TOPIC 6: SPECIFIC PERFORMANCE

1. When a court directs a party to perform the obligation imposed on it by the contract; It is a
remedy which compels the execution of a contract which requires some definite thing to be done
before the transaction is completed; The parties’ rights are settled and defined in the manner
intended.
2. General elements: Valid contract, and brought by either party of the contract.

General Principle

i) Discretionary Remedy

3. It is a discretionary remedy, decreed by a court solely at its discretion and not as a matter of right;
except in cases where clear cut statutory provision deprives the court discretion. Not given at the
pleasure of the judge but upon sound and reasonabl discretion and reasoning.
4. In Hasham v Zanab, court can still give orders for SP even if time of performance of contracts has
yet to arrive. In Hasham v Zenab, the plaintiff purchaser brought an action for specific
performance weeks before the date for completion, soon after the defendant vendor repudiated the
contract shortly after signing it. The Privy Council upheld the plaintiff’s claim to an order for
specific performance, holding that all that was required was to show two most important elements
in applying for specific performance which are firstly, there is a contract with some non-
performance act by either party, and secondly, there is a seek for directions for performance.
5. Discretion as to decreeing specific performance is provided in Section 21 of SRA 1950,
(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to
grant any such relief merely because it is lawful to do so; but the discretion of the court is not
arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a
court of appeal.
(2) The following are cases in which the court may properly exercise a discretion not to decree
specific performance: (a) where the circumstances under which the contract is made are such as to
give the plaintiff an unfair advantage over the defendant, though there may be no fraud or
misrepresentation on the plaintiff's part, (b) Where the performance of a contract would involve
some hardship on the defendant which he did not foresee, whereas its non-performance would
involve no such hardship on the plaintiff.
(3) A case in which the court may properly exercise a discretion to decree specific performance is
where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable
of specific performance.
*read illustrations
6. In Ganam d/o Rajamany v Somoo s/o Sinniah, the court exercises its discretion in the granting and
withholding of SP. It took into consideration the conduct and the respective interests of the parties.
7. In Sekemas v Lian Seng Co, the key for court’s discretion is to balance the interests of both
parties.
8. This exercise of discretion to withhold SP is mainly in hardship cases. For the purposes of
hardship in hand or hardship as a defence for SP, a few proposition or the general rule may be
stated:
a. Hardship is not a strong defence
b. Financial hardship alone is not sufficient
c. there is a general judicial reluctance to allow the defence of hardship to be successfully pleaded
d. financial hardship without more is normally insufficient to support a successful plea
e. entering a bad bargain is not hardship in this context as in Adams v Weare

1
 f. the discretion may properly be exercised where the defendant proves that a hardship amounting
to injustice would be inflicted on him or her and that it would not be reasonable to do so.
g. In Venkatachalam RM Chettiar v NKR Arunasalam Chettiar, it was held that the fact that the
bargain turned our to be worse than was originally anticipated by the defendant was outside the
intendment of the provision.
h. In Haywood v Cope, SP of a mining lease was granted although the mine was unprofitable.
i. in Patel v Ali, the plaintiff demanded specific performance to transfer the property from the
defencdant vendor who became disabled after the sale. However, it was decided by the court
not to grant such specific performance because as Goulding J said, considerable hardship would
be caused.
j. Specific performance has been denied in cases when it would, contrary to expectations at the
time of contracting or subject him to criminal prosecution as in Hope v Walter.
k. In Tamplin v James, the case established that if a person enters a contract on the basis of a
mistake that was not induced by the other party to the contract, specific performance will be
awarded against the person if no hardship amounting to injustice would be inflicted on the
person by holding the person to the contract.
l. In Nicholas v Ingram, where the defence was solely based on financial inability to complete,
the court stated that in an action for SP of a contract sale of land, hardship on the part of Df
may operate as a defence but the hardship must have existed at the time of contract.
m. In Johnson v Agnew, if an order for SP became impossible to enforce, Df then had the right to
ask the court to discharge the order and terminate the contract.
n. In Haji Osman Abu Bakar v Saiyed Noor bin Saiyed Mohamed, SP was granted but court
rejected the defence that hardship would be caused to the beneficiaries if such an order was
granted.
9. He who comes to equity must come with clean hands.
a. In Co-operative Insurance Society Ltd v Argyll Stores, conduct of the Pf is also key in
determining the award of SP. Gross breach of personal faith and the use of threat of non-
performance of contract as blackmail will result in failure on application for SP.
b. Fraud is a strong ground in denying an application for SP as in Rasiah Munusamy v Lim Tan,
the court was entitled to refuse the remedy of the appellant who came with no clean hands.
c. In Jericho v Guglieimin, poor grounds for a claim for SP if the applicant has taken advantage of
the circumstances of the other side such as for drunkenness, lack of appreciation of one’s right.

ii) It is a remedy in personam

10. It is made to individual defendant.

11.In Penn v Lord Baltimore, parties had entered into a written agreement fixing the boundaries of
Pennsylvania and Maryland the former which belonged to the claimants and the latter to the
Defendant. Claimant sued the defendant in England to have the agreement SP and are the
objections taken by the defendant was to jurisdiction of the court.

iii) Damages not adequate remedy

12. If remedy is adequate, equity won’t step in as stated in Beswick v Beswick and in Section 11(1)(c)
and (3)
13. In Co-operative Insurance v Argyll, SP is applicable in cases where loss would be difficult to
quantify.
14.In Leigh v Lillie, SP is not available if parties have agreed in contract that a specific sum of money
is to be paid as an alternative to performing contract.

2
iv) Damages may be awarded in substitution for or in addition to SP

15. As stated in Section 18:

(1) Any person suing for the specific performance of a contract may also ask for compensation for
its breach, either in addition to, or in substitution for, its performance.
(2) If in any such suit the court decides that specific performance ought not to be granted, but that
there is a contract between the parties which has been broken by the defendant and that the
plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly.
(3) If in any such suit the court decides that specific performance ought to be granted, but that it is
not sufficient to satisfy the justice of the case, and that some compensation for breach of the
contract should also be made to the plaintiff, it shall award him such compensation accordingly.
(4) Compensation awarded under this section may be assessed in such a manner as the court may
direct.
(5) The circumstance that the contract has become in capable of specific performance shall not
preclude the court from exercising the jurisdiction conferred by this section.

16. And in Section 19, A contract, otherwise proper to be specifically enforced, may be so enforced,
though a sum be named in it as the amount to be paid in case of its breach, and the party in default
is willing to pay the same. Or in other words, SP may be granted even where damages are agreed
upon as in Leigh v Lillie.
17. Also, in Section 13 and 14, damages may be awarded for apart unperformed. Further reading in
SRA. See Shiffon Creations (SG) Pt Ltd v Tong Lee Co - http://www.singaporelaw.sg/sglaw/laws-
of-singapore/commercial-law/chapter-18?id=1487

v) SP is unaffected by waiver

18. In Plenitude Holdings Sdn Bhd v Tan Sri Khoo Teck Puat & Anor, the agreement was to sell a
certain land comprising an area of 1,000 acres at the price of RM 47,939,958 to the purchaser,
Pletinude Holdings Sdn Bhd. Therefore, Tan Sri Khoo Teck Puat on his own behalf and on behalf
of the vendor undertook to obtain a loan from Nationals Bank of Brunei to enable the purchaser to
pay the balance of the purchased price. However, unable to do so, he and the second appellant
would join the respondent in a joint venture to develop the land. As such, the respondent had paid
the deposit of RM 47,939,958 but had failed to pay the balance purchase price. Due to non-
payment of the balance of the purchased price, the second appellant then terminated the agreement
and forfeited the deposit. This is where the respondent claimed for breach of contract for
terminating the agreement. So, in High Court, the appellants were ordered to pay certain amount
for wrongful termination of the agreement. The High Court also held that termination of the
agreement was not valid and ordered for specific performance. It was further reaffirmed by
Supreme Court.

vi) Only positive contracts may be specifically performed

19. In Spiro v Lintern, SP is only applicable for the enforcement of positive contractual obligations
and the obligations are binding on the Defendant.
20. In Sky Petroleum Ltd v VIP Petroleum Ltd, injunction can be obtained on interlocutory basis
while SP cannot.

vii) Considerations of hardship and expiry of limitation period may not necessirly defeat SP.

3
viii) SP dependant on an option is unaffected if the option is not exercised strictly in the prescribed
manner as in Kau Nia v Teck Wah

ix) SP may be claimed and granted even before the time of performance has arrived.

21. In Hasham v Zenab, SP of a contract for the sale of land was granted before the contractual
completion date.
22. In Marks v Lilley, Claimant a vendor had not completed in accordance with a non-essential time
obligation, and the purchaser commenced proceedings for specific performance. The contract was
thereafter completed, and the purchaser claimed costs. as saying that the cause of action for
specific performance was not a breach of contract, but the duty considered in equity to be
incumbent on the defendant of actually doing what he promised by the contract to perform.

SP under SRA

i) Performance of an act

23. As stated in Section 11(1) Except as otherwise provided in this Chapter, the specific performance
of any contract may, in the discretion of the court, be enforced,
(a) when the act agreed to be done is in the performance, wholly or partly, of a trust;
*read illustration
24. In Wood v Rowcliffe, specific delivery of a chattel has been ordered against the person in a
fiduciary relationship even if the applicant may receive satisfactory monetary compensation.

ii) No standard to ascertain actual damage

25. As per Section 11(b) : when there exists no standard for ascertaining the actual damage caused by
the non-performance of the act agreed to be done; *read illustration
26. The related principle at common law is that SP may be granted when damages are difficult to
quantify in Uniting Church In Australia Property Trust (NSW) v Immer regarding application on
SP for airspace rights.

iii) Pecuniary compensation not adequate relief

27. As per Section 11(c) : when the act agreed to be done is such that pecuniary compensation for its
non-performance would not afford adequate relief; *read illustration
28. The fundamental here is that SP will not normally be granted where damages are an adequate
remedy as in Perbadanan Setiausaha Kerajayaan Selangor v Metroway.
29. Also, SP will not be available when damages provide a complete remedy as in Adderley v Dixon
or when damages already amount to provide justice as in Beswick v Beswick.
30. It is decided in Co-opeative Insurance Society Ltd v Argyll that whether damages is adequate is
upon the consideration of judge and depends on the kinds of contract.

iv) Contracts can be specifically enforce

a) Contracts for disposal of interests in land

31. As per Section 11(2) Unless and until the contrary is proved, the court shall presume that the
breach of a contract to transfer immovable property cannot be adequately relieved by
compensation in money, and that the breach of a contract to transfer movable property can be thus
relieved. *read illustrations

4
32. It is stated in Adderley v Dixon, the rationale for the law is that, land might have a peculiar and
special value and as such, the plaintiff may not be adequately compensated solely by damages.
33. In Uniting Church In Australia Property Trust (NSW) v Immer, SP was also been granted in
respect of rights of airspace, not least because of the difficulty to assess damages.
34. Damages may be inadequate where the land has suffered from material misdescription. In this
context, it has been said that where the necessary conditions are satisfied, the courts will almost
invariably decree SP of a land contract, even if the contractual interest is no more than a short-term
licence.

b) Contracts for sale of goods

35. Generally, contracts for sale of goods are not specifically enforceable where suitable substitutes
could be secure on the market, so damages would normally be deemed adequate compensation for
the plaintiff who, in any event, is under a duty to mitigate his loss. This is supported in Section
11(2), which provides that unless and until the contrary is proved, the court shall presume that a
breach of a contract to transfer movable property can be adequately relieved by compensation in
money.
36. However, the first exception is where the plaintiff could not secure similar or suitable goods, a
proposition reinforced by illustration (d) to Section 11(1)(c),  “A contracts with B to sell him a
house for RM1,000. B is entitled to a decree directing A to convey the house to him, he paying the
purchase- money.”
a. Consistent with this, contract that had been specifically enforced in respect of articles of
unusual beauty or rarity as stated in Falcke v Gray, you can’t get specific performance for
ordinary chattels, but if the chattel is unique and damages wouldn’t be an adequate remedy you
can get specific performance – unless the object had been sold to a 3rd person, then you get
damages.
b. Also in where if the goods possess no special characteristics, SP may not be granted, in Cohen
v Roche, the claimant owned a furniture shop and entered an agreement to purchase a quantity
of Hepplewhite chairs to sell in his shop. The defendant, in breach of contract, refused to
deliver the chairs. The claimant sued for breach of contract and sought specific performance for
delivery of the chairs. Held: The court refused to grant specific performance. The claimant
would be adequately compensated by an award of damages. The chairs were considered
'ordinary articles of commerce and of no special value or interest'. The claimant could have
purchased the chairs elsewhere.

c) Contracts for disposal of shares

37. As provided in Section 11(1)(c), illustration (c), A contracts to sell, and B contracts to buy, a
certain number of railway-shares of a particular description. A refuses to complete the sale. B may
compel A specifically to perform this agreement, for the shares are limited in number and not
always to be had in the market, and their possession carries with it the status of a shareholder,
which cannot otherwise be procured.
38. This reflects the principle in Duncuft v Albrecht, that shares that are limited in number and not
available on the share market can be specifically enforced. However, there is a limit as provided in
Dougan v Ley, if shares are available on the market, and everyone can go buy them, this principle
may not be as readily applied.
39. In Gan Realty v Nicholas, a case involving the disposal of shares which were not readily available
in the open market, Raja Azlan Shah J explained, no standard to ascertain mutual loss that plaintiff

5
 would suffer by the non-performance of the sale as the effects would be irreparable and could not
be remedied by damages.

d) Contracts to lend money

40. The general position in respect of contracts to lend money is that the plaintiff can be adequately
compensated monetarily by sue for damages, thus SP should normally be refused.
41. However, there is an exception to this which is the damage is difficult to quantify or if the loan, it
represents only a component of a wider commercial arrangement. In Loan Investments
Corporation of Australia v Bonner, a Privy Council decision involving both the sale of land with
unsecured loan transaction, it is stated that exception to the rule where it is a contract with more
than just the component of lending money, a contract for sale of land and unsecured loan
transaction because a mere contract for loan of money will not be specifically enforced.

e) Contracts for personal services

42. The position today is reflected by a primacy being given to the appropriateness of the remedy in
the circumstances of the individual cases as in CH Giles v Morries, court refused SP of personal
services as it is difficult or impossible to ensure compliance.
43. Court also refused SP of personal services as it may amount to some kind of slavery.
44. In Dayang Nurfaizah bte Awang Dowty v Bintang Seni SB, the defendant failed to obtain SP of a
management agreement against the plaintiff since it calls for the enforcement of personal services.

v) Pecuniary Compensation Cannot be obtained

45. As provided in Section 11(1)(d) when it is probable that pecuniary compensation cannot be got for
the non-performance of the act agreed to be done, SP may be ordered. Illustration: A transfers
without endorsement, but for valuable consideration, a promissory note to B. A becomes insolvent,
and C is appointed his assignee. B may compel C to endorse the note, for C has succeeded to A's
liabilities and a decree for pecuniary compensation for not endorsing the note would be fruitless.
46. In Evans Marshall v Bertola, when damages may not be adequate, where loss complained of may
not be recoverable at law, situations that cause difficulty in estimating loss include loss of goodwill
and trade reputation, SP may be ordered.

vi) SP where subject has partially ceased to exist

47. As provided in Section 12, Notwithstanding anything contained in section 57 of the Contracts Act
1950, a contract is not wholly impossible of performance because a portion of its subject matter,
existing, at its date, has ceased to exist at the time of the performance.
48. Illustrations: (a) A contracts to sell a house to B for RM10,000. The day after the contract is made,
the house is destroyed by a cyclone. B may be compelled to perform his part of the contract by
paying the purchase-money. (b) In consideration of a sum of money payable by B, A contracts to
grant an annuity to B's life. The day after the contract has been made, B is thrown from his horse
and killed. B's representative may be compelled to pay the purchase-money.

vii) SP of part of contract

49. Section 16 provides that the court shall not direct the SP unless in cases of the three situations:
a. Section 13, where part unperformed is small.
b. Section 14, where part unperformed is large.

6
 c. Section 15, independant part. This reflects the general principle that the parts of contract to be
enforced must be severable from the whole contract as in Odessa Tramways v Mendel.

Contracts not specifically enforceable

50. As provided in Section 20(1) The following contracts cannot be specifically enforced:
(a) a contract for the non-performance of which compensation in money is an adequate relief;
- related to Co-operative Insurance Society Ltd v Argyll Stores, the HOL satisfied that since the
disputing parties were large sophisticated commercial organisations whose interests were purely
financial and in absence of personal breach of faith, compensation for the innocent party lies in
damages and not in SP.

(b) a contract which runs into such minute or numerous details, or which is so dependent on the
personal qualifications or volition of the parties, or otherwise from its nature is such, that the
court cannot enforce specific performance of its material terms;

-especially when there is a necessity for the continued supervision of the court to ensure the
observance of the contractual terms. As in Oon Hock Lai v Lee Kok Leong, building contracts
are generally not granted with SP because damages are adequate but exceptions in
Wolverhampton Corp v Emmons, i) building work is defined by contract, ii) plaintiff substantial
interest in having contract performed is that such damages is insufficient and iii) defendant has
by virtue of the contract obtained possession of the land on which the work is to be done.

-or contracts to carry on business and contracts to achieve results as in Co-operative Insurance
Society Ltd v Argyll Stores, the distinction between orders to carry on activities such as running
a business and orders which require him to achieve results which the contract to carry on an
activity will often be unsuitable for SP because of the difficulty of defining with what has to be
done. So court will grant SP to force a person to carry out a particular activity and not to achieve
a particular result.

(c) a contract the terms of which the court cannot find with reasonable certainty;
-This position at common law was emphasised in Co-operative Insurance Society Ltd v Argyll
Stores, where relevant clause which required the defendants “to keep the demised premises open
for retail trade during the usual hours of business in the locality and the display windows
properly dressed in a suitable manner in keeping with a good class parade of shops” was held not
to be sufficiently certain which may attract arguments as to whether a tenant is doing enough or
otherwise.
-Uncertainty is in fact more apparent than real meaning that the uncertainty must be sufficiently
serious, that the court cannot order what the defendant must specifically do. As in the case Lin
Nyuk Chan v Wong Sz Tsin, a case which involved a tenancy agreement but one which failed to
clearly stipulate for variation of rent, the court found that the uncertainty exists whenever parties
cannot agree and the matter must be settled by a court.

(d) a contract which is in its nature revocable;

-This reflects the view where the defendant has the right to terminate, it is assumed that he ccan
exercise it and render the SP that is ordered nugatory. In Puncak Niaga v NS Water, the court
held that if a contract can not be able to specifically enforced, no injunction could be granted to
prevent breach.

7
 (e) a contract made by trustees either in excess of their powers or in breach of their trust;
-Such as contract made by or on behalf of a corporation or public company or by promoters
which is in excess of its powers.
-Also, contract which involves the performance of a continuous duty extending over a longer
perios than 3 years from its date as in Si Rusa Beach Reasort v Asia Pacific Hotels, agreement
was made, then dispute arose and respondent applied for interim injunction to restrain applicant
from interfering in the running hotel but it was held that if the status to be maintain the only order
that could be made is to allow the applicant to continue run the hotel until the action is finally
litigated.
-Also, contract of which material part of the subject matter supposed by both parties to exist,
has, before it has been made, ceased to exist.

*read illustrations provided in SRA for further understanding of Section 20

For whom contracts cannot be specifically enforced (Applicant)

51. Specific performance of a contract cannot be enforced in favour of a person,

(a) who could not recover compensation for its breach;

(b) who has become incapable of performing, or violates, any essential term of the contract that
on his part remains to be performed;

-This is because the party seeking for SP must be readily, willingly and able to perform the
obligations as in Ganam d/o Rajamany v Somoo s/o Smith.

-Plaintiff may be denied Sp if breached important terms of contract as it indicates his inability or
unwillingness to perform his obligations as in Swain v Ayres.

(c) who has already chosen his remedy and obtained satisfaction for the alleged breach of
contract;
(d) who, previously to the contract, had notice that a settlement of the subject matter thereof
(though not founded on any valuable consideration) had been made and was then in force.
Against whom contracts cannot be specifically enforced (Defendant), also known for defences
52. As stated in Section 27, against whom Contracts cannot be Specifically Enforced or what parties
cannot be compelled to perform,
(a) if the consideration to be received by him is so grossly inadequate, with reference to the state
of things existing at the date of the contract, as to be either by itself or coupled with other
circumstances evidence of fraud or of undue advantage taken by the plaintiff;
-Falcke v Gray, gross inadequacy alone is insufficient as reason for refusal of SP as common law
alloes for such valid contracts. However, where the elements of fraud or undue influence were
used to obtain the grossly inadequate benefit, SP will be denied.

(b) if his assent was obtained by the misrepresentation (whether wilful or innocent), concealment,
circumvention, or unfair practices, of any party to whom performance would become due under
the contract, or by any promise of the party which has not been substantially fulfilled;
-Walter v Morgan, gaining unfair advantage by unfair means may not necessarily void a contract
in the eyes of common law but equity requires claimants come with clean hands and may deny
applications for SP.

8
-Blomley v Ryan, cthe case which illustrates the application of the weaker party’s disabilities,
fraud and unfair bargain which in this case, contract was set aside as the defendant was placed in
a weaker bargaining position due to his lack of education, advanced age, reduced mental and that
negotiations took place over a drink of rum rendering the defendant partly drunk and ill.

(c) if his assent was given under the influence of mistake of fact, misapprehension, or surprise.