The word ‘‘equity’’ means fair or just in its wider sense, but its legal meaning is rules developed by the Chancery court in England before 1873 to mitigate the harshness of the Common Law[1] with all the distinctive concepts, doctrines, principles and remedies as they have been refined and elaborated since then.[2]
Litigants disappointed with the decisions at Common Law petitioned the King as the ‘‘Fountain of Justice’’ asking him to do justice in respect of some complaint. For a time, the King in Council heard and determined these petitions himself, but as the workload overwhelmingly increased, he passed them on to the Lord Chancellor as the ‘‘Keeper of the King’s conscience.’’
The King through his Chancellor eventually set up a special court of Chancery to hear and determine these petitions. The Chancellor would deal with these petitions on the basis of what was morally right, give or with hold relief, not according to any precedent but on the basis of his on perception of right and wrong guided by the merits of a particular case before him. The narrative about the development of Equity also reinforces the principle that Equity affects the conscience of the holder of a legal right, or more generally that a court of Equity is a Court of Conscience.[3]It has been well said that;
‘‘Now 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 an universal truth; it does also assist the law where it is defective and weak in the constitution (which is the life of the law) and defends the law from crafty evasions, delusions, and new subtleties, invented and contrive to evade and delude the common law, whereby such as have undoubted right are made remediless; and this is the office of equity, to support and protect the common law from shifts and crafty contrivances against the justice of the law. Equity therefore does not destroy the law, nor create it, but assist it.’’[4](Emphasis mine)
The Common Law had the following defects; it had only one remedy, damages which was often inadequate, it did not recognize the trust, paid too much attention to technicalities. For instance, if a writ had a minor drafting error, it would be thrown out, had no power of enforcement, and did not recognise security for loans (mortgages), or rights of third parties in general. Equity was therefore important in the development of English law because it resolved some of the defects of the common law, which might otherwise have led to a loss of public confidence in the legal system since the hallmark of a civilised society is a proper legal system.
Having outlined the above, it is on that background that I agree with Story[5] that, historically, equity jurisdiction is divided into exclusive jurisdiction, concurrent jurisdiction and auxiliary jurisdiction. However, I would add that presently, most of these equitable remedies and procedures have been borrowed and incorporated into the Common Law jurisdiction and therefore, Story’s classification largely remains a historical one since presently, as discussed above, the courts are enjoined to administer equity and the Common Law concurrently and with undue regard to technicalities.
Exclusive Jurisdiction is primarily concerned with the development of new rights (equitable rights). The following are some of the rights/interests that were created, recognized and enforced by equity: the mortgagor’s equity of redemption, restrictive covenants, estate contracts and equitable mortgage.
The principle of equitable interest is discussed in Lwanga vs. Registrar of Titles[6]. In this case, Galiwango bought land from Mukasa in 1920 but died before registering it in his names. A one, Katemba using a forged agreement dated 30th September, 1953 purported to have acquired the piece of land from Galiwango as a gift. On 5th February 1953, Katemba forged a transfer of the said land into his names and was duly registered as proprietor of the same. On 8th February 1955, Katemba sold the land to Salongo who became the official registered proprietor. The applicant, the late Galiwango’s son brought this suit to compel the respondent to register the suit land in the names of Galiwango. Salongo, on cross examination testified that he was unaware of the fraud perpetrated by Katemba. Court held that according to Section 189 of the Registration of Titles Act, the title of a bona fide purchaser for value could not be impeached since a party who was registered through a fraudulent dealing could pass a good title to a bona fide purchaser who was not party to the fraud. Therefore, Salongo had good title.
For the case of estate contracts, this is an agreement for the sale or lease of land. At Common Law, if a vendor or lessor failed to transfer or execute a lease of property, the buyer’s or lessee’s remedy was damages for breach of contract. However, at equity, specific performance of the contract would be decreed.[7]The former was inadequate while with the latter, the vendor or lessor would be ordered by the equity court to transfer or execute a lease of the property. The above proposition was re-echoed in Walsh vs. Lonsdale[8] where the chancery court held that an agreement for the sale or lease of land is as good as a sale or lease.
The other type of equitable interest is the mortgagor’s equity of redemption. Under this, the common Law position is that if a mortgagor performs his obligations due under a mortgage, he/she should be able to get back his security at the agreed date. Equity however, allows a person to redeem his property even after the agreed date. In C&C vs. Pentagonian[9], the presiding judges try to trace the origin of the equity of redemption. Court goes to the story of usury and the need to protect vulnerable debtors from usurious creditors. The essence of the principle is to enable a mortgagor to get back his/her land after performing his/her obligation as to the payment of the debt or other obligation.
A restrictive covenant is normally a clause in an agreement relating to a lease of land which restricts the use of the land to certain purposes[10]. The case of Tulk vs. Moxhay[11] shows that in equity, the restriction on the land runs with the land and binds the original party to the agreement as well as the future owners save for a bonafide purchaser of the legal estate for value without notice of the restriction.
Under equitable mortgage, there is mortgage of equitable interest, agreement to create a mortgage, deposit of title deeds, equitable charge and equitable lien. Under mortgage of equitable interest, a mortgagor who has an equitable interest in a piece of property can only create an equitable mortgage over it when he borrows money and uses the interest as security. A beneficiary under a trust can also create an equitable mortgage over his/her equitable interest if he/she uses it as security to secure a loan advanced to him/her.[12]
In an agreement to create a mortgage, courts in Walsh vs. Lonsdale [13]and Ogunbambi V Abowba[14]have held that a court’s decree of specific performance converts the equitable mortgage created under an agreement into a legal mortgage.
The deposit of property title deeds with someone as security for a loan creates an equitable mortgage. For instance, The Registration of Titles Act provides that an equitable mortgage of land may be made by deposit by the registered proprietor of his/her certificate of title with intent to create a security thereon whether accompanied or not thereon by a note or memorandum of deposit subject to the provisions of the Act[15] and every equitable mortgage shall be deemed to create an interest in land.[16]
The other category of equity jurisdiction is concurrent jurisdiction which is primarily concerned with the creation of new remedies. Equitable remedies are judicial remedies developed and granted by courts of equity, as opposed to courts of common law. Equitable remedies were granted by the Court of Chancery in England, and remain available today in most common law jurisdictions. In many jurisdictions, legal and equitable remedies have been merged and a single court can issue either-or both remedies.[17]
These equitable remedies are now available in all courts exercising jurisdiction in civil cases, are available only in the absence of an appropriate and adequate common Law remedy and are discretionary.[18] Equitable remedies are distinguished from "legal" remedies (which are available to a successful claimant as of right) by the discretion of the court to grant them. They are exercised judicially and they include;
A decree of specific performance is a court order compelling a party to an agreement to perform his/her obligations in accordance with the terms of the agreement.[19]
Rectification was ably discussed by Cozens-Hardy, MR in Lovell & Christmas Ltd vs. Wall[20]. He said;
‘‘The essence of rectification is to bring the document which was expressed and intended to be in pursuance of a prior agreement into harmony with that prior agreement.’’
Therefore, where a written document as a result of common mistake of the parties does not accurately express an agreement between those parties, equity has the power to rectify the writing.[21]
Rescission is a right which a party has, in particular circumstances, to set aside/rescind the contract because of fraudulent misrepresentation, innocent misrepresentation, non disclosure in contracts of uberrimae fidei, constructive fraud and fundamental mistake.[22] In Sole vs. Butcher, Denning L J (as he was then) was of the view that a contract is liable to be set aside in equity if the parties were under a common misapprehension either as to the facts or as to their respective rights, provided the misapprehension was fundamental and the party seeking to set aside the agreement wasn’t at fault.
The equitable remedy of delivery up and cancellation of documents arises where the existence of a seemingly valid agreement which is in fact void. The court can order such document to be delivered up for cancellation.[23]
Injunctions are court orders directing a party to refrain from doing or continue to do some act complained of by the applicant, or restricting the defendant from continuing some omission. Previously, only the Chancery Court in Britain could grant an injunction. In 1854, the Common Law Procedure Act gave Common Law Courts power to grant injunctions in certain cases. In Uganda, The Judicature Act (Cap.13) is to the effect that:
The High Court shall have power to grant an injunction to restrain any person from doing any acts as may be specified by the High Court.
The Magistrates’ Courts under Section 219[24]by virtue of their civil jurisdiction can issue the same. Presently, as held by Justice Engonda Ntende in Osotraco vs The Attorney General[25], an injunction can issue against the Government.
Under the remedy of damages in lieu of injunction, court may award damages instead of an injunction if deems it fit in the interest of justice. In Uganda, Section 33 of The Judicature Act gives the High court the mandate to grant absolutely or on such terms and conditions as it thinks just, all such remedies as any of the parties to a cause is entitled to in respect of any equitable or legal claim properly brought before it.
The last category of equity jurisdiction is auxiliary jurisdiction and it is concerned with the creation of new procedures. Sneil argues that the maxim ‘‘Equity will not suffer a wrong to be without a remedy may be traced the origin of the auxiliary jurisdiction of the Court of Chancery, by virtue of which suitors at law were aided in the enforcement of their legal rights. Without such aid, these rights would often have been 'wrongs without remedies.' For instance, it was often necessary for a plaintiff in a common law action to obtain discovery of facts resting in the knowledge of the defendant, or of deeds, writings or other things in his possession or power. The common law courts, however, had no power to order such discovery, and recourse was therefore had to the Court of Chancery, which assumed jurisdiction to order the defendant to make discovery on his oath.[26]
Equity was not bound by the writ system, proceedings were carried out in English rather than Latin, and the Lord Chancellor concerned himself with questions of fact, did not use juries and could issue subpoenas compelling the attendance of the defendant or witnesses whom he could examine on oath. Furthermore, Professor Bakibinga points out that the development of new procedures like the administration of interrogatories and discovery of documents now provided for under Order 10 of the Civil Procedure Rules Cap. 65 Laws of Uganda, and perpetuation of testimony.
In Mugalula vs Musoke & Others,[27] Karokora,J held that the remedy of tracing is available to a beneficiary against a party who is not a bonafide purchaser for value.
Much as the exercise of this jurisdiction depends on legal principles, it is largely a creation of equity courts and therefore, in my humble opinion, it is right and fitting to say that the auxiliary jurisdiction of equity is the mother of these new procedures though it presently remains a matter of historical interest.
In a nutshell, it was all well said by Lord Goff of Chieveley in Westdeutsche Landesbank Girozentrale v Islington LBC[28]. He remarked that;
‘‘I start with the position that the common law remedy is, in a case such as the present, plainly inadequate, in that there is no power to award compound interest at common law and that without that power the common law remedy is incomplete. The situation is therefore no different from that in which, in the absence of jurisdiction at common law to order discovery,
equity stepped in to enable justice to be done in common law actions by ordering the defendant to make discovery on oath. The only difference between the two cases is that, whereas the equitable jurisdiction to order discovery in aid of common law actions was recognised many years ago, the possibility of the equitable jurisdiction to award compound interest being exercised in aid of common law actions was not addressed until the present case. Fortunately, however, judges of equity have always been ready to address new problems, and to create new doctrines, where justice so requires.’’
equity stepped in to enable justice to be done in common law actions by ordering the defendant to make discovery on oath. The only difference between the two cases is that, whereas the equitable jurisdiction to order discovery in aid of common law actions was recognised many years ago, the possibility of the equitable jurisdiction to award compound interest being exercised in aid of common law actions was not addressed until the present case. Fortunately, however, judges of equity have always been ready to address new problems, and to create new doctrines, where justice so requires.’’
SELECTED BIBLIOGRAPHY
STATUTES
The Civil Procedure Rules, Cap.65
The Judicature Act, Cap. 13
The Magistrate Court Act, Cap.16
TEXT BOOKS
Bakibinga,D.J ; Equity and Trusts in Uganda (Makerere University Printery, 2nd Edition,2006)
Curzon,L; Equity and Trusts (Cavendish Publishing Ltd. 2nd Edition,2006)
R P Meagher, J D Heydon and M J Leeming; Meagher, Gummow and Lehan’s Equity: Doctrines and Remedies (4th Edition, 2002)
Snell, E.H.T et al; The Principles of Equity (Sweet & Maxwell 29th Edition, 1991)
Story; Equity Jurisprudence (Randall, 3rd Edition)
JOURNALS
M R Macnair, 'Equity and Conscience' (2007) Oxford Journal of Legal Studies (e-pub).
Sir Anthony Mason, ‘The Place of Equity and Equitable Remedies in the Contemporary Common Law world’ (1994) 110 LQR
OTHER SOURCES
Case Law
INTERNET SOURCES
(All as at 15th February, 2011)
[1] R P Meagher, J D Heydon and MJ Leeming; Meager,Gummow and Lehane’s Equity:Doctrines and Remedies (4th Ed,2002) pg.3
[2] Sir Anthony Mason, ‘‘The Place of Equity and Equitable Remedies in the Contemporary Common Law World’’ (1994) 110 Law Quarterly Review 238, 239
[3] M R Macnair, 'Equity and Conscience' (2007) Oxford Journal of Legal Studies (e-pub).
[4] Lord Dudley and Ward, Thomas Newport, vs. the Lady Dowager Dudley, &c & econt' [1705] EngR 25; (1705) Prec Ch 241; 24 E.R. 118 (1 January 1705); http://www.commonlii.org/int/cases/EngR/1705/25.pdf
[5] In His Book, Story on Equity (Randall, 3rd Ed)
[6] [1980] H.C.B 23
[7] D J Bakibinga, Equity and Trusts in Uganda(Makerere University Printery Kampala, Uganda 2006)p.30
[8] (1882) 21 Ch.D.9
[9] (1914) AC 35
[10] Supra, n.5 pg. 31
[11] (1848) 2 Ph.774
[12] Supra,n.5
[13] Supra,n.6
[14] (1951) 13W.A.C.A. 222
[15] Sec 129(1)
[16] Supra, n.14 (2)
[18] Beswick vs. Beswick (1968)
[19] In Uganda, Courts are empowered by S.33 of The Judicature Act and S.11 of The Magistrates’ Courts Act
[20] (1911)
[21] L B Curzon, Equity and Trusts (Cavendish Publishing Ltd 2nd Ed, 1996) pg.26-27
[22] Supra, n.19, pg29
[23] Cooper vs Joel (1859) 27 Beav.Affd (1859) Ide & GF & J 240
[24] Of The Magistrates’ Courts Act, Cap 16
[25] HIGH COURT CIVIL SUIT NO. 00-CV-CS-1380 OF 1986
[27] [1984] HCB 53
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