UNIVERSITY OF NAIROBI
SCHOOL OF LAW
GPR 217 EQUITY AND TRUST LAW
COURTESY OF: J.K. ASIEMA/R. KARIUKI
NATURE, HISTORICAL ORIGIN AND DEVELOPMENT OF
EQUITY IN ENGLAND
INTRODUCTION
Definition of Equity
Equity has been defined as:
“those
principles of natural justice administered at first by the King-in-Council, and
later by the Chancellor, first as a member of that Council and afterwards as an
independent judge, to correct and supplement the common law.”
The word “equity” is derived from the classical
Latin word “aequitas”, which means
fairness or reasonableness. In its practical application, “aequitas” signified the following of the spirit of the law, as
opposed to the strict letter. It connoted reasonable modification of the letter
of the ordinary law.
“Equity is a word with many meanings. In a wide
sense it means that which is fair, just, moral and ethical; but its legal
meaning is much narrower. Equity is the branch of law which, before the
Judicature Act of 1783 came into force, was applied and administered by the
Court of Chancery.” See:
Hanbury and Maudsley, Modern Equity (16th
Edition, Sweet & Maxwell), page 3.
Equity therefore has two meanings:
1. Ordinary or popular meaning
2. Technical meaning
Ordinary Meaning
Equity in the
ordinary sense is equivalent to natural justice, morality or fair play. For
example, before a person is pronounced guilty of an offence by a court of law,
he must be given a chance to defend himself. Equity in this sense means to do
good/what is just.
Technical Meaning
Equity in the technical sense refers to the body of
rules or principles which are not and are distinct from the common law. It is a
body of rules or principles which form an appendage to the general rules of common
law.
It is necessary to understand the distinction
between common law and equity which gives rise to the meaning that equity is
that which is not the common law. Such a distinction can only be obtained by
examining the historical origin and development of equity in England.
Historical Origin and Development of
Equity in England
Before the evolution of equity, common law was the
prevalent law in England
1. The Court of King’s
Bench: This court takes its name from the original concept of the monarch
sitting with his judges “in banco”, that is “on the bench”. It dealt with both
civil and criminal cases in which the King had an interest.
2. The Court of Common Pleas: This court heard civil
cases brought by one individual or citizen against another.
3. The Court of Exchequer: This court’s principal
jurisdiction dealt with cases involving the royal revenue. Later it acquired
jurisdiction in cases of debt between one citizen and another citizen. It
eventually took many cases of debt which should have been heard in the Court of
Common Pleas.
The common law was rigid because before a person
could get redress for his grievance, he had to be issued with a writ disclosing
a cause of action. The King’s Chancellor issued this writ. Being an
ecclesiastic, the Chancellor was the “keeper
of the King’s conscience” and represented the “moral attitude” of the
Crown.
Fetters to the
Common law
The common law courts were fettered by precedent. In
addition, a statute referred to as the Provisions of Oxford of 1258 restrained
the Chancellor from issuing new types of writ on his own initiative. These
fetters prevented the common law from developing fast enough to do justice in
all cases.
Moreover, in the rough days of the 13th
century, a plaintiff was often unable to obtain a remedy in the common law
courts even when he should have, owing to the strength of the defendant, who
would defy the court or intimidate the jury.
Petitions to
the King
Due to the constraints of the common law, plaintiffs began to petition the King in
Council to exercise his extraordinary judicial powers on one of two grounds, either: (a) that there was no remedy available;
or (b) that there was a failure to
administer the available remedy. Thus, where the rigidity of the common law
worked unfairly or provided no remedy, an appeal was made to that higher justice
called “equity”, which resided in the King, as the “fountain of all justice.” The
King’s residuary power permitted him to temper the inflexibility of the
ordinary law and to do justice according to reason, good faith, good conscience
and the current ideas of morality, when he was petitioned to do so. Equity was
therefore developed to mitigate the defects of ordinary law.
Establishment of the Court of Chancery
The practice of petitioning
the King continued, giving rise to the establishment of a Court of Chancery as
an institution independent of the King and his Council. Equity may therefore
also be defined as “those principles of natural justice administered at first
by the King-in-Council, and later by the Chancellor, first as a member of that
Council and afterwards as an independent judge, to correct and supplement the
common law.”
In the Middle Ages, the Chancellor’s jurisdiction
was undefined. He exercised his powers on the ground of conscience. In theory, conscience was based on
universal and natural justice rather than the personal opinion or conscience of
the Chancellor. In practice,
however, the standards varied with each Chancellor, hence the phrase “Equity is
as long as the Chancellor’s foot.”
The Chancellor pronounced a remedy where the common
law did not provide for one. For example, the common law courts had no power to
order specific performance or grant an injunction. The Chancellor would also
provide a remedy where a common law rule resulted in substantial injustice in a
particular case due to some unforeseen set of facts. Justice required that the
rule be amended or modified. If the rule could not be amended or modified,
justice required that there be a new rule to mitigate the harshness and
severity of the common law rule.
This new body of rules is what came to be known as equity. The rigidity and
deficiency of the common law led to the evolution of equity. In this sense,
equity can be seen as supplementing or filling in gaps in the common law.
Equity is distinguishable from the general body of
law and from the common law, in particular, not because it seeks to achieve a
different end, since both equity and the common law seek to achieve justice.
Rather, equity is distinguishable because it appears at a later stage of legal development.
Systematization of Equity
With time, Chancellors began to apply the same
principles in all cases instead of following the inclination of the moment
necessitated by circumstances under the notion of conscience. The Court of Chancery
also became more organized. More judicial officers were appointed and a Court
of Appeal in Chancery was established. What had begun as an irregular process
of petitioning the Crown in extraordinary circumstances had become a regular
system of courts with a recognized jurisdiction.
Rigidity
of Equity
The systematization of the rules of equity in turn
produced rigidity. They became as fixed as those of the common law. One of the
most famous Chancellors, Lord Eldon (1801-1827) said the following in Gee v. Pritchard (1818) 2 Swans
402 at 414: 36 E.R 670
“The doctrines of this court ought to be as well settled, and made as
uniform almost as those of the common law, laying down fixed principles, but
taking care that they are to be applied according to the circumstances of each
case. I cannot agree that the doctrines of this court are to be changed with
every succeeding judge. Nothing would inflict on me greater pain, in quitting
this place, than the recollection that I had done anything to justify the
reproach that the equity of this court varies like the Chancellor’s foot.”
It must not therefore be assumed that every
injustice or wrong was the subject of equitable intervention. Initially, it was
never certain when equity would apply since the Chancellor’s powers were wide
but vague. Eventually, the Chancellor had to rely on well-settled principles of
equity.
Per Jessel, M.R. in Re National Funds Assurance Co. (1878) 10 Ch.D 118 at 128:
“This is not, as I have
often said, a Court of Conscience, but a Court of Law.”
According to the Court of Appeal in Re Diplock [1948] Ch.
If the claim being made did exist,
“it must be shown to have
an ancestry founded in history and in the practice and precedents of the courts
administering equity jurisdiction. It is not sufficient that because we may
think that the ‘justice’ of the present case requires it, we should invent such
a jurisdiction for the first time.’
Harman, L.J. said the following in Campbell Discount Co. v. Bridge
[1961] 1 Q.B. 445 at 459:
“Equitable principles are, I
think, perhaps rather too often bandied about in common law courts as though
the Chancellor still had only the length of his foot to measure when coming to
a conclusion. Since the times of Lord Eldon the system of equity for good or
evil has been a very precise one and equitable jurisdiction is exercised on
well known principles.”
The law of equity is therefore more concerned with
the technical rather than the ordinary meaning of equity. Any definition of
equity must have regard to two things, namely, firstly, form and history, and, secondly, substance or principle of equity.
Equity versus Natural Justice
It is not entirely accurate to define equity solely
in terms of natural justice. The principles of equity administered in the
courts are distinct from the rules of natural justice. When the rules of
natural justice enforced by the courts
are examined, it will be seen that many of them are rules of the common
law, many others are statutory, and some are derived from ecclesiastical and
other sources. Only a small fraction of the whole can be said to be rules of
equity in the technical sense.
Illustration:
The Rules
of Natural Justice: Luganda Proverbs:
“Enkima tesala
gwa kibira”: “The monkey does not
decide an affair of the forest.”
No man shall be a judge in his own cause. This is
the rule against bias, “Nemo judex in
causa sua.”
“Tosala gwa
kawala nga tonnawulira gwa kalenzi”:
“Do not decide the girls’ case until you have heard the boys’.” No man
shall be condemned unheard. This is the right to a fair hearing, “Audi
alterem partem.”
From the above, it can be said that equity in the
technical sense is entwined with the traditional rules of natural justice.
Disadvantages of Separate Courts of Common Law
and Equity
The Court of Chancery which was established
following the systematization of equity
was separate from the three common law courts –
King’s Bench, Common Pleas and Exchequer.
Soon the practice of having
different courts became cumbersome and inconvenient. Often in the course of the
same litigation, parties were driven to and fro between common law and equity
courts. For example, the common law courts had no power to order specific
performance or grant an injunction. On the other hand, the Court of Chancery
could not award damages. A plaintiff who had obtained a judgment in his favour in a common law court could be prevented from enforcing it by
an injunction granted by the Court of Chancery because in the opinion of the
latter court, the plaintiff obtained the judgment unfairly. This practice had
earlier evoked the bitter hostility of
the common law courts, until the dispute
was resolved in favour of the Court of Chancery by King James I after the Earl of Oxford’s Case (1615 1
Rep. Ch. 1 and App.; Holdsworth H.E.L. Vol. 1 pp. 459-469.
Mitigation of the Disadvantages
Some of the disadvantages of
having separate courts were mitigated by the common law courts themselves. For
instance, when a rule of equity differed from a common law rule, the common law
courts applied the rule of equity in order to save the parties the expense of
separate proceedings in equity. However, this would be done only when it was
plain in the proceedings at common law what equity would do.
Other disadvantages were
mitigated piecemeal by statute. For example, the Common Law Procedure Act 1854 gave the common law courts a limited
power of granting injunctions. The
Chancery Amendment Act 1858, commonly known as Lord Cairns’ Act, gave the Court of Chancery power to award damages
either instead of, or in addition to, an injunction or specific performance.
The situation was therefore
now ripe for a merger of the three common law courts with the Court of
Chancery.
Merger of Common Law and
Equity Courts
The merger was accomplished
through the enactment of the Judicature
Acts of 1873 and 1875. The main purpose of these Acts was to amalgamate
the numerous courts into one Supreme Court of Judicature.
Consequently, the Queen’s
Bench, Common Pleas, Exchequer, Court of Chancery and Court of Appeal in
Chancery were all replaced by one
Supreme Court consisting of:
1. the Court of Appeal; and
2. the High Court.
The High Court had five divisions:
a) Queen’s Bench
b) Common Pleas
c) Exchequer
d) Chancery
e) Probate Divorce and
Admiralty
These were reduced to three by the 1880 Order
in Council. The three were:
a) Queen’s or King’s Bench,
merging the Queen/King’s Bench, Common Pleas and Exchequer;
b) Chancery; and
c) Probate, Divorce and
Admiralty.
By the Administration
of Justice Act 1970, Probate and Divorce became the Family Division.
Admiralty matters were taken to an Admiralty
Court
The Supreme Court Act 1981 affirmed
the three divisions, namely:
(a) Queen’s Bench;
(b) Chancery; and
(c) Family Division.
The Supreme Court was directed
to administer both law and equity. Rules of equity remained distinct from those
of the common law but both systems were administered in the same courts.
In the words of
Pollock in Leading Cases Done
into English (1892), p. 57:
“The courts that were
manifold dwindled to diverse divisions of one (court).”
For the sake of administrative convenience, cases
were allocated to the Divisions according to their general subject matter.
The Kenyan court system derived from this English
system.
Contribution
of Equity to English Law
Equity has made the following contributions to
English law:
(a) Trusts and settlements in
respect of property
(b) Division of ownership
between Legal and equitable ownership
(c) The doctrine of “undue
influence” in respect of contracts
(d) Property for the separate
use of married women which the common law did not recognize
(e) Superior
Classification
of the Jurisdiction of Equity
The jurisdiction of equity can be divided into three
classes:
(a) Exclusive jurisdiction –new rights- this covered
matters which the common law did not provide for, e.g. trusts.
(b) Concurrent jurisdiction – This covered cases which
were known to the common law, but which the Court of Chancery would also
adjudicate on.
(c) Auxillary jurisdiction –new remedies- Here equity
assisted the common law with new remedies which were lacking, e.g. specific
performance and injunction.
Equity did not come to replace or supplant the
common law but to assist it. See:
Lord Eldon in Lord
Dudley v. Lady Dudley (1705) Pre. Ch.
“Equity is no part of the law, but a moral virtue, which qualifies,
moderates and reforms the rigour, hardness and edge of the law, and is a
universal truth; it does also assist the law where it is defective and weak…and
defends the law of crafty evasions, delusions and subtleties, invented and
contrived to evade and delude the common law…Equity therefore does not destroy
the law nor create it but assist it.”
Equity is as long as the Chancellor’s foot. See:
John Selden, Talk of John Selden (ed. Pollock, 1927)
quoted in Holdsworth, H.E.L., pp. 467-468:
“Equity is a
roguish thing. For law, we have a measure…equity is 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.”
MAXIMS OF EQUITY
(SNELL
27TH ED. CHAPTER 3 &4)
There are certain general principles
upon which the court of equity exercises its jurisdiction. Many of these
principles have been embodied in the so-called “maxims of equity.”
Some of the maxims overlap. A
particular maxim may contain by implication what another maxim contains. These
maxims do not cover all the situations in equity.
The most notable maxims are as
follows:
1.
He who seeks equity must do equity.
2.
He who comes to equity must come with clean hands.
3.
Equality is equity/Equity is equality.
4.
Equity looks to the intent/substance rather than the
form.
5.
Equity regards as done that which ought to be done.
6.
Equity acts in “personam”.
7.
Equity will not assist a volunteer.
8.
Equity will not suffer a wrong to be without a
remedy; where there is a wrong there is a remedy (“Ibi jus ibi remedium”).
9.
Equity does not act in vain.
10. Delay
defeats equity; equity aids the vigilant and not the indolent (“Vigilantibus
non dormientibus jura subveniunt”).
11. Equity
follows the law (“Acquitus sequitur legem”).
12. Where the
equities are equal, the first in time shall prevail.
13. Where there
is equal equity, the law shall prevail.
1.
He who seeks equity must do equity
This maxim means that a person who
comes to seek the aid of a court of equity to enforce a claim must be prepared
to submit in such proceedings to any directions which the court may deem fit to
give. He must do justice as to the matters in respect of which the assistance
of equity is sought. The plaintiff must be prepared to do equity in its popular
sense of what is right and fair to the defendant. For instance, a person
seeking an injunction will not succeed if he is unable or unwilling to carry
out his own future obligations. This maxim is the foundation of the equitable
doctrine of election.
Illustrations of this maxim are as
follows:
(i) Contracts
of employment and strikes
Chappell v. The Times
Newspapers Limited [1975] 2 All E.R. 233
The plaintiffs sought an
interlocutory injunction to restrain their employer from terminating their
contracts of employment after a strike. The court refused to grant the
injunction because the plaintiffs refused to give an undertaking not to engage
in activities that were disruptive to their employer’s business. The Court of
Appeal stated that in seeking an equitable remedy, the plaintiffs had to be
prepared to do equity. By refusing to give an undertaking not to disrupt
newspaper production, they were in effect telling the employers that they must
keep to their part of the contract even though the plaintiffs were not
themselves ready or willing to keep to theirs. Accordingly, the plaintiffs were
not entitled to the relief claimed.
(ii) Illegal
Loans
Lodge v. National Union
Investment Company Limited (1907) 1 Ch.
B borrowed money from M and mortgaged
certain securities to M. M was not a registered moneylender as required by law.
The transaction was therefore illegal and void. B sued M for delivery up of his
securities on this basis. The court refused to make the order unless B repaid
the loan. Since B was seeking equitable relief, he had to do what was right and
fair, that is, first repay the money owed by him to M.
See also: Kasumu
v. Baba-Egbe [1956] A.C. 539 at 549.
The Privy Council in this case stated
that the case of Lodge “cannot be treated as having established any wide
general principle that governs the action of courts in granting relief in
moneylending cases.” See also Barclay
v. Prospect Mortgages Ltd [1974] 2 All ER 672 and Chapman V. Michaelson (1909)
I Ch.238
Although courts do not enforce
illegal contracts, the case of Lodge v. National Union Investment
Company Limited is still important as an illustration of the early application of the
above maxim.
(iii) Consolidation:
This applies where a person has lent
money and is entitled to two mortgages made by the same mortgagor. The lender
may consolidate the mortgages and refuse to permit the mortgagor to exercise
the equitable right to redeem one mortgage unless the other mortgage is
redeemed as well. See: Pledge v. White [1896] A.C. 187
For a detailed discussion on
consolidation, particularly as to the conditions to be satisfied before a
mortgagee can consolidate, see: SNELL, Chapter on Securities (26th
Edition, pp. 425-426).
(iv) Notice
to redeem mortgage:
A mortgagor who wishes to exercise
his right to redeem his mortgage before
the due date of redemption must give his mortgagee reasonable notice of his
intention. Reason: This gives the mortgagee reasonable time to find some
other investment before payment is made by the mortgagor. The mortgagor would
otherwise be required to pay interest in lieu of notice.
(v) Election:
Where a donor gives his own property
to E and in the same instrument purports to give E’s property to X, E will be
unable to claim the whole of the gift to him unless he allows the gift to X to
take effect. This is referred to as the doctrine of election. ( SNELL 26th
Ed. P. 532 et seq)
(vi) Equitable
estoppel:
There are two types of estoppel,
namely, promissory and proprietary estoppel.
Promissory Estoppel
Promissory estoppel arises where by
his words or conduct, one person, A, makes some representation or promise to
another person, B, and B relies on that representation or promise and acts to
his (B’s) detriment. Here, equity will preclude A from resiling from his
representation or promise.
Example 1: If a landlord tells his
tenant towards the end of the term that he intends to demolish the leased
premises after the term expires, the landlord cannot subsequently claim damages
from the tenant for leaving the premises unrepaired or failing to re-decorate the premises at the
expiry of the term. See: Marquess of Salisbury
Example 2: If a landlord agrees to
accept a reduced rent and the tenant acts on this agreement to his detriment
(eg he spends the extra money), the landlord cannot thereafter demand the full
rent. See: Central London
Notice to resile from the promise
The promisor can resile from his
promise by giving the promisee notice so that the promisee has a reasonable
opportunity to resume his former position. It is only if resumption of the former
position is impossible that the promise becomes final and irrevocable. See: Ajayi v. R.T. Briscoe (Nigeria
In the case of Tool Metal Manufacturing Co. Ltd v. Tungsten
Electric Co. Ltd (1955) WLR 761, it was Held: That where a patentee grants a licence to a manufacturer
in return for certain periodic payments and later agrees not to enforce the
payments, he may nevertheless again enforce the payments when a reasonable time
has elapsed, after giving notice of his intention to do so.
To the extent that the promisor can
resile from his promise on giving notice, promissory estoppel at equity is
temporary. In contrast, promissory estoppel at common law is permanent.
Proprietary Estoppel
Proprietary estoppel arises where one
person, A, knowing that another person, B, is acting under some mistaken belief
that he (B) has some right to A’s property, actively or passively encourages
B’s acts. Here, equity will restrain A from acting contrary to the belief on
which B has acted. A will thus be precluded from denying B’s supposed rights in
A’s property.
Promissory estoppel at equity may be
temporary and merely provides a defence (shield). On the other hand,
proprietary estoppel is permanent in its effect and can confer a substantive
right of action (sword).
Four conditions must, however, be
satisfied for proprietary estoppel to apply:
(a) Expenditure
B must have incurred expenditure or
otherwise prejudiced himself. Eg. B may have spent money on improving property
which in fact belongs to A, for instance, by building a house on A’s land. See:
Inwards v. Baker (1965) 2 QB 29.
(b) Mistaken Belief
B must have acted in the belief, and
A must have actively or passively encouraged B to believe either that he (B
owns a sufficient interest in the property to justify the expenditure, or that
B will obtain such an interest. See: Michaud
v. City of Montreal
Thus if B improves A’s land believing
that A will grant B a sufficient interest in it, A cannot then evict B on the
ground that no rent or price has been agreed upon and therefore that there
cannot be a contract between them. See: Duke
of Devonshire v. Eglin (1851) 14
Beaver 530.
(c) Conscious Silence
A must have known that B was
incurring expenditure in the mistaken belief, and that A was entitled to object
but nevertheless stood by or participated in the expenditure without
enlightening B. See: Hopgood v. Brown (1955) 1
WLR 213.
(d) That there is No bar to Equity
No proprietary estoppel will arise in
equity if enforcing the right claimed would contravene a statute. See: Chalmers v. Pardoe (1963) 1 WLR 677; 1963 3 ALL
E.R. 552.
Contrast: Ward v. Kirkland
2.
He who comes to equity must come with clean
hands
The distinction between the first maxim,
“He who seeks equity must do equity” and the second maxim, “He who comes to
equity must come with clean hands” is that the first maxim applies to a future
obligation while the second maxim refers to the past conduct of the plaintiff.
E.g. A tenant whose lease has been
forfeited by the landlord for
non-payment of rent cannot expect relief against forfeiture if he has committed
a breach of covenant such as using the leased premises for a purpose other than
that allowed under the lease. See:
Gill v. Lewis [1956] 2 Q.B. 1 at 13, 14 & 17
Mountford
v. Scott [1975] Ch.
Litvinoff
v. Kent
Hubbard
v. Vosper [1972] 2 QB 84
The plaintiff must not only be
prepared to do what is right and fair (as in the previous maxim), but he must
also show that his past record in the transaction is clean, for "He who
has committed Iniquity…shall not have Equity.” See: Jones
v. Lenthal (1669) 1 Ch.
Limit to this rule:
See Loughran V. Loughran 292 US. 216 at 229 (1934) per Brandeis J. – no
requirement to have led a blameless life.
Where the plaintiff’s breach was only
trifling or where he has breached a much less important covenant than the one
he seeks to enforce, the maxim will not apply. See:
Besant
v. Wood (1789) 12 Ch.D 605
Chitty
v. Bray (1883) 48 LT 860
Meredith
v. Wilson
Hooper
v. Bromet (19030 89 LT 37; affirmed: (1904) 90 LT 234, CA
The unclean conduct of the plaintiff
should be closely
connected with the relief being sought . See:
Duchess of Argyll v. Duke of
Argyll
[1967] Ch.
The Duchess and Duke of Argyll had
been married and were divorced. During their marriage, they had exchanged
certain confidential information. After the divorce, the Duke sought to publish
the information. The Duchess applied for an injunction to restrain the Duke
from publishing the information, i.e. to restrain a breach of confidence by her
husband. The Duke argued that his wife had committed adultery and was the cause
of the divorce and in view of this the court should not grant her the relief
she sought. The court Held: That the wife’s alleged conduct had no connection
with her application for an injunction and allowed her application. The court
remarked that her conduct did not license the husband “to broadcast unchecked
the most intimate confidences of earlier and happier days.”
NOTE: What bars the success of the
plaintiff’s claim by using the maxim is not a general depravity but rather, a
depravity which has an immediate and necessary relation to the equity sued for.
The depravity must be a depravity in a legal as well as moral sense. The maxim
must therefore not be interpreted too widely as allowing any unclean conduct to
defeat a plaintiff’s claim. “Equity does not demand that its suitors shall have
led blameless lives.” Per Brandeis J. in Loughran v. Loughran (1934) 292
US
But see Donovan V. Donavan (1933) 263
N.Y.S 336 where premarital fornication was used to deny the husband a decree of
nullity of the marriage
3.
Equality is Equity/Equity is Equality
This maxim applies to a situation
where two or more persons are entitled to the same property. An important
principle of equity which is illustrated by this maxim is that in the absence
of sufficient reasons for any other basis for division, those who are entitled
to property should have the certainty and fairness of equal division.
Equality in this sense does not mean
literal equality but proportionate equality. Equity therefore seeks to effect a
distribution of property and losses proportionately to the several claims or
liabilities of the persons concerned. This maxim has been applied in relation
to property in a variety of ways:
A. Presumption
of a tenancy in common
Equity leans in favour of a tenancy
in common as opposed to a joint tenancy. In a joint tenancy, when one joint
tenant dies, the whole estate belongs to the surviving joint tenant. The estate
of the deceased inherits nothing. There is no equality here.
Equity will, therefore, in a number
of instances, treat persons who are joint tenants at law as tenants in common.
Although at law the survivor is entitled to the whole estate, he will hold in
part as trustee for the estate of the deceased.
Three of these instances are as
follows:
A (i) Purchase in unequal
shares
If A and B purchase property with
purchase money provided by both of them in unequal shares, and they hold the
property as joint tenants, on A’s death, B becomes entitled to the whole of the
property at law. In equity, however, B is treated as a trustee for A’s estate
proportionately to the share of the purchase money contributed by A. Had the
purchase money been contributed in equal shares, B would have been entitled to
the whole property in equity and at law. This is because where two purchasers
contribute the money in equal shares, they may be presumed to have purchased
with a view to the benefit of survivorship.
A (ii) Purchase in equal
shares: Severance of joint tenancy
Even where the property is vested in
the parties as joint tenants in equity as well as at law, e.g. where they
contribute money in equal shares, equity will treat the joint tenancy as
severed so as to exclude the incidence of survivorship.
A (iii) Partnership property
Where partners acquire property, they
are presumed to hold it as beneficial tenants in common. ‘Jus accrescendi inter
mercatores locum no habet’ (The right of survivorship has no place among
merchants).
B. Equal division
As stated above, the maxim will be
applied whenever property is to be distributed between rival claimants and
there is no other basis for division. Illustrations:
B (i) Husband and Wife
The court will, after a divorce,
refuse to dissect meticulously the joint bank account which both the husband
and wife drew upon and paid their income into. Meticulous dissection here
refers to division of funds in the account proportionately to the amount drawn
or deposited by each spouse. The court will therefore divide the balance
equally between the spouses. Note: This principle does not apply where
the husband and wife are still living together. Reason: Their
rights in a joint bank account are not
meant to be affected or interfered with by the court.
B. (ii) Trusts
Where property has been settled in
unequal shares with a provision that any share which fails to vest shall accrue
to the other shares by way of addition, the accrual takes place in equal shares
and not in the proportions laid down by the settlor for the original shares. See: Re Bower’s S.T. [1942] Ch.
This is the case notwithstanding that
equality is attained at the price of altering the proportions prescribed by the
settlor. See: A Critique in (1942) 58 L.Q.R. 311.
B. (iii) Copyright
Where an author bequeaths the
manuscript of a work to A and the copyright to B, and publication of the work
is made possible only by using the manuscript, the proceeds of sale of the
copyright will be divided equally between A and B. See: Re Dickens [1935] Ch.
For another example of the operation
of the maxim, see:
Re Kavanagh (1949) 66
T.L.R. 65, (1994) 2 All E.R 264.
Money deposited in court divided
equally between Bankrupt and Trustee in absence of evidence of other formular.
4. Equity looks to the intent/substance rather than the
form
The court makes a distinction between
matters of substance and form. Whenever there is a contradiction
between the two, equity presumes that matters of substance prevail over matters
of form. Form will not be allowed to defeat the substance
This maxim can be applied to trusts.
For a person to create a trust, it is not necessary to use technical words. The
intention to create a trust can be inferred from conduct. A court of equity
will hold the existence of a trust even if the word “trust” is not mentioned.
E.g. “in the
faith that he will hold the property safely for my son’s benefit.”
The court looks at the substance rather than the form.
Another illustration is the
equitable remedy of rectification where the court, in ordering rectification of an
instrument, looks at the intention of the parties as per their agreement so
that the instrument correctly reflects and records their intention or
agreement. See also, Webster v. Cecil (1861) 30
Beav. 62 54 E.R. 812
5. Equity looks
upon that as done which ought to be done
This maxim is applied mostly to
contracts, particularly agreements for lease. Equity treats a contract to do a
thing as if the thing were already done. It does so only in favour of persons
entitled to enforce the contract specifically and not in favour of volunteers.
E.g. if there is an agreement for a
lease of property and the lease requires to be registered, equity will presume
that the agreement is valid, notwithstanding the absence of registration. See:
Walsh v. Lonsdale (1882) 21 Ch.D 9
FACTS: The defendant, a landlord,
entered into a written agreement to grant the plaintiff (tenant) a lease of a
mill for 7 years. The agreement provided that rent was payable in advance if
the tenant so wished. The law provided that if a grant for a lease exceeded 3
years, in order for it to be enforceable, a deed must be prepared ( i.e. a
lease as distinguished from an agreement). In this case, there was no deed. The
tenant also paid rent in arrears, not in advance. The landlord demanded the
year’s rent in advance. It was not paid and the landlord sought to obtain
possession of the premises. The tenant argued that the landlord’s suit to
recover possession of the premises was illegal as no 7-year lease had been
granted and therefore the agreement was not in accordance with the law. As
such, he was not bound to pay the rent demanded by the landlord.
HELD: The agreement for the lease
was as good as the lease itself. The court would treat as done that which ought
to be done.
Distinction between English law and Kenyan law regarding
the application of Walsh v. Lonsdale
Souza Figuerido v. Moorings
Hotel (1960) EA 926
FACTS: By a lease, the respondent
landlord let certain premises to the appellant tenant. The applicable law
required such a lease, being for a period of more than 3 years, to be
registered. A lease was drawn but was not registered. The tenant defaulted in
payment of rent and the landlord sued for recovery thereof. The tenant argued
that he should not pay the money as the lease was unenforceable since the
provision requiring registration had not been complied with.
HELD: An unregistered lease cannot
create any interest, right or confer any estate which is valid against third
parties. HOWEVER, the
unregistered lease operates as a contract inter partes, is valid as between the parties and
can therefore be specifically enforced. The tenant was therefore liable to pay
the arrears of rent.
The Kenyan position modifies or
limits the application of the maxim. The agreement for lease or unregistered
lease, as the case may be, is not equated with the registered lease, but is
regarded as a contract between the parties which gives a right to either party
to sue for specific performance of the contract.
See: The Land Registration Act No 3
of 2012 and the Land Act No 6 of 2012
Other English Cases
Zimbler v. Abrahams [1903] 1 KB 577
Gray v. Spyer [1922] 2 Ch.
Manchester Brewery Company v.
Coombs [1901] 2 Ch.
6. Equity acts in
personam
A court of equity operates primarily
“in personam” and not “in rem”. A right in rem is a right in a specific piece of
property. A right in personam is a right that can be enforced only against a
specific person rather than a thing.
Originally, the court of Chancery did
not itself interfere with the defendant’s property. Instead, it made an order
against the defendant personally. If the defendant failed to comply with the
order, the court punished him for his disobedience by committal for contempt.
In this way, equity acted in personam. The same case applies today both in England and Kenya
However, in some cases, imprisonment
was ineffectual to compel a defendant to comply with an order of the court of
equity. Accordingly, the court of Chancery got the power to issue a writ of
sequestration, under which sequestrators were appointed to take possession of
the property in dispute, and eventually of all the defendant’s property, until
he did what he had been ordered to do.
This power of enforcing orders by
committal of the defendant or sequestration of property has been supplemented
by statute. See: The Civil Procedure Rules on Execution of Decrees and
Orders. (The rules refer to attachment and not sequestration but both have the
same effect.)
Although at present equity is not
confined to acting in personam, its jurisdiction is still primarily over the
defendant personally. It is therefore immaterial that the property in question
is not within the reach of the court, provided that that the defendant himself
is within the court’s jurisdiction. Accordingly, in the leading case of Penn
v. Lord Baltimore, specific performance was ordered in respect of an
agreement relating to boundaries of land in America ,
with the defendant being in England
Penn v. Lord Baltimore (1750) 1 Ves. Sen. 444; 27
E.R. 1132, 28 E.R. 498
FACTS: The plaintiff and defendant
had entered into an agreement as to how the boundaries of certain lands were to
be drawn. The land was in the USA
(Baltimore , Maryland ),
while both the plaintiff and defendant resided in England England England
had no jurisdiction since the subject matter of the dispute was in the USA
HELD: That the defendant was
nevertheless liable to perform his part of the agreement. The court reasoned
that the person on whom the order was made, the defendant, was in England
7. Equity will not assist a volunteer/Equity favours a
purchaser for
value without notice
A volunteer in this sense is a person
who has not paid consideration for property.
As a general rule, a court of equity will not give any
assistance to a person who has not paid valuable consideration. It will only
grant an equitable remedy to a purchaser for value without notice.
The remedy of specific performance,
for instance, can only be granted to a person who has paid valuable
consideration.
Exceptions to the application
of this maxim
Trusts
Claimants of rights under a trust
constitute an exception to the application of this maxim. Trusts are a creation
of equity. In a trust, property is conveyed by the donor to the trustee to hold
on trust for the beneficiary even though the beneficiary has not paid any
consideration. A beneficiary can seek the assistance of the court of equity to
order a trustee to convey property to that beneficiary.
8. Equity will not suffer a wrong to be without a remedy
“Ibi jus, ibi remedium.” (If there is a wrong, there is a
remedy for it.)
The meaning extracted from this maxim
is that no wrong should be allowed to go unredressed if it is capable of being
remedied by courts of justice.
It must not, however, be assumed that
every moral wrong should be redressed by equity. The maxim refers only to
rights which are suitable for judicial enforcement, but were not enforced at
common law owing to some technical defect.
E.g. Enforcement of a trust: Where A
( a donor) conveyed land to B (a trustee) to hold on trust for C (a
beneficiary), and B kept the benefit of the land for himself, C had no remedy
at law. Yet such an abuse of confidence was clearly a wrong capable of redress
in a court of justice. The court of Chancery therefore applied this maxim to
enforce the trust in favour of the beneficiary.
9.
Equity does not act in vain
The court of equity will not grant a
remedy which cannot be enforced. This also applies where there has been a
change of circumstances such that the remedy is rendered nugatory or is
overtaken by events e.g. “force majeure”. The rationale for this is that the
courts should not issue orders that cannot be enforced as this would bring the
court system into disrepute.
10. Delay defeats
equity; Equity aids the vigilant and not the indolent
“Vigilantibus,
non dormientibus, jura subveniunt”
A court of equity “has always refused
its aid to stale demands where a party has slept upon his right and acquiesced
for a great length of time. Nothing can call forth this court into activity,
but conscience, good faith and reasonable diligence; where these are wanting,
the court is passive and does nothing.”:
Per Lord Camden in Smith v.
Clay
(1767) 3 Bro. C. 639n at 640n, 27 E.R. 419.
Delay which is sufficient to prevent
a party from obtaining an equitable remedy is called “laches”.
This maxim does not apply to
equitable claims to which the Limitation of Actions Act (Cap 22) applies, either
expressly or by analogy.
Express Limitation: The act
itself contains provisions on equitable claims which are subject to limitation.
Implied Limitation/Limitation
by Analogy
Where a claim is not expressly
covered by any statutory period but is closely analogous to a claim which is
expressly covered, equity will act by analogy and apply the same period. The
class of cases to which the Act will be applied by analogy is, however,
extremely small.
In all cases where the Act applies
expressly or by analogy, delay which is within the statutory limitation period
will not be a bar
to a claim whether legal or equitable.
The doctrine of Laches
Laches essentially consists of the
lapse of time coupled with the existence of circumstances which make it
inequitable to enforce the claim. For instance, delay will be fatal to a claim
for equitable relief if the plaintiff has so acted as to induce the defendant
to alter his position on the reasonable faith that the claim has been released
or abandoned. See: Allcard v.
Skinner (1887) 36 Ch.D 145
Ignorance, disability (lack of legal
capacity), undue influence will be a satisfactory explanation of delay and will
not bar a plaintiff from obtaining equitable relief. In addition, laches,
unlike estoppel, is a personal disqualification and will not bind successors in
title. See: Nwakobi v.
Nzekwu
[1964] 1 WLR 1019
Delay may also bar claims for
equitable remedies such as specific performance, rescission, rectification and
injunctions other than final injunctions to which a party is entitled as of
right.
In Williams v. Greatrex [1957] 1
WLR 31; [1956] 3 All ER 705 the plaintiff (purchaser) brought an action for
specific performance of a contract made 10 years previously. HELD: The
purchaser was entitled to specific performance of the contract notwithstanding
the 10-year delay for the reasons that:-
(i)
time for completion of the contract was not of the
essence under the contract.
(ii)
he was not barred by laches since he had an equitable
title to the plots in question
by virtue of the contract and had entered
into possession of them.
(iii)
there had been
no abandonment of the contract by him.
Lolkilite ole Ndinoni v. Netwala ole Nebele (1952) 19
EACA 1
In the appellant was the son of a
deceased who was alleged to have committed homicide- he had killed another
person. Some 35 years later, a claim was made in the Native Tribunal for
compensation for the killing. The Native Tribunal rejected the claim but the
Supreme Court supported it. The Court of Appeal, however, HELD, inter
alia:
That it is repugnant to natural justice to entertain a claim of this nature
after so long.
See the judgments of:
Edwards C.J. and Sir Barclay Nihill.
.
11. Equity follows
the law (“Equitas sequitur legem”)
See Graf V. Hope Building Corporation
(1930) 254 N.Y.1 at 9 per Cardozo C.J.
This maxim means that equity treats
the common law as laying the foundation of all jurisprudence and it does not
necessarily depart from legal principles.
Both the common law and equity have
the same end, which is to do justice.
Where a statutory or common law rule
is direct and governs the case, equity applies the rule of law as the
appropriate system. In such cases, the rules of law are in fact binding in
equity as they are in common law.
Where equity has to regulate the
equitable interests which it has created, it acts, so far as possible, on the
analogy of the legal rules applicable to the corresponding legal interests. It
is only when there is some important circumstance disregarded by the common law
that equity interferes.
E.g. Equity follows the common law as
regards limitation of action. It applies the Limitation of Actions Act as a bar
to equitable claims either by way of analogy or because the Act is binding on a
court of equity.
12. Where the equities are equal, the first in time shall
prevail
13. Where there is equal equity, the law shall prevail
These two maxims govern questions of
the priority of rival claimants to the same property in equity. See: SNELL (26th Ed.) Chapter 4 pp.
46-71
Illustrations:
Mortgages and charges
Purchasers of property (land) each of
whom is claiming a prior right to purchase the property.
Qui prior est tempore potior est jure
–
-
Order of creation – he who is earlier in time is
stronger in Law. See Re Samuel Allen & Sons Ltd. (1907) I Ch – 575.
Modifications:-
-
Purchaser without Notice – Value – see Cave V. Cave (1880) 15 Ch.D.639
o Legal
Estate
o No Notice –
actual
constructive
o Not engaged
in fraud
o Not
negligent
-
Registration as notice and as bar to prior claim
which was registrable but has not been registered
EQUITABLE REMEDIES
INTRODUCTION
Equitable
remedies have three features or
characteristics:
1.
They are discretionary.
2.
They are remedies in personam.
3.
They are granted only where the common law remedy of damages is inadequate.
1.
Discretionary
The
court looks at the conduct not only
of the defendant but also the plaintiff
in exercising its discretion to grant or refuse an equitable remedy. The court also takes into account
circumstances surrounding the case. The
court will therefore refuse to grant relief to a plaintiff:
(a) who had unclean hands; or
(b) who was not willing to do equity; or
(c) who slept on his rights; or
(d) whose claim would produce unfair results.
In
addition, if a plaintiff has an adequate
remedy at law that in itself will be a ground for refusing equitable
relief. This is perceived as part of the
discretionary nature of equity.
2.
Equity acts “in personam”
Primarily,
equity acts on the person rather
than on the subject matter. The defendant is ordered to perform his part
of the obligation failing which he is charged with contempt of court. See: Penn
v. Lord Baltimore (1750) 1 Ves. Sen. 444 ; [1558-1774] All E.R 99
Richard West & Partners (Inverness) Ltd. v. Dick [1969] 1 All E.R. 289; affirmed [1969] 1 All E.R.
943; [1969] 2 Ch. 424 C.A.
3.
Equity cures the inadequacies of the common law
Equitable
remedies are granted where the common law remedy of damages is inadequate to compensate a plaintiff
for his loss or injury. The rigidity of the common law also
contributed to its inadequacy.
Equity
therefore evolved to provide a diversity of remedies to supplement the common
law and cure its inadequacies. In the words of Barton, J. in:
Gilligan v. National Bank Limited [1901] 2 I.R.
513 at 542:
A
remarkable feature of equity is “the ability
and willingness of equity to grant elastic remedies…. which were not obtainable at law.”
Two
characteristics are discerned from the above quote:
(a) elastic, ability and willingness – discretionary
nature
(b) not obtainable at law – inadequacy/rigidity of the
common law which equity cures/supplements the common law.
SPECIFIC PERFORMANCE
The
remedy of specific performance is an order of the court requiring the defendant
to carry out his obligations under an instrument
according to its terms, e.g. a contract of sale/agreement for sale. However,
not all contracts are specifically enforceable. The contracts are therefore
divided into two categories, namely, contracts which are specifically
enforceable as a general rule and contracts which are not specifically
enforceable. Even in the case of contracts that are specifically enforceable,
the court may exercise discretion and decline to grant specific performance.
The discretion is, however, exercised on well settled principles.
Specific
Performance a Discretionary Remedy
As
a general rule specific performance
is only available where the common law remedy of damages is inadequate. Therefore, equity will not interfere where
damages at law will give a party full compensation to which he is entitled and
will put him in a position as beneficial to him as if the agreement had been
specifically performed.
On
the other hand, there are also cases where the court will not grant specific performance even if the remedy of damages is inadequate. The court may take into account certain
matters such as the conduct of the plaintiff or the hardship which an order of
specific performance would inflict on the defendant. This is because specific performance is a discretionary remedy. The discretion is a judicial discretion which must be exercised on well settled principles.
Specific
Performance a Remedy in Personam
In
Penn v. Lord Baltimore, Lord Hardwick, L.C. granted specific performance of an English
agreement relating to boundaries between Pennsylvania
and Maryland , USA
Similarly,
in Richard West’s case, specific performance was granted in respect of a
contract for the sale of land outside the court'’ jurisdiction against a
defendant within the jurisdiction. The
land was in Scotland
Parties to an Action for Specific
Performance
It
is only parties to the contract or
their representatives who can sue or
be sued for specific performance.
In a contract for the sale of land, for instance, only the seller or
buyer can be sued. However, if the
seller has agreed to sell land to a purchaser and subsequently sells to a third
party, then unless the third party shows that he was a bona fide purchaser for
vale without notice, he should be joined as a co-defendant.
Ensuring
Observance
Equity
as distinguished from the common law can be characterised as a proud system of
law – it does not want to be embarrassed. One way in which a court can be embarrassed
is if it issues an order and that order cannot be observed or enforced. To avoid possible embarrassment, equitable
remedies, in general, and specific performance, in particular, will never be granted by the court unless the court is sure that it can be
enforced and that the defendant is in a position to comply with the court
order. This is based on the principle
that “equity does not act in vain.” See: Tito v. Waddell (No. 2) (1977) Ch.
Positive
Contractual Obligations
Specific
performance is ordered for the enforcement of positive contractual
obligations. This is similar to a mandatory injunction which
orders the defendant to take positive steps
to undo an act done or to do an act omitted to be done in breach of a
contract. It is different from a prohibitory injunction which restrains a defendant from committing an act in breach of a negative contractual agreement.
Where
a plaintiff wishes to enforce a positive contractual obligation, he may sue for
an injunction instead of specific performance.
The advantage of such a course is that an injunction can be obtained on
an interlocutory basis while specific performance cannot.
Note,
however, that specific performance cannot issue against the Government. See: the Government Proceedings Act (Cap 40
S.16). The proper remedy here would be a
declaration.
SPECIFICALLY ENFORCEABLE CONTRACTS
1.
Contracts relating to Land
This
is the most common situation where the court grants specific performance. The contract may be for the sale of land or
the grant of a lease, charge or mortgage of land. Land is property which has a fixed
location. It is of special or unique
value as no two pieces of land are alike.
It is therefore accepted as a general
rule that an award of damages is not
adequate compensation for the purchaser or lessee. The court, treating each person equally, will
also give specific performance to the vendor or lessor, even though in most
cases damages would be adequate. See:
Cogent v. Gibson (1864) Beav. 557.
If,
for instance, a vendor fails to comply with an order of specific performance,
the purchaser may apply to the court for an order nominating another person to
execute the conveyance/transfer in the vendor’s name.
See Jones V. Lipman (1962) I W.L.R 832, per
Russel J at 836.
2.
Contracts relating to Personal/Chattels
In
the case of chattels, the rule is that the court will not grant specific
performance unless it is shown that damages recoverable at law will not in the particular case afford a
complete remedy. This exception applies
to a contract for the sale of an article of unusual value, beauty or rarity.
Below are illustrations:
Unique value: damages inadequate
– specific performance granted: See:
Falcke
v. Gray (1859) 4 Drew 651 (Two china
flower vases)
Thorn v. Commissioners of Public Works (1863) 32 Beav. 490 (Stone
from the old Westminster
Bridge
Phillips
v. Lamdin [1949] 2 KB 33 (An Adams
door in a house), (1949) 1 ALL E.R 770 – injunction order akin to specific
performance
Behnke
v. Bede Shipping Co. [1927] 1 KB 649
at 661
The
judge made an order for specific performance of a contract for the sale of a
ship, being satisfied that the ship was of “peculiar and practically unique
value to the plaintiff”.
Sky
Petroleum Ltd v. V.I.P. Petroleum Ltd
[1974] 1 All ER 594; [1974] 1 WLR 576
A
contract had been entered into where the plaintiff company would buy all the
petrol needed for its garages from the defendant company and the defendant
would supply the plaintiff with all its requirements. The defendant, alleging breach, purported to
terminate the contract in November 1973, at a time when petrol supplies were
limited so that the plaintiff would have little prospect of finding an
alternative source. An interlocutory
injunction was granted to restrain the withholding of supplies.
The
judge acknowledged that this order amounted to specific performance but HELD: That the court had
jurisdiction to order specific performance of a contract to sell chattels,
although they were not specific or ascertained, where the remedy of damages was
inadequate. Further, the usual rule that
specific performance was not available to enforce contracts for the sale of
chattels was well established; but it was based on the adequacy of damages, and
was therefore not applicable to the present case, where the plaintiff might be
forced out of business if the remedy was not granted.
Cohen
v. Roche (1827) Ch.
The
plaintiff agreed to purchase from the defendant a set of 8 Hepplewhite
chairs. The judge refused to order
specific performance and instead awarded damages on the ground that the chairs
were ordinary articles of commerce and were of no special value or interest.
In
the case of a contract to deliver “specific or ascertained goods” within the meaning of the Sale of Goods Act
(Cap 31, S. 52), the court is given the power to order specific performance of
such a contract either unconditionally or upon such terms as it may think
fit. This power is discretionary and it
must be shown that damages are inadequate.
In Cohen v. Roche, the contract
was for the sale of specific goods, but the court nevertheless refused to grant
specific performance.
3.
Where the contract is to pay money to a third party
Unless
specifically enforced, damages awarded will probably be nominal. See:
Beswick
v. Beswick (1968) AC 58
Peter
Beswick was a coal merchant who wished to retire from the company. He made arrangements with his nephew under
which the business would be transferred to the nephew. It was agreed that Peter would be employed as
his consultant. Peter was to be paid a
wage of Stg 5 a week and after his death, the payments were to be made to his
widow for her life. Payments were made
to Peter but after his death no payments were made to his wife. The widow sued both as administratrix and in
her own right under the contract. The
defendant contended that the agreement was for the payment of money and was not
the type of contract whose breach is usually remedied by a decree of specific
performance. The House of Lords
nevertheless HELD: That she was entitled, at least as
administratrix, to specific performance.
The court said: “The court ought
to grant a specific performance order all the more because damages are nominal. She had no other effective remedy.”
4. Where
there is a contract for a secured loan (mortgage) and money is lent before the
mortgagor executes the mortgage instrument
Specific
performance may be obtained by the mortgagee to enforce execution of the
mortgage instrument. The remedy of
damages would clearly be inadequate here.
5.
Where a contract is with a company to take up and pay
for debentures
The
contract is specifically enforceable under the Companies Act (Cap 486) – 5.94
CONTRACTS NOT SPECIFICALLY ENFORCEABLE
There
are certain contracts which equity will not specifically enforce, as a general
rule. The following are examples:
1.
Contracts requiring constant supervision
The
general rule is that a court will not order specific performance of a contract
to do continuous successive acts which would require constant supervision by
the court to ensure that the decree is obeyed.
Reason: Supervision would be impracticable and since
“equity does not act in vain”, the court will not issue a decree when it is not
certain that the decree can be enforced.
See:
Ryan v. Mutual Tontine Westminster Chambers Association [1893] 1 Ch.
A
lease of a flat in a block of flats contained an agreement by the lessor to
keep a resident porter who should be ‘in constant attendance’ and perform
certain specified duties. The lessor
appointed a person who got his work done by deputies and absented himself for
hours at a time working as a chef at a neighbourhood café. The lessee applied for an order of specific
performance but the court HELD: That it could not make such an order because
supervision would be impracticable.
Modern
decisions, however, indicate a relaxation of this principle. The real question is whether there is a sufficient definition of what has to be done in
order to comply with the order of the court. In Beswick v. Beswick, specific performance
was granted in respect of a contract to make regular money payments to the
plaintiff for her life.
Building
contracts as contracts requiring constant supervision
The
general rule is that specific
performance will not be granted in
respect of a contract to build or repair.
This is because enforcement of the order would require constant
supervision. Agreements to construct
buildings are often indefinite and require the performance by the parties of a
very large number of individual acts.
Exceptions:
The
court will order specific performance of a contract to build if 3 conditions
are satisfied. The conditions were
stated in:
Wolverhampton
Corporation v. Emmons (1901) KB 515
The
conditions are that:
1. The building work must be sufficiently defined by the
contract, e.g. by reference to detailed plans.
2. The plaintiff must have a substantial interest in the
performance of the contract of such a nature that damages would not compensate
him for the defendant’s failure to build.
Hanbury states that if the building is to take place on the plaintiff’s
land, damages will normally be adequate because another contractor can be paid
to do the job and any increase in price can be recovered as damages.
3. The defendant must be in possession of the land so that
the plaintiff cannot employ another person to build without committing a
trespass. The plaintiff cannot enter
upon the land in order to do the work himself or through agents.
See also: Carpenters
Estates Limited v. Davies [1940] Ch. 160, explaining Wolverhampton .
2.
Contracts for personal services/involving personal
skill
Contracts
whose performance involves personal skill, knowledge or inclination will not be
specifically enforced. Reasons:
(i)
The court is not
prepared to assume the burden of deciding on subsequent applications whether
there has been a proper performance of the obligation in question. Hanbury p. 457 – singing contract. Megarry J. suggests that the reasons are
“more firmly bottomed on human nature”. See:
C.H. Giles & CO. Ltd v. Morris [1972] 1 All E.R. 960 at 969.
(ii)
If proceedings
are successfully brought to force a defendant to maintain the relationship of
employer and employee, the inconvenience and mischief to the defendant would be
greater than anything which could possibly happen to the plaintiff if the court
declined to order specific performance.
The
second ground (ii) appears to be based not merely on inconvenience or hardship
to a particular defendant but rather upon a general undesirability from the
view of public policy to force persons to maintain certain personal
relationships even though they had earlier agreed to do so. “The courts are bound to be zealous lest they
should turn contracts of service into contracts of slavery.” See:
Fry, L.J. in De Francesco v. Barnum (1890) Ch.D 430 at 438. See also:
Lumley
v. Wagner (1952) 1 De G.M. & G
604; (1852) Vol. 19 LTR 127 and 264
Opoloto
v. A-G (1969) EA 631
3.
Contracts lacking Mutuality
Where
a decree of specific performance is available to a purchaser or lessee, the
remedy will also be available to the vendor or lessor. The vendor or lessor can compel the purchaser
or lessee to purchase the property or accept a lease as the case may be even
though damages may be adequate compensation.
The basis of the vendor, purchaser, lessor or lessee obtaining an order
of specific performance is the doctrine
of mutuality.
The
rule states that in order to be specifically enforceable, a contract must be
mutually binding. The court will
therefore not grant specific performance at the suit of one party when it could
not do so at the suit of the other party.
For a contract to be specifically enforced, it must be such that it can
be enforced by either of the parties against the other. If the contract cannot be enforced against
one party for any reason, such as personal incapacity, that party will not be
able to enforce the contract against the other.
E.g. An infant/minor cannot obtain an order of
specific performance because the court cannot compel specific performance
against him: Flight v. Boland
(1828) 4 Russ. 298.; 38 E.R. 817
On
mutuality, See: Price v. Strange
(1978) Ch. 337; (1977) 3 all ER 37
Abdulzak Mbarak v. Faraj bin Ahmed el-Aweni (1956) EA 120
Mawogola Farmers Ltd v. Kayanja & Others (1971)EA 272
4.
Contracts specifically enforceable in part only
Generally,
where an agreement comprises two or more matters, some of which are
enforceable, the court will not enforce the enforceable matters if they are
dependent on the others. See:
Ryan
v. Mutual Tontine Westminster Chambers Assoc. [1893] 1 Ch.
Barnes
v. City of London Real Property Co.
[1918] 2 Ch.
Ogden v. Fossick (1862) 4 De G.F. &
J. 426 – Agreement for Lease of coal wharf coupled with appointment of
Defendant as manager thereof.
Frith
v. Frith [1906] A.C 254
Where
some the terms of an agreement are legal and the others are illegal, the court
will sometimes specifically enforce the legal terms if the illegal terms are
clearly severable.
See: Odessa Tramways Co. v. Mendel (1878) 8 Ch.D 235 Defendants having acted in
collusion with the directors to defraud the company could not be allowed to use
the fraud to invalidate an agreement to take up and pay for shares in the
company.
On
severance, see: Mohamed Hussein v.
Abdulla bin Salim (1955) EA 84
D’Silva v. Rahimtulla
(1968) EA 287
5.
Agreements without consideration
Equity
will not enforce an agreement which is merely voluntary, even if it is
contained in a deed. “Equity does not aid a volunteer”. Trusts are, however, an exception to this
rule.
DEFENCES TO AN ACTION FOR SPECIFIC
PERFORMANCE
The
general rule is that equity will hold the defendant to enforcement of his
bargain. Defences are exceptions.
1.
No Effective Contract
There
can be no specific performance unless there is a complete and definite
contract. There is a complete and
definite contract where an offer has been accepted without qualification and
the letters of offer and acceptance contain all the terms agreed on between the
parties.
2.
Absence of Writing for Land Transactions
In
order that an action may be brought for the 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.
In
the case of an oral contract, this means that no action may be brought in
respect of that oral contract until a memorandum is signed. The contract is not void, but merely
unenforceable – it is valid as between the parties (valid ‘inter partes’), but
no action can be brought on it in court.
The
so-called contract inter partes must, however, satisfy the requirements of S.3
(3) of the Law of Contract Act (Cap 23) as amended by Act No. 21 of 1990 and
Act No.2 of 2002. Both Acts came into effect on 1st June 2003 vide Legal
Notices No. 188 and 189 of 22nd November 2002.
Act
No. 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
founded –
(i) is in writing;
(ii) is signed by all the parties thereto;
and
(iii) incorporates all the terms which the
parties have expressly agreed in one
document; and
(b) the signature of each party signing has
been attested by a witness who is present
when the contract was signed by such party”.
Repeal of the doctrine of part
performance as an exception to the requirement of writing:
Previously
in Kenya
This
doctrine states that where the intending purchaser or tenant has in part performance taken possession of
the property, the oral agreement coupled with part performance constitutes an
effective disposition. This means that
the contract can be specifically enforced.
Note, however, that by virtue of the amendments to the Law of Contract
Act in Kenya, if a party to such a transaction involving land wishes to bring
an action in court, the requirement of writing must be met.
This
is in keeping with the maxlaw: “Equity follows the Law”.
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 has
“clean hands”)
That he is ready and willing to perform his obligations
( he must “do equity”);
That he has not acted in contravention of the essential
terms of the contract; and
That he has not delayed unreasonably to come to court
(laches).
4. Hardship
Specific
performance will usually 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 and oppressive to grant specific performance. The court will therefore refuse to grant it.
See:
Patel v. Ali (1984) Ch.
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 into, the seller got bone cancer and had her leg
amputated. She later brought forth her
second and third children. The purchaser
obtained an order of specific performance against which the seller appealed on
the ground of hardship. She pleaded that
she spoke little English and relied on help from nearby friends and relatives,
hence it would be hard to leave the house and move away. The
court allowed the appeal, stating that although a person of full capacity
before the contract took the risk of hardship, the court in a proper case could
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 hardship amounting to
injustice and therefore the appropriate remedy was damages.
Hardship to either the plaintiff or
defendant: See:
Warmington
v. Miller [1973] Q.B. 877
Mountford
v. Scott [1975] Ch.
Hardship to a third party: See:
Earl
of Sefton v. Tophams Ltd [1966] Ch.
Sullivan
v. Henderson
Financial inability to complete is
not hardship: See:
Nicholas
v. Ingram [1958] N.Z.L.R. 972
5. Fundamental
Mistake
The
mistake may be of such a nature that it precludes the “consensus ad idem,” that
is 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 letter offered to sell some
property to B. He intended to offer it
at Stg 2,250 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 the
sale.
Hardship and mistake:
Even
if the mistake is that of the defendant himself and is not in any way induced
by the plaintiff, specific performance will be refused if its imposition would
cause the defendant hardship amounting to injustice. See:
Malins
v. Freeman (1837) 2 Keen 25
Specific
performance was refused where the defendant purchaser bid for and bought one
lot at an auction in the belief that he was buying a totally different lot. The court stated that it would have been a
great hardship on him to compel him to take the property. The court further 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.
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 property
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 was
acquainted with the property and knew that the garden plots were occupied along
with the inn and shop and he did not therefore look at the plans. Instead, he agreed
to buy in the belief that he was buying the inn and shop together with the two
garden plots. The vendors brought an
action for specific performance. The
defendant pleaded mistake as a defence. HELD: The purchaser could not resist specific performance
on the ground of mistake in this case.
The
lower court (Baggallay, L.J.) ordered specific performance and his decision was
affirmed by the Court of Appeal (Chancery Division – James, LJ.).
Baggallay,
L.J. said at pp. 217-219:
“Where
there has been no misrepresentation, and where there is 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 upon his knowledge of the occupation of the
premises without looking at the plans…but is a person justified in relying upon
knowledge of that kind when he has the means of ascertaining what he buys? I
think not. I think that he is not
entitled to say… that he was under a mistake, when he did not think it
worthwhile to read the particulars and look at the plans. If that were to be allowed, a person might
always escape from completing a contract by swearing that 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 the door to fraud if
such a defence was to be allowed… The cases where a defendant has escaped on
the ground of mistake not contributed to by the plaintiff, have been cases
where a hardship amounting to injustice would have been inflicted upon him by
holding him to his 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 the 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.
Where
the plaintiff has contributed to the defendant’s mistake, however
unintentionally:
See:
Denny
v. Hancock (1870) 6 Ch.
Wilding
v. Sanderson [1897] 2 Ch.
Mistake that of the defendant:
See:
Stewart v. Kennedy (1890) 15 A.C. 75 at 105 per Lord Macnaghten
Van
Praagh v. Everidge [1902] 2 Ch
266; Reversed: [1903] 1 Ch 434
Unilateral mistake: See:
Mountford
v. Scott [1973] 3 WLR 884 at 885, per
Brightman, J.
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.
Hartog
v. Collin & Shields [1939] 3 All
ER 566
OTHER
DEFENCES
6. Misrepresentation by plaintiff
7. Misdescription
8. Lapse of time/Laches/Delay
9. Trickiness/Deceit/Fraud
10. Illegality
11. Defective Title
12. Public Policy e.g. Wroth V. Tyler 1974 Ch.30
13. Duress/undue influence
INJUNCTIONS
INTRODUCTION
An injunction is an order by the
court directing a party to the proceedings to do or refrain from doing a particular
act.
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
obligation 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 omission requiring remedial action).
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. The order, even
though mandatory in substance, had to be drafted in prohibitory form. Thus,
previously, a court would not, for instance, make an order directing wrongfully
erected buildings to be pulled down. Instead, the court would order the
defendant not to allow them to remain on the land. SNELL comments
that the doubts as to the court’s jurisdiction to grant mandatory injunctions
seem odd in a jurisdiction which traditionally looks to the substance rather
than the form. Now, however, a mandatory
injunction is issued in a positive form. See:
Note the distinction between specific
performance (which is granted under an instrument or contract) and a mandatory
injunction (which may be granted even there is no instrument).
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 dispute 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
This 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 or injury to be suffered
by the plaintiff could be such that it would be unjust to make him wait until
the trial is over in order 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. For instance,
where a person wants to sell a piece of land in respect of which there is a
dispute, an interlocutory injunction may be granted to restrain him from
selling that land until the dispute is heard and determined.
Usually, the plaintiff, when filing
the main suit, will also serve a notice on the defendant that on the next
motion day he will apply 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 for the interlocutory
injunction. However, the decision after the hearing will not be a final
decision on the merits of the case. If the plaintiff’s affidavit has made out a
sufficient case, the judge will grant 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, which will last
until the next motion day. By this time, notice will have been served on the
defendant who will then have an opportunity of opposing the plaintiff’s
application for an interlocutory injunction. The phrase “ex parte” signifies
that the court has not had an opportunity of hearing the other party to the
suit.
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 the Defendant, but he is not given
sufficient time to prepare his case, then an interim injunction until the next motion day is more likely to
be granted than a full interlocutory injunction until trial.
5.Quia
Timet(Anticipatory)
A
Quia Timet injunction is issued to prevent 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 granting this remedy. The
plaintiff must show a very strong probability of a future
infringement (that the danger is imminent) and that it will cause
substantial or irreparable damage (that the damage will be of
a most serious nature). That the
damage cannot be compensated through a monetary award.
Summary
- Prohibitory or
mandatory injunctions may be perpetual or interlocutory.
- Mandatory injunctions
are less frequently granted than prohibitory injunctions.
- An ex parte injunction may be interim, mandatory
or prohibitory (it cannot be perpetual).
- An interim injunction
may be mandatory or prohibitory.
- A quia timet
injunction may be mandatory or prohibitory.
PERPETUAL INJUNCTIONS
A
perpetual injunction is intended to relieve the plaintiff from the necessity of
bringing a series of actions to protect his right each time it is infringed.
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:
Day
v. Brownrigg (1878) 10 Ch.D. 294
The
Plaintiff lived in a house which he called “Ashford Lodge”. The Defendant lived in a smaller house
called”Ashford Villa. “The Defendant
changed the name of his house 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. (Contrast this with commercial premises – right to use a
trade name.)
2. Discretionary remedy
The
granting of an injunction is discretionary, this being an equitable remedy. 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:
(a) 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:
Armstrong
v. Sheppard & Short Ltd. [1959] 2 Q.B.
384; [1959] 3 W.L.R. 84; [1959] 2 ALL E.R. 651
Behrens
v. Richards [1905]2 Ch.
(b) Compliance difficult
The
fact that compliance will be inconvenient and expensive affords no defence to
an action for an injunction. However,
the court will not make an ineffectual order (“Equity does not act in
vain”). E.g. Where trees have already been cut down, an
order of 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.
(c) Annoyance ceased
If
the injury complained of has ceased before trial or is merely temporary and
there is no intention of repeating the injurious act, the court may refuse an
injunction. See:
Wilcox v. Steel [1904] 1 Ch.
(d) 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
A
party cannot obtain an injunction to restrain an actionable wrong for which
damages are the proper remedy. The Plaintiff must therefore 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 obtained
enforcement of the right. Examples:
a) Continuing nuisances:
A
perpetual injunction is particularly appropriate where the injury is
continuous, as in the example of continuing a nuisance. See:
Martin v. Nutkin (1725) 24E.R. 724;
2P. Wms.
266
Pride
of Derby Ch.
In
Martin v. Nutkin, the plaintiffs had been annoyed by the daily ringing
of a nearby church bell at 5 a.m. The
parson, churchwardens and others on behalf of the parish agreed to stop the ringing of the 5 O’clock bell during the
lives of the plaintiffs if the plaintiffs provided the church with a new
clock and bell. When the bell was rung
in breach of this agreement, the court restrained it by injunction, this being
a continuing nuisance for which the
remedy of damages was inadequate.
b) Infringements of trade marks, patents or copyrights:
The
infringement here is also of a continuous nature and the appropriate remedy is
a perpetual injunction. See:
Licensed
Victuallers’ Newspaper 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. Collyer
(1884) 28 Ch.D 103, an injunction to restrain the use of a house as a shop was
refused 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 the 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.
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.
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:
Gouriet v. Union
of Post Office Workers (1978) A.C.435
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.
According
to Hanbury and Martin, Modern Equity, the jurisdiction is related not to
the most just method of protecting established rights, but to the most
convenient method of preserving the status quo while rights are established.
The object of an interlocutory injuction is “to prevent a litigant, who must
necessarily suffer the law’s delay, from losing by that delay the fruit of his
litigation,” per Lord Wilberforce in Hoffman-La Roche (F) & Co. v.
Secretary of State for Trade and Industry [1975] A.C. 295 at 355.
Principles
There
are three main principles applicable to the granting of an interlocutory
injunction in Kenya
- Prima facie case
- Irreparable injury
- Balance of convenience
These
principles were set out in the case of East Africa Industries Ltd v.
Trufoods Ltd [1972] EA 420. These were reiterated in the case of Giella
v. Cassman Brown [1973] EA 358.
In
East Africa Industries Ltd v. Trufoods Ltd, 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.”
In
Giella v. Cassman Brown, the Court said,
“The
conditions for the grant of an interlocutory injunction are now, I think, well
settled in East Africa . 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 the application on a balance of convenience.”
- 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 judgement of the court will be in favour 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 Africa
Industries Ltd. V. Trufoods Ltd [1972] EA 420
Both parties were 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 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 reasonable 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 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 not
to be decided on the balance of convenience.”
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 not 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 that 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 judgement.
On the same issue, the Court of Appeal agreed with
counsel for the Appellant (Mr. Deverell) in his submissions that:
(a) “The High Court judge
misdirected himself when he spoke of the effect of an injunction being that the
Respondent company’s products would be taken off the market”, and
(b) “That there would be nothing
to prevent the Respondent company from continuing to sell fruit juices 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 greater
and graver 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. Irreperable
Injury or Damage
Irreparable injury means injury which, if not
prevented by injunction, cannot be sufficiently compensated afterwards by any
decree which the 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.
On the above three principles, see also:
Devani’s Case [1972] EA 22
Supra Studio [1971] EA 489
Nsubuga’s Case [1974] EA 487
Other
Factors
Claimant’s
Case not Frivolous or Vexatious
The court must be satisfied that the plaintiff’s
case is not frivolous or vexatious. This 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 court. As part of this requirement the
plaintiff must show that there is a serious
question to be tried.
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 honoured, it amounts to contempt of court and
not breach of contract.
ENGLISH
POSITION ON INTERLOCUTORY INJUNCTIONS
American
Cyanamid Co. v. Ethicon Ltd
(1975) A.C. 396; (1975) 2 W.L.R. 316.
Prior to the decision of the House of Lords in American
Cyanamid Co. v. Ethicon Ltd, it was well established in England that the
claimant had to show a strong prima facie case that his rights had been
infringed. He was then required to show that damages would not be an adequate
remedy if he succeeded at the trial, and that the balance of convenience
favoured the grant of an interlocutory injunctuion.
The above principles were replaced by the rules laid
down by Lord Diplock in American Cyanamid. These rules were designed to
circumvent the necessity of deciding disputed facts or determining points of
law without hearing sufficient argument.
The American Cyanamid case concerned an
application for a quia timet interlocutory injunction to restrain the
infringement of a patent. The House of Lords unanimously held that there was no
rule requiring the claimant to establish a prima facie case. The rule is that
the court must be satisfied that the claimant’s case is not frivolous or
vexatious and that there is a serious question to be tried. Once that is established,
the governing consideration is the 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 embark 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
of American Cyanamid Case: 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
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 no rule 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 H.L.
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”
“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 the balance of
convenience unless the plaintiff will suffer irreparable damage.”
Pp. 48-49: “Prima facie case with a probability of
success” vs. “serious question to be
tried”
Approval of
American Cyanamid Rule by the High Court of Kenya:
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 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 American 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 favour at the trial… If 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 claim appeared to be at that 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 that 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 proceeding to follow the principles set
out by Lord Diplock while consciously maintaining a golden silence on the three
conditions set out in his judgement, 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 INTERLOCUTORY INJUNCTION
Conduct of the
parties
The court will consider the conduct 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
Delay or
acquiescence
Delay or 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
The court has to weigh the hardship to each party.
MAREVA INJUNCTION
Mareva v. International Bulkcarriers [1975] 2 Lloyd’s Rep. 509
This is an injunction
restraining the Defendant from removing his assets out of the jurisdiction of
the court until hearing of main suit. See also:
•
Re
BCCI (No 9) [1994] 3 All ER 764
•
Derby
& Co Ltd V. Weldon (Nos 3 & 4) [1990] Ch 65
•
Babanaft
Int’l Co Sa V. Basantine [1990] Ch 13
ANTON PILLER INJUNCTION
Anton Piller K.G. v. Manufacturing Processes [1976] 1 All ER 779
This is an order granted
against the Defendant where the court believes that there is a danger that the
Defendant will remove or destroy evidence in the form of documents or moveable
property such as money, papers or illegal copies of films.
•
The
court order allows the Plaintiff to inspect relevant evidence or property at
the Defendant’s premises.
Ø It is not a search warrant.
Ø Approved in: Rank Film
Distributors Ltd v. Video Information Centre [1982] AC 380
OTHER EQUITABLE REMEDIES
- Rescission
- Delivery up and cancellation of Documents
- Rectification
- Account
- Receivers
APPLICATION OF EQUITY IN KENYA
The
reception of the English common law, doctrines of equity and statutes of
general application in Kenya is based on a specified date referred to as the
date of reception. That date, 27th August 1897, is stated in Section
3 (1) (c) of the Judicature Act (Cap 8).
Section
3 (1), referred to as the “reception clause” provides:
“The
jurisdiction of the [Supreme Court], the
High Court, the Court of Appeal 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;
but
the 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.”
Section
3 (2), referred to as the “repugnancy
clause” provides:
“[The
Supreme Court], the High Court, the Court of Appeal 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.”
Supremacy of the Constitution
The
Constitution of Kenya 2010, Article 2 (4) provides:
“Any
law, including customary law, that is inconsistent with this Constitution is
void to the extent of the inconsistency...”
The
date of reception means that any English decision after 1897 which modifies a
principle of common law or equity as it existed in 1897 has no effect in Kenya,
unless the later principle has been incorporated into the law of Kenya by
Parliament enacting relevant legislation or by the Kenyan courts following or
adopting the changed principle or rule of the English common law or equity.
Whether
the word “equity” is used alone, or is preceded by “doctrines of”, the
reference is to the body of rules developed by the English Court of Chancery
from medieval times as supplementary to the common law. Although originally
elastic and inspired by conscience rather than legalism, equity had by the end
of the 19th century become an enormous apparatus of highly
complicated and technical rules. It is this technical equity that has been
incorporated into the Kenyan law under the reception formula contained in the
Judicature Act.
Note,
however, that in S.3 (2) “equity”
retains its ordinary meaning of “fairness” – see reference to “justice and
morality.” The inclusion of this clause has been used to justify the
qualification of customary rules by equitable principles in the narrow
technical sense. But the English common law and equity will override customary
law only if the customary law is contrary to the judge’s view of justice and
morality. The judge has discretion here, somewhat similar to the discretion of
the Lord Chancellor in the early development of equity.
LIMITATIONS TO THE APPLICATION OF
EQUITY IN KENYA
1. Circumstances of Kenya
Courts
are not to apply the English doctrines of equity if these doctrines were
evolved to suit only English conditions or circumstances – see the proviso to
S.3 (1) of the Judicature Act. Some circumstances lack universality. Examples
are matters and laws relating to homosexual marriages, transvestites, surrogate
motherhood, euthanasia, etc.
The
above qualification is relevant, for instance, when applying the English
doctrine of advancement on the one hand, and the Benami Muslim/Hindu custom
similar to a resulting trust on the other hand. Courts have held, for example,
that the doctrine of advancement is a doctrine evolved to suit English
situations and should not be allowed to alter and resettle Benami transactions.
See: Raya binti Salim bin Khalfan el Busaidi v. Hamed bin Suleiman el
Busaidi and Another [1962] EA 248.
Facts: The plaintiff and her husband were Muslims living in
Zanzibar. She inherited property in Malindi and Mombasa from her father upon
his death. Due to her illiteracy, her properties were managed by her husband
and her brother. Her husband collected and received rent and other income from
the properties which he kept in his bank accounts in Mombasa and Zanzibar.
However, no proper accounts were kept by him. Upon the death of the plaintiff’s
husband, the plaintiff’s brother-in-law, that is, the deceased’s brother (the
defendant), was appointed as an administrator of the deceased’s estate. Since
there were no children of the marriage, both the plaintiff and the defendant
were the heirs of the deceased. Consequently, according to Muslim Sharia law,
the defendant was supposed to get ¾ and the plaintiff ¼ of the deceased’s
estate. The plaintiff claimed that she had her own estate which was distinct
from that of her deceased husband. Accordingly, she lodged an application for
an account of her income deposited in her husband’s accounts. The defendant, on
the other hand, contended that the plaintiff had made a gift to the deceased
and that therefore the doctrine of advancement applied. The plaintiff stated
that she only agreed with the deceased that he would look after her property
and keep her funds for her.
Held: Muslim law was applicable in this case. Further, it
was wrong to apply principles of equity devised to suit the Christian society
in England in order to import the presumption of advancement to gauge the
intention of a Muslim husband and wife living in Zanzibar and whose social and
cultural background was very different from that of England. The
administrator/defendant was therefore liable to account to the plaintiff as
there was a Benami in favour of the
plaintiff. Therefore the English doctrine of advancement did not apply.
2. Comprehensive Local Legislation
If
there is a comprehensive local legislation which expressly or impliedly
excludes English doctrines of equity, then the doctrines will not apply. Examples:
(a) Succession under Islamic Law
The Wakf Commissioners v. The Public Trustee [1959] EA
368
“Wakf” means the tying up of property in the ownership of God and the
devotion of profits for the benefit of human beings.
FACTS:
The deceased was a Muslim. He died intestate leaving a widow and no
heirs. The Public Trustee filed a petition for a declaration as to the
distribution of the estate. The Supreme Court held that since there were no heirs, the widow was entitled, in addition to
her ¼ share, to the whole residue of the estate. The Wakf Commissioners appealed, claiming that under the applicable Muslim
Shafi law, the widow was not entitled to the residue and that equitable
principles could not be applied in her favour. He claimed that the Wakf
Commissioners were entitled to the residue by virtue of S. 18(1) of the Wakf
Commissioners Ordinance.
On appeal, the Court of Appeal HELD:
THAT equitable
principles were expressly excluded by virtue of S.4 of the Mohammedan Marriage
Divorce and Succession Ordinance and that the trial judge had erred by
deviating from the Mohammedan law of succession. The Wakf Commissioners were
therefore entitled to the residue.
S.18(1) Wakf Commissioners Ordinance
“Notwithstanding
anything to the contrary in the Indian Succession Act 1865, any property of a
deceased Muslim to which no claim has been established within one year from the
date upon which such property vested in the administrator of the estate or in
the public trustee shall be handed over to the Wakf Commissioners by the said
administrator or public trustee as the case may be and shall if not handed over
in the form of money be converted into money and paid to the Wakf Commissioners
into a special fund created for the purpose to be known as the Surplus
Fund.”
In short, any property of a deceased Muslim to which
no claim has been established within one year from the date when such property
vested in the administrator of the estate or public trustee shall be handed
over to the Wakf Commissioners.
S.4 Mohammedan Marriage Divorce and
Succession Ordinance (Cap 148) (Now under Marriage Act 2014)
“Provided
that where in any sect of Mohammedans to which the deceased belonged the law of
succession differs from the ordinary law of succession, in accordance with the
ordinary principles of Mohammedan law, then the law of succession applicable to
such sect shall apply.”
In short, the law of succession of the particular
Mohammedan sect shall override the ordinary law of succession.
(b) Limitations of Actions
Where claims are barred by
statute, namely, the Limitation of Actions Act (Cap 22), the equitable doctrine
of laches is ousted.
EQUITY vis – e - viz
AFRICAN CUSTOMARY LAW
1. Example of a customary
civil claim in which the court applied a doctrine of equity See:
Lolkilite ole Ndinoni v. Netwala ole Nebele (1952) 19 EACA 1
This case
concerned a claim for blood-money in accordance with a Maasai customary law.
The Court of Appeal Held: That it was repugnant to justice and morality to
allow a claim to be made thirty to forty years after the killing complained of.
The doctrine of laches applied.
2. Examples
of other situations where African customary laws and practices are most
susceptible to challenge as being repugnant to justice and morality
·
Infant betrothal,
cradle snatchers, schoolgirl and child marriages
·
Marriage in which
the woman has not given her consent (arranged marriages) – forced marriages
·
Widow/Wife
inheritance – See S.13 (1) of the African Christian Marriage and Divorce
Ordinance which provides,
“Any African woman married in accordance with the
provisions of this Ordinance …shall not be bound to cohabit with the brother or
other relative of her deceased husband…or to be at the disposal of such brother
or other relative…, but she shall have the same right to support for herself
and her children of such marriage from such brother or other relative as she
would have had if she had been married as aforesaid.”
·
Connexion with a
madman as a sign of cleansing
·
Female Genital
Mutilation (FGM)
·
Woman to woman
marriages
·
Blood Money –
Maasai custom
·
Polygamy
·
Burial practices
e.g. “tero buru” – SM Otieno Case
·
Witchcraft/Sorcery/Nightrunning
·
Bride price
·
Killing of twins
·
Snake worship
·
Human sacrifice
·
Cannibalism
·
Wife beating
3. Examples of situations in which equity stepped in to protect a
customary right
·
Injunction – for
customary wife to stop a monogamous (Christian/civil) wedding
·
Trusts – in land
cases - communal land
·
Place of burial –
SM Otieno Case
Examples of customary practices that equity has been silent on
·
System of
matrimonial property law where all rights vest in the husband and none in the
wife – But note provisions of the Constitution of Kenya 2010
·
Differential law
of status – many positions, powers and transactions barred to women in African
customary law - But note provisions of the Constitution of Kenya 2010
Ø See Constitution of Kenya 2010 – e.g. provisions on
equality Article 27, equal rights in marriage Article 45
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