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30 Dec

EQUITY AND TRUST 1.1 GENERAL INTRODUCTION AND DEFINITION

LAW OF EQUITY

This note is too short please consult your textbooks. It should serve as a mere guide. Please read sentence line thoroughly and ask questions where confused.

DEFINITION OF EQUITY.

Broadly speaking, equity is that which is fair, right and just… a moderator of the rigour of legal rules seeking to mitigate the harshness. Technically speaking, it is the law administered by the early courts of chancery. This technical definition is unnecessary in the light of the fusion of both systems by the Judicature Act 1873 and 1875.

NATURE, ORIGIN AND RECEPTION OF EQUITY.

Traceable to 13th century England with the exercise of equitable jurisdiction by the chancellors during the reign of king Edward 1.

:: In those days, the Kings Bench, Common pleas and the Exchequer operated independently.

:: The common-law was operated by the writ (form of action) system. A claimant had to fit his claim into an existing writ. Chancellors were the secretary of state who drew and sealed royal writs.

:: With the suspension of this power (to draw writs) by the provision of Oxford 1258[1], the law became rigid and a claimant who could not fit his claim into an existing writ had no remedy.

:: The litigant who was denied justice (for inability to fit his claim into an existing writ) petitioned the king (through the council) who could exercise his prerogative of mercy.

:: The chancellors usually dealt with these petitions. The chancellors in dealing with these petitions were guided by the ideas of conscience, good faith and reason based on the facts of each case. This led to the administration of flexible and responsive justice based on the facts of each case rather than rigid systems of law.

:: This flexible system of justice was criticised by Selden as varying according to each chancellor’s conscience just as the length of their feet.

As the chancellor extended and consolidated his jurisdiction, inevitable conflicts between the Chancery and Common Law courts arose. Various cases (like Neath V Rydley and Courtney V Glanvil) demonstrated the belligerence of the common-law courts towards interference by the chancery. This notwithstanding, Cardinal Wosely granted “common injunction” in deserving cases to prevent access to common-law courts. This shows how aggressive the courts were towards one another.

:: The tension between common-law courts and the chancery became glaring in the Earl of Oxford’s Case, where a common-law court held that the defendant was entitled to eject the plaintiff (who built a house) from his land. When the case went to the Chancery, Lord Ellesmere held to the opposite and granted an injunction to restrain the defendant (landowner) from ejecting the plaintiff (assignee of lease) from the land as “by the law of God, he who builds a house must live in it”. This sparked the outrage of the common-law courts and the quarrel was referred to king James 1 who resolved the dispute in favour of the Chancery.

:: The Common-law Procedure Amendment Act 1854 and the Chancery Amendment Act (Lord Cairns Act) were enacted to accommodate the separate administration of the two systems. For example, it enabled each court to grant both common and equitable reliefs (to some extent).

:: Subsequently, Both systems of administration were fused by the Judicature Act 1873 and 1875 with Section 16 and 25 respectively providing that equity shall prevail over common-law in the event of conflict.

:: As years went by, equity began to rigidify as men with legal training assumed the position of chancellor. As Lord Eldon had once noted that the rules of equity must be well settled. For example, in National Provincial Bank V Ainsworth, the court refused to recognise the right of a deserted wife to occupy the matrimonial home. Lord Denning grieved over the rigidity and emphasised the need for the future generation to create a “new equity”. The need to do justice without undue regard to technicalities has also been emphasised in-Ezekiel V Nwankwo.

Although equity has been criticised and seems to have rigidified over the years, equity has contributed to both substantive, procedural and remedial justice in the following regards: (amongst others):

  1. Equitable Remedies: have been provided especially where damages would not do sufficient justice to the case. Specific performance compels the performance of an obligation under a contract. An injunction seeks to restrain or compel the performance of an act in deserving situations-American Cynamid V Ethicon. Rectification seeks to bring a written agreement in consonance with the prior consensus of the parties. Rescission seeks to nullify a contract for deserving reasons. These and many more remedies have been introduced by Equity.
  2. Equitable Reliefs: like doctrines of part performance, secret trust, and so on has been provided. These have been applied in numerous cases like: Walsh V Lonsdale, Obanor V Co-operative Bank Ltd, Udolisa V Nwanosike, Errington V Errington amongst others to prevent fraud and do justice to each case.
  3. Estoppel: the equitable doctrine of estoppel has arisen to prevent a promisor from going back on his word where a party has changed his positon in relying on the promisor’s representation/promise.
  4. In Trust:
  • Common law did not recognise the rights of beneficiaries. Equity recognises the right of beneficiaries. The trustee is compelled to act in the interest of the beneficiary.
  • Land is now devisable to women who can own separate property- Married Women’s Property Act.
  1. In Mortgage: A mortgage is a loan agreement secured with property. The contribution of equity to the realm of mortgage is that:
  • Equity now makes it possible for a mortgagor to redeem his property after the lapse of the contractual date for redemption. This was impossible at common-law.
  1. In Land: The burden of restrictive covenants (agreement that land shall not be used in a particular way) is now recognised as running with land except for a purchaser without notice.

In conclusion, the ingenuity and conscientious reasoning of the chancellor gave birth to equity which (at present) touches virtually every aspect of law and justice. Equity has been received into Nigeria (first) by Ordinance no. 3 of 1863, Supreme Court Ordinance 1914. The position is that the rules of common-law, doctrines of equity and statutes of general application that were in force in England as at the first of January 1900 have been received in Nigeria.

 

[1] Though granted respite by the In Consimili Casu Clause of Westminster 1285

Isochukwu

Quite eccentric really

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