- Co-operative Insurance Society Ltd v Argyll Stores
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Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd Court House of Lords Citation(s) [1998] AC 1 Case opinions Lord Hoffmann Keywords Remedies, specific performance Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 is an English contract law case, concerning the possibility of claiming specific performance of a promise after breach of contract.
Contents
Facts
The Cooperative Insurance Society Ltd (CIS) owned the freehold of a shopping centre and they let the anchor unit to Argyll Stores as a supermarket, for 35 years from 1979, with a convenant to ‘keep open the demised premises for retail trade’. In 1995, the store was making a loss and Argyll closed, despite the protests of the Coop. The Coop argued that they should be awarded specific performance, on the ground that it was necessary to keep a store open in an otherwise depressed area.
The trial judge refused a specific performance order. The Court of Appeal granted specific performance by a majority, because there was considerable difficulty proving a loss suffered and Argyll had acted with ‘unmitigated commercial cynicism’.
Judgment
The House of Lords allowed Argyll Store’s appeal and said the judge’s exercise of discretion was correct in refusing an award of specific performance. Damages were the appropriate remedy. There were a number of relevant considerations. First, it was settled practice that no order would make someone run a business. Second, enormous losses would result from being forced to run a trade. Third, framing the order would be unduly difficult. Fourth, wasteful litigation over compliance could result. Fifth, it was oppressive to have to run a business under threat of contempt of court. Sixth, it was against the public interest to require a business to be run if compensation was a plausible alternative.
Lord Hoffmann gave the leading judgment.
“ The purpose of the law of contract is not to punish wrongdoing but to satisfy the expectations of the party entitled to performance... The exercise of the discretion as to whether or not to grant specific performance starts from the fact that the covenant has been broken. Both landlord and tenant in this case are large sophisticated commercial organisations and I have no doubt that both were perfectly aware that the remedy for breach of the covenant was likely to be limited to an award of damages. The interests of both were purely financial: there was no element of personal breach of faith... No doubt there was an effect on the businesses of other traders in the Centre, but Argyll had made no promises to them and it is not suggested that CIS warranted to other tenants that Argyll would remain. Their departure, with or without the consent of CIS, was a commercial risk which the tenants were able to deploy in negotiations for the next rent review. ” See also
Remedies cases Robinson v Harman (1848) 1 Exch 850Peevyhouse v. Garland Coal & Mining Co., 382 P 2d 109 (1962)Ruxley Electronics Ltd v Forsyth [1995] UKHL 8Anglia Television Ltd v Reed [1972] 1 QB 60Chaplin v Hicks [1911] 2 KB 786Jarvis v Swans Tours Ltd [1972] EWCA Civ 8Farley v Skinner [2001] UKHL 49Hadley v Baxendale [1854] EWHC Exch J70The Achilleas [2008] UKHL 48British Westinghouse Ltd v Underground Ltd [1912] AC 673Banco de Portugal v Waterlow [1932] UKHL 1Saamco v York Montague Ltd [1996] UKHL 10Sky Petroleum v VIP Petroleum [1974] 1 WLR 576Patel v Ali [1985] Ch 283Cooperative Insurance Ltd v Argyll Ltd [1997] UKHL 17Attorney General v Blake [2000] UKHL 45Wrotham Park Ltd v Parkside Homes Ltd [1974] 1 WLR 798Surrey CC v Bredero Homes Ltd [1993] EWCA Civ 7Rowland v Divall [1923] 2 KB 500Dies v British Mining and Finance Corp Ltd [1939] 1 KB 724see Remedies in English law Notes
References
External links
Categories:- English contract case law
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