Georges v Wieland

The applicants, Georges, sought an order for specific performance of a contract for the sale of shares in a company, and for the specific performance of a loan agreement. The respondents, Wieland, had failed to pay the full amount of the purchase price for the shares and were in default of the loan agreement. The applicants had not transferred the shares as they had not received full payment and the shares had since been devalued due to the respondents' actions while they controlled the company. The applicants sought specific performance of the contract and loan agreement as damages would be difficult to quantify and an alternative purchaser for the shares could not be found.

The court considered whether specific performance was an appropriate remedy in this case. The applicants had part performed the contract by transferring some of the shares to the respondents and the respondents had part performed by paying some of the purchase price. The court noted that specific performance was not available as a matter of course and the court must consider whether it was just and equitable to grant the remedy. The court considered the devaluation of the shares due to the respondents' actions and the difficulty in quantifying damages. The court also considered the nature of the loan agreement, which was made for a specific purpose under a Quistclose trust.

The court held that specific performance of the contract for the sale of shares was not appropriate as it would require the court to supervise the respondents in the management of the company, which was not feasible. However, the court held that specific performance of the loan agreement was appropriate as the loan was made for a specific purpose and the applicants had not received the full amount of the loan. The court made an order for specific performance of the loan agreement and for the respondents to pay the outstanding amount of the loan to the applicants.

The court further held that the applicants were entitled to an account of the profits made by the respondents from the shares during the period that they controlled the company. The court made an order for the respondents to account for those profits to the applicants. The court did not make any orders in relation to the sale of the shares as it was not possible to find an alternative purchaser and damages would be difficult to quantify.