Oliver Southgate v Adam Graham

Specific performance is discretionary and will ordinarily be refused where damages adequately compensate the claimant or where enforcement would cause disproportionate hardship. Cryptocurrency is not inherently special property requiring specific performance; the ordinary principles apply.

Damages for breach of contract are compensatory, but valuation at the date of breach is not an inflexible rule. The court must select the date and method that place the claimant, so far as money can, in the position performance would have produced. Where damages are awarded in lieu of specific performance, and that remedy has been reasonably pursued, valuation at the date of judgment may be appropriate. Remoteness, mitigation and the reasonableness of continuing to pursue specific performance are ordinarily matters for the remedies hearing.

The appellant had transferred 144 Ethereum tokens to the respondent under an oral agreement. The trial judge found that the respondent was required to re-transfer the tokens, or their equivalent, with a 10% addition, but refused specific performance on hardship and proportionality grounds.

The judge ordered damages in lieu of specific performance to be assessed at a remedies hearing, but directed that the value of the outstanding 115.69 ETH be assessed as at 1 October 2019, the date of breach. The appellant appealed against the refusal of specific performance and the fixed valuation date. The central issues were whether specific performance was available and whether the valuation date should instead be determined after evidence and submissions on compensation, mitigation and the parties’ conduct.

1. Specific performance. The refusal of specific performance was upheld. It is an equitable and discretionary remedy, not available as of right. Hardship capable of leaving a defendant unable to comply, with the attendant risk of contempt proceedings, may independently justify refusal where the obligation is essentially pecuniary and the resulting burden would be unfair, disproportionate or unnecessary.
2. The fact that the subject matter was cryptocurrency did not create a special category. Although cryptocurrency may be specifically performable in an appropriate case, ETH was not shown to be unique, and the agreement permitted transfer of equivalent tokens. It was open to the judge to conclude that loss could in principle be adequately compensated by damages.
3. Jurisdiction. The County Court had jurisdiction to grant specific performance. Section 23(d) of the County Courts Act 1984 was not an exhaustive code. Sections 15 and 38 conferred jurisdiction over contractual claims and power to make orders available in the High Court. The reasoning in Bourne v MacDonald applied.
4. Valuation date. The appeal was allowed on the valuation issue. The trial judge should not have fixed 1 October 2019 without proper submissions or findings about whether the appellant could reasonably have acquired substitute ETH, when he had funds to do so, or how mitigation operated. The breach-date rule is a general rule, not an absolute one. The controlling principle is adequate compensation.
5. Damages under section 50 of the Senior Courts Act 1981, awarded in lieu of specific performance, are compensatory and may be assessed by reference to the date on which specific performance is lost. On the facts as presently established, the appellant’s argument for valuation at judgment had real merit because he had reasonably pursued specific performance and no contrary finding had been made. The issue was not finally determined.
6. The valuation date and all issues concerning measure of loss, including remoteness, mitigation, continuing volatility and the reasonableness of pursuing specific performance, were remitted to the remedies hearing before HHJ Saggerson. The stay was lifted and the appellant was directed to restore the matter for directions.

• High Court, Chancery Appeals: [2024] EWHC 1692 (Ch) allowed the appeal on the valuation-date issue, upheld the refusal of specific performance, set aside the fixed date of 1 October 2019, and directed determination of the valuation and related loss issues at the remedies hearing.
• County Court at Central London: HHJ Saggerson’s order dated 28 September 2023 refused specific performance and directed damages in lieu to be assessed by reference to the value of the ETH at 1 October 2019.