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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Telia Sonera AB v Hilcourt (Docklands) Ltd [2003] EWHC 3540 (Ch) (4 July 2003) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2003/3540.html Cite as: [2003] EWHC 3540 (Ch) |
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CHANCERY DIVISION
Strand London WC2A 2LL |
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B e f o r e :
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TELIA SONERA AB | Appellant | |
-v- | ||
HILCOURT (DOCKLANDS) LIMITED | Respondent |
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183 Clarence Street Kingston-Upon-Thames Surrey KT1 1QT
Tel No: 020 8974 7300 Fax No: 020 8974 7301
(Official Shorthand Writers to the Court)
MR SIMON BERRY QC appeared on behalf of the Respondent
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Crown Copyright ©
"Within ten (10) working days after the Lease Completion Date [Telia] shall procure the commencement of the construction of the Refurbishment Works and shall use all reasonable endeavours to procure that the Practical Completion Date occurs within the Construction Period…"
"48(1) The parties are free to agree on the powers exercisable by the arbitral tribunal as regards remedies.
(2) Unless otherwise agreed by the parties, the tribunal has the following powers.
(5) The tribunal has the same powers as the court-
(a) to order a party to do or refrain from doing anything
(b) to order specific performance of a contract (other than a contract relating to land)."
"16. The first task is to identify the relevant contract. As to that, I do not accept the Respondent's contention that the key is to identify the essential character of the whole contract. To do so is likely to lead to arbitrary results. This may be demonstrated by the example of the sale of a small business, discussed in the course of argument. In such circumstances, there is likely to be one document which governs the sale of things like stock, book debts, machinery, and goodwill; deals with the assignment of the lease of the business premises; and contains provisions as to employees, pensions and competition. If the document is treated as giving rise to a single contract, it is probably to be characterised as a contract for the sale of the business. Assuming for the moment that such a contract viewed as a whole does not relate to land, an arbitrator would have power to grant specific performance of any obligation contained in it - including the obligation to assign the 1ease, which viewed in isolation plainly does relate to land. If, on the other hand, the contract is characterised as one for the sale of the business premises together with the business carried on there, the whole contract would relate to land. That would have the consequence that an arbitrator could not order performance of any positive obligation in the contract and so could not, for example, order the vendor to transfer the stock, even though the obligation to do so does not itself relate to land.
17. It seems to me that the way to avoid the difficulties revealed by that example is to take a more restricted view, and to characterise not the whole contract but the obligation of which specific performance is sought. Care must be taken when conducting this exercise: it would, for example, be wrong to treat an obligation to pay purchase money as entirely separate from the corresponding obligation to transfer property. But in the present case there is no difficulty in treating the building obligation in clause 4.1 as a separate obligation from the obligation to grant and take the lease - not least because the time for performance of the building obligation does not begin until the lease has been granted.
18. If the relevant contract is the obligation to carry out the refurbishment works, is it a contract "relating to land"? In one sense, it may be said to be so: the works involve refurbishment of buildings, and those buildings are themselves land. But it seems to me impossible to suppose that the legislature, when enacting section 48(5)(b), intended the expression "relating to land" to be construed as meaning "having anything to do with land" or "in any way touching or concerning land". To construe the subsection in that way would mean that an arbitrator could not without consent enforce a free-standing contract for works of construction if they were to be carried out on land. Although the words in parenthesis in section 48(5)(b) were intended to restrict an arbitrator's powers, I do not believe they were meant to do so to that extent. In my view, the proper way to construe the expression "a contract relating to land' in this subsection is to treat it as confined to contracts for the creation or transfer of an interest of land. Clause 4.1 of the agreement is not such a contract."
"We have excluded specific performance of land contracts, so as not to change the law in this regard, but clarified the power of arbitrators to award injunctive relief."
"Unless a contrary intention is expressed therein, every arbitration agreement shall, where such a provision is applicable to the reference, be deemed to contain a provision that the arbitrator or umpire shall have the same power as the High Court to order specific performance of any contract other than a contract relating to land or any interest in land."
"(j) the arbitrators or umpire shall have the same power as the Court to order specific performance of any contract other than a contract relating to land or any interest in land…"
"28. At present it is at least doubtful whether an arbitrator or umpire can make an award ordering any sort of specific performance. We think that he should at any rate be given the power to order the delivery of specific goods under section 52 of the Sale of Goods Act, 1893, against payment of their price. It is perhaps a matter of policy but we see no reason why he should not also be given power to order specific performance of a contract by the delivery of any property other than land or money in any case in which the court might lawfully do so."
"the specific performance of contracts between vendors and purchasers of real estate, including contracts for leases".
"Subject to the provisions of this section, a county court shall have the same jurisdiction as the High Court to grant an injunction or declaration in respect of, or relating to, any land, or the possession, occupation, use or enjoyment of any land."
Those legislative provisions are a far cry from those with which I am concerned.
"Although the relief is described as a mandatory injunction, it seems to me plain that, in substance, what is sought is specific performance of the obligation contained in clause 4.1 of the agreement. The Applicant's only right to require the Respondent to do the work derives from the contract contained in clause 4.1, and what it wants is that the Respondent perform its contractual obligation. That seems to me to bring the claim within paragraph (b) of section 48(5)."
I agree with that approach.
"Every county court, as regards any cause of action for the time being within its jurisdiction, shall in any proceedings before it - (a) grant such relief, redress or remedy or combination of remedies either absolute or conditional .... as ought to be granted or given in the like case by the High Court and in as full and ample a manner."
"I think the county court judge had jurisdiction to make an order for specific performance. The appeal should therefore succeed and the necessary order be made."
That appears plainly to indicate that the order that the Court of Appeal was granting was one for specific performance.
"4.2 Given the fact that the Lease was completed on 15th September 2000 (being the Lease Completion Date which triggered the obligation to carry out the Refurbishment Works) the Agreement for Lease thereafter was no longer (on any view of the matter) a 'contract relating to land'. Such element of the Agreement had become performed and spent. The Agreement was thereafter no more than a building contract."
"19. I should add that, had I thought it was right to look at the contract as a whole, I would have regarded it as, in substance, a contract for the creation of an interest in land - just as if the obligation to do the refurbishment works had been contained in a building lease rather than in the agreement. Moreover, I would not have accepted the Applicant's argument that following the grant of the lease the agreement had become solely a contract for the building works; it seems to me that the character of the contract would have to be determined as at the date of its conclusion, and could not change thereafter."