LECTURE 9

SPECIFIC PERFORMANCE
INTRODUCTION
The enforcement of contractual obligations in equity is principally achieved by the
remedy of specific performance and to a lesser extent by the grant of an injunction.
These equitable remedies can be ordered even though a breach of contract has not yet
occurred: Urban Traders Pty Ltd v Proceris Pty Ltd [2005] NSWSC 1192 at [58],
Turner v Bladin (1951) 82 CLR 463.
NATURE OF SPECIFIC PERFORMANCE
Specific performance is in personam in nature: Richard West & Partners (Inverness)
Ltd v Dick [1969] 2 Ch 424.
The remedy of specific performance is applied in two distinct senses. First, there is
specific performance in the proper sense: JC Williamson Ltd v Lukey & Mulholland
(1931) 45 CLR 287; Bridge Wholesale Acceptance Corporation (Australia) Ltd v
Burnard (1992) 27 NSWLR 415 at 423, and second, relief analogous to specific
performance: Burns Philp Trust Co Ltd v Kwikasair Freightlines Ltd [1963] SR
(NSW) 492..
Specific performance, unlike damages, is not available as of right. It can be refused
on either jurisdictional or discretionary grounds.
JURISDICTIONAL FACTORS PRECLUDING AN ORDER FOR SPECIFIC
PERFORMANCE
Binding Contract Not for Valuable Consideration
A court has no jurisdiction to grant specific performance of a promise not supported
by consideration: In re Ellenborough, Towry Law v Burne [1903] 1 Ch 697 at 700. Is
nominal consideration enough? See Colman v Sarrel (1798) 30 ER 225 at 227;
Midland Bank Trust Co Ltd v Green [1981] AC 513 at 532; Nurdin & Peacock plc v
DB Ramsden & Co Ltd [1999] 1 EGLR 119; Cannon v Hartley [1949] Ch 213 at 217.
Inadequacy of Damages at Common Law
If a plaintiff can be adequately compensated by an award of damages at common law
the court has no jurisdiction to order specific performance. See Beswick v Beswick
[1968] AC 58; Heavener v Loomes (1924) 34 CLR 306 at 325; Aristoc Industries Pty
Ltd v Wenham (Builders) Pty Ltd [1965] NSWR 581 at 588; Adderley v Dixon (1824)
57 ER 239.
Contracts for the Sale of Personalty
In most, but not all, cases common law damages will be an adequate remedy for
contracts for the sale of personalty with the result that courts do not have jurisdiction

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to order specific performance of such contracts. Aristoc Industries v R A Wenham
(Builders); Fells v Read (1796) 30 ER 899; Adderley v Dixon (1824) 57 ER 239;
Evans Marshall & Co Ltd v Bertola SA [1973] 1 All ER 992 at 1006; Dougan v Ley
(1946) 71 CLR 142.
Land Contracts
Contracts involving land are ones in which damages at common law have almost
invariably been seen as ones in which damages at common law are inadequate. See
Verrall v Great Yarmouth Borough Council [1981] QB 202; Loan Investment Corp of
Australasia v Bonner [1970] NZLR 724 at 745; Pianta v National Finance &
Trustees Ltd (1964) 180 CLR 146; Turner v Bladin; Dougan v Ley, at 150. Are
damages always inadequate in such cases? See Semelhago v Paramadevan (1996) 136
DLR (4th) 1 at 9-11.
Contracts to Pay or Lend Money
Generally, contracts to pay or lend money are ones where a plaintiff will be
adequately compensated by an award of damages at common law. However, in some
circumstances common law damages will not do justice to the plaintiff and the court
will have jurisdiction to award equitable relief. See Wight v Haberdan Pty Ltd [1984]
2 NSWLR 280 at 290; Coulls v Bagots Executor & Trustee Co Ltd (1967) 119 CLR
460, at 501-3; Beswick v Beswick; Attorney General v Blake [2001] 1 AC 268 at 282.
DISCRETIONARY FACTORS FOR REFUSING AN ORDER OF SPECIFIC
PERFORMANCE
A variety of discretionary factors exist which enable a court to refuse to make an
order for specific performance. Historically some of them, such as the lack of
mutuality, were treated as jurisdictional factors, but have since been transformed into
discretionary factors. Some, but not all, of the discretionary factors are considered
below.
Personal Services Contracts
Equity will not enforce a contract if to do so would result in compelling the defendant
to maintain a personal relationship with the plaintiff. See Giles v Morris [1972] 1 All
ER 960; Turner v Australasian Coal & Shale Employees Federation (1984) 55 ALR
635 at 648.
Constant Court Supervision
Contracts in which the parties obligations are imprecisely defined will generally not
be specifically enforced. The defence is usually phrased in terms of the principle that
contracts requiring the constant supervision of the courts will not attract equitable
relief: JC Williamson v Lukey & Mulholland, at 297-8. See Co-operative Insurance
Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1; Ryan v Mutual Tontine
Westminster Chambers Association [1893] 1 Ch 116; Tito v Waddell (No 2) [1977] Ch
106 at 321; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of
Australia (1998) 195 CLR 1 at 46-7; Diagnostic X-Ray Services Pty Ltd v Jewel Food

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Stores Pty Ltd [2001] 4 VR 632. Are building contracts an exception to this principle?
See Wolverhampton Corporation v Emmons [1901] 1 KB 515; Thomas v Harper
(1935) 36 SR (NSW).
Hardship
An order for specific performance will be refused if such an order would result in
unconscionable hardship upon the defendant. See Dowsett v Reid (1912) 15 CLR 695;
Patel v Ali [1984] Ch 283; Gall v Mitchell (1925) 35 CLR 222. The terms of the
contract can, in special circumstances, establish hardship: Falcke v Gray (1859) 62
ER 250; Axelsen v OBrien (1949) 80 CLR 219 at 226.
Laches
Laches, or delay, by the plaintiff in commencing or prosecuting an application for
specific performance will lead a court to deny the application. See Lamshed v
Lamshed (1963) 109 CLR 440; Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at
241.
Vitiating Factors
Equitable relief will be refused if the contract is affected by vitiating factors due to the
defendants conduct or actions. Thus, contracts induced by a defendants
misrepresentation, duress, unconscionable behaviour, undue influence, or as the result
of mistake in equity will not be enforced in equity. Contracts that are unjust or
unconscionable within the terms of any statutory regime, such as the Contracts
Review Act or Trade Practices Act, will also not be specifically enforced.
Lack of Mutuality
Specific performance is not available to a plaintiff unless the defendant could also
have obtained relief against the plaintiff. This principle of mutuality cannot be raised
by a defendant if the reason that the defendant could not get equitable relief against
the plaintiff is to be found in the defendants own conduct or default. When does
mutuality have to be present? See Price v Strange [1978] Ch 337
An important exception to the requirement of mutuality concerns contracts for the sale
of land or interests in land that are required by legislation to be evidenced in writing
to be enforceable. If, for example, a vendor has the necessary written documentation
signed by the purchaser, but the purchaser does not have written documentation
signed by the vendor, mutuality clearly does not exist. The purchaser would be
unable, due to the lack of documentation signed by the vendor, to seek specific
performance against the vendor. This lack of mutuality would, on the application of
the mutuality principle mean that the vendor would be denied specific performance
against the purchaser. However, it is clear that in this situation the vendor will be
granted equitable relief, notwithstanding that the purchaser would be unable to obtain
an order for specific performance.
Plaintiff in Substantial Breach and/or Not Ready, Willing & Able to Perform

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A plaintiff will be denied equitable relief if he or she is in substantial breach of the
contract: Green v Sommerville (1979) 141 CLR 594 at 610. See also Mehmet v
Benson (1965) 113 CLR 295; Consolidated Credit Network v Illawarra Retirement
Trust (No.2) [2005] NSWSC 1007 at [76].
THE EFFECT OF AN ORDER FOR SPECIFIC PERFORMANCE
If equitable relief is actually ordered but compliance with it becomes impossible the
court can award equitable damages. See Johnson v Agnew [1980] AC 367; Sunbird
Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 258-60; Aarons v Advance
Commercial Finance Ltd (1995) NSWConvR 55-746 at 55,759.
INJUNCTION
INTRODUCTION
In enforcing a contract the most significant context in which a plaintiff/promisee may
seek an injunction is to restrain the breach of a negative contractual obligation. A
negative contractual obligation is one in which the defendant/promisor has promised
not to do something. The injunction in this context is referred to as a prohibitory
injunction, as opposed to a mandatory injunction which requires a defendant to do
some positive act. The granting of an injunction is subject to the same jurisdictional
and discretionary factors that apply to the granting of an order for specific
performance.
NEGATIVE CONTRACTUAL OBLIGATIONS
The negative contractual obligation to be enforced by injunctive relief must be
negative in substance in the sense that inactivity by the promisor will be complete
performance of the obligation. See Wolverhampton & Walsall Railway Co v London
& North West Railway Co (1873) LR 16 Eq 433 at 440; O'Keefe v Williams (1910) 11
CLR 171 at 211; Whitwood Chemical Co v Hardman [1891] 2 Ch 416 at 426;
Doherty v Allman (1878) 3 App Cas 719; Dalgetty Wine Estates Pty Ltd v Rizzon
(1979) 141 CLR 552, at 573-4.
RESTRAINTS OF TRADE IN PERSONAL SERVICE CONTRACTS
An important illustration of injunctive relief being sought to enforce negative
contractual obligations is with restraints of trade in the context of personal service
contracts. The typical example of such cases occurs when X, a person with particular
skills and talents, promises to provide those skills and talents for the benefit of Y (the
positive contractual obligation), but also promises not to provide those skills and
talents for the benefit of anybody else (the negative contractual obligation). If X
attempts to breach the negative contractual obligation, Y will seek to enforce it by
obtaining injunctive relief. In determining cases involving the enforcement of
negative contractual obligations the courts have been careful in not granting
injunctive relief if the effect of the order would be tantamount to ordering specific
performance of the positive contractual obligation. See Lumley v Wagner (1852) 42
ER 687; Warner Bros Pictures Inc v Nelson [1937] 1 KB 209; Hawthorn Football

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Club Ltd v Harding [1988] VR 49; Buckenara v Hawthorn Football Club Ltd [1988]
VR 39; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337; Warren v
Mendy [1989] 3 All ER 103 esp at 114; Whitwood Chemical Co v Hardman; Page
One Records Ltd v Britton [1967] 3 All ER 822.