A ‘keep open’ clause in a commercial lease can be enforced by an order specific performance but only in rare cases. It would normally be unreasonable.
Millett LJ said: ‘The competing arguments in the present case, and the difference in the views of the members of this court, reflect a controversy which has persisted since the dispute between Sir Edward Coke and Lord Ellesmere LC Sir Edward Coke resented the existence of an equitable jurisdiction which deprived the defendant of what he regarded as a fundamental freedom to elect whether to carry out his promise or to pay damages for the breach Modern economic theory supports Sir Edward Coke; an award of damages reflects normal commercial expectations and ensures a more efficient allocation of scarce economic resources The defendant will break his contract only if it pays him to do so after taking the payment of damages into account;the plaintiff will be fully compensated in damages;and both parties will be free to allocate their resources elsewhere Against this there is the repugnance felt by those who share the view of Fuller CJ in Union Pacific Railway Co v Chicago, Rock Island and Pacific Railway Co (1896) 163 US 564, 600 that it is an intolerable travesty of justice that a party should be allowed to break his contract at pleasure by electing to pay damages for the breach English law has adopted a pragmatic approach in resolving this dispute The leading principle is usually said to be that equitable relief is not available where damages are an adequate remedy In my view, it would be more accurate to say that equitable relief will be granted where it is appropriate and not otherwise;and that where damages are an adequate remedy it is inappropriate to grant equitable relief’
Judges:
Millett LJ
Citations:
Times 29-Dec-1995, Independent 25-Jan-1996, [1996] Ch 286
Jurisdiction:
England and Wales
Cited by:
Appeal from – Co-Operative Insurance Society Ltd v Argyll Stores HL 21-May-1997
The tenants of a unit on a large shopping centre found the business losing money, and closed it in contravention of a ‘keep open’ clause in the lease. They now appealed from a mandatory injunction requiring them to keep the store open.
Held: . .
Cited – Coventry and Others v Lawrence and Another SC 26-Feb-2014
C operated a motor racing circuit as tenant. The neighbour L objected that the noise emitted by the operations were a nuisance. C replied that the fact of his having planning consent meant that it was not a nuisance.
Held: The neighbour’s . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 09 December 2022; Ref: scu.79485
