When an Order for Specific Performance Fails
| Date | 01 November 1979 |
| Published date | 01 November 1979 |
| DOI | http://doi.org/10.1111/j.1468-2230.1979.tb01561.x |
NOTES
OF CASES
WHEN
AN ORDER
FOR
SPECIFIC
PERFORMANCE
FAILS
The vendor under
a
contract for the sale
of
land obtains an order for
specific performance. The purchaser fails to comply. What can the
vendor do?
In
Johnson
v.
Agnew’
the House
of
Lords has given
the vendor
a
relatively helpful answer.
The
vendor may proceed to ‘‘work out” the order for specific
performance by selling the property in pursuance of his cquitable
lien, claiming any further sum due or accounting for any surplus, for-
feiting any deposit, and claiming interest on
the
purchase price for
the period for wllich
it
was outstanding. But he may prefer to
terminate the contract and recover damages.
In
Johnson
v.
Agnew
this was his only possibility. The purchaser’s default had prevented
the vendors from redeeming mortgages on the properties, and the
mortgagees had sold them, rendering specific performance
impossiblc. Moreover, the vendors had lost heavily. The contract
price had been
E117.000
and
the
mortgage debts much less, but the
price obtained from the mortgagees’ sales was about
C48,OOO.
It
was clear that the vendors could be granted
a
discharge of the
order for specific performance. The difficulty arose over their claim
for damages. The Court of Appeal followed its dccision in Capital
and
Suburban Properties
Ltd.
v.
Swycfier
(hereafter
Swycher).
It
held that, on the occurrence of the breach the vendors had had
two
alternative courscs: to treat the breach as
a
repudiation and claim
damages at common law; or
to
seek specific performance. Having
adopted the latter,
they
could not subsequently revert
to
the formcr.
Some difficulties arose from
the
use of the term “rescission”
for three distinct procedures. First, when
a
contract
is
voidable
ub
initio,
the party not responsible for the vitiating factor is said
to have
a
right of rescission. Secondly, where a party
to
a valid con-
tract commits
a
fundamental breach
or
a breach of
a
fundamental
tcrm, and the othcr accepts this as a repudiation, there is said to
be rescission, in
a
“loose sense
of
the
word.” Thirdly, where a
court.
after granting an order for specific performance, consents
to discharge the order there is said to bc rescission. The third
mcaning was employed in the Court of Appcal in these cases,4
although in
Johnsort
v.
Agncw
Lord Wilberforce (delivering
the
sole
reasoned speech in the House of Lords) said simpIy that
a
court
J
(19781
Ch.
176
(C.A.);
119791
2
W.L.R.
487
(H.L.).
2
119761
Ch.
319.
3
Swycher
(19761
Ch.
319,
330F.
But
it
has
“
often
”
been used thus:
Buckland
4
As
explained in
Swycher
[1976]
Ch.
319,
3270
(Buckley
L.J.)
v.
Farmer
[I9791
1
W.L.R.
221, 2378-238~.
696
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