I am not sure if this helps in any sense, if it might be considered as a supporting point....or even as a weakness instead, but from a continental or civil law perspective anything different from what Robert is explaining is rather hard to be justified.

We do still live here under the direct or indirect influence of the 6th Roman Table in our codes and in our Law (..."uti lingua nuncupassit, ita ius esto").

Specially regarding land. At the end of the day, land and real estate are the perfect example of unique pieces of property (there is no plot with the exact same location of another, at least on planet Earth). Your GPS would say so. You can be close, but not on it (or if you are on, you can be below or above, but not exactly the same).

Mitigation would make no sense here, as you will never obtain a really (totally) equivalent alternative.

And beyond that: You are entitling one party to decide about the fulfillment of the agreement. Again, "uti lingua"....

So mitigation here (as Robert commented regarding England as well) would make sense for the quantification of loss. But not in order to prevent a kind of remedy in itself, which is a very different question.

Best Regards
Miguel Ángel.

Associate Professor of Law
University of Murcia
ma.lopez.mateo@um.es
 +34 868 88 30 95
www.um.es

Senior Associate Lawyer
GARRIGUES
miguel.angel.lopez@garrigues.com
 +34 968 27 47 27
www.garrigues.com

-----Original Message-----
From: Robert Stevens [mailto:robert.stevens@law.ox.ac.uk]
Sent: jueves, 18 de octubre de 2012 12:34
To: David Campbell; obligations@uwo.ca
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

We come here of course to a basic difference between David and myself. I think that if you enter into a contract that you are legally obliged to perform it (which is the same as saying that the counter-party has a right to performance). One party cannot unilaterally determine this duty. David does not agree, and very sadly it looks like the SCC may agree with him.

So, for me, the ultimate justification for awarding specific performance in contracts for the sale of land is that that is what has been agreed to. It seems very doubtful to me whether one piece of land is always just as good as any other, even for commercial parties. In a standard contract for the sale of generic goods 1,000 widgets from A is not just as good as but in fact indistinguishable from 1,000 widgets from B. Where the contract is for the sale of specific goods the same position is usually reached as in relation to land because property passes when intended to pass: ie title passes without any further act of conveyance by the seller so that no claim for specific performance is required.

White and Carter does not seem to me to be in point. White and Carter concerned an action for the agreed sum (as did Finelli v Dee). So where my right to be paid a sum of money under the deal is conditional upon my performing my duty under the bargain, if I cannot perform my duty without your co-operation, which you withhold, I cannot claim it. As the pursuer in W&C could perform without the other side's co-operation he was awarded the agreed sum. The rules on mitigation were neither here nor there as the claim was not one for loss suffered.

Lord Reid did, in an obiter dictum, say that the action for the agreed sum might in some circumstances be withheld where the claimant had no legitimate interest in seeking it, but what he meant by that is obscure to me (there are a number of different possible interpretations). It is a very radical argument to suggest that it now means that one party has the unilateral power to determine a contract.

But perhaps that is the law in Canada.

________________________________________
From: David Campbell [I.D.Campbell@leeds.ac.uk]
Sent: 18 October 2012 10:42
To: obligations@uwo.ca
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

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

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