CO-OPERATIVE INSURANCE SOCIETY LTD. V. ARGYLL STORES (HOLDINGS) LTD., [1998] A.C. 1 (H.L. 1997) CASE BRIEF

CO-OPERATIVE INSURANCE SOCIETY LTD. V. ARGYLL STORES (HOLDINGS) LTD.,

[1998] A.C. 1 (H.L. 1997)

NATURE OF THE CASE: This was a dispute over whether a court has the power to specifically enforce a lease contract against a commercial business that is losing money.

FACTS: Argyll Stores (Holdings) Ltd. (D), decided in May 1995 to close their Safeway supermarket in the Hillsborough Shopping Centre in Sheffield because it was losing money. This was a breach of a covenant in their lease, which contained in clause 4(19) a positive obligation to keep the premises open for retail trade during the usual hours of business. D admitted the breach and, in an action by the landlord, Co-operative Insurance Society Ltd. (P) consented to an order for damages to be assessed. The judge refused to order specific performance. He said that there was on the authorities a settled practice that orders which would require a defendant to run a business would not be made. The judge held that an order to carry on a business, as opposed to an order to perform a 'single and well-defined act,' was difficult to enforce by the sanction of committal. And where a business was being run at a loss, specific relief would be 'too far-reaching and beyond the scope of control which the court should seek to impose.' P had knowingly acted in breach of covenant, it had done so 'in the light of the settled practice of the court to award damages.' Even though the assessment of damages might be difficult, it was the kind of exercise which the courts had done in the past. The Court of Appeal [1996] Ch. 286, reversing the trial judge, ordered that the covenant be specifically performed. It made a final injunction ordering D to trade on the premises during the remainder of the term (which will expire on 3 August 2014) or until an earlier subletting or assignment. The lease was eventually assigned with P's consent. The injunction never took effect. The appeal was for costs.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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