As I see it David is shoehorning 2 issues into one here. He may be right to suggest that if one office block is very like another (itself arguable), there should no more be an "as of course" grant of SP any more than there is for a contract to sell a bog-standard Ford Mondeo. But even if he is right this is nothing whatever to do with mitigation. Mitigation is about reducing a loss. By being told to buy a replacement for what is promised and claim the difference from the other guy I'm not being told to reduce any loss at all.

On the duty to mitigate where a repudiation is unaccepted, it also seems to me that White & Carter is a red herring. Even if White & Carter is controversial, the principle that you can wait for the other chap to perform without meanwhile having to mitigate is well accepted: e.g. Shindler v N Raincoat Co [1960] 1 WLR 1038.


Best wishes from a very wet part of Britain

Andrew

Dear Obligations colleagues

If this case represents the further acceptance of the idea that mitigation should play a wider role in the claimant's choice between specific performance and damages, then it is, I suggest, ultimately welcome. (I do not deny the existence of a lot of current difficulties). In England, of course, if there is a breach of a conveyance of land, the default remedy is specific performance. But there is no ultimate justification for this. If the claimant's interest is commercial and a substitute property is available, the argument for confining the claimant to market damages applies just as much as it would to a standard sale of goods. It is different, of course, if there is a non-commercial interest or a substitute is not available, just as it would be in a sale of goods, and there may be, as it were, procedural reasons for making specific performance the default remedy for breach of a conveyance of land, though I do not see them myself.

I cannot agree with Rob about an unaccepted repudiatory breach being a thing writ in water. White and Carter Councils has not been overruled (and one cannot see how it ever will be), but it does not actually state the law, and a number of Canadian cases, such as Finelli v Dee, have led the way in making this clear. The point is that, in effect, mitigation considerations do rightly influence the claimant's election between affirmation and termination after repudiatory breach, albeit under the guise of the legitimate interest and defendant's co-operation arguments, and it is good that they do, though the law would be better if the influence of mitigation was made explicit.

And, in principle, it would be better if mitigation considerations explicitly played a role in the decision to award specific performance, for this would bring a superior coherence to the equitable defences that, in effect, if obliquely, do this now.

Best wishes

David Campbell

David Campbell, BSC(Econ), LLM, PhD, FCI(Arb)
Professor of International Business Law

School of Law
Liberty Building
University of Leeds
LEEDS
LS2 9JT
UK

tel:  [+44] (0) 113 343 7041
fax: [+44] (0) 113 343 5056
email: i.d.campbell@leeds.ac.uk

http://www.law.leeds.ac.uk/about/staff/d-campbell.php
________________________________________
From: Robert Stevens [robert.stevens@law.ox.ac.uk]
Sent: 18 October 2012 10:02
To: James Lee; obligations@uwo.ca
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

"Specific performance is an equitable remedy that is difficult to reconcile with the principle of mitigation. "

Oh dear, that is a sentence that makes one's heart sink.

The SCC has long been away with the fairies when it comes to whether to award specific performance of contracts for the sale of land. Now however it seems to have got itself confused about the relationship between mitigation and specific performance.

Simplified, this is a standard contract for the sale of land on a specific date. The seller fails to complete by that date, and then says it won't be completing and returns the deposit. The buyer refuses to accept this and presses for specific performance (or failing that damages).

Was the buyer under any duty to mitigate its loss at this point?

No, because a repudiatory breach that is not accepted is a thing writ in water. Although the obligation to sell by a particular date had been rendered impossible, the seller remained under a duty to convey the land to the buyer.

If the buyer had accepted the repudiation then the obligation to sell would have been brought to an end, replaced by an obligation to pay damages for breach, with a consequent "duty" on the buyer to mitigate his loss from that point. That did not happen.

Now in a country other than Canada, specific performance would have been awarded, but when it is refused the time for assessing damages should be the date of trial. There can be no 'duty' to mitigate for loss caused by the failure to sell before that time (see, in England unfortunately, Johnson v Agnew).

The rules relating to mitigation concern the quantification of loss. If a breach occurs, losses which are not suffered cannot be recovered, and consequential losses caused by the innocent party's own fecklessness in failing to avoid them are his own look out. There is not, and could not be, any tension between these rules and the availability of specific performance.

I have only read the SCC decision, and so may not have the full facts, but on its face this is not very good.

Rob