Revise Equitable for Cambridge 9084 (3.4.2)

Unlike the common law remedy of damages, which a successful claimant is entitled to as of right, equitable remedies are entirely discretionary. A court is never obliged to grant specific performance or an injunction. These remedies were developed by the Court of Chancery to provide justice in cases where the strict application of common law rules would lead to an unfair result. The fundamental prerequisite for any equitable remedy is that damages must be an inadequate form of compensation for the claimant. If money can sufficiently compensate the claimant for their loss, the court will not exercise its equitable jurisdiction. Equity exists to supplement, not replace, the common law, guided by principles of fairness and justice known as the maxims of equity.

Specific performance is a court order compelling a party to fulfil their precise obligations under a contract. It is an exceptional remedy, most commonly granted in contracts for the sale of land, as each piece of land is considered unique. It may also be ordered for contracts involving rare or unique chattels, such as a valuable antique (Falcke v Gray). However, it will be refused if the item, while perhaps hard to find, is not truly unique (Cohen v Roche). Crucially, courts will not grant specific performance for contracts of personal service, as this would be tantamount to slavery (De Francesco v Barnum).

A significant bar is where the order would require constant supervision by the court. The House of Lords in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd refused to grant specific performance of a covenant to keep a supermarket open in a shopping centre. They reasoned that forcing a business to run would require endless court rulings on compliance, which is not a proper function of the court. However, in rare circumstances, SP might be granted for goods that are not strictly unique if their commercial importance to the claimant is such that damages would be inadequate. In Sky Petroleum Ltd v VIP Petroleum Ltd, during an oil crisis, the court granted an interim injunction to compel the supply of petrol, as the claimant had no other source and would go out of business without it.

An injunction is a court order that either compels a party to do something or restrains them from doing something. In contract law, they can be categorised by their function and timing:

• Prohibitory Injunction: The most common type, it forbids a party from doing a specific act, such as breaching a negative covenant. The classic example is Warner Bros v Nelson, where an actress was contractually bound not to work for any other film studio. The court granted an injunction to prevent her from breaching this negative promise.
• Mandatory Injunction: This is a more exceptional order that compels a party to perform a positive act to rectify a breach, for example, to demolish a structure built in breach of a restrictive covenant. Courts are more reluctant to grant these.
• Interim (or Interlocutory) Injunction: This is a temporary injunction granted before a full trial to preserve the status quo. The claimant must satisfy the court of certain criteria, famously laid down in American Cyanamid Co v Ethicon Ltd: there must be a serious question to be tried, damages must be an inadequate remedy, and the 'balance of convenience' must favour granting the injunction.

Even where damages are inadequate, a court may refuse an equitable remedy if the claimant has not acted fairly. This is governed by the maxims of equity. For example, 'He who comes to equity must come with clean hands' means a claimant who has acted improperly in relation to the contract will be denied a remedy (D&C Builders v Rees). Another bar is 'Delay defeats equity' (laches), where an unreasonable delay in seeking a remedy may cause it to be refused (Leaf v International Galleries). Furthermore, the court will not grant a remedy that requires constant supervision (Co-operative Insurance v Argyll Stores) or where there is a lack of mutuality. The principle of mutuality means the court must be satisfied that the defendant could also have obtained the remedy against the claimant. However, the relevant time for assessing mutuality is the date of the hearing, not the date of the contract (Price v Strange). Finally, the court may refuse an order if it would cause severe hardship to the defendant, as seen in Patel v Ali, where specific performance of a house sale was refused due to the seller's exceptional personal circumstances.