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Lord Strathcona Steamship Co Ltd v Dominion Coal Co Ltd (1925) PC
This case establishes the application of equitable principles regarding restrictive covenants to chattels (movable property), extending beyond the previously established precedent in Tulk v Moxhay (which dealt with land).
I. Core Facts:
This case extends the principle of Tulk v Moxhay which deals with restrictive covenants concerning land, to other forms of property. The core principle is:
The court granted an injunction against the new owners, preventing them from using the ship inconsistently with the original charterparty.
IV. Limitations:
This case establishes the application of equitable principles regarding restrictive covenants to chattels (movable property), extending beyond the previously established precedent in Tulk v Moxhay (which dealt with land).
I. Core Facts:
- Contract: A charterparty (shipping contract) was signed where the plaintiff (charterers) arranged for a ship's construction, agreeing to charter it for 10 years with renewal options.
- Ownership Changes: The ship changed hands several times after its 1916 launch. The new owners (defendants) were aware of the existing charterparty.
- Breach: The new owners refused to honor the charterparty.
- Legal Issue: Can a subsequent purchaser of a ship be bound by a pre-existing charterparty concerning its use, even though they weren't originally a party to the contract?
This case extends the principle of Tulk v Moxhay which deals with restrictive covenants concerning land, to other forms of property. The core principle is:
- Notice and Subsequent Ownership: A purchaser of property (land or chattels like a ship) with notice of a prior contract restricting the property's use, cannot act inconsistently with that contract.
The court granted an injunction against the new owners, preventing them from using the ship inconsistently with the original charterparty.
IV. Limitations:
- Specific Performance: The court cannot force the new owners to positively perform the charterparty (i.e., they cannot be compelled to fulfill the contract's terms). Only an injunction preventing inconsistent use was granted. This highlights the difference between positive and negative covenants. Only negative covenants (restrictions on use) are enforceable against subsequent purchasers.
- Plaintiff's Interest: The plaintiff's right to enforce the contract (via injunction) is contingent upon them maintaining an interest in the property (i.e., the charter).
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