Co-Operative Insurance Society v Argyll Stores [1997]

Court: House of Lords

Facts: Argyll Stores (D) was the anchor tenant in Co-Operative Insurance Society's (C) shopping centre. Under the 35-year lease, a covenant required D to keep their premises open for the usual hours of business. After 16 years, D decided to close their store and dispose of the lease. C sought to enforce specific performance of the covenant until such time the lease was assigned. The judge initially denied the order, but it was granted on appeal by the Court of Appeal.

Issue: Should specific performance be granted to enforce a covenant requiring a tenant to keep their business premises open for the usual hours of business?

Held: Appeal allowed; specific performance was denied.

Key Judicial Statements: Lord Hoffmann stated that specific performance is considered an exceptional remedy in English law and is not typically granted for obligations to carry on a business. He elaborated that specific performance involves several practical challenges, such as the need for constant court supervision, potential for unjust enrichment of the plaintiff, and public interest concerns. Lord Hoffmann emphasized that specific performance could lead to more significant losses for the defendant than the plaintiff’s loss due to the breach, and could foster ongoing hostility between the parties. He referred to Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] to support these principles, indicating that such orders are generally undesirable and impractical.

💡 Leveluplaw: Highlights the general reluctance to grant specific performance for business continuation obligations due to practical difficulties, potential unjust enrichment, and public interest considerations.