EQUITY AND TRUST 1.6 EQUITABLE REMEDIES

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• Equity and Trust I

EQUITABLE REMEDIES.

• Act in personam: (on the conscience of the party).
• Are discretionary.
• Shall not be granted where it would be in vain. For example where constant supervision of the court is necessary.
• It may not be available to a volunteer- Oba Akezua V Benin Divisional Council.
• Applies subject to other maxims of equity, like the claimant must come with clean hands, must not delay, and so on.

THE REMEDY OF INJUNCTION.

Latin “injungere” (to forbid or command). An injunction is a discretionary and equitable remedy which compels a party to do or refrain from doing an act-American Cynamid V Ethicon. To preserve the res in cases of extreme urgency to prevent irreparable loss. “Res” was defined by Belgore JSC in Muhammadu Buhari V Olusegun Obasanjo as the subject matter of the right complained of.

High Courts are empowered to grant injunctions. This is reflected in (section 25 of the Judicature Act 1873 Section 10 of the High Court law of Lagos and other State High Court laws.

TYPES OF INJUNCTION:

1. Mandatory Injunction: requires a party to do a specified act in order to restore the parties to (as much as possible) status quo ante. Unlike mandamus, it is NOT granted to compel the performance of a public duty by a public official.
2. Prohibitory Injunction: Restrains a person (to whom it is directed) from doing a certain act. Under this we have:

• Interim injunction: a temporary order granted in event of real urgency to restrain the defendant from doing an act till a named date[1].
• Interlocutory injunction: granted for the parties to maintain status quo pending the determination of the substantive suit.
• Perpetual injunction: A post-trial Relief granted to permanently prevent the occurrence of the act prohibited. Unlike other injunctions, it can only be set aside on appeal.
• Quia Timet Injunction: in Latin means “because he fears”. Lord Up John noted that it is granted to prevent an apprehended legal wrong though none has occurred at present. For example prevent publishing pirated copies of an applicants book.
• Mareva Injunction: also called freezing injunction-Mareva Compania Daviera V International Bulk Carriers SA. Granted to freeze a debtors property and prevent him from disposing same until the determination of the suit. Can be sought ex-parte or on notice.
• Aton pillar injunction: granted to permit the plaintiff search and inspect the defendants premises to discover infringing documents. If the defendant is forewarned, he may dispose or destroy such documents. Important for copyright and election cases. Section 22 of the copyright Act provides that the plaintiff must be accompanied by a police officer not below the rank of Assistant Superintendent of Police. This has been granted in Anton Pillar KG V Manufacturing Processes and in Emmanuel V Emmanuel (a matrimonial suit) also Ferodo V Unibros Nig Ltd.

DIFFERENCES BETWEEN INTERIM AND INTERLOCUTORY INJUNCTION:

1. Applications for interim injunctions are made exparte while an application for interlocutory injunction is made on notice to the other party.
2. Interim orders are made to preserve status quo till a named date or until application on notice for interlocutory injunction can be heard while an interlocutory injunction is granted pending the determination of the substantive suit-Kotoye V CBN.

Issues arising in ex-parte injunction:

Ex-parte injunction is granted without notice to the other party. At the back of the other party. It has been criticised as being contrary to the requirement of natural justice which requires both sides to be heard “audi alteram partem” and the requirement of fair hearing entrenched in Section 36 of the 1999 constitution.

The above criticism has been rejected and ex-parte injunction has been justified in 7-up Bottling Co V Abiola and Sons ltd: Odutola V Lawal: Kotoye V CBN and many other cases on the basis that:

• It is granted in cases of real urgency to prevent irreparable harm to the applicant and to do justice to deserving cases where it would be impossible to give notice before irreparable damage is done[2]
• By the combined provisions of Section 6(6)(B) and Section 45(1) of the 1999 constitution an injunction is necessary to ensure peace and order and prevent self-help.

The discretionary power to grant ex-parte injunction has been abused. For example filing in more than one court in respect of the same issue-NBN V Yinka Commercial Entertainment. Injunction to restrain the conduct of presidential election-Abimbola V NEC. Injunction restraining a university from conducting convocation based on the application of two students. Judges have thus been warned to exercise great caution in the grant of such injunctions.

CONDITIONS FOR GRANT.

Though an injunction is a discretionary equitable remedy, the discretion is exercised taking into consideration the following: (The conditions were listed in American Cynamid V Ethicon). They include:

• The applicant must show that there is a substantial issue to be tried–Obeya Memorial Hospital V G Federation.
• It must be shown that the plaintiff would suffer irreparable damage if his application for an injunction is refused and damages cannot compensate him for such damage-Saraki V Kotoye.
• Balance of Convenience must weigh in favour of the applicant: The court explained in ACB V Awogboro, to mean that it should be evident that the applicant would suffer more damage if the order is not granted. In Savage V Akinrinade, the plaintiff sought an injunction for the removal of a multi-storey building which obstructed his premises. The court in refusing, held that the hardship would be more for the defendant.
• Whether damages would be sufficient.
• Whether the order would injure the interest of a third party.
• Conduct of the applicant: for example, he must not delay, he must come with clean hands, he must be willing to do equity to the defendant, and so on.
• The court should extract an undertaking to pay damages from the applicant in the case of his application causes hardship to the other party-Kotoye V CBNIt can be extracted on appeal where the trial court failed to extract it[3].
• The court would hesitate where the order would require constant supervision of the court as equity does not act in vain.

PROCEDURE AND PROCESS (Ex-parte injunction): By the interpretation of Order 33 rule 1 of the High Court (Civil Procedure) Rules, order 33 rule 1 FHC rules, Uniform Civil Procedure Rules,

• Any party to an action can apply before or after the trial of the action. An ex-parte application can be made in cases of real urgency-Kotoye V CBN.
• The application should be supported by an affidavit showing applicant’s legal right and justifying the urgency.
• The applicant should also file a motion on notice asking for interlocutory injunction.
• HEARING: The judge may conduct hearing in chambers (Order 36 High Court Civil Procedure Rules). The court should NOT go into contentious issues, cases, authorities or arguments at this stage.
• The defendant may attend or abstain from the proceeding. He can be seen but not heard-7-Up Bottling Company V Abiola and sons. He can however apply to the court to participate. In Fawehinmi V Akilu, it was noted that the court is obliged to grant his request to participate in accordance with Section 33 (now 36) of the 1999 constitution.

An ex-parte injunction is discharged where the other party has been served the order. Thus intimating him of the order obtained behind his back. The party restrained (or an interested party) may within 7 days move the court on ex-parte application to discharge the order. He can also challenge the jurisdiction of the court.

THE COURT CAN DISSOLVE AN EX-PARTE INJUNCTION, where it was obtained by fraud, misrepresentation or suppression of facts, and other equitable principles shall guide the court.

SPECIFIC PERFORMANCE.

Is a discretionary and equitable remedy compelling a party to a contract to fulfil his obligation in accordance with the terms of the contract especially where damages would not suffice to compensate for non-performance. Telling the other party oya perform ya side of the bargain na.

An order for specific performance can be made in one of the following situations:

• Where there is a valid contract between the parties: a contract entails an offer which has been accepted and consideration furnished with the intention of both parties to be bound. Anything less is not a contract In Hyde V Wrench, suit for specific performance failed as the defendant had not accepted the plaintiff’s offer. In Kuri V Kuri, consideration was lacking. Note also that specific performance would not be ordered for an illegal or void contract or a contract obtained by fraud, duress, misrepresentation or undue influence.

OR

• Where there has been sufficient act of part performance: A contract may be unenforceable at common-law where formalities have not been complied with for example Section 4 Statute of Frauds requires all land transactions to be in writing. However, in equity, specific performance may be decreed where there has been part performance:
• By the plaintiff.
• Unequivocally referable to the contract: payment and entry into possession may be sufficient act of part performance-Ogunbambi V Abowaba.
• Where the plaintiff has altered his position and it would be inequitable for the defendant to evade his obligation by alleging non-compliance with mere legal formalities Udolisa V Nwanosike.

An order for specific performance may be REFUSED in the following circumstances:

• Where there has been misrepresentation by the plaintiff.
• Where there is a fundamental mistake by the vendor: As there is no consensus ad idem Tamplin V James. Although rectification can be ordered where there was a prior agreement between the parties and the mistake was just in the drafting of the document
• Where there has been a substantial mis-descriptoin of subject matter or title
• Where the execution of the specific performance order would require constant supervision of the court as equity would not act in vain. In Apara V UAC, the defendants promised to employ the plaintiff after a long training if “he shaped well”. The courts could not compel the defendant to employ him.
• Where the conduct of the plaintiff is unconscionable: where he does not come with clean hands, unwilling to do equity, delays or is guilty of fraud, trickery, undue influence or duress.
• Where the defendant has a defective title in the property (rescission instead of specific performance can be ordered).
• Where the order will inflict hardship on the defendant or an innocent third party who has acquired interest in the property as a bona-fide purchaser for value without notice. The court may weigh the balance of hardship as between the plaintiff and defendant.

THE REMEDY OF RESCISSION.

An equitable remedy which enables a party to set aside a transaction and be restored to status quo. It may be done by mutual agreement of the parties but the court may be needed to restore property… it can be equated with cancellation. Until the contract has been rescinded, third parties can acquire interest because the contract is not void.

Basis of rescission.

• Fraud: In Sule V Aromire, the court noted that the innocent party is entitled to rescind notwithstanding caveat emptor. At common-law, the plaintiff can sue for damages for deceit.
• Innocent Misrepresentation: defined in Derry V Peek as a statement the defendant makes honestly believing in his assertions. The statement must be untrue and induced the plaintiff to enter the contract in reliance-Redgrave V Hurd. The rule has been varied by the Misrepresentation Act 1967 which provides that damages may now be awarded for innocent misrepresentation in deserving cases. The Act also shifts the burden to the representor to prove that he was not fraudulent or negligent in making his statement. The position remains the same in Nigeria because the misrepresentation act is not a stature of general application.
• Common Mistake: by both parties as to the subject matter of the contract which can render the contract void and where it is not fundamental, voidable- Cundy V Lindsay. Mistake here means misapprehension or oversight. In Cooper V Phibbs, the plaintiff contracted to buy land which already belonged to him. Held, that the agreement could be rescinded. In Bell V Lever Brothers, the appellants were employed. They committed a breach which could lead to dismissal. When the company merged, the respondent company paid them off and sought to recover money paid upon discovery of the disobedience. The court held that the mistake did not relate to the subject matter. See also Re Griffith
• Duress, Undue influence: in Taylor V Brew, the settlor’s father persuaded her to make settlement of her property by a trust deed with a clause entitling him to her estate if she dies intestate. The trust deed was declared null and void on the ground that the settlor did not understand what she was doing.
• Non-disclosure: where there is a duty to disclose but you don’t disclose, the contract can be rescinded. For example contracts Uberrimae Fidei like insurance contracts.
• Breach of fiduciary relationship.
• Other situations where one party has acted unconscionably and other situations which equity deems fit.

Right to rescind may be lost when:

• The plaintiff affirms the contract expressly or impliedly.
• The plaintiff delays. In Leaf V International Galleries, a delay of 5 years was fatal to the plaintiff’s case.
• Where a third party bona fide purchaser for value in good faith has acquired rights under the contract-Taylor V William.
• Where the contract has been completed. Except there has been fraud-Wilde V Gibson.

RECTIFICATION.

Seeks to correct a common mistake in the recording/writing of the contract so as to make it reflect what the parties had actually agreed to-Lord Denning in Rose V Pin. May not be granted for apparent or typographical mistakes that cannot alter the nature of the contract. It does not seek to alter a contract but the instrument/document  The burden of proving previous oral consensus is really high on the person alleging such because Section 128 of the Evidence Act is against using oral evidence to vary written agreements.

Generally a unilateral mistake (only one party) shall not be rectified except the mistake is fundamental to the execution of the contract or there has been fraud. In ***A. Roberts and co V Leicestershire County Council, the plaintiffs had undertaken to build a school for the defendant within 18 months, the council altered the period to be 30 months in the draft contract. The company signed ignorant of the alteration. Rectification was ordered. When fraud is at play, it is advisable to seek rescission.

Companies articles of association cannot be rectified but can be altered through due process of the law-Scott V Scott

In THE VESSEL “LEONA II” V FIRST FUELS LTD, the court noted that in granting rectification, we should consider:

• Whether there was a prior agreement between both parties.
• Whether the document properly embodied the terms of the agreement.

Rectification can be effected by the presentation of Evidence which shows that the contract does not dictate the intention of the parties-Riverlate Properties V Paul.

Rectification does not entail transformation of the contract, it only seeks to amend the contract to evidence the intention of the parties. F.E Rose V W.N Prime Junior and Co. Also Roberts V Listershire County Council.

In Garrard V Frankel, the plaintiff put 130 instead of 230 which was agreed as the lease amount. Court allowed rectification. In Craddock Bros V Hunt, both parties had agreed to a piece of land but the document conveyed the land along with the adjoining one. The court granted rectification.

Defences available to equitable remedies.

• Bona fide purchaser for value without notice.
• Delay, Laches and acquiescence.

 

[1] Oshiomole has termed this as black market injunction.

[2] Note that the Urgency must not be self induced-Kotoye V CBN.

[3] The applicant may be required to deposit security in deserving situations (like where he is not within the jurisdiction of the court).