would operate at all times during the opening hours so that the unit would be an anchor unit, attracting trade to the smaller businesses in the shopping centre. Should the defendants ever close the unit, this would have serious consequences on all other units hence the agreement to ensure that the unit was open at all times. At a point in time, the defendants suffered financial loss and decided, in breach of contract, to close down the supermarket. The claimants brought an action for specific performance. (p. 584)

HELD: A covenant in a lease of retail premises to keep open for trade during the usual hours of business was not, other than in exceptional circumstances, specifically enforceable, since it was the settled practice of the court not to make an order requiring a person to carry on a business. That practice was based on sound sense, as such an order required constant supervision, was only enforceable by the quasi-criminal procedure of punishment for contempt, and might cause injustice by allowing the plaintiff to enrich himself at the defendant’s expense if the defendant was forced to run a business at a loss.

The reasoning of Lord Hoffmann particularly in this case was that making a specific performance order in this instance might result in the defendant being oppressed by being made to do things under constant threat of the court’s contempt for failure to perform. Also, his Lordship reasoned that a specific performance order here could lead to the claimants enriching themselves at the expense of the defendant.

However, in Barrow v Chappell & Co Ltd [1976] RPC 355, specific performance was granted in a case concerning a contract to publish music.

19.8.4 Contract for personal services

The general principle is that the court will not grant specific performance in a contract for personal services.

Francesco v Barnum (1890) 45 Ch 430

Fry LJ:


… the courts are bound to be jealous, lest they should turn contracts of service into contracts for slavery.

For Megarry J, there are other much more complex reasons for the courts’ reluctance to grant specific performance in respect of contracts for services.

CH Giles & Co Ltd v Morris [1972] 1 All ER 960

Megarry J at 969: The plaintiffs sought specific performance to compel defendants who had refused to take the necessary steps to procure an appointment of someone as managing director in accordance with the consent order they agreed to. The order was refused.


… the reasons why the court is reluctant to decree specific performance of a contract for personal services [and I would regard it as a strong reluctance rather than a rule] are, I think, more complex and more firmly bottomed on human nature. If a singer contracts to sing, there could no doubt be proceedings for committal if, ordered to sing, the singer remained obstinately dumb. But if instead the singer sang flat, or sharp, or too fast, or too slowly, or too loudly, or too quietly, or resorted to a dozen of the manifestations of temperament traditionally associated with some singers, the threat of committal would reveal itself as a most unsatisfactory weapon; for who could say whether the imperfections of performance were natural or self-induced? To make an order with such possibilities of evasion would be vain.

(p. 585) 19.8.5 Contract lacking in mutuality

A minor cannot bring an action for specific performance because such an order cannot be granted against him.

Flight v Bolland [1824–34] All ER Rep 372

Sir John Leach MR:


No case of a bill filed by an infant for the specific performance of a contract made by him has been found in the works. It is not disputed that it is a general principle of courts of equity to interpose only where the remedy is mutual.

However, the rule of mutuality does not apply to the sale and purchase of land. In such cases, the principle is that the seller is as much entitled to a decree of specific performance as the buyer, despite the fact that the latter’s obligation is only to pay the purchase price.

Price v Strange [1977] 3 All ER 371

The defendant agreed to a new lease to the claimant in a property in consideration of the latter undertaking some repairs. Although the claimant carried out repairs to the interior of the property, the defendant’s repudiation of the agreement prevented him from carrying out exterior repairs.

In an action for specific performance, the court of first instance declined the claimant’s application on the basis, inter alia, that damages were sufficient. This was, however, reversed by the Court of Appeal.

HELD: Buckley LJ:


If one party were compelled to perform his obligations in accordance with the terms of the contract while the obligations of the other party under the contract, or some of them, remained unperformed, it might be unfair that the former party should be left to his remedy in damages if the latter party failed to perform any of his unperformed obligations.

19.8.6 Where specific performance will be futile

The court will not grant an order for specific performance if, in the court’s opinion, to do so would be useless. Examples include a refusal to grant an order of specific performance for parties to enter into a partnership that will be dissolved almost immediately (Hercy v Birch (1804) 9 Ves 357).

Apart from these, the general bases for denying equitable interest such as delay and acquiescence and conduct of parties, as have been discussed under injunctions earlier in the chapter, all apply to specific performance as well.

(p. 586) Conclusion

Equity developed in order to meet the rigidity of the common law and to do justice as between parties where common law rules would have been either inadequate or too formalistic. It is in respect of equitable remedies that equity shows its great ability to adapt to different situations and to keep reinventing itself. Hence, whereas equity would not formally prevent a person from dealing with his assets located within a jurisdiction where a lawsuit is pending or being conducted against him, equity devised the freezing injunction to put an end to such sharp practices so that judgments would not be frustrated. The same principle also underpins equitable intervention with the Anton Piller order to prevent destruction of materials of serious evidential value. Where a person would have been poorly compensated, for instance with regard to his items of inestimable value, it is now possible to order specific performance to protect such items.

Therefore, equitable remedies are a very potent tool for equity to implement its flexible and adaptability agenda not against the common law, but in a complementary fashion that leaves even the rules and principles of common law better fulfilled.

Questions

Self-test questions

  1. 1 What are injunctions and how are they used?

  2. 2 What is specific performance and how do you distinguish between it and normal actions to remedy breaches of contract?

  3. 3 To what extent do you think that the new test of ‘frivolity and vexatiousness’ in awarding injunctions meets the shortcomings of the ‘prima facie’ test?

  4. 4 Can you distinguish between an Anton Piller order and a search warrant with respect to decided cases?

  5. 5 What principles would the court consider before ordering the grant of interlocutory injunctions?

Discussion questions

  1. 1 If a court would not have granted an injunction before the Judicature Act, it has no power to grant such today. To what extent does this statement reflect the current thinking and case law on the remedy of injunction?

  2. 2 The requirement of mutuality is indispensable in a consideration of specific performance. Do you agree?

  3. 3 The court would not normally grant an equitable remedy that will require its continuous supervision. Discuss. (p. 587)

  4. 4 Once a claimant can prove that damages are not enough to remedy a breach of wrong committed against him, the court will automatically grant an injunction. Evaluate this statement in light of case law and jurisprudence.

  5. 5 What do we mean when we speak of discretionary power of the courts to award equitable remedies?

Assessment question

James employs John, a building contractor, to construct blocks of flats on some acres of land James recently purchased. James paid an advance sum of £3 million to John’s company, to commence the construction. John promptly started working, but after a few months, he abandoned the work. Up to that point he had undertaken construction worth up to £1.5 million, leaving a balance of £1.5 million in his bank account in London. James commenced an action in London against John, first, that the court should decree specific performance of the rest of the contract. While this action lasted, James also brought an action praying that the court should freeze James’s account in London until the outcome of the case. Advise James.

Key cases

  • American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 (at 19.4.2, 19.4.3, 19.4.4, and 19.4.5)

  • Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55 (at 19.5, 19.6.2, 19.6.3, 19.6.4, and 19.6.5)

  • Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (at 19.8.3)

  • Entick v Carrington (1765) 2 Wils 275 (at 19.6.1 and 19.6.3)

  • Kennaway v Thompson [1981] QB 88 (at 19.4.1)

  • Mareva Compania Naviera SA v International Bulk Carriers SA [1980] 1 All ER 213 (at 19.5, 19.5.1, and 19.5.2)

  • Shelfer v City of London Electric Co [1895] 1 Ch 287 (at 19.4.1)

  • Wilson v Northampton and Banbury Junctions Rly Co (1874) 9 Ch App 279 (at 19.7)

Further reading

P Pettit Equity and the Law of Trusts (12th edn, Oxford: Oxford University Press, 2012)Find this resource:

Excellent analysis of equitable remedies. (p. 588)

FP ‘The Highwayman’s Case (Everet v Williams)’ (1893) 9(35) LQR 197Find this resource:

    On the maxims of equity.

    J Berryman, ‘Thirty Years After: Anton Piller Orders and the Supreme and Federal Courts of Canada’ (2007) 2(3) J of International Commercial Law and Technology 128Find this resource:

      For a comprehensive overview of Anton Piller orders.