Compensation in Substitution of Specific Performance

After the Specific Relief (Amendment) Act 2018 comes into force on 1 October 2018, a plaintiff will not be able to seek compensation in substitution of specific performance.

If the Act has been amended to enable plaintiffs to seek confidently the relief of specific performance, this particular amendment will deter plaintiffs from seeking it. It is hoped that this particular amendment in Section 21(1) of the Act that takes away the right to seek compensation in substitution, and indeed many other amendments to the Act, do not become one more instance of ‘legislate in haste, amend at leisure’.

This change to section 21(1) was NOT recommended by the Expert Committee set up to suggest amendments to the Specific Relief Act.

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Specific performance as a general remedy

The Specific Relief (Amendment) Act 2018 takes away the exceptional nature of the remedy of specific performance and injunctions. Section 10 of the Act makes it a general remedy.
The pre-amendment approach has historical and economical justifications. These are discussed in my article ‘Exceptional Nature of Specific Performance‘.
When the remedy of specific performance is exceptional in nature, the plaintiff, who is already aggrieved by the breach, must prove his entitlement: that compensation is either unascertainable or is inadequate. When specific performance is available to any person who seeks it, the plaintiff is saved of this burden, and the defendant who has broken the contract must show why plaintiff should not get this relief.
It is not expected that litigation will increase because of this amendment, or that the proportion of suits of specific performance will rise.
The true purpose of the amendment is to deter breaches and encourage performance.
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Summary of the Specific Relief (Amendment) Act 2018

The Specific Relief (Amendment) Act 2018 changes the features of contract remedies. The important provisions relating to contract remedies are as follows:

  • Specific Performance is a general remedy.
  • The list of contracts not specifically enforceable has changed.
  • Specific performance by or against limited liability partnership
  • Readiness and willingness need be proved
  • Personal bar to relief after substituted performance
  • Court’s discretion removed
  • New remedy of substituted performance
  • No compensation in substitution of specific performance.
  • No injunction to restrain progress of infrastructure projects
  • Other provisions.

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Click to read or download
the Specific Relief Act 1963 as amended in 2018 (SRA 1963)
the Specific Relief Act 1963 as amended showing all changes.