LSC 2208 – EQUITY NOTES

TOPIC 1 : DEFINITION AND HISTORY OF EQUITY

INTRODUCTION

Definition

The definition of equity is attempted from two perspectives, namely:

- The ordinary meaning

- The legal meaning

Ordinary Meaning

The word “equity” in the ordinary sense, may be defined to mean fairness. It may
also be defined as something or a situation that ordinarily ensures the presence of
justice.

According to David B. Bakibinga1, equity, in its ordinary sense, is defined as

follows:

“The ordinary and popular meaning of equity refers to right doing, good
faith, honest and ethical dealings in transactions or relationships between
individuals. Put another way, equity refers to whatever is just and right in all
human relationships and transactions. The ordinary conception of equity is,
therefore, based on morality and is linked to what is normally exhorted in
churches, mosques and other religious establishments”.2

1
Bakibinga is a professor of Commercial Law at Makerere University.
2
Bakibinga D, Equity and Trusts, LawAfrica Publishing, 2016

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From the above definition, it can be concluded that equity is predicated upon the
morals of a society.

Legal Definition/JURISTIC CONCEPT

The legal definition, otherwise termed as the juristic concept of equity, is further
categorized into two, namely;

- General juristic concept

- Technical juridical concept

General juristic concept

The first category is called the general juristic sense of equity. By this is meant that
power to meet the moral standards of justice in a particular case, by a judicial body
possessing the discretion to mitigate the rigid application of strict rules, in order to
adapt the judicial relief to the peculiar circumstances of a case (McClintock,
Handbook of the Principles of Equity (1948).

In this sense, it refers to the ability of a court of law to use its discretion to
administer justice that is morally acceptable amidst the rigid nature of the law
that may hinder conscientious administration and adjudication of the law. It
refers to the liberal and humane application of the law.

Put another way, equity in the general juristic sense means liberal and humane
interpretation of law in general so far as that is possible without actual antagonism
to the law itself (Allen Law in the Making (1964)).

The provision under the Constitution of Kenya that invites courts to be liberal in
their application of the law is Article 159 (2) (d) which requires courts to
administer justice without undue regard to the procedural technicalities.

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Effectively, therefore, equity in the general juristic sense refers to a judicial body's
power to administer the law justly taking into account the special facts of the
particular case. This conception is recognised by our Constitution 1995 in Article
126(2)(e) which says:

In adjudicating cases of both civil and criminal nature the courts shall subject to the
law, apply the following principles (e) substantive justice shall be administered
without undue regard to technicalities.

In applying Article 126(2)(e) of the Constitution, the Supreme Court of Uganda

in Stephen Mahosi VS Uganda Revenue Authority (1995) held that a
Memorandum of Appeal which was filed out of time could not be rejected because
the appellant could not file it before obtaining the official record of proceedings
from the High Court which were released after the 60 day period required for filing
the Memorandum of Appeal had elapsed.

Technical Juridical Concept

In the technical juridical concept, it refers to the principles and doctrines that
were developed by the English courts to cure the defects or injustices that the
common law, which developed after the Norman Conquest, failed to address.

It refers to a sui generis sphere of rules and procedure that was created, developed
and applied by the Court of Chancery in England. The adjudication over the
doctrines of equity, however, later on was vested in the Supreme Court of
Judicature Act which was a product of amalgamation of all the superior courts in
England through a statute called the Judicature Acts of 1873 and 1875. Thus equity

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may be defined as the body of rules applied by the English courts, but previously
applied by the Courts of Equity only.

HISTORICAL BACKGROUND

Classical Times

Application of the doctrines of equity may be traced back to the Greek scholars
who considered equity as supplemental to the law in order to achieve justice.

This notion of equity by the Greeks was borrowed by the Roman Jurists who
applied equity to expand the Roman Legal System that was stagnating at the time.
The law reform, as spearheaded by the Roman Jurists, was premised on the theory
of natural law as a universal law of reason. This means that that which is applied as
law must be a product of reason; by reasoning, human beings should arrive at a just
decision.

English Equity

English equity borrowed some aspects of Roman equity. For instance, in the
Roman legal system, the Praetor administered equity. In the English legal system,
the Lord Chancellor had the jurisdiction to apply equity. The initial lord
Chancellors who had the knowledge of Roman law used that knowledge in
developing the English equity. Same applied to the subsequent Chancellors who
applied the Canon law knowledge in equity.

Following the Norman conquest in 1066 AD, there was development of Common
Law. At this stage, there was a liberal environment for the English Common Law
courts to apply both the law and ethics in determining the cases before them.

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The Lord Chancellor, inter alia, had the singular power to give permission to a
subject before filing a case. This permission was granted by way of issuance of
writs which were sealed with the Royal Seal. It therefore means that it was the
prerogative of the King to dispense justice, and the court's power to act depended
on whether the King, through the Lord Chancellor, allowed or declined the filing of
a suit.

The liberal environment was gradually hampered by a number of reasons in the

years that followed. Firstly, the conservative judges of the common law started
making decisions challenging the power of the Lord Chancellor to issue new writs.
The judges placed more emphasis on the form/technicality rather than the
substance of a case. As a result, the common law’s ability as a tool to deliver what
was just and right fell behind as form and technicality was elevated.

Secondly, the growth and recognition of parliament as the only recognized

law-making organ meant that cases could be adjudicated only in accordance with
what the parliament said in their laws. Issuance of new writs could not happen
unless the parliament approved.

Thirdly, legal positivism gained traction; the judges rigidly distinguished law from
ethics. Law was applied as it is, not what it ought to be.

Provisions Of Oxford, 1258

Through the above instrument, the power of the Lord Chancellor to issue a new
writ was curtailed. He could issue a new writ only with the approval of the King
and his Council. This caused hardships to the litigants.

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Statute Of Westminster 1, 1285

This Statute attempted to cure the problems caused by the Provisions of Oxford,
1258 by giving power to the Chancery to modify the existing writs to take into
account new cases that were coming up. However, this law was frustrated by the
common law judges who assumed the power of determining the validity of the new
writs issued by the Lord Chancellor.

Many litigants suffered consequently because:

- No new writs could be issued to cater for new cases as the common law
judges invariably invalidated any writ that did not conform to the old ones
- The common law remedies were inadequate. For example, the remedy of
injunction was not available at common law.

The administration of common law was thus manifestly imperfect towards the end
of the 13th century.

What followed was that the litigants began moving away from the common law
courts and started filing their cases directly with the King In Council. They avoided
the common law courts because some remedies were not available at common law,
and secondly, because they feared that the opposing party could corrupt the courts.

The matters were initially handled by the King In Council but later on transferred
to the Lord Chancellor due to the increasing volume of work. The Lord Chancellor
thus started exercising judicial powers at this stage.

Jurisdiction

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The jurisdiction of the Chancery Court to administer was initially practiced in
accordance with the common law rules, albeit applying them flexibly and in a
humane way in order to achieve justice.

The petitions that the Chancery initially handled included mainly;

- Assault cases
- Battery
- Imprisonments

Litigants took this cases to the Chancery because of the rigid nature of the writs
before the common law courts, and the difficulty experienced by the poor people to
obtain justice in the common law courts. The Chancery played the role of a court
that determined disputes on the basis of reason, conscience and justice which were
lacking under the common law system that had taken a positivist approach to law.

Since the common law restricted itself to the existing writs in determining cases, it
means that cases which could not fit into existing writs lacked remedies. The
Chancery thus took the opportunity to develop doctrines that filled the gap which
the common law left.

Jurisdiction Prior to 17th Century

There was flexibility, but vague and unclear application of the equity jurisdiction
because the exercise of equity jurisdiction was characterized by the following
factors:

- The Lord Chancellors were religious people educated in canon and Roman
law, hence they could grant appropriate reliefs to the litigants.
- There was a wide variety of reliefs sought

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 - The reports on equity decisions were few and irregular. This affected the
development of a clear system of precedents.
- The Chancellors were not bound by the previous decisions; no rules on
precedents had been developed.
- The Chancellors were not trained lawyers and hence exercised the equity
jurisdiction based on conscience and natural justice.

Post 17th Century

The Chancery lost its flexibility in administering equity jurisdiction due to the
following reasons:

- The principles of conscience upon which the equity jurisdiction was

exercised were vague and uncertain as to leave free range to a particular
Chancellor which then posed a risk of making autocratic decisions by that
Chancellor.
- Some common law judges later presided over the Chancery as a result of
which they entrenched the system of precedents.
- The improved system of precedents meant that the rules of precedents
became fixed and systematized just like in common law.

APPLICATION OF EQUITY IN KENYA

COLONIAL ERA

Doctrines of Equity were introduced in Kenya through the East African Order In
Council of 1897 which received the laws that were applicable in England as at the
12th of August, 1897. The reception clause read as follows:

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 "So far as circumstances admit.. . in conformity with the Civil Procedure and
Penal Codes of India and the other Indian Acts which are in force in the
Colony . . . and subject thereto and so far as the same shall not extend or apply
shall be exercised in conformity with the substance of the common law, the
doctrines of equity and the statutes of general application in force in England
on the 12th day of August 1897,"

The doctrines of equity, and other laws, were supposed to be administered taking
into account the local circumstances.

Subsequently, Article 15 of The East African Order in Council of 1902, received

the English laws in the following words:

“... …all civil and criminal jurisdiction shall, so far as circumstances admit,
be exercised in conformity with the Indian Acts and so far as the same shall
not extend or apply shall be exercised in conformity with the substance of the
common law, the doctrines of equity and the statutes of general application in
force in England on August, 1897…provided always that the said common
law, doctrines of equity and statutes of general application shall be in force in
the protectorate so far only as the circumstances of the protectorate and its
inhabitants and limits of His Majesty’s jurisdiction permit, and subject to such
qualifications as local circumstances render necessary.”

According to the above provision, the doctrines of equity would be subordinate to

the Indian statutes, meaning that they could only apply in areas where the Indian
Statutes failed to cover.

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However, the Colonial era judges applied the received laws in their rigid nature
and took every opportunity to dismiss the local customs on the premise that they
were repugnant to justice and morality.

Lord Denning, in attempt to remind the English judges in Kenya about their duty to
apply the English in a manner that the local circumstances could permit, made the
following remarks in the case of Nyali Ltd. v. Attorney-General [1955] 1 A.E.R.
646, at 653,

"The next proviso says, however, that the common law is to apply 'subject to
such qualification as local circumstances render necessary'. This wise
provision should, I think, be liberally construed. It is a recognition that the
common law cannot be applied in a foreign land without considerable
qualification. Just as with an English oak, so with the English common law. You
cannot transplant it to the African continent and expect it to retain the tough
character which it has in England. It will flourish indeed but it needs careful
tending. So with the common law. It has many principles of manifest justice and
good sense which can be applied with advantage to peoples of every race and
colour all the world over: but it has also many refinements, subtleties and
technicalities which are not suited to other folk. These off-shoots must be cut
away. In these far-off lands the people must have a law which they understand and
which they will respect. The common law cannot fulfil this role except with
considerable qualifications. The task of making these qualifications is entrusted
to the judges of these lands. It is a great task. I trust that they will not fail
therein.”

The remarks by Lord Denning in the above case is a clear example of reinforcing
the first limb of the juristic meaning of equity, that is, Applying the General Juristic
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Concept of equity by using the discretion of court to give a liberal interpretation to
laws for purposes of achieving justice. Justice to the people in the colonies could
only achieved by interpreting the common law in a way that it could suit the local
circumstances.

A number of cases prove that the colonial judges had little or no appetite to remedy
the rigid nature of the common law in as far as its application in the colonies was
concerned:

Rex vs Amkeyo 7 E.A.L.R.14

The judge here likened marriage under African Customary law to wife purchase.
The issue was whether marriage under customary law would be recognized as such
under Article 122 of the Indian Evidence Act which gave protection to spouses
against being compelled to give evidence against husband or wife. According to
the judge, the native custom of wife purchase was not a marriage within the
meaning of Article 122 of the Indian Evidence Act. In his words:

"In my opinion, the use of the word 'marriage' to describe the relationship
entered into by an African native with a woman of his tribe according to tribal
custom is a misnomer which has led in the past to considerable confusion of
ideas. I know of no word that correctly describes/ it; 'wife-purchase' is not
altogether satisfactory, but it comes much nearer to the idea than that of
'marriage' as generally understood among civilised peoples."

This was a dangerous approach because there were chances that the married couple
under customary law stood the risk of not being recognized as husband and wife in
the eyes of the then Kenyan law as interpreted by the judges.

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POST-COLONIAL ERA

Upon independence, an Act of parliament which provided for the Kenyan sources
of law and their hierarchy, was introduced. The Judicature Act, under section 3(1)
thereof, provides the sources of law as follows:

(1) The jurisdiction of the Supreme Court, the Court of Appeal, the High
Court, the Environment and Land Court, the Employment and Labour Relations
Court and of all subordinate courts shall be exercised in conformity with—

(a) the Constitution;

(b) subject thereto, all other written laws, including the Acts of
Parliament of the United Kingdom cited in Part I of the Schedule to this
Act, modified in accordance with Part II of that Schedule;

(c) subject thereto and so far as those written laws do not extend or
apply, the substance of the common law, the doctrines of equity and the
statutes of general application in force in England on the 12th August, 1897,
and the procedure and practice observed in courts of justice in England at
that date:

Provided that the said common law, doctrines of equity and statutes of
general application shall apply so far only as the circumstances of
Kenya and its inhabitants permit and subject to such
qualifications as those circumstances may render necessary.

The doctrines of equity thus come third in their application within the Kenyan
jurisdiction. The Court of Appeal of Kenya sitting in Eldoret reiterated this

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position in Willy Kimutai Kitilit v Michael Kibet [2018] eKLR, in the following
words:

18] The doctrines of equity are part of our laws although Section 3 of the
Judicature Act subordinates common law and the doctrines of equity to the
Constitution and written law in that order. Sections 3(3) of the Law of
Contract Act and Section 38 (2) of the Land Act as amended clearly
stipulate that the requirement that contracts for disposition of an interest in
land should be in writing does not affect the creation or operation of a
resulting, implied or constructive trust. The equity of proprietary estoppel is
omitted but as the decision in Yaxley v. Gotts [2000] Ch. 162 (Yaxley’s case)
on which the Court in Macharia Mwangi Maina Decision relied, amongst
others, shows that the doctrine of constructive trust and proprietary estoppel
overlaps and both are concerned with equity’s intervention to provide relief
against unconscionable conduct.

The application of equity in Kenya has achieved various ends, including the kind
of justice under the General Juristic concept. One particular area is the tampering
of the strict application of customary law with the doctrines of equity to achieve
conscientious outcomes.

EQUITY AND THE APPLICATION OF CUSTOMARY LAW

Kenya is a plural legal system country with the predominant system being the
Common law inherited from Britain. Other systems include the African Customary
law and the Islamic law which applies to matters of personal status to people who
profess muslim faith.

Customary law is recognized as a source of Kenyan law under section 3(2) of the
Judicature which states that:
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. (2) The Supreme Court, the Court of Appeal, the High Court, the
Environment and Land Court, the Employment and Labour Relations Court
and all subordinate courts shall be guided by African customary law in civil
cases in which one or more of the parties is subject to it or affected by it, so
far as it is applicable and is not repugnant to justice and morality or
inconsistent with any written law, and shall decide all such cases according
to substantial justice without undue regard to technicalities of procedure and
without undue delay.

The equivalent provision the Ugandan legislation, that is, section of the Judicature
Act, section 10 of the Magistrates’ Courts Act, clearly provide that customary law
in Uganda will not be applied by their courts if it is, inter alia, repugnant to natural
justice, equity and good conscience. The Kenyan provision of the Judicature Act
cited above does not expressly mention equity or good conscience as a basis for
declining the application of customary law.

That notwithstanding however, in the application of customary law, courts have not
hesitated to depart from the strict application thereof where that kind of application
would occasion injustice. Areas in which the courts have equitably applied
customary law include marriage and inheritance.

Marriage

The courts have previously overlooked the strict application of customs to declare
a union as marriage under customary law, notwithstanding the fact that some
practices under the relevant customary law were not observed. It would be against
good conscience to not recognize a union between a man and woman that takes the
character of marriage by virtue of, among other considerations, the number of
years that such a union has seen.

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In Peter Hinga v. Mary Wanjiku, C.A. No. 94 of 1977 (unreported), Miller J.,
declared the appellant and the Respondent as legally married under the Kikuyu
customary law even though the ngurario ceremony had not been performed. The
appellant, a successful career civil servant, had attempted to abandon Mary
Wanjiku after living together as husband and wife and being blessed with many
children. In the words of Justice Miller;

"I have not enjoyed hearing this appeal. Here is a man of

commanding presence and undoubted respectability and for 14 years
an employee of a statutory Corporation. He established a home with
the respondent Mary Wanjiku from 1962 having made her pregnant
whilst she was still at school and during the period of their living
together as man and wife, as many as a half of a football team of
children were born to them in their established home. The children
range from 13 to 5i years of age and up till 1976 they were
maintained and cared for by the joint efforts of their father and
mother. In 1976 the appellant abandoned the home and got married to
another woman by a Christian marriage ceremony and he is now
before the third court of law assisted by an advocate throughout whilst
the woman remains unrepresented and he continues to contend that:
'Because Ngurario was not performed there was no customary law
marriage and the children are illegitimate and are not therefore
entitled to main- tenance.' It is on the record of proceedings that
before the marriage to the second woman, the respondent Mary
Wanjiku lodged objection thereto, and that despite the Registrar's
advice to the Pastor not to celebrate the marriage before the decision
of the Magistrate's Court, he nevertheless performed the marriage

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 ceremony. This case poses a very serious state of affairs. As this Court
sees it Mr. Hinga whether or not he has deliberately postponed the
Ngurario ceremony, is relying on a mechanical point in Kikuyu
customary law so as to take advantage of the repeal of the Affiliation
Act. I believe that the repeal of the Affiliation Act was to prevent
women so inclined, from freely collecting illegitimate children and
then sit in legal receipt of custom. I am however quite certain that the
Legislature by repeal never intended to grant men licences to inflict
unwanted and abandoned children upon our society. I have studied
the record of proceedings in both the District and Senior Resident
Magistrates' courts and endorse the findings of both; that there is a
recognisable Kikuyu Customary Law Marriage between the parties. I
consider it most unfortunate that the Pastor did not heed the advice
of the Registrar. It may well be that he was too busy with the affairs of
other members of his flock and did not as a matter of precaution
remember the passage of the Bible: 'For-as-much as you have done it
to these my children, you have done it unto me. Be that as it may, on
the evidence, the application of Divine law, the true spirit of Kikuyu
customary law and the relevant provisions of our Judicature Act
1967— I now legally pronounce Peter Hinga and Mary Wanjiku man
and wife."

Inheritance

The strict application of customary law may sometimes disadvantage women. The
courts have come on board to remedy this state of affairs by flexibly apply
customary law. For instance, under the Nandi customary law, upon the death of a

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father/husband, the first born son in the family was entitled to administer the estate
of the deceased. The widow was excluded from this role.

In Re Kibiego (1972) E.A. 179, Madam J., departed from such custom and
appointed the widow of Kibiego as the Administrator of his estate. In his words:

"A glimmering of the law relating to administration of a Nandi's estate

is referred to in Restatement of African Law by Cotran, Vol. 2, p. 115
who states, at p. 116, that on intestacy the family elders will always
appoint the eldest son of the deceased as administrator. I think it is
this statement of the law which made the registrar consider the
propriety of grants of letters of administration to the widow. Whatever
Cotran's source of Nandi law may be, I am of the opinion that in
today's Kenya, in the absence of a valid reason such as grave
unsuitability, a widow of whatever race living in the country, is
entitled to apply to the court for the grant of letters of administration
more so when the children, as in the instant case, are minors. A widow
is the most suitable person to obtain representation to her deceased
husband's estate. In the normal course of events she is the person who
would rightfully, properly and honestly safeguard the assets of the
estate for herself and her children. It would be going back to a
mediaeval conception to cling to a tribal custom by refusing her a
grant which is obviously unsuited to the progressive society of Kenya
in this year of grace. A legal system ought to be able to march with the
changing conditions fitting itself into the aspirations of the people
which it is supposed to safeguard and serve.”

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The above cases are examples of the instances where the courts displayed the
willingness of the courts to mitigate the technical application of the law in their
rigid form which would otherwise occasion injustice. The courts in this case
applied equity in a general juristic sense, not the technical juridical concept which
means applying the doctrines of equity as developed under English law. It has been
argued that if equity would be applied in its technical juridical sense, it would wipe
out customary law.3

TOPIC 2: MAXIMS OF EQUITY

INTRODUCTION

Over time, some principles were developed to regulate the application of equitable
remedies. These principles are known as the maxims of equity and are broadly
categorized into twelve.

1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A

REMEDY

This means that for equity, once there is wrong, there should be a remedy.
This principle sums up the hallmark of Equity. As Common Law became
increasingly rigid and unable to provide remedies in new situations that came up,
remedies were developed to cure the deficiency experienced in common law. This
maxim was thus given birth to signify that where common law failed to provide a
remedy, equity would not allow that state of affairs to continue.

3
Bakibinga, ibid, at page 13

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No wrong should go unaddressed if it can be remedied by the court. Eg Injuria Sine
Damno. Where common law does not provide remedy, equity does. However it
does provide a remedy in all situations.

1.Ashby v white
Facts: The plaintiff had the right to vote, but he was denied that right by the
defendant. The plaintiff brought suit for violation of his civil rights and the jury
returned a verdict in his favor. The defendant appealed. Issue: The issue of this
case is whether one party may recover damages when one of his civil rights is
hindered by the action of another. Judgment: Chief Justice Holt held that a
plaintiff ought to be allowed to recover, because the right to vote is a common law
right and thus, an obstruction of that right should give rise to a cause of action.
When the actions of one person serve to hinder the rights of another, a cause of
action may arise.
2.Walsh vs Lonsdale (1882) 21 Ch.D.9.
In Walsh v. Lonsdale, the plaintiff (Walsh) had agreed to sell land to the defendant
(Lonsdale) under a contract. However, before completion of the sale, the defendant
expressed his intention to rescind the contract due to declining land values. The
plaintiff sought an injunction to prevent the defendant from rescinding the contract
and demanded specific performance, which means that the defendant should be
compelled to fulfill the terms of the contract. The court ruled in favor of the
plaintiff, stating that since the plaintiff had a valid contract for the sale of land, and
the defendant's reasons for rescission were insufficient, the plaintiff was entitled to
specific performance. This decision reinforced the principle that, in certain
circumstances, the remedy of specific performance could be granted in equity.

The maxim of equity that is particularly relevant to this case is "Equity will not
suffer a wrong to be without a remedy." This maxim underscores the fundamental
principle in equity law that when a legal right is violated, and there is no adequate
remedy at law, equity will step in to provide a remedy. In the context of Walsh v.
Lonsdale, the court, applying this maxim, recognized that the plaintiff had a valid
contract right, and without the remedy of specific performance, the plaintiff would
suffer a wrong without adequate redress.In summary, Walsh v. Lonsdale is an
important case in equity law that highlights the court's willingness to grant specific
performance as a remedy when a contractual right is violated, embodying the
maxim that equity will not allow a wrong to go without a remedy.

Exceptions

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Equity cannot provide remedy in some instances. Examples include:

- Unfair trade competition

- Contracts requiring constant supervision
- Contracts involving personal services

Courts may be able to grant specific performance in these instances.

2. EQUITY FOLLOWS THE LAW

This means that equity generally follows the common law rules.
However, where following the common law rule will lead to
injustice, equity was ever ready to depart from the law. This means
that equity will supplement the law.
Examples

Trusts: although the beneficiaries under a trust are recognized as the equitable
owners, the legal title of the trustees is not denied by equity.

Doctrine of Estates: equity recognized the common law doctrine of estates. These
interests could be recognized as equitable interests under the law of trusts.

However, where the common law rules were too rigid, equity would not follow the
law under those circumstances.

Stickland v Aldridge
Facts: where a person died intestate who owned an estate in fee-simple, leaving
sons and daughters, the eldest son was entitled to the whole of the land to the
exclusion of his younger brothers and sisters.Issue: The issue of this case is
whether younger brothers and sister may recover the possession of
properties.Judgment: This was unfair, yet no relief was granted by Equity Courts.
If the son had induced his father not to make a will by agreeing to divide the estate
with his brothers and sisters, equity would have interfered and compelled him to
carry out his promise, because it would have been against conscience to allow the
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son to keep the benefit of a legal estate which he obtained by reason of his
promise. Equity follows the law and even if by analogy law can be followed, it
should be followed.

3. WHERE THERE IS EQUAL EQUITY, THE LAW SHALL PREVAIL

The maxim "Where there is equal equity, the law shall prevail" reflects the
principle that, in situations where both parties have equal claims in equity, the legal
rights and remedies provided by the law will be applied. This maxim highlights the
idea that equity acts in a supplementary and complementary manner to the law,
intervening when legal rules are insufficient to address a particular situation. The
maxim implies that if both parties have equal moral claims or equitable rights, the
legal principles and rules will be the deciding factor in resolving the dispute.
Where two parties have claims that are equally fair, and one of the claims is a legal
interest, the legal interest prevails over the equitable interest.Here are a few key
points to consider in understanding this maxim:

Legal Precedence: The maxim underscores the importance of legal rules and
precedents in resolving disputes. When equitable considerations are balanced or
canceled out between parties, the legal framework becomes crucial in determining
the outcome.

Role of Equity: Equity is not meant to override or replace the law but to fill in
gaps where the law may not provide a just remedy. When the law can adequately
address a situation, equity takes a back seat.

Balancing of Equitable Claims: The maxim suggests that when equity is evenly
balanced between the parties, the legal system should step in to provide resolution
based on established legal principles.

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For example, where a land owner takes loan from bank A and the bank secures the
said loan under an equitable charge/mortgage (not registered under statute), if that
land owner subsequently takes a loan from bank B under a legal charge (registered
under statute), the second charge will prevail over the first charge if Bank B did not
have the knowledge of the existence of the first charge.

However, if Bank B had the knowledge of the existence of the first charge, it will
not have priority over Bank A.

4. WHERE EQUITIES ARE EQUAL, THE FIRST IN TIME PREVAILS

The maxim "Where equities are equal, the first in time prevails" is a fundamental
principle in equity law. This maxim indicates that if two parties have equal
equitable claims, the one who asserted their rights or acquired the interest first will
be given preference or priority. This principle emphasizes the importance of timing
and priority in equitable claims. Here are some key points to consider in
understanding this maxim:

Priority in Equity: The maxim recognizes the significance of the order in which
equitable interests or claims arise. The party who establishes their claim first, in
terms of time, is accorded greater consideration.

Prevention of Unjust Enrichment: The principle helps prevent unjust enrichment

by ensuring that the first party to assert their equitable rights is protected against
subsequent claims of equal merit.

Notice and Good Faith: The maxim also takes into account the concepts of notice
and good faith. If a party acquires an equitable interest without notice of a prior
equitable claim and in good faith, the priority principle may still apply in their
favor.

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The General Rule

Where there are several equitable interests over a property, the interest created
earlier takes priority over the rest.

Cave v Cave (1880) 15 Ch.D.639

A trustee, in breach of trust, used the trust money to buy land, and then sold the
land to his brother. The brother later on mortgaged the land to A by way of a legal
mortgage. He subsequently mortgaged the land to B by way of an equitable
mortgage. Both A and B did not have the knowledge of the existence of a trust
from where money was used to buy the property. It was held that the legal
mortgage of A took precedence over the two equitable interests, that is, the
interests of the beneficiaries under the trust and the equitable mortgage to B. the
interests of the Beneficiaries under the trust, however, took priority over the
interests of the equitable mortgage to B.

Exceptions

The first equitable interest may not necessarily take priority, as illustrated by the
following examples

Fraud

If the first equitable interest was obtained fraudulently, it will be postponed to the
subsequent equitable interests.

Rice v Rice (1853) 2 Drewry 73;61 E.R.646

In the above case, a vendor transferred land to a buyer without receiving payment
for it. He signed a conveyance which had a receipt for money attached to it, though
he did not receive payment. The vendor subsequently, under an equitable

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mortgage, mortgaged the land to a third party (mortgagee) and deposited the title
with the said mortgagee. It was held that the interests of the buyer were postponed
to the interests of the mortgagee since the first transaction of sale was procured by
fraud.

Notice under Successive Assignments and Mortgages

Priority under successive assignments or mortgages of equitable interests is not

determined by the order in which they were created, but by the order in which the
notice of the assignment was given by assignee or mortgagee to the trustee, debtor
or other relevant person.

In Dearle v Hall (1828) 3 Russ; 38 E.R.479, B was a beneficiary under F’s Will
which created a trust for sale. B assigned the trust to D but the executors had no
notice of that assignment. He later assigned the property to C and proceeded to sell
the trust to H who had no notice of the existence of the previous assignments. He
gave notice of his purchase to the Executors of the Will. It was held that H had
priority over the previous assignees, notwithstanding the fact that the assignments
were created earlier than H’s interest.

5. HE WHO SEEKS EQUITY MUST DO EQUITY

The maxim "He who seeks equity must do equity" reflects a fundamental principle
in equity law, emphasizing that a party who seeks the intervention of an equitable
court must come with clean hands and act fairly in the matter. In other words, a
person seeking equitable relief must be willing to do what is fair and just in their
own conduct.

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Here are key points to understand about this maxim:

Clean Hands Doctrine: The maxim is closely associated with the "clean hands"
doctrine, which states that a person who seeks the aid of equity must have acted
fairly and without wrongdoing in the matter at hand. If a party has engaged in
improper conduct or has "unclean hands," they may be denied equitable relief.

Equitable Maxim: This principle highlights the nature of equity as a system of

justice that considers not only legal rules but also fairness and good conscience. It
encourages parties to approach the court with a sense of fairness and honesty.

Prevention of Injustice: The maxim is designed to prevent a party from taking

advantage of equity without themselves acting equitably. It aligns with the broader
goal of preventing injustice and promoting fair dealings.

Relevant Case Laws:

Dering v. Winchelsea (1787) 1 Cox Eq. Cas. 318: In this case, Lord Alvanley
emphasized the importance of the party coming to court with "clean hands" when
seeking equitable relief. The maxim was invoked to deny relief to a party with
unclean hands.

Gordon v. Gordon (1824) 1 Sim. & Stu. 563: This case illustrates the application
of the maxim in the context of family law. The court emphasized that a party
seeking equity in family matters must act equitably in their own conduct.

A person seeking an equitable relief must himself act fairly. The following areas
illustrate this maxim.

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Doctrines of Election

The doctrines of election are equitable principles that apply when a person is given
a choice between two or more inconsistent rights or benefits. These doctrines aim
to ensure fairness and prevent individuals from taking advantage of contradictory
positions.

The principle of election arises in situations where a person receives a benefit or

property under a will, trust, or other instrument, but that person also has an
obligation or duty associated with the same instrument that is inconsistent with the
benefit received. In such cases, the person is required to make an election between
accepting the benefit or adhering to the obligation. There are two main doctrines of
election:

The doctrine of ademption: This doctrine applies in the context of a will or

testamentary gift. It states that if a testator makes a specific gift in their will, and
that specific asset is no longer in the testator's estate at the time of their death (e.g.,
it was sold or otherwise disposed of), the intended beneficiary must make an
election. The beneficiary can either accept an equivalent amount of money or
property from the estate in lieu of the specific gift or give up their claim to any
benefit from the estate. The doctrine prevents a beneficiary from receiving both the
specific gift and the proceeds from the sale of the same asset.

The doctrine of equitable election: This doctrine applies in situations where a

person receives a benefit under a document (such as a will or trust) but is also
obligated to transfer property to another party under the same document. The
doctrine requires the beneficiary to make an election between accepting the benefit
or complying with the obligation. If the beneficiary chooses to accept the benefit,
they must transfer the property or assets specified in the document to the other

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party. The doctrine prevents a beneficiary from benefiting from an instrument
while disregarding the associated obligations.

The doctrines of election are rooted in equity and aim to prevent unjust enrichment
and ensure fairness in situations where conflicting rights or benefits arise. They
provide a framework for resolving conflicts of interest and require individuals to
make a clear choice between inconsistent positions. The application of these
doctrines may vary depending on the jurisdiction and the specific circumstances of
each case. It is advisable to seek legal advice in matters involving the doctrines of
election to understand the implications and requirements in a particular situation

For example, if a person under a Deed gives his property to A and in the same
Deed gives A’s property to B, A will not be able to claim the property until he
allows the gift to B to take effect.

THE DOCTRINE OF ELECTION AND SURVIVORSHIP PROPERTY

The doctrine of election is a common law rule of equity that requires that if a
testator attempts to dispose of property belonging to someone else and also makes
a devise to that person, the beneficiary must choose between either keeping the
property or accepting the devise. Usually, the doctrine of election will require the
following:

1. The testator must intentionally dispose of the property.

2. The property must belong to someone other than the testator.
3. The will must devise other property to the actual owner.

In Illinois, the first district appellate court held that the doctrine of election does
not apply to survivorship property. In Williamson v Williamson, 657 NE2d 651,
275 Ill App 3d 999, 212 Ill Dec 450 (1st D 1995), a joint tenant attempted to

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dispose of the tenancy property in his will and then made a disposition to the other
joint tenant. The court found that where a testator attempted to dispose of property
that passed by survivorship, the doctrine of election could not be applied to defeat
the operation of law. The court premised its decision upon the fact that the
survivorship feature of joint tenancy was created by the legislature, whereas the
doctrine of election is a judicially applied rule imported into the common law from
Roman-based civil law. Finding that statutory law created through the legislature
supersedes common law rulings, the court refused to allow the doctrine of election
to defeat the survivorship feature of joint tenancy. The court stated that it was
limiting the doctrine to cases where application would prevent injustice or where
the testator expressly stated an intent to make the beneficiary choose. Id. at 656.

Wisconsin's statute on wills specifically states that the doctrine of election applies
whether the beneficiary holds the property by right of ownership, survivorship,
beneficiary designation or election. W.S.A. 853.15.

In Indiana's most recent case on the doctrine of election, the Court of Appeals of
Indiana held the opposite of Williamson, applying the doctrine of election to
tenancy by the entirety. Citizens Nat'l Bank of Whitley County v Stasell, 408
N.E.2d 587 (1980), reh'g denied, 415 NE2d 150 (Ind Ct App 3rd D 1981). In that
case a wife died, and her will attempted to dispose of property that she held with
her husband in tenancy by the entirety. The husband elected to take the property
through the terms of the will, which granted him a life estate with the remainder to
the deceased wife's nieces and nephews. Later, the husband remarried and
subsequently died with a will devising his property to his second wife. The second
wife brought a quiet title suit against the nieces and nephews. The appellate court
quieted title to the property in the nieces and nephews because the husband
retained only a life estate in the property when he chose to accept the bequests to

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him from his first wife's will. If he had refused to take under the will, then he
would have held the property in fee simple, due to the survivorship quality of
property held in tenancy by the entirety. In denying rehearing, the court of appeals
emphasized that since the husband had elected to take under the will when his first
wife's estate was probated, and if the other requirements for the doctrine of election
were satisfied, then the property must pass by the terms of the will. Thus, the
Indiana court held that the common law doctrine of election can interfere with the
intended effects of the statutorily-created tenancy by the entirety.

Although Illinois's Williamson case soundly denounces applying the doctrine of

election to survivorship property, the split of opinion in other jurisdictions indicates
the possibility that different Illinois courts could rule otherwise. Therefore, ATG's
underwriting guidelines will continue to recommend that attorneys obtain joint
tenancy or tenancy by the entirety affidavits and carefully examine wills for
possible doctrine of election problems when insuring joint tenancy or tenancy by
the entirety property.

Notice of Redemption of Mortgage

If a mortgagor wants to redeem a mortgage from a mortgage, he must give a

reasonable notice to the mortgagee of his intention to do so. The right of a
mortgagor to redeem is an equitable right.

Consolidation of Mortgages

This allows the holder of more than one mortgage from the same mortgagor to
require that if the mortgage wishes to redeem, he must redeem all the mortgages,
not just some, from the mortgage. For example, a bank lends 50 million to A based
on a mortgage on A’s property situated in Nakuru. The same bank lends A 30
million shillings to A by way of a mortgage on A’s property situated in Kiambu. If
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the value of property in Nakuru falls to 25 million while the value of the property
in Kiambu increases to 60 million, if the owner of the properties in Kiambu and
Nakuru wishes to exercise his equitable right of redemption of the Kiambu
property from the bank, the bank is entitled to consolidate the mortgages to prevent
the land owner from redeeming the Kiambu land without the Nakuru land.

Illegal Loans

One cannot redeem his securities from a lender who illegally lent him money on
the basis of those securities. The borrower will be required to be prepared to do
equity by repaying the loan even though the lending was illegal.

In Lodge v National Union Investment Co. (1907) 1 Ch.300, a borrower received

a loan from a lender upon some securities that he had provided. The contract was
not registered under the U.K Moneylender’s Act of 1900 and was therefore illegal.
It was held that the order for the delivery of the securities would only be made if
the borrower was prepared to do equity by repaying the loan.

A contrary decision was made in Kasumu v Baba Egba (1956) A.C.539 (Privy
Council), where the defendant, a money lender, did not succeed in getting back the
money he hand lent to the plaintiff on the basis of the title deeds given as security,
even though he cited the Lodge’s case. It was held that since the Defendant failed
to keep the records as demanded by section 19 of the Nigerian Moneylender’s Act,
the contract was unenforceable, hence the lender could not recover under an
agreement that violated the statute. The plaintiff had sued claiming the possession
of the property, cancellation of the mortgage and delivery of the title deeds.

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 6. HE WHO COMES TO EQUITY MUST COME WITH CLEAN
HANDS

This maxim means that he who seeks equitable relief must have behaved fairly.
The difference between this maxim and the one that states that “He who Seeks
equity must do equity” is that “he who seeks equity must do equity” deals with the
future conduct of the person seeking relief, while this maxim deals with the past
conduct of the person seeking relief.

The maxim "He who comes to equity must come with clean hands" is a legal
principle that underscores the idea that a party seeking equitable relief or justice
must be free from wrongdoing in the matter for which they seek the court's
intervention. This principle reflects the broader concept that a person should not be
allowed to benefit from their own misconduct.

Here are some key points to discuss regarding this maxim:

Equity in Law:In legal systems, there are generally two branches of law: common
law and equity. While common law deals with monetary compensation and
damages, equity is concerned with fairness and justice.The maxim is particularly
associated with equity, emphasizing the importance of moral and ethical
considerations in addition to legal rules.

Clean Hands Doctrine: The maxim is often referred to as the "clean hands
doctrine." This doctrine implies that a person who seeks equitable relief must have
acted fairly and in good faith regarding the matter at hand.Courts are reluctant to
provide remedies to individuals who have engaged in deceit, fraud, or any other
form of wrongdoing related to the issue they bring to court.

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Prevention of Unjust Enrichment:One of the underlying principles is the
prevention of unjust enrichment. The court wants to ensure that individuals do not
profit or gain an unfair advantage by engaging in unethical or wrongful conduct.

Consistency with Equitable Principles: The maxim is consistent with the broader
principles of equity, which seeks to achieve fairness, justice, and the prevention of
unconscionable conduct.Courts in equity are concerned not only with legal
technicalities but also with achieving a just result.

Examples in Legal Cases:The maxim is often cited in cases where a party seeks
specific performance, injunctions, or other equitable remedies. For example, if
someone seeks an injunction to stop a competitor from engaging in certain
conduct, they should not have engaged in similar conduct themselves.

Flexibility of Equitable Relief: Equity allows for a more flexible approach

compared to strict legal rules. However, this flexibility is balanced by the
requirement that those seeking equitable relief must have acted fairly and with
clean hands.

In summary, the maxim "He who comes to equity must come with clean hands"
encapsulates the idea that those seeking fairness and justice in an equitable court
must themselves be fair and just in their actions related to the matter at hand. It
reflects a fundamental principle of equity that aims to prevent individuals from
benefiting from their own wrongful conduct.

The conduct that invokes this maxim need not be strictly illegal. What amounts to
unclean hands is not necessarily an illegal conduct. It is sufficient if the conduct is
unconscionable or morally reprehensible. In Gascoigne v Gascoigne (1918) 1
K.B.223, it was held that a husband who transferred his property to his wife in

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order to defeat his creditors’ claims may not be allowed to recover the said
property on account of his inequitable conduct to his creditors.

Examples

Loss of tenancy

If a tenant has lost tenancy because of nonpayment of rent, he or she cannot regain
the tenancy if he or she was using his/her tenancy for immoral purposes as was
held in Gill v Lewis (1956) 2 Q.B.1,14,17.

Lease Agreement

In Croatsworth v Johnson (1886) 54 L.T.520, it was held that with equitable

interest under a lease agreement could not get a decree of specific performance
available of the legal lease because he was in breach of the covenants under the
lease.

Fraud by a Minor

In Loughran v Loughran 292 US.216, a beneficiary who had not attained the
majority age falsely presented himself as a person of majority age to the trustees of
the money to which he was entitled. The trustees paid him the money. Upon
attaining the age of majority, he sued the trustees for the same amount of money. It
was held that he could not recover the said money. Neither his assignees could
recover it.

Dissolution of Marriage

In Craig v Craig (1942) 16 N.L.R, A woman sought dissolution of her marriage to

her husband on the ground of adultery and cruelty. The woman, though previously
guilty of adultery herself, did not confess this in her petition for divorce. Her

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husband filed a counter-petition premised on the adultery of his wife and asked the
court to exercise its discretion in his wife’s favour. The court found that the woman
deliberately suppressed the truth about her adultery, and dismissed her petition on
account of her inequitable conduct, while granting the husband’s.

This maxim was used in an extreme manner to deny divorce to both parties in
Kellogg v Kellogg (171 Mich.518 (1912); 137 N.W.249(1912) where the wife had
petitioned for divorce on the ground of extreme cruelty. The husband filed a
cross-petition on the ground of extreme cruelty and adultery. The court dismissed
both petitions, stating that divorce is a remedy for the innocent, not the guilty, and
should not be granted where both parties are at fault.

7. DELAY DEFEATS EQUITY/DOCTRINE OF LATCHES

The maxim "Delay defeats equity" encapsulates the legal doctrine of laches.
Laches is a principle in law that emphasizes the importance of timely action in
seeking legal remedies. The doctrine is often expressed through maxims like
"Equity aids the vigilant, not those who slumber on their rights" and "He who
comes to equity must come with clean hands." Here are key points to discuss
regarding the maxim "Delay defeats equity" or the doctrine of laches:

Timeliness of Legal Action: Laches is concerned with the timely assertion of

one's rights. It suggests that a party should not delay unreasonably in asserting a
legal claim or seeking equitable relief.

Prevention of Stale Claims: The doctrine of laches aims to prevent stale claims. If
a party waits too long before seeking legal remedies, evidence may be lost,
memories may fade, and the overall administration of justice may be compromised.

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Equity Favors Diligence:Equity is said to favor those who diligently assert their
rights and take prompt action. Courts in equity are less inclined to grant remedies
to those who have been inactive for an extended period.

Prejudice to the Opposing Party: The concept of laches also involves

consideration of whether the delay has caused prejudice to the opposing party. If
the delay has led to a situation where it would be unjust or impractical to grant the
requested relief, the court may be less inclined to do so.

Applicability in Equitable Relief: Laches is often applied in cases where a party

seeks equitable remedies such as injunctions, specific performance, or declaratory
relief.

For example, if someone waits for an extended period before seeking an injunction
to stop another party from using a trademark, and during that time the alleged
infringer has invested significantly in building their brand, the court may consider
the delay in deciding whether to grant the injunction.

Balancing Equitable Principles: While equity seeks fairness and justice, it also
requires a balance of interests. The doctrine of laches acknowledges that fairness
involves not only the merits of a claim but also the timeliness of seeking legal
remedies.

Exceptions to Laches: There may be circumstances where the delay is excusable,

such as situations involving fraud, duress, or incapacity. In such cases, the court
may consider whether there are valid reasons for the delay.

In summary, the maxim "Delay defeats equity" underscores the importance of

timely and diligent action in seeking legal remedies. The doctrine of laches aims to

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balance the interests of both parties and prevent the unfair assertion of stale claims
in courts of equity.

Equitable action will not be granted if the claimant has been inordinately delayed
in filing the case. See Smith v Clay (1767) 23 Broc.C.639; Lindsya Petroleum Co.
v Hurd (1874)L.R.5P.C.221; Nwakobi v Nzekwu (1964) 1 WLR 1019.

The doctrine does not apply where actions are limited by statutes.

In Fagbemi v Aluko (1968) 1 All N.L.R.233, three factors for consideration of the
doctrine of latches were formulated. Firstly, the delay by the plaintiff, secondly,
acquiescence by the plaintiff in the delay, and thirdly, the change in the position of
the Defendant.

In Aganran v Olushi (1907) 1 NLR 66 and Ibeziako v Abutu (1954) 3 E.N.L.R.24,

it was held that the doctrine of latches would apply if the plaintiff behaves in a way
that makes the Defendant alter his position in the belief that the plaintiff’s claim
has been abandoned or that the delay amounts to an agreement on the part of the
plaintiff that he has abandoned his claim.

It also applies where there is a delay in application challenging the grant of letters
of administration. See Ephraim v Asuquo (1923) 4 N.L.R.98.

8. EQUALITY IS EQUITY

The maxim "Equality is equity" reflects the idea that true equity is achieved when
individuals are treated with equality and fairness. It emphasizes that fairness and
justice entail the equal treatment of people, without discrimination or favoritism.
Let's explore key points related to this maxim:

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Equality as a Fundamental Principle: The maxim underscores the fundamental
principle of equality in the administration of justice. It suggests that equitable
outcomes should be based on the equal treatment of individuals before the law.

Legal and Social Implications: In legal contexts, the maxim implies that legal
rules and decisions should be crafted and applied in a manner that ensures equal
treatment for all individuals, regardless of their background, status, or
characteristics. Beyond the legal realm, the maxim can also be applied more
broadly to social and ethical considerations, emphasizing the importance of
treating individuals with equality and fairness in various aspects of life.

Anti-Discrimination and Inclusion:The maxim aligns with the principles of

anti-discrimination and inclusion. It suggests that equity is not possible when
certain groups or individuals are treated unfairly or are subject to prejudice based
on factors such as race, gender, religion, or socioeconomic status.

Access to Opportunities and Resources: In the pursuit of equity, there should be

equal access to opportunities, resources, and benefits. This includes educational
opportunities, employment, healthcare, and other essential aspects of life.

Challenges to Equality: The maxim implies that any challenges to equality, such
as systemic discrimination or unequal distribution of resources, need to be
addressed to achieve true equity. Legal frameworks and social policies should be
designed to rectify such disparities.

Equity in Legal Remedies: In legal proceedings, the maxim suggests that

equitable remedies should be crafted in a way that ensures equal treatment. Courts
should strive to provide remedies that promote fairness and equality among the
parties involved.

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Practical Application:Achieving true equality may require affirmative action or
measures to rectify historical injustices. The maxim acknowledges that achieving
equity may sometimes involve proactive steps to address systemic inequalities.

In summary, the maxim "Equality is equity" emphasizes the close connection

between the concepts of equality and equity. It suggests that true equity is achieved
when individuals are treated equally and without discrimination. This principle is
foundational in legal systems that strive to uphold justice and fairness for all
individuals, regardless of their background or characteristics.

It applies in three situations, namely:

- Presumption of tenancy in common

- Severance of joint tenancy
- The principle of equal division

a. Presumption of tenancy in common

The principle of survivorship, where a surviving tenant inherits the share in a

property jointly acquired by the surviving and the deceased tenant, does not apply
in tenancy in common. The share of the deceased tenant goes to the estate of the
deceased.

However, in joint tenancies, the share of the deceased tenant in a jointly owned
property is taken over by the surviving tenant. Equity intervenes in this case to
dislodge the right of survivorship and presume tenancy in common so that the
beneficiaries who are entitled to inherit from the estate of the deceased are
protected. The surviving tenant is treated as the trustee of the share of the deceased.

There are three instances where tenancy in common is presumed.

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 i. Where the joined tenants bought the property in unequal shares

For example, where two people bought a property in unequal proportions, and the
same is transferred to them as joint tenants, that is, one of the parties contributing
towards the purchase of 60 per cent while the other party contributes the remaining
40 per cent, if the party owning 60 percent of the property dies, the surviving
tenant is entitled to take over the 60 per cent left behind under joint tenancy.
Equity, however, comes in and presumes tenancy in common so that the share of
the deceased tenant becomes part of the estate of the deceased. The surviving party
is regarded as a trustee to the share of the deceased.

However, where the parties owned equal share in the property, that is, 50-50, it has
been held that the surviving tenant acquires the entire portion left by the deceased
both in common law and equity, as was the case in Lake v Gibson (1729) 1
Eq.Ca.Abr.290. The reason behind this position is that where parties acquired
equal proportions in a property, it is presumed that they had intention of creating a
joint tenancy.

ii. Loan on Mortgage

Where two people jointly advance a loan to a third party who provides a security to
the mortgage jointly to the two lenders, upon the death of one of the lenders, equity
presumes tenancy in common.

iii. Partnerships

Equity presumes that partners who acquire a property for business hold the said
property as tenants in common.

b. Severance of Joint Tenancies

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It has been stated above that where parties acquire a property in equal shares, the
same is regarded as joint tenancy both in equity and at common law.

However, equity may come through the doctrine of severance of joint tenancy, that
is, converting it from joint tenancy to the tenancy in common.

Severance applies in situations such as

- Where a joint tenant bequeaths his/her portion in a will

- Where a joint tenant alienates his portion through sale
- Where a joint tenant mortgages his portion

In Ipaye v Aribisala (1930) 10.N.L.R.10, the issues was whether an equitable

mortgage over the interest of a joint tenant in a property would result into
severance of joint tenancy. The court found that the creation of such a mortgage
resulted into severance of the joint tenancy.

c. Equal Division

Where there is no basis for distributing a property between claimants, courts may
apply the maxim equality is equity to distribute the property equally among the
claimants.

Applicable Instances

Trust Powers

Where trustees are unable to exercise trust powers to divide a property, the court
may intervene and divide the property equally among the claimants.

Divorce

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Where parties have been granted divorce and the parties contributed towards
acquisition of a property during the marriage, yet the proportion of each party’s
contribution remains unclear, the court will divide the property equally.

Re Bower’s Settlement Trust Criteria

In Re Bower’s Settlement Trust (1942) Ch.197, it was held that if there is a

settlement to the effect that:

i) A fund should be held in trust of certain people in unequal shares

ii) Any share which fails to vest shall accrue to the other shares by addition

then the accruer will be in equal shares and not in the proportion laid down for the
original shares.

Deceased Survived by Many Children

Where a parent dies leaving behind many children, equity presumes that the
property of the deceased will be divided equally among the children.

9. EQUITY LOOKS AT THE SUBSTANCE RATHER THAN THE

FORM

The maxim "Equity looks at the substance rather than the form" reflects a
fundamental principle in equity law, emphasizing that equitable courts focus on the
underlying fairness and justice of a situation rather than being strictly bound by the
formal legal structure or technicalities. This principle allows equitable courts to
consider the true essence of a matter and to provide remedies that achieve a fair
and just result. Here are key points to discuss regarding this maxim:

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Flexibility in Equitable Jurisdiction: Equity is known for its flexibility and
adaptability. Unlike strict legal rules, equitable principles allow courts to look
beyond the formalities of a case and delve into the substance of the matter to
achieve a just outcome.

Prevention of Unjust Enrichment: The maxim aligns with the broader goal of
equity, which is to prevent unjust enrichment and ensure fairness. Equitable
remedies are often designed to prevent a party from benefiting unfairly from
technicalities or legal loopholes.

Situations Where Formalities are Inadequate:Equity becomes particularly

relevant when the strict application of legal rules or formalities would lead to an
unjust result. In such situations, equitable courts have the authority to intervene and
consider the substance of the matter.

Application in Contract Law: In contract law, the maxim may be applied when a
party tries to enforce a strict contractual provision that, if strictly applied, would
lead to an unfair or inequitable result. Equitable relief, such as specific
performance or injunctions, may be granted to prevent injustice.

Fraud and Unconscionability: Equity often comes into play in cases involving
fraud or unconscionable conduct. Even if a transaction appears valid on its face,
equitable courts may set it aside if the substance of the transaction is tainted by
fraud or unfairness.

Individualized Consideration:The maxim underscores the individualized

consideration that equitable courts give to each case. It allows for a more holistic
examination of the circumstances, taking into account the specific facts and
equities involved.

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Balancing Legal Formalities with Justice: While legal rules and formalities are
important, the maxim highlights the need to balance them with the broader
principles of justice and fairness. Equity seeks to ensure that the law achieves just
results in individual cases.

In summary, the maxim "Equity looks at the substance rather than the form"
emphasizes the essence of equitable jurisdiction, which is to consider the true
nature of a matter and provide remedies that align with principles of fairness and
justice. It allows equitable courts to be more responsive to the nuances of
individual cases, intervening when strict legal formalities would lead to unjust
outcomes.

Before the development of equity, what existed were common law doctrines that
focused more on the form rather than the substance in determining cases. Equity
came in to remedy this state of affairs by focusing on substance rather than the
form, thus the maxim “equity looks at the substance rather than the form”.

Areas where this doctrine has been applied include the following:

Time Clauses

The sale of land contracts under common law had time clauses which a party was
supposed to comply with, failing which the other party was free to repudiate or
cancel the contract. Equity frowned on this. In equity, time is not of essence in a
contract unless expressly stated in the contract.

Covenants

A covenant, which is positive in form, may be regarded as negative in substance by

equity.

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In Catt v Tourle (1869) 4 Ch.App.654, the owner of a bar agreed with a brewery to
the effect that the brewery would be the sole supplier of alcohol to that bar (tied
house covenant). It was held that in equity an injunction could be granted to the
brewery to enforce the covenant by prohibiting the bar owner from receiving
alcohol supplies from other suppliers.

Mortgages

In certain cases, documents may appear to transfer land to another party. However,
equity will admit evidence which prove that what appears to have been conveyance
was in fact a mortgage.

Also, at common law, where a party failed to repay the loan on the date fixed by
the mortgage agreement, that party lost the right to redeem his property. However,
under equity, time fixed for redemption was just a formality; a mortgagor would
redeem his property even after the expiry of the fixed time.

10.EQUITY LOOKS AT THAT AS DONE WHICH OUGHT TO BE

DONE

The maxim "Equity looks at that as done which ought to be done" reflects a
guiding principle in equity law, emphasizing the court's power to recognize and
enforce obligations that, though not legally executed, are morally or equitably
binding. This principle allows equitable courts to go beyond the strict letter of the
law and ensure that justice is served in situations where legal remedies may be
inadequate. Here are key points to discuss regarding this maxim:

Moral and Equitable Obligations: The maxim underscores the idea that equity is
concerned not only with enforcing existing legal rights but also with recognizing

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and enforcing obligations that are morally or equitably binding, even if not
formally established.

Addressing Unjust Enrichment: Equity seeks to prevent unjust enrichment and

ensure that individuals are not allowed to benefit unfairly from a situation. The
maxim allows courts to look at the moral or equitable obligations that should exist
and enforce them accordingly.

Specific Performance and Injunctions:Equitable remedies such as specific

performance and injunctions are often granted based on this principle. If there is a
clear moral or equitable obligation that should be fulfilled, equity may compel
parties to perform specific acts or refrain from certain actions.

Cases of Unconscionable Conduct: The maxim is particularly relevant in cases

involving unconscionable conduct, fraud, or situations where strict legal rights may
not adequately address the injustice. Equity may intervene to enforce what ought to
be done to rectify the unfairness.

Flexibility of Equitable Jurisdiction: Equity is known for its flexibility and

adaptability. This maxim reflects the discretionary power of equitable courts to
fashion remedies that align with principles of fairness, justice, and moral rightness.

Balancing Legal Formalities and Justice: The maxim highlights the importance
of balancing legal formalities with the broader principles of justice. It allows
equitable courts to consider the spirit of the law and the equitable obligations that
parties should recognize.

Prevention of Hardship and Injustice:Equity aims to prevent hardship and

injustice. By looking at that as done which ought to be done, equitable remedies

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may be designed to prevent situations where strict legal rules would lead to
inequitable outcomes.

In summary, the maxim "Equity looks at that as done which ought to be done"
underscores the inherent flexibility of equitable jurisdiction. It allows courts to
recognize and enforce obligations that are morally or equitably binding, ensuring
that justice is served in situations where the strict application of legal rules may fall
short of achieving a fair result.

A legal duty may arise to do something, or perform some obligation. For example,
under the doctrine of conversion, a duty may arise on the part of a trustee to sell a
trust property and convert it into money or use the trust money to buy property for
the trust. In equity, the duty is considered as already performed the moment the
duty arises, that is, it is regarded that the trust money has already been converted
into a property the moment the duty arises on the part of the trustee to purchase a
property or to convert a property into money.

In leases, an agreement for a lease is as good as a lease, as was held in Walsh v

Londsdale (1882) 21Ch.D.9 and Grosvenor v Rogan Kamper (1974) EA 446.

11.EQUITY IMPUTES AN INTENTION TO FULFILL AN

OBLIGATION

This doctrine provides that where a party performs an act that amounts to the
performance of a duty which he is under obligation to perform, equity will regard
that duty as performed.The maxim "Equity imputes an intention to fulfill an
obligation" reflects a principle in equity law that allows courts to attribute an
intention to perform a legal or equitable obligation even in the absence of a clear

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expression of that intention. This principle is rooted in the idea that equity seeks to
ensure justice and fairness by recognizing and enforcing obligations that may not
be explicitly stated but are implied by the circumstances. Here are key points to
discuss regarding this maxim:

Implied Intention in Equity: The maxim implies that equity is willing to look
beyond explicit expressions of intention and impute an intention to fulfill an
obligation based on the equitable considerations of the case.

Addressing Unexpressed Agreements: Equity is concerned with preventing

injustice, and this maxim is particularly relevant when dealing with unexpressed or
implied agreements. If the circumstances suggest an obligation, equity may impute
the intention to fulfill that obligation.

Enforcement of Moral or Equitable Obligations:Equity may impute an intention

to fulfill obligations that are not only legally binding but also morally or equitably
required. This recognizes that justice goes beyond the strict letter of the law.

Preventing Unjust Enrichment: The principle is aligned with the broader goal of
equity to prevent unjust enrichment. If a party would be unjustly enriched by
failing to fulfill an obligation, equity may impute the intention to fulfill that
obligation.

Application in Contract Law: In contract law, equity may impute an intention to

fulfill an obligation when the circumstances suggest that the parties intended to
create a legal relationship, even if the contract is not formally or explicitly stated.

Implied Trusts and Fiduciary Duties: The maxim is relevant in cases involving
trusts and fiduciary relationships where equity may impute an intention to fulfill
the duty of care and loyalty even if not expressly stated.

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Discretionary Nature of Equitable Jurisdiction: This maxim reflects the
discretionary power of equitable courts. It allows for a more flexible and nuanced
approach to justice, recognizing and enforcing obligations based on the particular
circumstances of each case.

Balancing Legal Formalities and Substantial Justice: The maxim highlights the
balance between legal formalities and the broader principles of substantial justice.
It allows equitable courts to focus on the substance of the obligation rather than
strict adherence to formalities.

In summary, the maxim "Equity imputes an intention to fulfill an obligation"

underscores the inherent flexibility of equitable jurisdiction. It enables courts to
recognize and enforce obligations, whether legal or equitable, by imputing an
intention to fulfill those obligations based on the overall circumstances and
considerations of justice.

12.EQUITY ACTS IN PERSONAM

The maxim "Equity acts in personam" signifies a fundamental principle in equity

law, emphasizing that the jurisdiction of equitable courts is exercised over the
person rather than the property. This means that equity primarily concerns itself
with the rights and obligations of individuals rather than the legal ownership of
specific assets. Here are key points to discuss regarding this maxim:

Personal Jurisdiction: The term "in personam" refers to jurisdiction over the
person. Equity operates by adjudicating disputes based on the personal rights and
responsibilities of individuals involved in a legal matter.

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Individual Rights and Obligations: Equity is concerned with resolving disputes
by examining the specific rights and obligations of individuals. This can include
matters related to contracts, trusts, family law, and other personal relationships.

Flexibility and Adaptability: The principle of acting in personam highlights the

flexibility and adaptability of equitable courts. Equitable remedies are tailored to
the specific circumstances of the parties involved, and the focus is on achieving
justice in individual cases.

Enforcement of Personal Rights:Equitable courts are particularly suited to

enforce personal rights that may not be adequately addressed by common law or
legal remedies. For example, specific performance, injunctions, and declarations
are common equitable remedies directed at individuals.

Trusts and Fiduciary Relationships: The maxim is often relevant in cases

involving trusts and fiduciary relationships. Equity is concerned with ensuring that
individuals fulfill their personal obligations, especially when acting in a position of
trust.

Balancing Conflicting Rights: In situations where legal and equitable rights

conflict, equity acts in personam to consider the specific equities involved and
balance the conflicting interests of the individuals rather than merely applying rigid
legal rules.

Prevention of Unjust Enrichment: Equity, by acting in personam, seeks to

prevent unjust enrichment by ensuring that individuals are held personally
accountable for their actions and obligations.

Specific Performance and Injunctions: Equitable remedies such as specific

performance and injunctions are typically granted against specific individuals. The

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court orders a person to perform a specific act or refrains from doing something
based on the equities of the case.

Enforcement of Decrees: Equitable decrees are enforceable against the person,

and disobedience may lead to contempt proceedings. This contrasts with legal
judgments, which may be enforced against specific property through processes like
liens or executions.

In summary, the maxim "Equity acts in personam" underscores the personalized

and individualized nature of equitable jurisdiction. It emphasizes that equitable
courts are concerned with the personal rights and obligations of individuals, and
the remedies they provide are directed at the person rather than specific pieces of
property.

The decrees or orders by the Old Court of Chancery were directed against the
defendants personally. This happened even in matters involving properties where a
person who refused to comply with an order regarding the property would be
imprisoned, thus the Court against the person (in personam), not against the
property (in rem).

There are remedies which were extended to this maxim to help it function. The
said remedies are not directly concerned with the person of the defendant. These
include:

Writs of Assistance

Equity introduced the writs of assistance during the middle of the seventeenth
century. This was issued by court to allow the sheriff to put the plaintiff in
possession of the property in dispute. The aim was to get to the subject matter of
the dispute (specific res).

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Writs of Sequestration

Was issued by the Court of Chancery against a defendant who continued to be

stubborn even after being committed to prison. The court would issue a writ of
sequestration, that is, appointing a sequestrator to take charge of the property of the
defendant until he complies with the court order or decree.

ASSIGNMENT

Equitable Rights and Interests.

1.Estate Contract

2 Assignments

3.Restrictive Contract

4.Mortgegors Right of Redemption.

5.Unequitable mortgage or charges.

Also read about the doctrine of notice Lina Management Company vs The City
County of Mombasa

1. Estate Contract:

An estate contract is an agreement that creates an interest in land but does not
immediately transfer the legal title. It arises when parties enter into a contract for
the sale of land, and the purchaser is granted an equitable interest in the property.
Until the legal title is transferred, the purchaser holds an equitable interest.An
estate contract is a type of agreement that creates an equitable interest in land. This
arises when parties enter into a contract for the sale of land, and the purchaser
gains an equitable interest in the property before the legal title is transferred. The

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classic case that illustrates this concept is Street v. Mountford (1985) AC 809,
where the House of Lords emphasized that the nature of the agreement, not the
labels, determines whether it creates a lease or a contractual right.

A contract in which the owner of the land agreed to state or convey a legal estate in
the land. What kind of estate from property law, a leasehold estate. He may
contract to grant a lease to sell or an option.. Such a right confers an interest in the
purchaser that is enforceable against a third-party if it is registered and upon the
purchaser payment of full price, the vendor holds the legal estate in estate in trust
for the purchaser, which the purchaser can enforce against the vendor, the
beneficiary and such interest can grant against third who acquire equitable interest
of the same property.

2. Assignments:

Assignments refer to the transfer of a person's rights or property to another. In an

equitable context, it often involves the transfer of equitable interests. For example,
if someone has an equitable interest in a property through a contract, they may
assign that interest to another party.Assignments in equity involve the transfer of
equitable interests. In the context of land, this often relates to the assignment of
contractual rights. The case of Chappell & Co Ltd v. Nestle Co Ltd [1960] AC
87 is relevant, as it highlights that equitable assignments can be valid even without
formalities, depending on the intention of the parties.

WHAT IS AN EQUITABLE INTEREST

An equitable interest refers to a beneficial interest or right that a person has in

property, even though the legal title to that property may be held by someone else.
This concept is a fundamental aspect of equity and the principles that govern
equitable remedies. Unlike legal interests, which are recognized at law and
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registered on legal titles, equitable interests arise from principles of fairness and
justice.

Key points about equitable interests include:

Not Registered on Legal Title: Equitable interests are often not recorded on the
legal title of a property. Legal title and equitable interest can be separated, with one
person holding legal title while another holds the equitable interest.

Enforced by Equity: Equitable rights and interests are enforced by the courts of
equity, which operate on principles of fairness and justice. Equity developed
historically to provide remedies when the common law was insufficient or unjust.

Examples of Equitable Interests:Equitable Mortgage: When a person lends money

to another in exchange for an interest in the borrower's property, even though legal
title remains with the borrower.

Beneficial Interest in Trusts: In a trust, the legal owner (trustee) holds the
property for the benefit of another (beneficiary). The beneficiary has an equitable
interest in the trust property.

Recognition of Fairness: Equitable interests often arise from situations where

strict legal rules may lead to unfair outcomes. Equity steps in to ensure that the
rights and interests of all parties are balanced and that justice is served.

Remedies Available: Courts of equity can provide various remedies to protect

equitable interests, such as injunctions, specific performance, or orders for the
transfer of property.

In summary, an equitable interest represents a person's right or interest in property

that is recognized and enforced by the principles of equity. This concept allows the

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legal system to address situations where the law alone might lead to unjust
outcomes.

Requirements for a legal assignment

1.Intention to assign through a contract

2. Notice to third party. There should no binding relationships.

3.There must be acceptance or consent by third parties or lessoo.

Requirements for an equitable assignment.

1. There must be an intention manifested from the action of an assignoo.

2. There must be a consideration. Equity does not assist a volunteer.
3. There must be a right implementation.

Assignment is the process whereby a person, the assignoo transfers his benefits to
the assignee. The rights should be vested or contingent and may in fact include an
equitable interest.

For an assignment to be valid in equity, it must meet the following requirements.

1. There must be a clear intention by the assignor to transfer the rights or the
benefits to the assignee.
2. There must be a consideration for the assignment by the assignee, (absent
consideration, the assignee must demonstrate that the doctrine of estoppels
applies)
3. The assignee must be able to demonstrate the particular interest that were
assigned.

3. Restrictive Covenant:

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A restrictive covenant is a promise in a contract that restricts the actions of one of
the parties. In the context of land, a restrictive covenant may limit how the land can
be used. The enforcement of restrictive covenants is an equitable remedy, and the
courts may issue injunctions to prevent a party from violating the terms of the
covenant.A restrictive covenant is a promise that limits the use of land. In the case
of Tulk v. Moxhay (1848) 2 Ph 774, it was held that an equitable obligation can
bind subsequent purchasers who have notice of the covenant. This demonstrates
the equitable principle of enforcing restrictions for the benefit of the original
covenantor.

A restrictive covenant is a clause or provision in a title or lease to property that

limits what the owner of the land or lease can do with the property. They allow
surrounding property owners who have similar covenants in their deeds to enforce
the terms of the covenant in a court of law.

To be enforced however we need to note that such restrictive covenants must be

fair and reasonable. Unduly burdensome restrictions may be rejected by the courts.

4. Mortgagor's Right of Redemption:

The mortgagor's right of redemption is an equitable right that allows a borrower to

reclaim their property by paying off the mortgage debt. Even after a default, the
mortgagor typically has a certain period during which they can redeem the property
by satisfying the outstanding debt, including interest and costs.The mortgagor's
right of redemption is a fundamental equitable right. In Chappell & Co Ltd v.
Nestle Co Ltd [1960] AC 87, the court recognized the mortgagor's equitable right
to redeem the property and stressed the importance of protecting this right against
unreasonable restrictions.

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This right allows the mortgagor to redeem his property at any time before the
statutory power of sale of property is exercised by the mortgagee/creditor. He who
seeks equity must do equity.

5.Difference between a charge and a mortgage

Charge creates an obstruction on the title of a property when there is a charge

on the asset, the asset cannot be sold or transferred.The charge is incurred on
the asset by the lender to the borrower’s movable asset.

Structure of charges

○ On immovable property: Mortgages

○ On movable property: Pledge, Hypothecation

Types of charges
1) Fixed charges
Fixed charges are incurred on the fixed assets like land & building, plant &
machinery.
2) Floating charges
It is charged upon uncertain assets like stock, etc

The mortgage is an agreement between two parties, (i.e. the lender and the
borrower) the borrower gives assurance to the lender to transfer the right to
the immovable property for the security purpose. Immovable property
includes plant & machinery, building, land, and many other properties which
are static. In a mortgage, the ownership remains with the borrower and the
possession is given to the lender. If in any situation, the borrower fails to pay
back in time, the lender has the right to sell the mortgaged property and
recover the amount.Types of mortgages include, Simple mortgage, English

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mortgage, Equitable mortgage, Anomalous mortgage, Usufructuary mortgage,
Mortage by conditional sale.
So, the main difference between the mortgage and charge is the classification
of an asset. The mortgage is on an immovable property while a charge is on a
movable property.In charge, the lender doesn't get right to sell the property. If
the lender sells the property to recover the amount it becomes mortgage.

6. Unequitable Mortgage or Charges:

An unequitable mortgage or charge refers to a situation where the mortgage or

charge is not created in the typical legal manner but is recognized and enforced by
equity. This might occur when formal legal requirements for a mortgage are not
met, but the courts recognize the existence of a security interest. In the case of
Abbey National Building Society v. Cann [1991] 1 AC 56, the House of Lords
acknowledged the existence of an equitable charge even though it did not meet the
formalities required by the Law of Property Act 1925.

An equitable mortgage is created by the mortgagee taking the documents of legal

title but not being registered.

6.Doctrine of Notice:

The doctrine of notice is crucial in property law. It deals with the idea that a party
dealing with property is deemed to have notice of certain facts or rights. There are
three types of notice: actual notice, constructive notice, and imputed notice. Courts
may impute notice based on the circumstances, and a bona fide purchaser without
notice is generally protected.(where the legal owner was aware of a subsisting
equitable interest, his legal interest will be defeated.)

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The doctrine prevents a buyer of a superior title from setting it against earlier
owners of inferior title or interests which affect property. However such a buyer of
a superior title will prevail and take priority over any preexisting equitable interest
which is not registerable where such a buyer did not have actual constructive or
imputed notice of the existence of the prior or earlier inferior interests.

For a purchaser or mortgagee to acquire the land free from pre-existing interest, he
must prove that he is a bona fide purchaser of a legal estate for value without
notice.

TOPIC 3: NATURE OF EQUITABLE RIGHTS AND INTERESTS AND

THE DOCTRINE OF NOTICE

1. NATURE OF EQUITABLE RIGHTS AND INTERESTS

Equitable rights or interests are broadly categorized into two:

- Rights arising from common law

- Rights exclusively created by equity

Rights/Interests Arising From Common Law

These are rights that were created by common law, and equity adopted them on the
basis of the principle that equity follows the law.

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For example, under common law, the legal title to a property under a trust is held
by the trustee. The beneficiaries hold equitable interests. The beneficiaries’ rights
were recognized under common law. Equity came to recognize the beneficiaries’
rights under a trust as equitable rights. Thus equitable rights just followed the law
to recognize what had already been recognized.

Rights Exclusively Created by Equity

The rights that were exclusively created by equity include:

- The mortgagor’s equity of redemption

- Restrictive covenants
- Vendor’s equitable lien
- Estate contracts
- Equitable mortgages

i. Estate Contract

This is a contract of sale or lease of land. Under common law, if a vendor failed to
transfer land to the buyer after entering into an estate contract, the only remedy
available to the buyer was to sue for damages for breach of contract. The same
applied to a case where a lessor failed to execute a lease of property.

However, under equity, the remedy of specific performance was developed to

compel the vendor to transfer the property to the buyer or the lessor to execute the
lease in favour of the lessee.

In Walsh v Londsdale (1882) 21 Ch.D.9, it was held that an agreement for sale or
lease is as good as a sale or lease. This is the premise upon which a seller is

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compelled under specific performance to transfer land to the buyer, or a lessor is
compelled to execute the lease of a property.

Equitable Interest; it then turns out that the estate contract creates an equitable
interest for the benefit of a buyer or lessee and this interest overrides all other
interests that may be subsequently created over the same property. However, where
a subsequent interest holder acquires legal title through purchase, for instance, a
buyer of a property who acquires legal title without notice of existence of prior
equitable interests, his interest would override prior equitable interests.

Application to the Sale of Customary Land

It is common to find land held by families in the African setting. These type of
land mostly are not registered under the law.

It is also common to find transactions involving such lands not being pursued to
the logical conclusion, that is, ultimately registering the land in the name of the
buyer. When a dispute arises, it is possible that the court will regard the interest of
the buyer as equitable and capable of being converted to legal interests by way of
registration.

In the Ugandan case of Ogunbambi v Abowba (1951) 13W.A.C.A.222,225,

members of the Oloto Chieftaincy family sold a plot of their land to O in 1927 and
were paid. They issued a receipt to O and allowed him to take possession. The
interest in the plot was later inherited from O by P. In 1948, the Oloto family sold
the same plot to Q and executed a conveyance. It was held that P had good title to
the land under customary law. It was further held that although the purchase receipt
could not be admitted in evidence for failure of its registration in accordance with
the Land Registration Act, it raised a presumption that O, the predecessor of P,
entered into the possession of land pursuant to an agreement for sale, which,
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coupled with possession of land by O which created an equitable interest, was
capable of being converted into a legal estate by a decree of specific performance.

Where a buyer fails to take possession after purchase, his equitable interest cannot
prevail over a legal interest created in favour of a subsequent buyer. In the Nigerian
case of Orasanmi v Idowu (1959) 4 F.S.C.40, 42, the Federal supreme court
declined to apply the Ogunbambi case law above because the Claimant did not
remain in continuous possession of the land.

ii. Restrictive Covenant

This is a clause in an agreement relating to the lease of land that restrict the use to a
certain purpose. For example, the lease may prohibit the keeping of pets in a
particular parcel of land. These covenants outlive the lessor and applies to
subsequent users unless the subsequent user or owner of the land is proved to be a
bona fide purchaser without notice.

iii. Mortgagor’s Equity of Redemption

Right of redemption means the right of mortgagor to earn back his property by
repaying loan on the basis of which the land was mortgaged. Equity recognizes that
a mortgagor has a right of redemption even after the date of redemption has passed.

iv. Equitable Mortgage

Several interests come under this category, including

a. Mortgage of Equitable Interest

A person who owns equitable interest in a piece of land can create an equitable
mortgage by securing a loan over that equitable interest.

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A beneficiary of a property under a trust has an equitable interest over that
property. Therefore, he can offer that equitable interest to create an equitable
mortgage in exchange of a loan.

Thirdly, a holder of legal interest over a parcel of land who has created a legal
mortgage over that retains an equitable interest over that land which he can
subsequently mortgage.

b. Agreement to Create Mortgage

Where there is an agreement to create a mortgage which has not been registered, it
amounts to an equitable mortgage. A court’s decree of specific performance of
such a mortgage converts it into a legal mortgage.

c. Deposit of Title Deeds

When a land owner deposits the title to the land with a lender as a security for a
loan, it creates an equitable mortgage. However, the borrower should make it clear
that the act of depositing htitle deed with the lender signifies his intention to make
the property a security for loan.

Where the deposit of the title Deed is accompanied by a memorandum of deposit,

it clearly proves that an equitable mortgage by deed has been created.

v. Equitable Lien

A seller who transfers his land to a buyer before receiving payment has equitable
lien over that property in respect of the outstanding practice.

The equitable lien is enforceable against everybody except against the buyer of the
property for value without notice of the existence of the lien.

In Ayorinde v Scott4, a land owner sold it to a buyer for a total purchase price of
12,000/- nairas. The buyer made an initial payment of 4,000 nairas and agreed in
writing to pay the balance. The Deed of transfer contained a receipt which
mistakenly stated that the purchase price had been paid in full. The buyer did not
pay the balance of the purchase price. He subsequently sold the land to the
defendant. The plaintiff asked the court to grant an order for sale to satisfy his lien

4
CCHCJ/2/72, p.49

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over the unpaid price. It was held that the defendant was a bona fide purchaser of
the property for value without notice, hence the plaintiff’s claim could not succeed.

2. THE DOCTRINE OF NOTICE

Notice ensures that the interests of prior interest holders over a property, though
inferior, is not defeated by the interest of a subsequent superior interest holder over
the property. The subsequent holder of a legal interest will already have a notice
about the existence of the prior interests. Therefore, he will not be able to defend
himself as a buyer for value without notice. If he acquires a legal interest despite
the knowledge of the existence of the prior interests, he will hold it subject to those
interests.

CONCEPT OF NOTICE

Notice means having the knowledge of an existing fact. Notice may be categorized
into three, namely;

- Actual notice
- Constructive notice
- Imputed notice

a. Actual Notice

This was defined in Perham v Kempster (1907) 1 Ch.373,379 as a situation where

a buyer has actual or express notice of a prior interest at the time he made the
purchase or at any time before the completion of the purchase.

Actual notice consists of personal knowledge of the existence of a prior equitable

interest over the property which the buyer intends to purchase, as was held in
Lawton v Gordon (1869) 37 Cal 202, 206.5 However, a buyer is not bound by a
notice whose source is unreliable rumours.

b. Constructive Notice

5
A similar position held in Lloyd v Banks (1868) 3Ch.App.488

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Constructive notice was defined in Williamson v Brown (1857)15 N.Y.354,362 as
follows:

Where a purchaser has knowledge of any fact sufficient to put him on

inquiry as to the existence of some right or title in conflict with that he is
about to purchase, he is presumed either to have made the inquiry and
ascertained the extent of such prior right or to have been guilty of a degree
of negligence equally fatal to his claim.

It is noteworthy that this is a presumption which can be debunked by providing

evidence to the effect that despite making diligent inquiries, the buyer was not able
to discover the existence of prior equitable interests.

If inquiry is not made, equity will assume that failure to conduct inquiry was
actuated by bad faith or occasioned by gross negligence.

Nature of Inquiry

The buyer is required to investigate the title of the property, failing which he will
be regarded as having notice of all the encumbrances affecting the title to the land
as was held in Wilson v Hart (1866) L.R.I Ch. 463, 467.

Failing to investigate the title means that the purchaser of legal estate won’t be
entitled to claim priority over prior equitable interests.6

In the unreported Nigerian case of Labinjoh v Olufunmise, a trustee sold a trust

property in breach of trust. The buyer’s argument that he was a bonafide purchaser
without notice was rejected by the court on the ground that he failed to carry out
inquiries to establish if there were other interests over that property. It was held
that he had a constructive notice pursuant to Section 3(1) of the UK Conveyancing
Act of 1882 which was applicable in Nigeria. The defendant’s title over the
property did not stand. He was declared a constructive trustee over the legal estate
for the benefit of the plaintiff.

A party should be diligent enough as to study an instrument under which a

previous tenant enjoyed tenancy over the same estate for which the party intends to
create an interest with the owner thereof. Therefore, if a party fails to examine the

6
See Oliver v Hinton (1988) 2 Ch.264

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contents of an instrument which creates prior equitable interest, he cannot claim
that he did not have notice. It is deemed that he had constructive notice.

In Crayem v Consolidated African Selection Trust Ltd (1949) 12 W.A.C.A 443,

the appellant took a legal lease over a land which was subject to the equitable lease
of the Respondent that had an option for renewal at the expiry thereof. The
appellant sued the respondent when the latter tried to exercise the option to renew
the equitable lease arguing that they had no notice of the defendant’s option to
renew. They relied on information given to them by the lessor. It was held that the
appellant had a constructive notice of the existence of the Respondent’s right to
exercise an option to renew which they could have discovered upon reasonable
inspection of the Respondent’s lease.

c. Imputed Notice

An actual or constructive notice to the agent of a buyer may be imputed on that

buyer. In agency law, it is established that a notice to the agent is a notice to the
principal. Therefore, if an Advocate acts for a buyer in a transaction, any notice
that he comes across that affects the land which his client intends or is in the
process of acquiring, is imputed on his client.

However, notice is only imputed to the principal/buyer if the agent is bona fide. In
G.B. Ollivant Ltd v Alakija (1950) 13 W.A.C.A 63,67, a buyer who instructed his
agent to buy property in an auction was bound by a notice of an interest in equity
over that land which came to the knowledge of the agent.

TOPIC 4 : EQUITABLE REMEDIES UNDER THE LAW OF EQUITY

INJUNCTIONS
An injunction is an order of the court directing a party to the proceedings to do or refrain
from doing a specific act.

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Types of Injunctions:

1. Prohibitory
2. Mandatory
3. Perpetual
4. Interlocutory/Temporary/interim/Ex Parte
5. “Quia Timet”

1. Prohibitory

It is restrictive. A person is ordered to refrain from doing or continuing to do a particular act.

2. Mandatory

There are two broad categories of mandatory injunctions:

i) Restorative injunction: - requires the defendant to undo a wrongful act. This applies
where an unlawful act has been committed and an order restraining its commission is
therefore meaningless.
ii) Mandatory injunction: - Compels the defendant to carry out some positive
obligations in order to remedy a wrongful omission. Specific performance is more
usual in this situation, but an injunction may be granted. (e.g. where there is no
contract but there is a wrongful act requiring a remedial action. For instance, garbage
strewn all over your gate by neighbor. No contract, but there is a wrongful omission.)
Until late in the 19th century, all injunctions were couched in prohibitive form. This
was due to doubts as to the jurisdiction to grant mandatory injunctions. (SNELL
comments that these doubts seem odd in a jurisdiction which traditionally looks to the
substance rather than form.) Thus recently, a court wished to secure the removal of
wrongfully erected buildings would order the defendant not to allow them to remain
on the land. Now, however, a mandatory injunction is issued in a positive form. See:
Jackson v. Norman v. Brick Co. [1899] 1 Ch 438
Note the distinction between specific performance (which is granted under an
instrument/contract) and a mandatory injunction (where there is no instrument, e.g.
cited above).

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 3. Perpetual
A perpetual injunction is so- called because it is granted at the final determination of the
rights of the parties and not because it will necessarily operate forever. It means that the
order will finally settle the disputes between the parties. It is granted only after the
plaintiff has established his right and the actual or threatened infringement of it by the
defendant.
4. Interlocutory/Temporary
An interlocutory injunction is granted before the hearing (trial) of an action. Its purpose is
to maintain the status quo until the dispute between the parties is determined. The
damage/injury to be suffered by the plaintiff could be such that it would be unjust to
make him wait until the trial is over to obtain relief. The damage may be irreparable. In
such a case, the court may grant an interlocutory injunction pending the outcome of the
main suit. E.g. where a person wants to sell a piece of land in respect to where there has
been a dispute, an interlocutory injunction may be granted to restrain from selling the
piece of land until the dispute is heard and determined.
Usually the plaintiff, when filing the main suit, will also file and serve a notice of motion
which is an application to the court for an interlocutory injunction. The service of this
notice will enable the defendant (through his advocate) to be heard (where he wishes to
object to the application of the interlocutory injunction). However, the hearing will not be
a final decision on the merit of the case. If the plaintiff’s affidavit has made out a
sufficient case, the judge will order an interlocutory injunction which will last until the
trial of the action.

4a. Ex Parte Injunction

Sometimes, a Plaintiff cannot wait until the next motion day. He therefore applies for an
ex parte injunction, (usually under a certificate of urgency), which will last until the next
motion day. By this time notice will have been served on the Defendant who will
therefore have the opportunity of opposing the plaintiff’s application of interlocutory
injunction. The phrase ‘ex parte’ signifies that the court has not had the opportunity of
hearing the other side.

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 4b. Interim
An interim injunction restrains the defendant, not until the trial, but until some specified
date. An interim injunction is usually, but not always ex parte. For example, if a notice
has been served on a defendant, but he is not given sufficient time to prepare his case,
then an interim injunction until the next motion day is most likely to be granted than a
full interlocutory injunction until trial.

5. Quia Timet (Anticipatory)

A Quia Timet injunction is issued to provide protection against a threatened infringement
of the plaintiff’s right. The infringement is threatened but has not yet occurred. It is
anticipatory. Courts take great care before exercising this remedy. The plaintiff must
show a strong probability of a future infringement (that there is imminent danger) and
that it will cause substantial and irreparable damage (that the damage will be of most
serious nature).

Summary:

i) Prohibitory or mandatory injunctions may be perpetual or interlocutory.

ii) Mandatory injunctions are less frequently granted than prohibitory injunctions.
iii) An ex parte injunction may be interim, mandatory or prohibitory, but cannot be
perpetual).
iv) An interim injunction may be mandatory or prohibitory.
v) A quia timet injunction may be mandatory or prohibitory.

A. PERPETUAL INJUNCTIONS

General Rules
1. The Plaintiff must establish a right
There must be a right to be protected. The plaintiff must therefore establish some
legal or equitable right. Mere inconvenience cannot be protected. See:
Dav v. Brownrigg (1878) 10 Ch.D 294

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 The Plaintiff lived in a house which he called “Ashford Lodge”. The defendant lived
in a smaller house which he called “Ashford Villa”. The defendant changed the name
to “Ashford Lodge”, whereupon the plaintiff sued for an injunction. The Court of
Appeal refused to grant an injunction to prevent the Defendant from calling his house
by the same name as the Plaintiff’s house even though the parties lived next door to
each other and the plaintiff had used the name “Ashford Lodge” for sixty years. The
court reasoned that there is no legal or equitable right to the exclusive use of the name
of a private residence.

2. Discretion
The granting of an injunction is discretionary. However, the discretion must not be
exercised according to the fancy of the court. It must be exercised judicially
according to the rules established by precedent.
As a general rule, a party who establishes his right and its violation will be entitled to
an injunction. However, a number of circumstances may be taken into consideration
by the court in determining whether or not to grant the remedy. These are as follows:

i) Nominal Damage
The general rule is that the fact that the plaintiff has suffered nominal damage
does not disentitle him to an injunction, however, as an exception, the court
may take that circumstance into account. See:
Doherty v. Allman (1878) 3 A.C. 709
Armstrong v. Sheppard & Short Ltd. [1959] 2 ALL Q.B. 384,
[1959] 3 WLR 84, [1959] 2 ALL E.R. 651
Behrens v. Richards [1905] 2 Ch. 614 – Here, the plaintiff merely suffered
trespass by the public which did not injure him.

ii) Compliance difficulty

The fact that compliance will be inconvenient and expensive affords no
defence to an action for an injunction. On the other hand, the court will not
make an ineffectual order (“equity does not act in vain”) E.g. Where trees

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 have already been cut down as an order of an injunction not to allow the trees
to remain lying on the ground is ineffectual as this cannot make the trees stand
upright. The only remedy is damages under the common law. See:
Attorney-General v. Colney Hatch Lunatic Asylum (1868) 4 Ch. App 146,
per Lord Hatherley L.C. at 154

iii) Annoyance ceased

If the injury complained of has ceased before trial or is merely temporary and
there is no intention of renewing it, the court may refuse an injunction. See:
Barber v. Penley [1893] 2 Ch. 447
Wilcox v. Steel [1904] Ch. 212

iv) Undertaking by Defendant

If the defendant gives an undertaking to the court to abstain from the acts
complained of by the plaintiff, an injunction may be refused. Such an
undertaking is itself equivalent to an injunction and a breach may be punished
in the same way as a breach of an injunction.

3. Inadequacy of damages
The plaintiff must satisfy the court as to the inadequacy of damages. He must show
that the right sought to be protected is of such a nature that an award of damages will
not leave him in substantially the same position as if he had obtained enforcement of
the right. Examples:

a) Continuing nuisances
Martin v. Nutkin (1725) 24 E.R. 724; 2 P Wms 266
Pride of Derby v. British Celanese Ltd. (1953) Ch. 149
In Martin v. Nutkin, the plaintiffs had been annoyed by the nearby daily ringing
of a church bell at 5 a.m. The parsons, church wardens and others on behalf of the
parish agreed to stop the ringing of the bell at 5 O’clock during the lifetimes of
the plaintiffs if the plaintiffs provided the church with a new clock and bell. When

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 the bell was rung in breach of the agreement, the court restrained it by injunction,
this being a continuing nuisance for which the remedies of the damages was
inadequate.

b) Infringement of trademarks/copyrights:-
Licensed victualler’s Newpaper Co. v. Bingham (1888) 38 Ch. D 139
Borthwick v. The Evening Post (1888) 37 Ch. D 449

4. Conduct of the Plaintiff

The court considers the conduct of the Plaintiff. Thus “He who comes to equity must
come with clean hands” Also, “He who seeks equity must do equity”.
The plaintiff may also be guilty of laches (delay) or acquiescence. Acquiescence
means conduct from which it can be inferred that a party has waived his rights. In
Sayers v. Collver (1884) 28 Ch. D 103, an injunction to restrain the use of a house as
a shop was denied on proof that the plaintiff had himself bought goods there.

5. Locus Standi and Public Rights

The question we are concerned with is who may seek an injunction to protect a public
right. The answer requires a consideration of the extent to which courts may restrain a
breach of criminal law by injunction.
The general rule is that Public Rights are protected by the Attorney General. He may
obtain an injunction to restrain a breach of criminal law even if there is a statutory
remedy, where that remedy is inadequate. See:
Attorney General v. Harris [1961] 1 Q.B. 74
This case concerned two flower sellers who sold flowers illegally from stalls. They
had 237 convictions between them.

Attorney General v. Sharp (1931) 1 Ch. 121

An injunction was granted against an omnibus proprietor who had been refused a
licence but nevertheless found it profitable to run his omnibuses and pay the
prescribed fines almost daily. The profits were greater than the fines.

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 Attorney General v. Chaudry (1971) 1 WLR 1623
An injunction was granted against a hotel operating without a fire certificate, thereby
posing danger to the public.

Can an individual seek an injunction if there is a violation of a public right

created by statute?
It has been held that under certain circumstances an individual can seek an injunction
if infringement of a Public right created by statute or existing at common law would:
i) Infringe some private right or
ii) Inflict special damage on the individual or
iii) Where the individual is a member of a class for whose benefit the statute was
passed.

An individual who does not fall within the above exceptions has no remedy. See:

Lonrho v. Shell Petroleum Ltd (1982) A.C. 173

Gouriet v. Union of Post Office Workers (1978) A.C. 434

The Kenyan Constitution and Injunctions

Under the constitution of Kenya, the rule on locus standi has been broadened to allow
people who are not necessarily affected by an act or omission which threatens or has
denied, violated, infringed upon the right(s) of another person.

Article 22(2) of the Constitution allows the following categories of people to apply to
court for orders meant to protect fundamental rights and freedoms:

- A person who is directly affected, that is, a person whose right is being or has
been denied, violated, infringed upon or threatened.
- A person acting on behalf of another who cannot act on his/her own behalf.
- A person acting in the public interest
- An association acting in the interest of one or more of its members.

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 Therefore, any person from the above categories may seek an injunctive relief under
the constitution to protect a fundamental right or freedom that is being or has been
denied, violated, infringed upon or threatened. An order of injunction is one of the
reliefs that a court may grant under Article 23(3) of the Constitution. It is no longer
the exclusive power of the attorney general to sue on behalf of a people who may be
affected by acts or omissions in violations of rights.

INTERLOCUTORY INJUNCTIONS

An interlocutory injunction is an injunction granted pending the hearing and final

determination of the suit. The basis for the grant of this remedy is the need to protect the
applicant by preserving the circumstances prevailing at the time of his application until the rights
of the parties are finally determined by the court. The need for this kind of protection usually
arises where property over which there is a dispute is threatened with damage, destruction or
removal.

Principles

There are three main principles applicable to the granting of an interlocutory injunction in
Kenya. These are:

1. Prima Facie case – with a probability of success

2. Balance of convenience
3. Irreparable injury

These principles were set out in the case of East Africa Industries Ltd v. Trufoods Ltd [1972]
EA 420.

Spry, V-P (CAEA) said:

“A plaintiff has to show a prima facie case with a probability of success and if the court
is in doubt it will decide the application on the balance of convenience. An interlocutory
injunction will not normally be granted unless the applicant might otherwise suffer
irreparable injury which would not adequately be compensated by an award of
damages.”

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 1. Prima Facie Case

A plaintiff who seeks an interlocutory injunction has to adduce sufficient evidence to disclose
a prima facie case for relief. “Prima facie” denotes the fact that if the evidence remains the same
at the hearing of the main suit, it is probable that the judgment of the court will be in favor of the
plaintiff. There are two requirements:

i) The plaintiff must establish a prima facie case for the existence of his right.
ii) He must also establish a case for the violation of this right that is reasonably
capable of succeeding.

East African Industries Ltd. V. Trufoods Ltd [1972] EA 420

Both parties are manufacturers of fruit drinks. The Appellant applied to the High Court for an
Interlocutory injunction to restrain the passing off of the Respondent’s product as that of the
Appellant. The Appellant claimed that the Respondent had changed the shape of the bottles
which the Respondent used and the shape and design of the labels it affixed to the bottles was in
such a way that they so nearly resembled those of the Appellant company as to be likely to
deceive. In dismissing the application, the High Court Judge directed his attention to the names
on the labels and not to the overall impression created by the bottles and labels. The judge also
stated that he took judicial notice that the vast majority of customers for the products would be
sophisticated and able to read English. The judge then concluded that the Appellant Company
was unlikely to succeed in the suit because; in his opinion, no ordinary shopper would be misled
by the resemblance of the two products. The application was therefore refused.

The Appellant then appealed to the Court of Appeal. Spry, V-P (CAEA) said:

“A plaintiff has to show a prima facie case with a probability of success and if the court
is in doubt it will decide the application on the balance of convenience. An interlocutory
injunction will not normally be granted unless the applicant might otherwise suffer
irreparable injury which would not be adequately be compensated by an award of
damages. I think that a prima facie case has been shown but I am not prepared to say
that the outcome is so certain one way or the other that the application ought to be
decided on the balance of convenience.”

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Consequently, the Court of Appeal Held: dismissing the appeal, that on the balance of
convenience, the application was properly refused by the High Court and that the Appellant
would suffer no loss which could not be sufficiently compensated in damages.

On shoppers the Court of Appeal HELD: that the sophistication or otherwise of Kenyan shoppers
is a matter for evidence and Judicial notice.

The Court of Appeal said, per Spry, V.P.

“It will be open to the parties at the trial… to adduce evidence as to the channels through
which they sell their goods and evidence of retailers as to the character of the customers
who buy them. It would be dangerous to make assumptions which, however superficially
reasonable, might be very wide of the truth.”

2. Balance of Convenience

The court has to balance the harm or injury to the Defendant if at the trial the Defendant
succeeds against the harm or injury to the Plaintiff in being refused an interlocutory injunction if
at the trial the Plaintiff succeeds.

In this regard, the High Court Held:

that the Appellant company would not suffer irreparable harm if an injunction were refused
and if the Appellant succeeded in the suit, it could be adequately compensated by damages.
On the other hand, the High Court stated, the Respondent Company would suffer irreparable
harm if its products were taken off the market for the time it would take for the suit to come
to judgment.

On the same issue, the Court of Appeal agreed with counsel for the Appellant (Mr. Deverell)
in his submissions that:

i) “The High Court judge misdirected himself when he spoke of the effect of an
injunction being that the Respondent’s Company products would be taken off the
market”, and

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 ii) “That there would be nothing to prevent the Respondent’s Company from
continuing to sell fruit juice under the name it had recently adopted, provided only
that it did so under a different “get-up”.

Nevertheless, the court of Appeal, in refusing to grant the injunction, HELD: that on the
whole, the harm, which the Respondent company would suffer as the result of an injunction, if
the Respondent succeeded in the suit, was likely to be graver and greater than that which the
Appellant company would suffer from the refusal of an injunction, should the Appellant be
successful. (The court did not, however, specify the kind of harm.)

3. Irreparable Injury or Damage

Irreparable injury means injury which, if not prevented by injunction, cannot be sufficiently
compensated afterwards by any decree which the High Court may make at the final
determination of the suit. The Court of Appeal HELD: that the Appellant Company would not
suffer any loss that could not be sufficiently compensated by an award of damages.

The principles set in the East African Industries Ltd case above were reiterated in the case of
Giella v Cassman Brown (1973) EA 358. In this case, the court, at pg 360, stated as follows:-

“First, an applicant must show a prima facie case with a probability of success.
Secondly, an interlocutory injunction will not normally be granted unless the applicant
might otherwise suffer irreparable injury, which would not adequately be compensated by
an award of damages. Thirdly, if the court is in doubt, it will decide an application on the
balance of convenience. (EA Industries v Trufoods, [1972] EA 420.)”

On the above three principles, look at the following authorities as well:

Devani’s Case [1972] EA 22

Supra Studio [1971] EA 489
Nsubuga’s Case [1974] EA 487

4. Other Factors

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 a. Not Frivolous or Vexatious (There must be a serious question to be tried)

The court must be satisfied that the plaintiff’s case is not frivolous or vexatious. The
requirement is intended to remove any attempts by the plaintiff to harass the defendant in cases
where the suit is futile or misconceived or an abuse of the process of the court. As part of this
requirement, the plaintiff must show that there is a serious question to be tried.

b. Conditions and Undertakings

The Court may impose terms as a condition for granting or withholding an interlocutory
injunction. Where the remedy is granted, the plaintiff is normally required to give an undertaking
in damages in the event that the injunction is discharged at the trial as having been granted
without good cause. Although the undertaking is executed for the defendant’s benefit, it is not a
contract with the defendant. The undertaking is given to the court so that if it is not honored, it
amounts to contempt of court and not breach of contract.

ENGLISH POSITION ON INTERLOCUTORY INJUNCTIONS

American Cyanamid v. Ethicon Ltd(1975) AC 396; (1975) 2 W.L.R. 316

This case considered the test of a serious question to be tried and the principle of balance
of convenience.

Serious question to be tried

This means that the plaintiff must have a good arguable case.

Balance of Convenience

The concept of balance of convenience connotes that the court should not act on anything
representing a trial. At the interlocutory stage, it is not the court’s function to resolve conflicts of
evidence in affidavits or to resolve difficult questions of law. These are matters for the actual
trial.

Facts: The Plaintiff, an American company, owned a patent covering certain surgical sutures. The
defendant was also an American company. It manufactured its products in the USA and was
about to launch a suture on the British market which the Plaintiff claimed infringed its patent.

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The Plaintiff applied for an interlocutory injunction. The court at first instance granted it. The
Defendant appealed. The Court of Appeal reversed the earlier Court’s decision on the ground
that no prima facie case of infringement had been established by the Plaintiff. The Plaintiff
Appealed.The House of Lords HELD: allowing the appeal, THAT:-

1. In all cases including patent cases, the court must determine the matter on a
balance of convenience.
2. There was nothing requiring the court to first be satisfied that if the case went to
trial on no other evidence than that available at the hearing of the application, the
Plaintiff would be entitled to a permanent injunction in the terms of the
interlocutory injunction sought;
3. In the present case, there was no ground for interfering with the first judge’s
assessment of the balance of convenience or his exercise of discretion and the
injunction should be granted accordingly.

The House of Lords therefore reversed the decision of the Court of Appeal and
affirmed that of the Court at first instance.

The American Cyanamid case was discussed and explained in Series 5 Software Ltd V.
Clarke (1996) 1 All ER 853

The American Cyanamid case placed more weight on the principle of balance of
convenience rather than prima facie case with a probability of success at the interlocutory stage.

Disadvantages of the prima facie requirement are that hearings are often ex parte,
evidence is by affidavit and it is difficult for the plaintiff to establish a prima facie case with a
probability of success in such circumstances.

Note: While the balance of convenience is the governing consideration, a significant

factor in assessing it is the inadequacy of damages to each party.

Excerpts from Richard Kuloba, Principles of Injunctions

P: 34-35: “If the court is in doubt”

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 “Logically, the doubt referred to must be a doubt as to the existence of a prima facie
case (with a probability of success), it cannot be a doubt as to whether the plaintiff
will suffer irreparable damage. This is because the balance of convenience is defined
as a comparison of the irreparable losses likely to be suffered by the plaintiff and the
defendant. That is to say, there can be no consideration of convenience unless the
plaintiff will suffer irreparable damage.”

Pp. 48-49 “Prima facie case with a probability of success” vs. “serious questions to be
tried”

Approval of Cyanamid Rule by the High Court of Kenya:

Minnesota Mining and Manufacturing Co. v. Shah & Shah, HC.C.C. No. 3446 of
1980

According to Cotran J. in the above case, there is little difference between “a prima facie
case with a probability of success’ and a “serious question to be tried”. Cotran J. Said:

“The question is whether the defendant’s packet is so similar to that of the plaintiff as
is likely to confuse or deceive the average customer in a village shop or in a city
supermarket. If I were to answer this question right now, I will virtually be deciding
the case. But suffice it to say at this stage of the proceedings and upon the material
before me I am satisfied that the applicant in the words of the first condition in
Giella’s case, has shown “a prima facie case with a probability of success” and I
stress a probability and no more, or in the words of the American Cyanamid Case has
shown that there is “a serious question to be tried.”

Indirect Approval of Cyanamid Rule by Court of Appeal (Kenya)

Wairimu Mureithi v. City Council of Nairobi Civil Appeal No. 5 of 1979(C.A.)

Madan J.A. quoted Lord Diplock in the Cyanamid case:

“The object of the interlocutory injunction is to protect the plaintiff against injury by
violation of his right for which he could not be adequately compensated in damages
recoverable in the action if the uncertainty were resolved in his favor at the trial… If

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 damages recoverable at common law would be adequate remedy and the defendant
would be in a financial position to pay them, no interlocutory injunction should
normally be granted, however strong the plaintiff’s case appeared to be at the stage.”

The Court of Appeal in Wairimu Mureithi’s Case HELD: that on the facts of the
case, the plaintiff would not suffer irreparable injury and the defendant would be in a
financial position to pay any damages that may be awarded to the plaintiff. If the
plaintiff’s action succeeded, the Court of Appeal further held, she could be adequately
compensated in damages, including loss of profits.

Kuloba at p.48:

“Thus, by proceedings to follow the principles set out by Lord Diplock while
consciously maintaining a golden silence on the three conditions set out in his
judgment, Madan J.A., with memorable judicial diplomacy, rejected the former
assertions that the three conditions are the pre-requisites for granting a temporary
injunction. He politely says that Mustafa J.A. and Spry V.P. are wrong, as Lord
Diplock is right.”

DEFENCES TO AN ACTION FOR AN INJUNCTION

Conduct of the parties

The court will consider the conducts of the parties (read plaintiff) in deciding whether or
not to grant an interlocutory injunction. Consequently, a plaintiff who complains of the
defendant’s breach of contract will not obtain an interlocutory injunction if he is also
substantially in breach. See: Litvinoff v. Kent (1918) 34 TLR 298

Delay of acquiescence

Delay of acquiescence is enough to bar a plaintiff from the grant of an interlocutory

injunction. This remedy is usually granted in matter of urgency so that a plaintiff who delays
thereby shows the absence of any urgency requiring prompt relief.

Hardship

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 The court has to weigh the hardship to each party.

SPECIFIC PERFORMANCE
INTRODUCTION

Specific performance is an order compelling a defendant to perform a contractual obligation.

Compared to prohibitory injunctions which imposes a negative obligation, this remedy imposes a
positive obligation on the defendant.

As opposed to injunctions, an order of specific performance is final in nature. This means that it
is not available for granting as an interim order; it can only be granted at the end of the case.

DISCRETIONARY NATURE

An order of specific performance, just like an injunction, is discretionary in nature. This means
that the court can choose to grant or deny it. However, this discretion must not be exercised
arbitrarily.

In addition to non-arbitrary application, it is noteworthy that the remedy will only apply if it is
capable of being enforced; this is in line with the maxim that equity does not act in vain. In
Jones v Lipman (1962) 1 W.L.R.832, the defendant entered into a contract to sell a parcel of land
to the plaintiff. After the date of the contract, the defendant changed his mind and sold the land
to a company which he owned. It was held that the defendant could not resist the contract as he
was still in a position to complete the contract. Russel J, stated that the company was:

“a creature of the vendor, a device and shame, a mask which he holds before his face in
an attempt to avoid recognition by the eye of equity.”

The court therefore ordered specific performance against the defendant and the company.

Specific Performance Before Contract Expiry

Although it is a remedy for breach of contract, it can be granted before the expiry of the contract.

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In Hesham v Zenab (1960) A.C.316, a decree of specific performance of a contract was issued
even though the date fixed for completion of the contract had not materialized. In this case, the
defendant was found to be in anticipatory breach because she had torn the contract as soon as she
had signed it arguing that she had not anticipated selling such a huge parcel of land.

CASES FOR GRANT OF AN ORDER OF SPECIFIC PERFORMANCE

The general rule is that a decree of specific performance will not be granted in cases where the
harm caused can be adequately compensated by award of damages.

The following eleven situations are ideal for the grant of an order of specific performance:

- Contract for sale of land

- Contract for sale of personal property
- Contract for payment of money
- Voluntary nature contract
- Contract of a supervisory nature
- Contract for personal service
- Contract for the creation of terminable interests
- Contract of a testamentary nature
- Contract for transfer of goodwill
- Contract for reference to arbitration
- A partial performance contract

1. Contract for Sale of Land

Court may grant an order of specific performance to compel the transfer of land in a contract
for sale of land or lease.

The award of damages may be inadequate in a contract for sale of land because the value of
land may be unique hence getting a replacement with similar qualities may be impossible.
Therefore, the court would normally order for specific performance.

If the vendor fails to execute the conveyance documents, the purchaser may apply to court to
nominate someone else to execute conveyance documents.

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 2. Contract for the Sale of Personal Property

Chattels

An order of specific performance would normally be issued to enforce a contract for

purchase of a chattel with a unique or special value because of its individuality, beauty or
rarity. Falckey v Gray (1859)4 Dr.659.

Under section 52 of the Sale of Goods Act, Cap 31 Laws of Kenya, a court may order for
specific performance in a contract for sale of specific or ascertained goods. The order may be
for absolute performance, that is, for delivery of the goods specified, or for payment of price
equivalent to the value of the goods.

Examples

Ordinary Articles

The court may decline to grant an order of specific performance if it deems that the chattels
involved are ordinary articles. In Cohen v Roche (1927)1 K.B.169, the plaintiff agreed to buy
from the defendant a set of 8 Hepple white chairs. The court refused to grant an order of
specific performance as these where ordinary articles of commerce with no special value or
interest.

Unique Value

Where the property is of unique value, a court would usually grant an order of specific
performance.

In Behnke v Bede Shipping Co. (1927) 1 K.B.649, the court ordered for specific
performance in a contract for sale of ship between the plaintiff and the defendant because
according the court, the ship was of peculiar and practically unique value to the plaintiff.

3. Contract to Pay Money

The general rule is that specific performance would not be ordered in contracts for payment
of money. However, the following are exceptions where specific performance would be
ordered:

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 a. Contract to pay money to a third party whereby if damages are awarded they would be
nominal, hence unsatisfactory.
b. Where the contract is for payment of periodical sum or annuity. In Beswick v Beswick
(1968) A.C.58, one Peter, concluded a contract for the sale of his company to his nephew.
Under that contract, his nephew would be required, upon Peter’s death, to pay to his
widow an annuity of 5 pounds per week. The nephew refused to pay upon the death of
Peter. The widow sued, and succeeded to get an order of specific performance against the
nephew. However, it was held that she succeeded as the administratrix of the estate of
Peter; she was not entitled in her personal capacity because she was not a party to the
contract between Peter and his nephew.
c. Where the contract is with a company to take up and pay for its debenture.
d. Where the order is for purposes of enforcing a contract for secured loan in a situation
where money has already been lent but the mortgage/charge has not been executed yet.
See Ashton v Corrigan (1871) L.R.13 Eq76.
e. Equity would order an indemnifying party to pay a debt if that is the true construct of a
contract.

4. Volunteers

Specific performance may not be granted in a contract under which a party has not given
consideration. See Re Pryce(1918) 1 Ch.234,241.

However, in exceptional circumstances where the plaintiff is in possession of a land without

giving consideration if it would be unjust to deprive the said plaintiff of the legal estate.

5. Contracts Requiring Supervision

Generally, an order of specific performance would not be granted in cases that require
constant supervision of the court. In Ryan v Mutual Tontine Westminster Chambers
Association (1893) 1 Ch.116, a lease of flat which was among a block of flats contained an
agreement by the lessors to avail a potter who would be constantly present and perform some
specified duties. The lessors availed someone who appointed deputies to be performing the
tasks on his behalf while he absented himself for hours to perform his duty as a chef in a

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 neighbouring club. It was held that the court could grant an order of specific performance as
this case would require constant supervision by the court.

This rule has however been relaxed in subsequent cases. For instance, in contracts relating to
land, specific performance would be granted even if the act to be performed is not one off.
The court simply appoints another person to execute the contract on behalf of a vendor that is
not cooperative. In Cooperative Insurance Society Ltd v Argyll Stores Ltd (1996) E.G.128,
the court held that a tenant’s covenant to keep the demised premises open for trade during
normal hours was specifically enforceable. It held that there was no rule or invariable
practice that required the court to refuse the grant of a decree of specific performance simply
because the decree was not a one off act.

Construction Cases

The general rule is that the court would not normally order specific performance in building
or construction cases.

However, an order would be granted if certain conditions are met. This conditions were
developed in Wolverhanmpton Corpn v Emmons (1901) 1 K.B.515. in this case, a plot of
land was sold by the plaintiffs who were an urban sanitary authority pursuant to a scheme of
sanitary improvement, to the defendant. The defendant agreed to erect buildings and went
into possession of the land. A separate agreement required the defendant to erect the
buildings in accordance with detailed plans. It was held that an order of specific performance
was available. The conditions to be met were as follows:

- The building work to be enforced should be defined by the contract, that is, the
particulars of the work are so definitely ascertained that the court can see the exact nature
of work of which it is being asked to issue an order of specific performance.
- The plaintiff should have substantial interest in having the contract performed and cannot
be adequately compensated by an award of damages
- The defendant has by the contract, obtained possession of the land on which the
construction work is to be done

6. Contracts for Personal Services

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 The general rule is that contracts that are personal in nature or that require the provision of
personal services would not be specifically enforced. See Lumley v Wagner (1852) 1 D
G.M.&G604.

The reason is that such a contract would require constant supervision by the courts and this
would contrary to public policy because the court would be required to continue its
association with the affairs of two parties who cannot sustain their association on their own,
as was held in De Francesco v Barnum (1890) 45 Ch.D.430.

It is noteworthy that some personal contracts are specifically enforceable as discussed earlier
(see contract for payment of money).

7. Contracts for the Creation of Terminable Interests

Specific performance will not apply to lease contracts that have expired at the time of going
to court – See Turner v Clowes (1869) 20 L.T.214. this equally applies to an agreement for
tenancy at will or partnership at will as was held in Hercy v Birch (1804) 9 Ves.357.

However, a more recent English authority has departed from this position and held that even
an agreement to occupy a premises for two days is specifically enforceable. See Verall v
Great Yarmouth Borough Council (1981) QB,202,220.

8. Contract to Leave Property by Will

Where there is a contract entered into between a property owner and another party to leave
property to the latter by a Will, such a contract is not enforceable because it will amount to
interference with testamentary freedom.

There is an exception. Where someone induces a party to marry him by an agreement in

which a party promises to bequeath property to a woman if she agrees to marry him, such a
contract can be enforced. In Synge v Synge (1894) 1 Q.B.466 C.A.(E), a woman who was
induced to marriage by a promise to leave her a property by Will was awarded damages
when she sued for damages following the transfer of the said property to a third party. The
court of appeal however said that an order of specific performance would be granted had the
woman pleaded for it.

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 9. Contract to Transfer Goodwill

A contract to transfer goodwill is not on its own specifically enforceable because the subject
matter is unascertainable. Specific performance can be ordered to transfer the goodwill and
the premises or assets of the business as was held in Darbey v Whitaker (1857) 4 Drew 134.

10. Contracts to Refer to Arbitration

A contract to refer a matter to arbitration is not specifically enforceable as was the case in Re
Smith (1890) 45 Ch.D.

However, where a party to a contract which has a provision for resolving disputes by
arbitration, goes straight to court without considering arbitration, under section 6 of the
Kenya’s Arbitration Act (No. 11 of 2009), the party sued may apply for stay of proceedings
and apply to court to refer the matter for arbitration.

11. A partial Performance Contract

Court will not decree specific performance in regards to any part of the contract unless it is in
a position to order for the performance of the whole contract.

DEFENCES TO AN ACTION FOR SPECIFIC PERFORMANCE

The general rule is that equity will hold the defendant to enforcement of his bargain.

1. No Effective Contract

There can be no specific performance unless there is a complete and definitive performance
contract, where an offer has been accepted without qualification and the letters of offer and
acceptance contains all terms agreed between the parties.

2. Absence of Writing for Land transaction

In order that an action may be brought for specific performance of a contract for the sale of land,
there must be a written memorandum of the contract, signed by the defendant or his duly
authorized agent.

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This means that no action may be brought in respect of an oral contract until a memorandum is
signed. The contract is not void, but merely unenforceable – it is valid, it is valid but no action
can be brought on it.

The so-called contract inter-parties must, however, both Acts came into effect on 1st June 2003
provide Legal Notices No. 188 and 189 of 22nd Nov 2002.

Act N0. 21 of 1990 and Act No. 2 of 2002 both provide as follows:

“(4) No suit shall be brought upon a contract for the disposition of an interest in land unless –

a) The contract upon which the suit is found is in:

i) Writing;
ii) Is signed by both parties thereto: and
iii) Incorporates all the terms which the parties have agreed in one document; and
b) The signatures of each parties signing has been attested by a witness who is present when
the contract was signed by such party.

3. Conduct of the Plaintiff/Default

For the plaintiff to be granted an order of specific performance, he must show:

That he has performed all his obligations (he had “clean hands”);

That he is ready and willing to perform his obligations (he must “do equity”): and

That he has not acted in contravention of the essential terms of the contract.

4. Hardship

Specific performance will always be granted to the plaintiff even if this causes
inconvenience or hardship to the defendant. However, if the hardship suffered by the defendant if
specific performance is granted will be greater than the detriment which will be suffered by the
plaintiff if specific performance is not granted, it will be unreasonable or offensive to grant
specific performance. The court will therefore refuse to grant it.

Patel v. Ali (1984)Ch. 283

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 The seller and her husband were co-owners of a house which they contracted to sell in
1979. The husband’s bankruptcy caused a long delay in completion of the sale transaction for
which neither the seller nor the purchaser was to blame. After the contract had been entered to,
the seller got bone cancer and her leg was amputated. She later brought fourth her second and
third children. The purchaser obtained an order of specific performance against which the seller
appealed on grounds of Hardship. She spoke a little English and relied on the help of friends and
relatives, hence it would be hard to leave the house and move away. The court allowed the
appeal, stating that although the person of full capacity before the contract took the risk of
hardship, the court on a proper case would refuse to grant specific performance on the ground of
hardship occasioned subsequent to the contract even if it is not caused by the plaintiff and is not
related to the subject matter of the suit. On the facts of this case, there would be hardships
amounting to injustice and therefore the appropriate remedy was damages.

Malins v. Freeman (1837) 2 Keen 25

Specific performance was refused where the defendant bid for and bought one lot at an
auction in the belief that he was buying a totally different lot. It would have been a great hardship
on him to compel him to take the property. The court stated that intoxication of the defendant
when the contract is made is a ground for refusing specific performance even though it is not
induced by the plaintiff.

Hardship to either the plaintiff or defendant: See:

Warmington v. Miller [1973] Q.B. 877.

Mountford v. Scott [1975] Ch. 258
Hardship to a third party: See:
Earl of Sefton v. Tophams Ltd [1966] Ch. 1140
Sullivan v. Henderson [1973] 1 W.L.R. 333
Watts v. Spence 2 W.L.R. 1039
Financial inability to complete is not hardship: See:
Nicholas v. Ingram [1958] N.Z.L.R. 972

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 5. Fundamental Mistake

The mistake of such a nature that it precludes the “consensus ad idem” (a meeting of the
minds) which is required in every contract. Such a mistake is a good defence to an action for
specific performance.

In Webster v. Cecil (1861) 30 Beav. 62, A, by a letter offered to sell some property to B.
He intented to offer it at Stg 1,250 but by mistake wrote Stg 1,250. B agreed to buy at Stg 1,250.
A immediately gave notice of the error and was not compelled to carry out a sale.

Contrast:
Tamplin v. James (1880) 15 Ch. D 215

A purchaser agreed to buy an inn and a shop at an auction in the mistaken belief that two
pieces of land (garden plots) at the back of the shop formed part of the purchased property. The
particulars of sale and the reference plans exhibited at the auction described the plot correctly.
The garden plots were not included in the sale as they did not belong to the vendor, even though
they had commonly been occupied with the inn and the shop. The defendant who was acquainted
with the property and knew the garden plots were occupied along with the inn and the shop, did
not look at the plans, and agreed to buy in the belief that he was buying the inn and the shop and
the garden plots. The vendors brought an action for specific performance. The performance
pleaded mistake as a defence. HELD: The purchaser could not resist specific performance of
mistake in this case.

The lower court (Baggalay, L.J.) ordered specific performance and his decision was
affirmed by the Court of Appeal. (Chancery Division – James, L.J.)

Baggallay, L.J. said at pp. 217 – 219:

“ Where there has been no misinterpretation and where there has been no ambiguity in
the terms of the contract, the defendant cannot be allowed to evade the performance of it
by the simple statement that he has made a mistake. The defendant appears to have
purchased in reliance to his knowledge of the occupation of the premises without looking
at the plans… but is a person justified in relying on knowledge of that kind when he has
means of ascertaining what he buys? I think not. I think that he is not entitled to say…

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 that he was under a mistake, when he did not think it worthwhile to read and look at the
particulars of the plans. If that were to be allowed a person might always escape from
completing a contract by saying he was mistaken as to what he bought, and a great
temptation to perjury might be offered. Here the description of the property is accurate
and free from ambiguity.”
James, L.J. said at 221
“If a man will not take reasonable care to ascertain what he is buying, he must take the
consequences. The defence on the ground of mistake cannot be sustained… It would
open a door to fraud, if such a defence was to be allowed… The cases where a defence
has escaped on grounds of a mistake not contributed by the plaintiff, have been cases
where a hardship amounting to justice would have been inflicted upon him by holding
him to bargain, and it was unreasonable to hold him to it… if a man makes a mistake of
this kind without any reasonable excuse he ought to be held to his bargain.”
Cotton, L.J. said at 222:
“There is no injustice in holding a man to a contract which specifically describes the
property sold in a way not calculated to mislead.”
Where the mistake is in written record of the contract, the plaintiff may obtain
rectification and specific performance in the same action, See: Craddock Bros v. Hunt
[1923] 2 Ch. 136

Where the Plaintiff has contributed to the defendant’s mistake, however unintentionally:
See:

Denny v. Hancock (1870) 6 Ch. App. 1

Wilding v. Sanderson [1897] 2 Ch. 534

Mistake that of the defendant: See:

Stewart v. Kennedy (1890) 15 A.C. 75 at 105 per Lord Macnaghten

Van Praugh v. Everidge [1902] 2 Ch 266; Reversed: [1903] 1 Ch 434
Unilateral mistake: See:
Mountford v. Scott [1973] 3 W.L.R. 884 at 885, per Brightman, J.

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 Riverlate Properties Ltd v. Paul [1975] Ch 133 at 140, per Russel, L,J.

Other Cases:

Solle v. Butcher [1950] 1 KB 671

Grist v. Bailey [1967] Ch. 532
Hartog v. Collin & Shields [1973] 2 All ER 566

OTHER DEFENCES
6. Misrepresentation by plaintiff
7. Misdescription
8. Lapse of Time/Laches/Delay
9. Trickiness
10. Illegality
11. Defective Title

RESCISSION
This is a right to rescind. The right is available to a party to a transaction to set that
transaction aside and be restored to his/her former position. It is not strictly a judicial remedy.
Rather, it is effected by the act of the party entitled to rescind. However, it is still a remedy to the
extent that the assistance of the court is usually required to determine whether a party can rescind
and also obtain restitution of property handed over pursuant to the transaction.

It is an equitable remedy since only a court of equity could do what was necessary to make
restitution.

Why Rescind?

A party may rescind a transaction due to the following:

a) Fraudulent Misrepresentation – The party might be induced to enter into a contract by

fraudulent misrepresentation.

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 b) Innocent Misrepresentation – A misrepresentation is innocent if the defendant believes
in the truth of his assertions even if there is no reasonable ground for his belief. See:
Derry v. Peek (1889) 14 AC 331. The misrepresentation is also innocent if the defendant
once knew the true facts but has forgotten them. See: Low v. Bouverie (1891) 3 Ch. 82.
c) Constructive Fraud – Gifts and bargains procured by undue influence and
unconscionable bargains may be set aside by the victim. Constructive fraud may be
implied in two circumstances.
i) Undue influence – This is where the person who agreed to enter into the contract
was induced to do so because of the special relationship existing between him and
the other party to the contract. Special relationships in which undue influence is
presumed by law include: parent and dependent child, religious adviser and
disciple, advocate and client, doctor and patient and trustee and beneficiary.
ii) Unconscionable bargain – This is where one of the parties has a great advantage
over the other party such that the contract entered into is unconscionable. This
will occur when the party who is at a disadvantage is, for example, illiterate,
unskilled, or has no experience in the area in which he contracts.
Per Phadke, J. in Syedna and Others v. Jamil Engineering Company [1973] EA
254 at 264:
“When can a bargain be said to be unconscionable? Should a bargain be
set aside when there has been no fraud, undue influence, breach of
fiduciary duty, or proved inequality about the respective positions of the
parties? No principles appear to determine what is unreasonable or
unconscionable or unjust, which are emotive rather than precise terms,
and so it is presumably a question of what shocks the conscience of
whoever is trying the case, leaving equity to vary with the length of the
judge’s foot.”
d) Non-disclosure in contracts “uberrimae fidei”(utmost great faith) – These are, for
example, contracts of insurance. They are characterized by the fact that one party has
commands of means of knowledge not available to the other party who may therefore
rescind the contract if he is not fully informed, though normally there is no duty on one
party to a contract to disclose to the other.

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 e) Misdescription – The right to rescind may be included as term of the contract. The
contract will usually stipulate such a right if one party does not or is unable to fulfill
certain obligations.

Limits to the use of the Right

1. A vendor cannot claim that he was unable to secure a title to the property. Such a claim is
not ground for rescission. The court regards it as an unreasonable use of the right. The
vendor must not have any failure on his part. There must be no element of shortcoming.
He must have done what a reasonable man would do.
2. The vendor cannot rescind after a judicial decision has been given against him. E.g.
specific performance.
3. The vendor cannot rescind merely because the purchaser has delayed in the payment of
installments unless such delays amount to total abandonment of the contract. See:
Cornwall v. Henson (1900) 2 Ch. 298.

Loss of Right of Rescission

i) By acquiescence – Here, the person entitled to rescind elects to waive the right
and affirm the contract after the facts concerning the right have come to his
notice.
ii) By impossibility of “restitutio in integrum” – A contract liable to be
rescindable is generally valid until set aside, i.e. it is voidable. A contract may
cease to be capable of being set aside or rescinded where the parties cannot be
restored to their original position.
iii) After Completion – Innocent misrepresentation gives no right to rescind after
completion. If it is contract for the sale of goods, the right is lost after the goods
have been accepted as was held in Long v Lloyd (1958) 1 WLR 753.
iv) By intervention of third parties – If the third party is a purchaser, the right is
lost if such third party has acquired rights thereunder for value without notice. If
the third party is a volunteer, the right to rescind is not lost.

Effect of Rescission

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 A person who rescinds a contract is entitled to be restored to the position he would have
been in had the contract not been made. Property must therefore be returned, possession given up
and accounts taken of profits or deterioration. However, no damages are recoverable.

Forfeiture of Deposit

If a vendor rescinds on the purchaser’s default, he does so under a contractual term that
enables the vendor and to charge the defaulting purchaser with the deficiency on a resale. In that
case, any deposit paid by the purchaser must be taken into account when competing the
deficiency on a resale, even though the deposit has been forfeited. See: Shuttleworth v. Clews
[1910] 1 Ch. 176; only 10% deposit to be forfeited.

See also Jamaican Workers Trust & Merchant Bank Ltd.

Privy Council Dojap Investments Ltd [1993] 2WLR 702 (PC).

Multiple Remedy

A plaintiff may in this suit pray for more than one remedy.

See Abdul Karim Khan v. Mohammed Roshan [1965] EA 289

The appellant sued the respondent on an agreement in writing whereby the

respondent agreed to sell him an undivided half share in a property for a price,
which he had paid. Subsequently, the respondent charged the property to a
company and refused to complete the sale. The appellant claimed specific
performance of the agreement, damages for breach of contract, rescission and a
return of the money paid, in alternatives.The respondent argued that the appellant
should elect which of the remedies he sought and that it was bad in law to put
them in alternatives.

Held:

1. That the appellant in putting his reliefs distinctly and separately was in order
and should not be put in an election. The appellant, over and above the claim

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 for specific performance, was entitled to claim damages for breach of contract
at common law.
2. That rescission is an equitable remedy and the court has discretion to
determine whether it ought to be granted.

The appeal was allowed.

DISTINCTION BETWEEN REPUDIATION AND RESCISSION OF A

CONTRACT

RESCISSION

Rescission is an equitable remedy, which arises when a person has been induced to enter
into a contract by a misrepresentation. The effect on the contract is to give the affected party an
option whether to avoid or to affirm to it. The party that wishes to exercise this remedy must
communicate this to the other party.

Although the right to claim damages for fraudulent and negligence in misrepresentation is
still available, there are several limitations to the exercise of this remedy, namely:

1. Affirmation – If the representee affirms the contract by express word or act, which
shows the intention to affirm it, then the right to rescind the contract is lost.
2. Lapse of Time – This is treated as evidence of affirmation of the contract. However,
mere lapse of time may not be treated as affirmation. In Leaf v. International
Galleries [1950] 2 KB 86. It was held, inter alia, that rescission for innocent
representation may be barred for lapse of time, In this case, five years, after the
plaintiff had bought a picture of Salisbury Cathedral which the defendants innocently
represented to him to be painted by constable was held by the Court of Appeal to be
time barred.
3. Since the contract is valid until rescinded, a third party bona fide purchaser for value
has a right against the party misled provided that the contract has not been rescinded
at that time.

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 4. The party who wishes to rescind must be in a position to restore parties to their
original state before the contract. If estitutio integrum is impossible the right to
rescind is destroyed.
5. Except for cases of fraud, the court has discretion to refuse to allow rescission and
award damages in lieu of rescission where misrepresentation is negligent or innocent.

REPUDIATION

On the other hand, repudiation of a contract arises when a breach of contract gives a party
who has suffered from such breach a right not to perform his contractual obligations. This may
arise in the following ways: -

- Refusal by the other party to perform his part of the contract.

- Inability by the other party to perform.
- Total or substantial failure by the other party to perform – the failure may be willful
or deliberate.

RECTIFICATION
If, by mistake, a written instrument does not accord with the true agreement of the
parties, equity has the power to reform or rectify that instrument so as to make it accord with the
true agreement. What is rectified is not a mistake in the transaction itself (the agreement) but
rather a mistake in the way in which that transaction has been expressed in an instrument – the
form of expressing the transaction in writing.

“Courts of equity do not rectify contracts, they… rectify instruments purporting to

have been made in pursuance of the terms of the contract,”Mackenzie v. Coulson
(1869) LR 8 EQ. 368 at 375

Rectification is a discretionary remedy “which must be cautiously watched and jealously

guarded.”: Per Evershed, M.R. in Whiteside v. Whiteside (1950) Ch. 65 at 71.

Conditions for the granting of Rectification

In order to succeed in a claim for rectification, the Plaintiff must show the following:

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 1. Absence of Alternative Remedy
a) If the desired result can be achieved through other means, rectification will not be
granted. E.g. Where parties would like to insert an addition in the instrument to express
their further intention, the insertion or addition is by itself enforceable as a collateral
contract. Also, where parties voluntarily agree to rectify the instrument, there is no need
to seek rectification by the court.
b) Construction: If the problem is an obvious clerical, typographical or grammatical error,
the court will usually correct it as a matter of construction without ordering rectification,
e.g., an erroneous “not” may be ignored. This is where both the error on the face of the
document, and the intention of the parties, are manifest from the document itself,

2. Mistake

It must be very clearly shown that the parties had come to a final and genuine agreement and
that the instrument had failed to record it. Oral evidence is admissible to prove the agreement.
The crux of the remedy is proof of what the parties actually had decided at the time of reaching
the agreement and not what they, or one of them, had thought if they had considered the matter in
greater detail or in the light of more information than that available to them. In other words, the
remedy exists to correct, but not to improve, an instrument.

Accordingly, it must be shown that the mistake was a gross mistake. A mistake can either
be a common mistake or unilateral mistake.

a) Common mistake – If the mistake is common to both or all parties to the instrument,
rectification will be granted.
b) Unilateral Mistake- Where one party incorrectly records a term of the agreement,
but the term is bona fide accepted as it is written by the other party, the mistake is
unilateral. The general rule is that there can be no rectification where the mistake is
unilateral.

There are, however, four excerptions to the general rule – four instances where
rectification will be ordered in case of a unilateral mistake.

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 i) Fraud –The party making the mistake can only obtain rectification if he shows
that the mistake is due to the fraud of the other party.
ii) Estoppel – If one party to a transaction knows that there is a mistake in his favor
in the instrument but does nothing to correct it, he will be precluded from
resisting rectification on the ground that the mistake is unilateral.
iii) Equitable Election – The defendant may be put to an election of either accepting
rectification or submitting to rescission. See: Paget v. Marshall (1884) 28 Ch. D.
255. The Plaintiff made an offer to let certain premises, and, by mistake, he failed
to exclude from his offer the first floor of one of his properties. The defendant
accepted the offer, and a lease which included the first floor was executed. The
plaintiff sued for the rectification of the lease. The court gave the defendant the
option of having the lease rectified or of having the lease set aside altogether.
(NOTE: The court agreed that the defendant had throughout known that there was
no intention of letting the first floor, but he did not find the D guilty of fraud!)
(See: criticisms in SNELL pp. 684-685; HANBURY pp. 639.)
iv) Unilateral Transactions – in such a case, a mistake will entitle a person to obtain
rectification. E.g. Deed Poll)

Other cases on unilateral Mistake:

Riverlate Properties Ltd. V. Paul [1975] Ch. 133; (1974) 9 L.Q.R. 439

Roberts & Co. Ltd. V, Leicestershire County Council [1961] Ch. 555

Burden of Proof of Mistake

He who seeks rectification must establish his case by “strong irrefragable evidence”
which means something more than the highest degree of probability. There must be evidence of
the clearest and most satisfactory description that will establish the mistake with a high degree of
conviction, and leave no fair and reasonable doubt upon the mind that the deed does not embody
the final intention of the parties. This heavy burden of proof becomes even more difficult to
discharge in particular circumstances, E.g.

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 1. With the passage of years – see: Fredensen v. Rothschild [1941} 1 All E.R. 430,
where there was a lapse of over 33 years.;
2. Where the plaintiff is a solicitor who drafted the instrument himself – see: Ball v.
Storie (1823) 1 Sim. St. 210

Instruments that will be rectified

1. Mercantile documents such as policies of marine insurance

2. Bills of exchange
3. Transfer of shares
4. Conveyancing documents
5. Consent Order (Which for this purpose is treated as an agreement interparties)

BUT NOTE: Instruments that will not be rectified:

1. The Memorandum and articles of association of a company will not be rectified. They
are inter alia a contract between the company and its members. They can only be
amended by relevant resolution – Shareholders Resolution.
2. A will cannot be rectified save for fraud. Where no fraud – codicil.
3. The Constitution
4. Acts of Parliament

Defences to an action for Rectification

1. A person cannot claim rectification of a contract if it is no longer capable of

performance. “Equity does not act in vain.”
2. The remedy will not be granted to the prejudice of bona fide purchaser for value
without notice who takes an interest conferred by the instrument. See: Smith v. Jones
[1954] WQLR 1089; Nathan No. 8
3. The remedy is not also available where the plaintiff is guilty of laches or
acquiescence. See: Beale v. Kyte [1970] 1 Ch. 560. This case held that time runs from
the discovery of the mistake.

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 Bad Defence

Carelessness of the plaintiff is no defence. See: Ball v. Stori (above)

Effect of Order

After rectification is ordered, no new document need be executed. Instead, a copy of the
order of the court is endorsed on the instrument rectified, which will then operate accordingly.
The order/decree has retrospective force. The instrument will be read as if it had originally been
drawn in its rectified form.

QUESTIONS

Equitable doctrines

Introduction

The maxims of equity are the general principles upon which the Chancery Court developed this
system of law and reflect the desire to be fair and even-handed between litigants. The maxims
underlie the equitable doctrines and remedies. Their origins are to be found in the history of
property law but they are sometimes applied to more modern situations and not always very
happily. The application of conversion to trusts for sale of land led to some surprising results and
the Trusts of Land and Appointment of Trustees Act (TLATA) 1996 converted all trusts for sale
of land existing on 1 January 1997 (when the Act came into force) into trusts of land to which
the doctrine does not apply. (There is one very limited exception to this which is referred to in
question 2(a)(iii) in this chapter.) Although it is still possible to create a trust for sale of land,
there is little point in it, as the power to postpone sale overrides any provision to the contrary (s.
4(1)), and s. 3 abolishes the application of the doctrine of conversion to a trust for sale of land.

Questions on the doctrines of equity may well be general essay questions which will draw on
your overall knowledge of the subject. It would be unwise to attempt these types of questions
perhaps, unless you feel you have read generally and widely enough on the background of
equity. Problem questions involving the more modern applications of the doctrines are a
possibility if your lectures have covered these areas.

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In deciding how much attention to give to these more general areas of equity, you should look at
past examination papers and consider the emphasis given to equity itself by your lecturer.
Although all courses on trusts will include some background of equity, some lecturers will not
regard it as worthy of examination questions, whilst other lecturers may set questions on it. You
will only know which type of course your lecturer favours by looking at the past examination
questions and listening to your lecturer!

Question 1

Equity looks on that as done which ought to be done. Discuss critically the applications of
this maxim in the equitable doctrine of conversion.

Commentary

The equitable doctrine of conversion is an anachronism which can produce unfortunate results in
its present day applications. It probably has more significance in land law than in trusts, although
it is still capable of affecting interests on succession. The material for this type of question is
more likely to be found in a book on equity rather than a book on trusts, and some reference may
well be made to it in books on land law, e.g., Maudsley and Burn’s, Land Law: Cases and
Materials, 9th edn, Oxford University Press, 2009.

It is essentially only something which would be examined on a course which covers equity as
well as trusts.

Answer plan

Wherever there is an obligation to convert property to another form, e.g., to sell land and thereby
convert it to money, equity regards the obligation as carried out

Where there is a contract for the sale of land, equity therefore regards the purchaser as having
already acquired the beneficial interest in the land; the vendor has the bare legal title and an
interest in the proceeds of sale (personalty)

This was extended in the rule in Lawes v Bennett to options to purchase and applied in Re
Sweeting to a conditional contract

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Trustees of residuary personalty left in succession must also convert wasting or future assets into
authorised investments (rule in Howe v Dartmouth)

Suggested answer

Although equity did not have the same rigid rules of precedent as the common law, the Court of
Chancery did have certain principles which it applied in administering equity. These became.
known as the ‘maxims’ of equity, and ‘equity looks on that as done which ought to be done’ is
one of these. Its application is evident in several areas of equity and it underlies the doctrine of
conversion.

The doctrine applies wherever there is an obligation to convert property into another form.
Equity will then notionally convert the property before the actual conversion takes place. This
has the curious result that realty may sometimes be regarded as personalty, and vice versa, in the
eyes of equity. This was significant on the passing of property on an intestacy before 1926, when
realty devolved upon the heir and personalty to the next of kin, and may still be relevant after
1925 in the case of a will leaving realty to one person and personalty to another.

Jekyll MR gave the reason for the doctrine in Lechmere v Earl of Carlisle (1733) 3 P Wms 211
as the fact that a cestui que trust should not be prejudiced by a trustee’s possible delay in dealing
with trust property in accordance with his obligations. It has received some unfortunate
extensions however, in certain areas, which have produced criticisms from the judges, and it was
abolished as regards trusts for sale of land by s. 3 of the TLATA 1996.

The doctrine of conversion still applies, however, to a contract for the sale of land. As soon as
there is an enforceable contract, equity will impose a constructive trust on the vendor. From the
contract, the vendor’s interest is treated as being in the proceeds of sale which, if the vendor dies
before completion, are payable to the persons entitled to his personalty. The purchaser, who is
regarded as having a beneficial interest in the land, should therefore insure it. The position as to
insurance may of course be varied by the terms of the contract for sale, and the Standard
Conditions applicable to domestic conveyances provide that insurance of the property shall
remain the responsibility of the vendor until completion.

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In Re Sweeting (deceased) [1988] 1 All ER 1016, the doctrine was applied to a conditional
contract where the condition was not fulfilled until after the testator’s death. An unfortunate
extension of its application is the rule in Lawes v Bennett (1785) 1 Cox 167, which decided that
the doctrine applies retrospectively when an option to purchase is exercised after the grantor’s
death. Moreover, if the option is granted after a specific devise of the property by will, on
exercise of the option the devise is adeemed and the property, which becomes personalty
retrospectively, passes to the residuary legatee: Weeding v Weeding (1861) 1 J & H 424.

A duty to convert property also arises under the rule in Howe v Earl of Dartmouth (1802) 7 Ves
137. The rule aims at achieving fairness as to investments between a life tenant and a
remainderman. It requires trustees of a residuary personalty fund which is left in succession to
convert any wasting assets, or future assets not yielding an income, into authorised investments,
unless the will reveals a contrary intention. The income from any such part of the fund before
conversion is apportioned between the life tenant and the remainderman. A strict application of
the doctrine of conversion can produce some unfortunate results, and it is hardly surprising that
the courts have sought to avoid it in some circumstances.

Question 2

James, who died earlier this year, appointed Tina and Tom as executors and trustees of his will
and devised all his realty to his son Sam and all his personalty to his daughter Doris.

Advise the executors as to who is entitled to the following properties owned by James:

(a)(i) ‘The Beeches’, held by James and his wife Wynne upon trust for sale for themselves as
tenants in common.

(ii) Would your answer differ if James and Wynne had held ‘The Beeches’ as joint tenants?

(iii) Would your answer differ if James had died before 1 January 1997?

(b) ‘The Larches’, which James contracted to sell to Peter shortly before he died, subject to
Peter obtaining planning consent for an extension. Peter has now obtained planning consent.

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(c)‘The Firs’, upon which he had granted an option to purchase to Frank. Since James died,
Frank has given notice to Tina and Tom of his intention to exercise the option. Would your
answer differ if the will had included a specific devise of ‘The Firs’ to Sam?

Commentary

This question requires a knowledge of some of the circumstances in which the doctrine of
conversion applies.

Like all questions in parts, it is probably unwise to attempt it unless you know the answer to at
least two parts of it! If you have revised this topic, however, it is a fairly straightforward
question, with almost arithmetical answers. You should achieve at least a pass if you can apply
the principles, although a more detailed knowledge of the cases would be required to pass well.
Part (a)(iii) will have an increasingly limited relevance as its only importance now is in tracing
title to unregistered land where there is such a will disposing of property subject to a trust for
sale.

Answer plan

(a) (i) A trust for sale takes effect as a trust of land under TLATA 1996 and the doctrine of
conversion does not apply to it (TLATA, s. 3). ‘The Beeches’ is regarded by equity as land and
passes to Sam

(ii) Wherever there is a joint tenancy, property passes by the right of survivorship to the
surviving joint tenant or joint tenants and not under the will. ‘The Beeches’ would therefore go
to Wynne

(iii) This is the only exception to TLATA, s. 3. The doctrine of conversion still applies to land
held on a trust for sale in the will of a testator who dies before 1 January 1997 leaving ‘realty’
and ‘personalty’ specifically in the will. ‘The Beeches’ would therefore pass as personalty to
Doris

(b) The doctrine of conversion applies to a binding contract for sale, and ‘The Firs’ is therefore
regarded as personalty which passes to Doris

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• This includes a conditional contract once the condition is fulfilled (Re Sweeting), and so the
proceeds of sale of ‘The Larches’ would go to Doris

(c) As soon as an option to purchase is exercised, there is a binding contract to sell, and ‘The
Firs’ is. therefore regarded as personalty which passes to Doris

• If ‘The Firs’ had been specifically devised by name before the option was granted, the option
would override the devise and the position would be as above

• If the specific devise was made after the option was granted, then ‘The Firs’ would go to Sam
together with the benefit of the option

Suggested answer

(a)(i) Wherever there is co-ownership of land, this must take effect behind a trust. Before 1
January 1997, s. 34 of the Law of Property Act 1925 imposed a statutory trust for sale. Because a
trust imposes a binding obligation on trustees and ‘equity looks on that as done which ought to
be done’, the equitable doctrine of conversion operated to convert property held on a trust for
sale to personalty. In the eyes of equity, there was a notional sale and the property was regarded
as money.

On or after 1 January 1997 when the TLATA 1996 came into force, co-ownership takes effect
behind a trust of land under the Act, and any trusts for sale existing at that date became trusts of
land. It is still possible expressly to create a trust for sale (as here), but the requirement to sell
can be overridden (TLATA 1996, s. 4(1)) and it will take effect as a trust of land under the Act.
Section 3 of the Act abolishes the doctrine of conversion as regards any trust for sale of land
(with one exception referred to in (iii) below).

James and Wynne will therefore hold the legal estate to ‘The Beeches’ as joint tenants at law on
a trust of land under TLATA 1996, for themselves as tenants in common in equity. The right of
survivorship does not apply to a tenancy in common and James’s share of ‘The Beeches’ will
therefore pass under his will to his son Sam as realty.

(ii) If James and Wynne held ‘The Beeches’ as joint tenants, the position as regards the legal
estate is the same, and co-ownership takes effect behind a trust of land under TLATA 1996. The

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right of survivorship applies to a joint tenancy at law or in equity, however, so that James’s
equitable interest in ‘The Beeches’ will pass to Wynne and not under James’s will at all.

(iii) Although s. 3 of the TLATA 1996 abolished the application of the doctrine of conversion to
a trust for sale of land, a saving was made by the section for a will such as James’s where the
testator died before the Act came into force. If James had died before 1 January 1997, therefore,
at his death the doctrine of conversion would have applied to the trust for sale on which ‘The
Beeches’ was held, and his share would have passed under his will as personalty to Doris.

The position would have been the same even if there had been no express trust for sale but one
had been imposed by reason of co-ownership by s. 34 of the Law of Property Act 1925. This
provision can now be relevant only in tracing title, and in practice, wills leaving personalty to
one person and realty to another are rare (except perhaps in examination questions!). A testator is
much more likely to specify the property he is leaving by name (‘The Beeches’) in his will.

(b) As soon as a valid and enforceable contract to sell property exists, equity regards the
beneficial interest as having passed to the purchaser, and the vendor holds the legal title as a
constructive trustee for the purchaser. Because the contract is enforceable by equity, equity
regards the transaction as a notional sale. The interest of the vendor is therefore in the proceeds
of sale, which are personalty.

In Re Sweeting (deceased) [1988] 1 All ER 1016, conversion applied to property subject to a

conditional contract for sale when the condition was fulfilled after the testator’s death. The
proceeds of sale of ‘The Larches’ will therefore go to Doris as personalty.

(c) The application of the doctrine of conversion to contracts for the sale of land was extended by
the rule in Lawes v Bennett (1785) 1 Cox 167 to options to purchase. As soon as an option to
purchase land is exercised, the property becomes personalty in the hands of the vendor because
there is a binding obligation to sell it. This is still the case, even if the option is made exercisable
after the death of the grantor (Re Isaacs [1894] 3 Ch 506). Therefore, as soon as Frank gives
notice to Tina and Tom of his intention to exercise the option, it is regarded as personalty in their
hands and will again go to Doris.

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However, if the will makes it clear that the devisee of property is to take all the testator’s interest
in it, then the devise may operate to override the rule in Lawes v Bennett. Moreover, it is relevant
whether the option was granted before or after the devise in the will. If it was granted before the
devise, then there may be a presumption that the testator intended to give the whole of his
interest in the property to the devisee, including any rights under the option. In Calow v Calow
[1928] Ch 710, a devise of land or ‘the proceeds of sale of the land’ was held to survive a
subsequent contract to sell the land completed after the testator’s death. Conversely, if the option
was granted after the devise, then the option is regarded as overriding the devise: Re Carrington
[1932] 1 Ch 1.

If James’s will specifically devising ‘The Firs’ to Sam was made before the option to purchase
was granted, then the effect of Frank’s notice to Tina and Tom to exercise the option is to operate
the doctrine of conversion retrospectively. ‘The Firs’ becomes personalty in their hands and will
go to Doris.

If James’s will was made after the option was granted, however, then it is likely that the option
will be regarded as a right attaching to the property, and ‘The Firs’ will pass, together with the
right, to Sam as realty.

Question 3

(a) Two sisters, Amy and Bertha, were joint tenants of a house. Amy, who died recently, by her
will purported to leave the house to Bertha and their brother Cyril in equal shares. There was also
a bequest in the will of valuable jewellery worth at least half of the value of the house to Bertha.
Advise Bertha and Cyril.

(b) John, who died recently, made a will in which he gave a legacy of £5,000 to Bill. Bill had lent
John £5,000 secured by a charge on John’s house. There is a sum of £3,000 outstanding on this
debt.

Advise Bill as to whether the debt will be satisfied by the legacy.

Commentary

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The first part of this question is on the application of the doctrine of election, and the second part
on a possible application of the doctrine of satisfaction.

Both of these doctrines have their origins in equity’s desire to be fair to the children of a family
in the distribution of family wealth. The doctrines were extended, however, beyond the family
circumstances and the doctrine of satisfaction particularly, in its application to creditors to whom
a legacy was left. There are few recent cases on the doctrines although they are still occasionally
applicable today.

This is not a subject to cover unless your lecturer directs you to do so or deals with it in your
lectures. The doctrines, which were included in the 15th edition of Hanbury and Martin’s
Modern Equity (Sweet & Maxwell, 1997) were left out of the 16th edition (2001) and all later
editions, no doubt to allow room for more modern developments and applications of the subject.
Answer plan

(a) • Where a person receives a benefit but also suffers a loss from a transaction or a will, he may
elect to reject it or to accept it; if he accepts the benefit of the transaction, he must also suffer the
loss

• The doctrine would therefore apply to Bertha with regard to Amy’s half share of the house and
the jewellery

(b) • The doctrine of satisfaction, which had its origins in allowing for portions advanced to
beneficiaries under a family settlement, was extended to debts owed by a testator

• The satisfaction of a debt by a legacy left to a creditor became subject to certain technical rules
(listed in the answer) which may mean that it will not apply here

Suggested answer

(a) The doctrine of election means that a person who receives a benefit from a transaction, from.
which he also suffers a loss, must elect to take with the transaction or against it; that is, he may
elect to take the benefit and suffer the loss, or not to accept the benefit at all. It usually applies to
a will and arises where property is left to A and some of A’s property is left by the same will to
B. A cannot accept the gift under the will unless he compensates B from his own property. It is

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irrelevant that the testator has made a mistake as to the ownership of A’s property which he has
purported to leave to B.

Because Amy and Bertha were joint tenants of the house and the right of survivorship applies to
a joint tenancy, the house automatically passes to Bertha on Amy’s death. Amy is therefore
leaving to Cyril property which is not hers to dispose of. In Re Gordon’s Will Trusts [1978] Ch
145, where a mother and son owned a house as joint tenants and the mother devised it to her
trustee upon trust for sale and left furniture and £1,000 to her son, Buckley LJ accepted that the
doctrine of election could apply to those gifts to the son.

In that case, other property given in trust for the son was not freely alienable by him, which in
fact prevented the application of the doctrine to it. If the property of the elector is not freely
alienable, no case for election arises (Re Lord Chesham (1886) 31 ChD 466). The jewellery in
this question would appear to have been given outright to Bertha, however, so it would seem that
the doctrine would apply.

Bertha will therefore have to elect to take with the will, in which case she may keep the jewellery
but must convey half of the house to Cyril, or against it, in which case she may keep the whole of
the house but must compensate Cyril by letting him have the jewellery. She will be obliged to let
him have the whole of the jewellery, however, and not just jewellery to the value of half of the
house.

Hanbury and Martin’s Modern Equity, 15th edn, Sweet & Maxwell, 1997, criticised the doctrine
of election as ‘too uncertain an instrument of equity’, pointing out that the ultimate donee of the
elector’s property will always benefit, whereas the person put to their election may not benefit at
all. This would seem to be the position here.

(b) The doctrine of satisfaction evolved in order to ensure, as far as possible, an equal
distribution of family wealth among the children of a family. It was applied in certain
circumstances to adeem a legacy left to a child who had previously received a portion (a sum of
money to set him up in life). It also applies where a legacy is left to a creditor, the underlying
maxim for this being that ‘equity imputes an intent to fulfil an obligation’. It must be possible to
presume from the circumstances that the testator did intend to pay the debt with the legacy and,

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like all presumptions, it is rebuttable. Certain technical rules have developed to rebut the
presumption.

First, the legacy must be as beneficial to the creditor as the debt (see Re Van den Bergh’s Will
Trusts [1948] 1 All ER 935). As Bill’s loan was secured by a charge on John’s house, this would
not be the case.

Secondly, the doctrine applies only if the will was made after the debt was incurred. We are not
told the dates of the will or the debt.

Thirdly, it will not apply if the will includes a clause (which is frequently included in wills)
directing the testator’s executors to pay the testator’s debts and funeral and testamentary
expenses. In these circumstances, both the debt and the legacy will be payable. This principle
was established in Chancey’s Case (1717) 1 P Wms 408. It is not even necessary for the clause
to include reference to the payment of legacies (Re Manners [1949] 2 All ER 201). For all these
reasons, it is possible that the doctrine of satisfaction will not apply to the legacy in John’s will,
and Bill will be able to recover his debt from the estate and also take his legacy of £5,000

QUESTION 1

1) "Equity can be described but it cannot be defined. There is no clear thread running
through the areas where Equity has jurisdiction." Do you agree with this statement? Explain
your answer with relevant authorities.

We agree with the statement that equity can be described but cannot be easily defined and there
is no clear thread running through all areas where equity has jurisdiction. This perspective is in
line with the nature of equity as it has historically developed and operates within the legal
system.

While equity can be described as fairness and impartiality, it cannot be easily defined in law
because it has a complex concept that can have different meanings depending on the context. It is
difficult to describe in that it has a rich historical development that spans centuries. It evolved as
a response of prejudice, injustice and limitation of common law in England. Its historical
development is complex with the establishment of courts of equity and the development of

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equitable principles occurring gradually over time. This historical evaluation makes it
challenging to provide concise and fixed definitions.

John Seldon said “Equity is a roguish thing, for law we measure known what to trust to. Equity is
according to the conscience of the chancellor and as that is large or narrow so is equity. That is
all one as if they should make the standard of measure we call a foot, to be the chancellor foot;
what an uncertain measure this would be; one chancellor has a long foot another a short foot a
third an indifferent foot; is the same thing in the chancellor’s conscience.' The phrase referring to
the chancellor’s foot was coined which was equity as long as the chancellor’s foot which meant
equity was what the chancellor decided was equity.

Equity operates on a set of general principles known as equitable maxims or maxims of equality.
These maxims provide guidance for judges, emphasising concepts such as fairness, conscience,
and just. These maxims provide a framework for understanding equity. Example the maxim he
who seeks equity must do equity meaning that the person who is in pursuit of the aid of the court
of equity must be prepared to follow the courts directions, to abide whatever conditions the court
gives for relief. It is also designed to address situations where strict application of legal rules
may lead to unjust outcomes. It allows judges to tailor remedies fit the specific circumstances of
each case. It is vital that equity ‘s boundaries are not rigidly defined and can adapt to different
situations and needs. Banister v banister [1928] 2 ALL ER133

A conveyed a house to B and B agreed orally to allow A to live in it rent free for as long as she
wished. the agreement was not in writing, B attempted to evict A, claiming that A had not
fulfilled the statutory requirement of furnishing a tenancy agreement. the agreement was
enforceable notwithstanding the absence of writing Equity like any other legal concept evolves
over time to reflect changing societal norms and values. What is considered just and fair may
differ from another. Equity has jurisdiction over a wide range of legal issues including property
disputes, trust, family law matters and injunctions. Its jurisdiction is diverse covering areas
where fairness and flexibility are deemed necessary.

Areas of Equity Jurisdiction Trusts:

Equity plays a crucial role in the administration of trusts, where fiduciary duties and principles of
fairness and loyalty are applied. The Trustee Act, Cap 167, Laws of Kenya, governs the

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administration of trusts in the country, providing a clear legal framework for equity's role in this
area. Injunctions: Equity courts have the authority to issue injunctions to prevent parties from
engaging in certain actions that would result in harm or injustice.Injunctions are a fundamental
equitable remedy. Specific Performance: Equity courts can order specific performance of
contracts when monetary damages are inadequate to provide a remedy. This principle is widely
recognized in legal systems worldwide.

QUESTION 2

HISTORICAL FOUNDATION OF EQUITY

To be able to comprehend Equity as a doctrine, it is crucial to refer to English history, from

which its foundations lie. In 1066 AD, with the Norman Conquest of England, the Normans from
France introduced the Common law system, which was established as the governing legal
system. The legal system was referred to as common law, since they relied on precedent
developed in the Courts of Westminster, from where they would be applied throughout the
regions of England, thus occasioning the doctrine of stare decisis or Judicial Precedent. A bundle
of rights and freedoms were crafted from judicial determinations made in previous cases before
courts that were relied upon.

‘Henry II created the courts of King’s Bench to hear matters otherwise brought before the
Crown…So, for example, a tenant of land who was unjustly dealt with in the court of his local
lord could seek a remedy directly from the King if he was unsatisfied with the decision of the
court.For the monarchy this provided an important safeguard against the power of these courts
by reserving the ultimate control over the administration of justice to the person of the monarch.’

As can be inferred from the above passage, King Henry I, who orchestrated the Norman
conquest reserved the right of the subjects being able to petition to the monarch directly if
unsatisfied with judgement meted out by the common law courts. As can be predicted, the public
would prefer approaching the King’s Bench for the variety of remedies the monarch would offer
as opposed to the Common law courts, since the latter had a small range of remedies offered,
owing to the fact that they relied on obligations established in early courts, in lieu of their
observance of judicial precedents. Furthermore, petitioning at the King’s bench was
advantageous since the Monarch was not bound by the rigidities and obligations attached to the

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exercise of justice in the Common law Courts. The preference for petitioning at the King’s
Bench, saturated the court, which further necessitated the shifting of the King’s bench
jurisdiction to that of a separate post, that of the Chancellor. ‘During the mediaeval period the
position of Lord Chancellor was created, among other things, to hear those petitions which
would otherwise have been taken directly to the monarch…As a result the Lord Chancellor’s
discretion broadened, until some lawyers began to comment that it had begun to place too much
power in the hands of one person. It is also interesting to note that the courts of equity did not
necessarily concern themselves with strict legal rules (or even the doctrine of precedent) at all
but instead focused on inquiring specifically into the defendant’s conscience.’

Obvious fissures in the courts of the Lord Chancellor, The Chancery, were highlighted by
practitioners of the Common law, who were perturbed by the chancery’s non-observance to the
common law doctrine of Judicial Precedent. Pressure from common law practitioners, brought
forth the Judicature Act, which in 1893, sought to fuse the courts of equity and common law
courts, which were both established as sources of law.

INFERENCES THAT CAN BE DRAWN UP FROM THE HISTORICAL

DEVELOPMENT OF EQUITY

Equity as can be inferred from its historical development, originally served as a tool that meant
to uphold fairness and morality by acknowledging the conscience of the parties to a dispute,
which were rather disparaged by the common law system that held form and precedent in a
higher regard. ‘Chief Justice Fortescue declared in 1452 that: ‘We are to argue conscience here,
not the law.’He meant that the role of a court of equity at that time was considered to be to reach
a morally correct result without worrying about precedent. This caused great concern among the
judges of the common law courts that there was a system of law in England without a doctrine of
precedent and that its judges (in particular the Lord Chancellor) could simply do whatever they
chose. Selden is reputed to have said: Equity is a roguish thing. For [common] law we have a
measure . . . equity is [decided] according to the conscience of him that is Chancellor, and as that
is longer or narrower, so is equity. ’Tis all one as if they should make the standard for the
measure a Chancellor’s foot.’

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That new found dissection into conscience in regards to matters of the law, gives more insight
into the role of equity in upholding morality in the administration of justice, which may be
limited by the law’s obsession with form and precedent. This crucial role can be referenced in the
case of Lord Dudley v Lady Dudley (1705) Prec Ch 241, 244 whereby ord Cowper stated, ‘Now
equity is no part of the [common] law, but a moral virtue, which qualifies, moderates, and
reforms the rigour, hardness, and edge of the law, and is an universal truth; it does also assist the
law where it is defective and weak in the constitution (which is the life of the law) and defends
the law from crafty evasions, delusions, and new subtleties, invested and contrived to evade and
delude the common law, whereby such as have undoubted right are made remediless: and this is
the of ice of equity, to support and protect the common law from shifts and crafty contrivances
against the justice of the law. Equity therefore does not destroy the law, nor create it, but assist
it.’

QUESTION THREE.

“The so-called ‘fusion debate’ is simply an ‘old hat’ and is only of historical interest.”
critically consider this statement.”

Until the 1870s the judicial system in England was divided between the common law courts and
the courts of equity 6 . It was the fruit of the historical development of the judiciary, which
resulted in troubling, mainly procedural issues, in the administration of justice using this
principle, the Lord Chancellor issued writs and it was rigid on the forms whereby the system was
more obsessed with the form other than the substance and justice was not created before the
courts of common law. The common law system made it hard to approach the seat of justice,
leading to the fusion between common law courts and the Chancery courts, hence the ‘fusion
debate’.

This notion of an acquired over-a-century perspective is supported in our present juristic sphere
because, The jurisdiction of the Supreme Court, the Court of Appeal, the High Court, the
Environment and Land Court, the Employment and labour relations Court and of all subordinate
courts shall be exercised in conformity with- the Constitution, subject thereto, all other written
laws including the Acts of Parliament of The United Kingdom, subject thereto and so far as those
written laws do not extend or apply, the substance of the common law, the doctrines of equity

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and the statutes of general application in force in England on the 12 th August, 1897, and the
procedure and practice observed in courts of justice in England at that date.

The said phrase herein is a part of a legal statement that establishes a hierarchy of legal
principles and the sources of law, in that it is implied that the phrase “Subject thereto” signifies
that certain legal principles are subordinate to something else. The constitution of Kenya is the
primary source of law within the jurisdiction of Kenya, the next source of law is the substance of
the common law; this is a body of law that developed overtime through court decisions and
precedent and is a source of law within the jurisdiction of Kenya today. We also have the
doctrines of equity that seek to provide fairness and justice in situations where strict application
of written laws may not be appropriate. The statement of Section 3(c) of the Judicature Act, CAP
8, Laws of Kenya includes the doctrines of equity as another source of law, suggesting that
equity principles should be applied as per the regular functioning of the courts within their
jurisdictions if need be. However, these debate is simply not outdated and having only historical
interests, these debate interests the legal atmosphere of the modern world in that, principles
developed therein still benefit the juristic sphere at present:

The paramount objective of the ‘Fusion debate’ was to rectify procedural issues of the courts,
Hence the Ashburner’s “one channel, two streams” metaphor.The fact that due to procedural
fusion a single court has been allowed to grant both common law and equitable remedies. If an
issue is solely equitable in nature, it cannot be rectified through a common law remedy for it
constitutes an improper interpretation of the Judicature Acts.Parenthetically, equitable remedies
are available for i.a. a breach of contract, even though contracts have always been a common law
area, while purely equitable wrongs cannot necessarily be rectified with eg. Compensatory
damages. The fusion debate allowed the party a right which would not have been available with
the merely procedural merger.Within the context of Kenya, there is concurrent equitable
jurisdiction where the Kenyan Courts can grant additional remedies than those granted under
common law, perfect example is Article 23(3) of the Constitution of Kenya 2010.

There are practices of exclusive equitable jurisdiction where the Kenyan courts recognized and
created new rights which were not recognized at common law. In conclusion, after critical
consideration of the statement in question, we find it not outdated and of historical interest only,
it is also of legal interest currently.

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QUESTION
Explain when equity might perfect an imperfect gift, and critically assess the courts’
approach to this process. (15 Marks)

Equity may intervene to perfect an imperfect gift in certain situations where legal formalities
required for a valid transfer of property are not strictly complied with. The courts, guided by
equitable principles, aim to prevent unjust enrichment and ensure fairness in the transfer of
property. This process is commonly referred to as the doctrine of equity perfecting an imperfect
gift. One scenario where equity may perfect an imperfect gift is when there is an incomplete
transfer of legal title due to a failure to comply with formalities such as writing or registration.
For instance, if a donor intends to gift real property to a donee but fails to execute a proper deed
or meet statutory requirements, equity may step in to recognize the gift and enforce the donor's
intention.

One landmark case illustrating equity's role in perfecting imperfect gifts is Milroy v Lord
1
(1862). In this case, Lord Cranworth established the principle that if a donor intends to make a

gift, but the legal formalities are not completed, equity will not perfect an imperfect gift. The
donor must either complete the transfer or use an alternative method recognized by law.
2
However, this strict approach was later modified in the case of Re Rose (1952) Ch 499. The

court held that if a settlor has done everything in their power to transfer the property, equity will
perfect an imperfect gift. This case reflects a more flexible and lenient stance, allowing the court
to step in when the donor has taken substantial steps towards making the gift.

In Richards V Delbridge (1874)7, the equitable maxim “equity will not perfect an imperfect gift”
was stated by Sir George Jessel. In legal terms, this means that equity will not accept a beneficial
interest as being transferred to the donee before legal title has. This rule took a fundamental
change in Pennington v Waine 20028, which established that equity will perfect an imperfect gift
if it would be unconscionable for the donor to revoke the gift they intended to make. Before this,
the approach in Milroy v Lord (1862)9 was followed. In this case, Lord Cranworth established

7
Richards v Delbridge (1874) LR 18 Eq 11
8
Pennington v Waine [2002] 1 WLR 2075
9
Milroy v Lord (1862) 4 De GF & J 264.

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the principle that if a donor intends to make a gift, but the legal formalities are not completed,
equity will not perfect an imperfect gift. The donor must either complete the transfer or use an
alternative method recognized by law.
However, as it was seen in Pennington v Waine 2002, equity may intervene to perfect an
imperfect gift in certain situations where legal formalities required for a valid transfer of property
are not strictly complied with. The courts, guided by equitable principles, aim to prevent unjust
enrichment and ensure fairness in the transfer of property. This process is commonly referred to
as the doctrine of equity perfecting an imperfect gift.
One scenario where equity may perfect an imperfect gift is when there is an incomplete transfer
of legal title due to a failure to comply with formalities such as writing or registration. For
instance, if a donor intends to gift real property to a donee but fails to execute a proper deed or
meet statutory requirements, equity may step in to recognize the gift and enforce the donor's
intention.In the case of Re Rose (1952) Ch 499.10 The court held that if a settlor has done
everything in their power to transfer the property, equity will perfect an imperfect gift. This case
reflects a more flexible and lenient stance, allowing the court to step in when the donor has taken
substantial steps towards making the gift.
Other scenarios where equity may perfect an imperfect gift include;
I. Part performance: If the donee has partially relied on the gift and has altered their
position in some way, equity might intervene to prevent injustice to the donee.
II. Estoppel: If the donor has made representations or assurances that the property has been
gifted and the donee has relied on these statements, equity may prevent the donor from
going back on their word.
III. Resulting trust: If the donor transfers property to the donee but does not complete the
legal formalities, equity might consider that the property is held in trust for the donee,
thus effectively perfecting the imperfect gift.
IV. Equitable conversion: In cases where the subject matter of the gift is a future interest in
property, equity might treat the donee as the rightful owner of the property from the
moment the gift was made, even if legal formalities were not completed.
V. Donatio Mortis Causa (death-bed gift): Generally, a voluntary transfer of property
through a deathbed gift is imperfect and a donee who is a volunteer would ordinarily be

10
Re Rose (1952) Ch 499

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 incapable of benefiting from it. However, according to the dictum by Nourse LJ in Sen v.
Headley,11 there are three conditions which must be complied with to enable the courts to
perfect an imperfect transfer of property of such nature. Each condition will be
highlighted below.
a) The Gift Must be Made in Contemplation of the Donor’s Death
The donor must make the gift in particular contemplation of impending death and not
death someday. For instance, a donor who is suffering from an ailment and is expecting to
die gives a piece of jewelry to another (the donee) on the condition that if he dies, the
donee becomes the owner of the jewelry. The gift is imperfect because there is no
intention at that time that title should pass to the donee. However, if the donor dies, the
condition precedent is fulfilled and the intention comes into existence thus perfecting the
imperfect gift.
b) The Gift Must be Conditional and Absolute on the Donor’s Death
To satisfy this requirement, the gift must have been made on the condition that it would
become effective on the death of the donor. This applies even if the gift has been
delivered to the donee, and the effect is that the donor can demand that the property be
returned to him because title does not pass to the donee until the donor dies. Thus, if the
donor recovers from his illness or revokes the gift while still alive, the gift fails.
c) The Donor Must Part with the Subject Matter of the Gift
The donor must part with dominion over the subject matter of the gift. If the donor fails
to undertake physical delivery of the property to the donee (whether himself or through
an agent), the donatio mortis causa will fail. For example, in Bunn v. Markham12, the
donor declared that specific parcels were intended for the named donees but that the
parcels should be given to them after his death. The court held that there was no sufficient
delivery and that the gift was ineffective.

11
Sen v Headley [1991] Ch. 425 (1991)
12
Bunn v Markham [1816]

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