53(nv.s. 3) 5-8. 10S On appeal to the High Court, v fa- Held,

53(nv.s. 3) 5-8. 10S On appeal to the High Court, v fa- Held, - [1931] HCA 15 - HCA 1931 case summary — Zoe

[31]

reason of the term of five years, came within sec. 128, and the only question is whether it was a contract to which the doctrine of part performance applies, and whether, if it is such a contract, there was sufficient part performance to enable the Court to grant the relief claimed. The damages were awarded under sec. 62 (4) of the Supreme Court Act 1928, which introduced Lord Cairns' Act into Victoria. The learned trial Judge held that it was a case for specific performance and awarded damages against the defendant in lieu thereof. There are two main propositions : - First, even accepting the Judge's analysis of this agreement as simply a licence and a contract not to revoke it for five years simpliciter, that is not such an agreement as a Court of equity would specifically enforce. The parties would be left to their strict legal rights, that of the defendant to revoke his licence at will and the right of the plaintiff to bring an action in a common law Court for breach of contract. Secondly, on the proper interpretation of this agreement the defendant's obligations were dependent upon performance by the plaintiffs of obligations to perform continuous acts throughout the term, namely, through themselves or their servants to provide for the supply of confectionery to patrons of the theatre, and this element brought it within the class of which a Court of equity would not decree relief in the nature of specific performance (Lavery v. Pursell (1) ). Specific performance is really the basis for the order for damages in this case. Damages could only be awarded in substitution for specific performance. In this case specific performance would not have been decreed, (1) because the defendant was not in a position to carry out the contract, and there- fore to decree specific performance would be to decree something which J. C. Williamson Ltd. would not have power to carry out ; (2) because the rights of third parties to whom the licence to sell sweets had subsequently been granted had intervened; and (3) even if the doctrine of part performance were applicable the acts relied upon in this case were not sufficient to constitute that part performance. As to the first proposition: - With the limited interpretation the learned trial Judge put upon this contract there was no equity created to attract the jurisdiction of a Court of

[98]

Drxon J. By sec. 62 (4) of the Supreme Court Act 1928 of Victoria it is enacted that in all cases in which the Court entertains an application for an injunction against a breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract or agreement, the Court may, if it thinks fit, award damages to the party injured either in addition to or in substitution for such injunction or specific performance, and such damages may be assessed in such manner as the Court directs. This provision differs from sec. 2 of Lord Cairns' Act (21 & 22 Vict. c. 27) in the substitution of the expression "in all cases in which the Court entertains" for the words "in all cases in which the Court of chancery has jurisdiction to entertain." The change in the language may have been made because it was considered more appropriate, in the case of a Court exercising concurrently full jurisdiction at law and in equity, to speak of the application it entertains than of the application it has jurisdiction to entertain, or because the object of introducing the provision was to enable the Court to refuse altogether, or to modify, the injunction or the decree for specific performance to which the suitor would have been entitled and to give him damages in lieu of that remedy or in addition to the modified form of specific relief granted. The lack of such a power was referred to in Beswicke v. Alner (1). Whichever be the reason for the change in language, it does not operate to give to the Supreme Court of Victoria a wider power of substituting damages for equitable remedies than was conferred upon the Court of chancery by Lord Cairns' Act. That power is confined to cases in which there is a title to equitable relief, cases in which there are the ingredients that enable the Court, if it thought fit, to exercise its power of decreeing specific performance or of granting an injunction (Ferguson v. Wilson (2) ).

[106]

The plaintiffs entered upon the performance of the agreement, and, by their servants, sold confectionery from the stands and show-cases and in the auditory, and they duly made the weekly payments. But before the term of the agreement expired the Company purported to bring it to an end, contending that no fixed period had been agreed upon, and so renounced the contract. An action of damages could not but fail, because, when a common law remedy is sought, part performance never did and does not now afford an answer to the Statute of Frauds. Equitable relief is obtainable, notwithstanding the Statute of Frauds, by a party who in pursuance of his contract has done acts of performance consistent only with some such contract subsisting, but, if the doctrine is not confined to cases in which a decree might be made for the specific performance of the contract, it is at least true that the doctrine arose in the administration of that relief and has not been resorted to except for that purpose. It must be remembered that, although the remedy of specific performance is commonly applied in aid of a legal right, it extends to cases where, for one reason or another, there is no remedy at law, as well as to cases where the remedy at law is inadequate. See Fry on Specific Performance, 6th ed., secs. 49-60. But it is evident from a mere statement of the nature of the agreement in this case that it falls outside the scope of the remedy of specific performance. The parties meant their oral contract to be a final expression of obligation for the regulation of their future relations. It was not an agreement preliminary to a further transaction which, when carried out, should define their relative positions. Unlike a contract to assure property, it did not require the parties to adopt a formal instrument or to do some act in the law which should thereafter afford the measure of their rights and duties. Specific performance, in the proper sense, is a remedy to compel the execution in specie of a contract which requires some definite thing to be done before the transaction is complete and the parties rights are settled and defined in the manner intended. Moreover, the remedy is not available unless complete relief can be given, and the contract carried into full and final execution so that the parties are put in the relation contemplated

[112]

scope of the remedy of specific performance, e.g., McManus v. Cooke (1). '"' Where a Court of equity was asked to enforce a contract by injunction, it merely acted in furtherance of common law rights. Hence, it did not of itself determine except in the clearest cases (until it received statutory authority to do so) either the validity or construction of the contract, but referred these matters to a Court of common law. If the contract could not be enforced at common law by an action of damages, it could not be enforced in equity by an injunction. On the other hand, in cases of specific performance strictly so called, the Court of equity itself has for the last two hundred years decided on the validity and construction of the contract with which it had to deal; and it performs contracts for the breach of which an action of damages could never have been brought, e.g., contracts struck at by the Statute of Frauds but partly performed by the plaintiff' (Ashburner, Principles of Equity, p. 526). If, however, a clear legal duty is imposed by contract to refrain from some act, then, prima facie, an injunction should go to restrain the doing of that act. It appears to be of little importance now whether the duty is imposed by a term of the contract expressed in negative or affirmative language. It is said that the agreement in this case imposed upon the Company a duty not to revoke, during the term contracted for, the licence to the plaintiffs to go into the theatre to sell confectionery, and, during the term, to admit to the theatre no one else for the purpose of selling confectionery. To grant an injunction restraining the defendants from doing either of these things may appear an indirect way of compelling specific performance of the Company's part of the agreement. Probably the true rule is that an injunction should not be granted which compels, in substance, the defendant to perform his side of the agreement when the continuance of his obligation to do so depends upon the future conduct of the plaintiff in observing conditions to be fulfilled by him. If the contract is one the execution of which the Court cannot superintend, it does not seem to be in accordance with principle to bind one party to performance in specie leaving him to a remedy in damages only if the other fails to fulfil the conditions on his side to be observed. But, perhaps, if a clear and

[180]

defendant, J. C. Williamson Ltd." (the present appellant), "to execute in a proper form a grant of the rights agreed to be given to the plaintiffs" (the present respondents). With deference to the learned Judge, I think that he misapprehended the nature of the contract into which the appellant and the respondents had entered. The view which I take of the contract is that the relative positions of the parties were finally determined and settled by the terms and conditions of that contract. In Wolverhampton and Walsall Railway Co. vy. London and North-Western Railway Co. (1) Lord Selborne said : - " There is a class of suits in this Court, known as suits for specific performance of executory agreements, which agreements are not intended between the parties to be the final instruments regulating their mutual relations under their contracts. We call those executory contracts as distinct from executed contracts : and we call those contracts 'executed,' in which that has been already done which will finally determine and settle the relative positions of the parties, so that nothing else remains to be done for that particular purpose. The common expression ' specific perform- ance,' as applied to suits known by that name, presupposes an executory as distinct from an executed agreement, something remaining to be done, such as the execution of a deed or a conveyance, in order to put the parties in the position relative to each other in which by the preliminary agreement they were intended to be placed. Of course if you pass from the technical to the etymological effect of the words, ' specific performance ' might signify any direction given by the Court for the doing of anything whatever in specie ; and I cannot help thinking that in this class of cases a little confusion has sometimes arisen from transferring considerations applicable to suits for specific performance, properly so called, to questions which have arisen as to the propriety of the Court requiring something or In my opinion, the contract which the

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Judgment (215 paragraphs)

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