Specific Relief Act 1950 [Act 137]

17 Purchaser's rights against vendor with imperfect title   cite [+]

Where a person contracts to sell or let certain property, having only an imperfect title thereto, the purchaser or lessee (except as otherwise provided by this Chapter) has the following rights:

(a) if the vendor or lessor has subsequently to the sale or lease acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of that interest;

(b) where the concurrence of other persons is necessary to validate the title, and they are bound to convey at the vendor's or lessor's request, the purchaser or lessee may compel him to procure the concurrence; and

(c) where the vendor or lessor sues for specific performance of the contract, and the suit is dismissed on the ground of his imperfect title, the defendant has a right to a return of his deposit (if any) with interest thereon, to his costs of the suit, and to a lien for the deposit, interest, and costs on the interest of the vendor or lessor in the property agreed to be sold or let.

18 Power to award compensation in certain cases   cite [+]

(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.

ILLUSTRATION


A contracts to sell a hundred gantangs of rice to B. B brings a suit to compel A to perform the contract or to pay compensation. The court is of opinion that A has made a valid contract and has broken it, without excuse, to the injury of B, but that specific performance is not the proper remedy. It shall award to B such compensation as it deems just.


(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.

ILLUSTRATION


A contracts with B to sell him a house for RM1,000, the price to be paid and the possession given on the 1st January. A fails to perform his part of the contract, and B brings his suit for specific performance and compensation, which is decided in his favour. The decree may besides ordering specific performance, award to B compensation for any loss which he has sustained by A's refusal.


(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.

ILLUSTRATIONS


(a) A, a purchaser, sues B, his vendor, for specific performance of a contract for the sale of a patent. Before the hearing of the suit the patent expires. The court may award A compensation for the non-performance of the contract, and may, if necessary, amend the plaint for that purpose.

(b) A sues for the specific performance of a resolution passed by the directors of a public company, under which he was entitled to have a certain number of shares allotted to him, and for compensation for the non-performance of the resolution. All the shares had been allotted before the institution of the suit. The court may, under this section, award A compensation for the
non-performance.

19 Liquidation of damages not a bar to specific performance   cite [+]

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.

ILLUSTRATION


A contracts to grant B an under-lease of property held by A under C, and that he will apply to C for a licence necessary to the validity of the underlease, and that, if the licence is not procured, A will pay B RM10,000. A refuses to apply for the licence and offers to pay B the RM10,000. B is nevertheless entitled to have the contract specifically enforced if C consents to give the licence.

Contracts which cannot be Specifically Enforced

20 Contracts not specifically enforceable   cite [+]

(1) The following contracts cannot be specifically enforced:

(a) a contract for the non-performance of which compensation in money is an adequate relief;


ILLUSTRATION

A contracts to sell, and B contracts to buy, RM10,000 in the four per cent loan of the City of Penang;

A contracts to sell, and B contracts to buy, 40 pikuls of coffee at RM30 per pikul;

In consideration of certain property having been transferred by A to B, B contracts to open a credit in A's favour to the extent of RM10,000, and to honour A's drafts to that amount:

The above contracts cannot be specifically enforced, for in the first and second both A and B, and in the third A, would be reimbursed by compensation in money.


(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;


ILLUSTRATIONS

(a) A contracts to render personal service to B;

A contracts to employ B on personal service;

A, an author, contracts with B, a publisher, to complete a literary work;

B cannot enforce specific performance of these contracts.

(b) A contracts to buy B's business at the amount of a valuation to be made by two valuers, one to be named by A and the other by B. A and B each name a valuer, but before the valuation is made A instructs his valuer not to proceed;

By a charter-party entered into in Telok Anson between A, the owner of a ship, and B, the charterer, it is agreed that the ship shall proceed to Rangoon, and there load a cargo of rice, and thence proceed to London, freight to be paid, one-third on arrival at Rangoon, and two-thirds on delivery of the cargo in London;

A lets land to B, and B contracts to cultivate it in a particular manner for three years next after the date of the lease;

A and B contract that, in consideration of annual advances to be made by A, B will, for three years next after the date of the contract, grow particular crops on the land in his possession and deliver them to A when cut and ready for delivery;

A contracts with B that, in consideration of RM1,000 to be paid to him by B, he will paint a picture for B;

A contracts with B to execute certain works which the court cannot superintend;

A contracts to supply B with all the goods of a certain class which B may require;

A contracts with B to take from B a lease of a certain house for a specified term, at a specified rent, "if the drawing-room is handsomely decorated," even if it is held to have so much certainty that compensation can be recovered for its breach;

A contracts to marry B:

The above contracts cannot be specifically enforced.



(c) a contract the terms of which the court cannot find with reasonable certainty;


ILLUSTRATION

A, the owner of a refreshment-room, contracts with B to give him accommodation there for the sale of his goods and to furnish him with the necessary appliances. A refuses to perform his contract. The case is one for compensation and not for specific performance, the amount and nature of the accommodation and appliances being undefined.


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


ILLUSTRATION

A and B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership.


(e) a contract made by trustees either in excess of their powers or in breach of their trust;


ILLUSTRATIONS

(a) A is a trustee of land with power to lease it for seven years. He enters into a contract with B to grant a lease of the land for seven years, with a covenant to renew the lease at the expiry of the term. This contract cannot be specifically enforced.

(b) The directors of a company have power to sell the concern with the sanction of a general meeting of the shareholders. They contract to sell it without any such sanction. This contract cannot be specifically enforced.

(c) Two trustees, A and B, empowered to sell trust property worth RM10,000, contract to sell it to C for RM3,000. The contract is so disadvantageous as to be a breach of trust. C cannot enforce its specific performance.

(d) The promoters of a company for working mines contract that the company, when formed, shall purchase certain mineral property. They take no proper precautions to ascertain the value of the property, and in fact agree to pay an extravagant price therefor. They also stipulate that the vendors shall give them a bonus out of the purchase-money. This contract cannot be specifically enforced.


(f) a contract made by or on behalf of a corporation or public company created for special purposes, or by the promoters of the company, which is in excess of its powers;


ILLUSTRATION

A company existing for the sole purpose of making and working a railway contracts for the purchase of a piece of land for the purpose of erecting a cotton-mill thereon. This contract cannot be specifically enforced.


(g) a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date; and


ILLUSTRATION

A contracts to let for twenty-one years to B the right to use such part of a certain railway made by A as was upon B's land, and that B should have a right of running carriages over the whole line on certain terms, and might require A to supply the necessary engine-power, and that A should during the term keep the whole railway in good repair. Specific performance of this contract must be refused to B.


(h) a contract of which a material part of the subject matter supposed by both parties to exist, has, before it has been made, ceased to exist.


ILLUSTRATION

A contracts to pay an annuity to B for the lives of C and D. It turns out that, at the date of the contract, C, though supposed by A and B to be alive, was dead. The contract cannot be specifically performed.



(2) Save as provided by the law relating to civil procedure, no contract to refer a controversy to arbitration shall be specifically enforced.

Discretion of the Court

21 Discretion as to decreeing specific performance   cite [+]

(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; and


ILLUSTRATIONS

(a) A contracts to sell to B the interest of C in certain stock-in-trade. It is stipulated that the sale shall stand good, even though it should turn out that C's interest is worth nothing. In fact, the value of C's interest depends on the result of certain partnership-accounts, on which he is heavily in debt to his partners. This indebtedness is known to A, but not to B. Specific performance of the contract should be refused to A.

(b) A contracts to sell, and B contracts to buy, certain land. To protect the land from floods, it is necessary for its owner to maintain an expensive embankment. B does not know of this circumstance, and A conceals it from him. Specific performance of the contract should be refused to A.

(c) A's property is put up to auction. B requests C, A's attorney, to bid for him. C does this inadvertently and in good faith. The persons present, seeing the vendor's attorney bidding, think that he is a mere puffer and cease to compete. The lot is knocked down to B at a low price. Specific performance of the contract should be refused to B.


(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.


ILLUSTRATIONS

(a) A and B, trustees, join their beneficiary, C, in a contract to sell the trust-estate to D, and personally agree to exonerate the estate from heavy incumbrances to which it is subject. The purchase-money is not nearly enough to discharge those incumbrances, though, at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.

(b) A contracts with B to sell him certain lands, and to make a road to it from a certain railway-station. It is found afterwards that A cannot make the road without exposing himself to litigation. Specific performance of the part of the contract relating to the road should be refused to B, even though it may be held that he is entitled to specific performance of the rest with compensation for loss of the road.

(c) A, a lessee of mines, contracts with B, his lessor, that at any time during the continuance of the lease B may give notice of his desire to take the machinery and plant used in and about the mines, and that he shall have the articles specified in his notice delivered to him at a valuation on the expiry of the lease. Such a contract might be most injurious to the lessee's business, and specific performance of it should be refused to B.

(d) A contracts with B to buy from B's manufactory and not elsewhere all the goods of a certain class used by A in his trade. The court cannot compel B to supply the goods, but if he does not supply them A may be ruined, unless he is allowed to buy them elsewhere. Specific performance of the contract should be refused to B.



(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.

ILLUSTRATION


A sells land to a railway company, who contract to execute certain works for his convenience. The company take the land and use it for their railway. Specific performance of the contract to execute the works should be decreed in favour of A.

For whom Contracts may be Specifically Enforced

22 Who may obtain specific performance   cite [+]

Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by-

(a) any party thereto;

(b) the representative in interest, or the principal, of any party thereto:

Provided that, where the learning, skill, solvency, or any personal quality of the party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed;

(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between members of the same family, any person beneficially entitled thereunder;

(d) when a public company has entered into a contract and subsequently becomes amalgamated with another public company, the new company which arises out of the amalgamation; or

(e) when the promoters of a public company have, before its incorporation, entered into contract for the purposes of the company, and the contract is warranted by the terms of the incorporation, the company.

For whom Contracts cannot be Specifically Enforced

23 Personal bars to the relief   cite [+]

Specific performance of a contract cannot be enforced in favour of a person-

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


ILLUSTRATION

A, in the character of agent for B, enters into an agreement with C to buy C's house. A is in reality acting not as agent for B but on his own account. A cannot enforce specific performance of this contract.


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


ILLUSTRATIONS

(a) A contracts to sell B a house and to become tenant thereof for a term of fourteen years from the date of the sale at a specified yearly rent. A becomes insolvent. Neither he nor the official receiver of his estate can enforce specific performance of the contract.

(b) A contracts to sell B a house and garden in which there are ornamental trees, a material element in the value of the property as a residence. A, without B's consent, fells the trees. A cannot enforce specific performance of the contract.

(c) A, holding land under a contract with B for a lease, commits waste, or treats the land in an unhusbandlike manner. A cannot enforce specific performance of the contract.

(d) A contracts to let, and B contracts to take, an unfinished house, B contracting to finish the house and the lease to contain covenants on the part of A to keep the house in repair. B finishes the house in a very defective manner: he cannot enforce the contract specifically, though A and B may sue each other for compensation for breach of it.


(c) who has already chosen his remedy and obtained satisfaction for the alleged breach of contract; or


ILLUSTRATION

A contracts to let, and B contracts to take, a house for a specified term at a specified rent. B refuses to perform the contract. A thereupon sues for, and obtains, compensation for the breach. A cannot obtain specific performance of the 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.

24 Contracts to sell property by one who has no title, or who is a voluntary settlor   cite [+]

A contract for the sale or letting of property, whether movable or immovable, cannot be specifically enforced in favour of a vendor or lessor-

(a) who, knowing himself not to have any title to the property, has contracted to sell or let the same;

(c) who, though he entered into the contract believing that he had a good title to the property; cannot, at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt; or

(c) who, previous to entering into the contract, has made a settlement (though not founded on any valuable consideration) of the subject matter of the contract.


ILLUSTRATIONS


(a) A, without C's authority, contracts to sell to B an estate which A knows to belong to C. A cannot enforce specific performance of this contract, even though C is willing to confirm it.

(b) A, out of natural love and affection, makes a settlement of certain property on his brothers and their issue, and afterwards enters into a contract to sell the property to a stranger. A cannot enforce specific performance of this contract so as to override the settlement and thus prejudice the interests of the persons claiming under it.

For whom Contracts cannot be Specifically Enforced, except with a Variation

25 Non-enforcement except with variation   cite [+]

Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases, namely:

(a) where by fraud or mistake of fact the contract of which performance is sought is in terms different from that which the defendant supposed it to be when he entered into it;

(b) where by fraud, mistake of fact, or surprise the defendant entered into a contract under a reasonable misapprehension as to its effect as between himself and the plaintiff;

(c) where the defendant, knowing the terms of the contract and understanding its effect, has entered into it relying upon some misrepresentation by the plaintiff, or upon some stipulation on the plaintiff's part, which adds to the contract, but which he refuses to fulfil;

(d) where the object of the parties was to produce a certain legal result, which the contract as framed is not calculated to produce; and

(e) where the parties have, subsequently to the execution of the contract, contracted to vary it.


ILLUSTRATIONS


(a) A, B, and C sign a writing by which they purport to contract each to enter into a bond to D for RM1,000. In a suit by D, to make A, B and C separately liable each to the extent of RM1,000, they prove that the word "each" was inserted by mistake; that the intention was that they should give a joint bond for RM1,000. D can obtain the performance sought only with the variation thus set up.

(b) A contracts in writing to let to B a wharf, together with a strip of A's land delineated in a map. Before signing the contract, B proposed orally that he should be at liberty to substitute for the strip mentioned in the contract another strip of A's land of the same dimensions, and to this A expressly assented. B then signed the written contract, A cannot obtain specific performance of the written contract, except with the variation set up by B.

(c) A contracts in writing to let a house to B, for a certain term, at the rent of RM100 per month, putting it first into tenantable repair. The house turns out to be not worth repairing, so, with B's consent, A pulls it down and erects a new house in its place. B contracting orally to pay rent at RM120 per mensem. B then sues to enforce specific performance of the contract in writing. He cannot enforce it except with the variations made by the subsequent oral contract.

Against whom Contracts may be Specifically Enforces

26 Relief against parties and persons claiming under them by subsequent title   cite [+]

Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against-

(a) either party thereto;

(b) any other person claiming under a party to the contract by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;


ILLUSTRATIONS

(a) A contracts to convey certain land to B by a particular day. A dies intestate before that day without having conveyed the land. B may compel A's heir or other representative in interest to perform the contract specifically.

(b) A contracts, in consideration of RM1,000, to bequeath certain of his lands to B. Immediately after the contract A dies intestate, and C takes out administration to his estate. B may enforce specific performance of the contract against C.

(c) A contracts to sell certain land to B. Before the completion of the contract, A becomes mentally disordered, and C is appointed his committee. B may specifically enforce the contract against C.



(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;

(d) when a public company has entered into a contract and subsequently becomes amalgamated with another public company, the new company which arises out of the amalgamation; and

(e) when the promoters of a public company have, before its incorporation, entered into a contract, the company:

Provided that the company has ratified and adopted the contract and the contract is warranted by the terms of the incorporation.



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