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Vacating an order for specific performance September 28, 2016

Attia v Caird Seven Pty Ltd [2016] NSWCA 271

  1. In Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 260, Mason CJ (Deane, Dawson and Toohey JJ agreeing) stated that the High Court would continue to treat as authoritative the proposition that “rescission after an order for specific performance requires the leave of the Court or, more appropriately, the vacation of the order”.
  2. An order vacating an order for specific performance does not follow as of course where one party is in default. It is a matter for the exercise of the Court’s discretion whether, in all the circumstances, to discharge the order for specific performance would be unjust to the other party: Despot v Registrar General of New South Wales [2016] NSWCA 5 at [114].
  3. In JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600 Hope JA said at 606B (Glass and Mahoney JJA agreeing) that an order vacating a decree for specific performance:

… does not follow as of course; it is undoubtedly a matter for the exercise of a discretion. As McLelland J, said in Buckman v Rose [(1980) 1 BPR 97,059 at 2]:

“The power is of a discretionary nature to be exercised on equitable principles according to the requirements of justice as between the parties.”

  1. In Johnson v Agnew [1980] AC 367 at 399 Lord Wilberforce said:

Once the matter has been placed in the hands of a court of equity, or one exercising equitable jurisdiction, the subsequent control of the matter will be exercised according to equitable principles. The court would not make an order dissolving the decree of specific performance and terminating the contract (with recovery of damages) if to do so would be unjust, in the circumstances then existing, to the other party, in this case to the purchaser.

  1. The decision of the primary judge not to vacate the orders for specific performance involved an exercise of discretion. It was common ground that if leave to appeal was granted, in order to succeed on the appeal the applicants must establish error in the sense described in House v The King (1936) 55 CLR 499.

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