Archive for the ‘equitable remedies’ Category

Owner seeking to enforce DMC covenants must come with clean hands

July 24, 2012

In Perfect China International Ltd v Chan Yat Siu ([2012] HKEC 1025, Lands Tribunal) P and C were neighbours. There were structures on each of their properties that were in breach of the DMC. Each sought equitable remedies in the form of declarations and injunctions. Each failed on the basis that they did not come with clean hands since each of them had unlawful structures on their own property ([46] and [67]). In the case of P, there was also the fact that he had encouraged C to commit the breach. This gave rise to a successful defence based on acquiescence so that he was estopped from seeking relief in respect of the works that he had encouraged. It may also have been an aspect of the finding that he did not come to equity with clean hands ([46]).

Even if the unlawful structures existed before the owner bought his property, this fact would afford no defence. Nor would the fact that the Estate was full of unlawful structures (appalling though this would be if true) afford any defence.

When is a contractual licence irrevocable? Is an injunction available to restrain unlawful revocation?

February 2, 2011

A contractual licence is not irrevocable simply because there is no express provision concerning revocation. It depends on the intention of the parties. If need be, a term concerning revocation can be implied to give efficacy to the agreement.

Winter Garden Theatre (London) Limited v Millenium Productions Limited ([1948] AC 173, HL) concerned a contractual licence of a theatre. It contained no term that would allow the licensor to revoke it and no stated term date. The licensor gave the licensee one month’s notice to leave the theatre. The licensee sought a declaration that the licensor was not entitled to revoke the licence. The House of Lords held that, on its true construction, the licence was revocable.  It was a case of finding the true construction of the document from its terms and the circumstances underlying the transaction. Obiter, Lord Uthwatt said that an injunction is a possible remedy where there is an attempt to revoke in breach of contract (at 202).

Equitable remedies are available to compel a licensor to honour a contractual licence

February 1, 2011

The equitable remedies of specific performance and injunction are available to compel a contractual licensor to honour his bargain, whether or not the licensee is yet in possession.

Verrall v Great Yarmouth Borough Council ([1981] QB 202, CA (Eng)) concerned a licence that the council had granted to the National Front to allow the latter to hold its annual conference in council-owned premises. Before the conference began, the council revoked the licence. The National Front sought specific performance of the licence. This was awarded. The important message from this case is that in appropriate circumstances equity will award specific performance or injunction to compel a contractual licensor to honour its bargain.

Damages would not be an adequate remedy. The National Front would not be able to find an alternative venue for its conference anywhere in England or Wales. Freedom of speech was at stake. The National Front was entitled to the freedoms of speech and of assembly provided they were exercised peaceably. In general, specific performance would be appropriate if a licensor sought to revoke a license in circumstances where many people would be affected and the revocation would have important consequences.

Equity will not assist a licensor to wrongfully terminate a licence agreement

October 15, 2010

In Hounslow Borough Council v Twickenham Garden Developments Ltd ([1970] 3 WLR 538) Hounslow Borough Council had entered into a building contract with Twickenham Garden Developments under which the defendants were to carry out certain construction works on land owned by the Council. As part of the contract, the Council granted the defendants a licence to enter the site to carry out the work. The Council was unhappy at the slow progress being made on the building works and purported to terminate the agreement. The defendants refused to accept that the Council were entitled to do this. In these interlocutory proceedings, one of the issues was whether (regardless of who was right on the main issue just described) the Council could obtain an injunction to force the defendants to leave the site. Megarry J refused to grant the injunction on the basis that equity will not assist a man to break his contract (at 248). At the interlocutory stage, it was not clear that the Council was entitled to terminate the contract.

 

The judgment is briefly mentioned in Anstalt Nybro v Hong Kong Resort Co Ltd [1978] HKLR 414 at 439 (per McMullin J).