Maxims of Equity PDF

MAXIMS OF EQUITY. The maxims are: 1. Equity will not suffer a wrong to be without a remedy. 2. Equity follows the law. 3. Where the equities are equal the law shall prevail. 4. Where the equities are equal the first in time shall prevail. 5. He who seeks equity must do equity. 6. He who comes into e...

MAXIMS OF EQUITY. The maxims are: 1. Equity will not suffer a wrong to be without a remedy. 2. Equity follows the law. 3. Where the equities are equal the law shall prevail. 4. Where the equities are equal the first in time shall prevail. 5. He who seeks equity must do equity. 6. He who comes into equity must come with clean hands. 7. Delay defeats equity. 8. Equity is equality. 9. Equity looks to the intent rather than the form. 10. Equity looks on as done that which ought to be done. (re rose and Milroy case) 11. Equity imputes an intention to fulfill an obligation. 12. Equity acts in personam. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY. This is the most important of all the maxims, this is because it provides the justification for the intervention of equity; equity intervened because the common law could not provide adequate remedies in certain situations. The reason for the intervention of equity is to ensure that all wrongs have their corresponding remedies. What is meant by wrongs in this context are wrongs which are capable of being remedied by a court of justice. It does not mean every type of wrong. Equity being a supplement of the law, was concerned only with justiciable wrongs or wrongs capable of judicial redress. It must not be supposed that every moral wrong was redressed. An example of the application of the maxims is that if A conveyed land to B to the use of or in trust for C it was based on confidence in B that he would honour the terms. However the common law courts will not even grant C a locus standi because legal title was vested in B while C, the beneficiary, was not a party to the transaction. This of course was wrong. Therefore equity intervened to compel B not to abuse the confidence of A but to hold and use the property for the benefit of C. Trusts therefore became enforceable in equity because the chancellor thought that to refuse to enforce it would lead to an injustice. In exercising its auxiliary jurisdiction, equity devised new procedures to assist parties in enforcing their legal rights. Example a party in a common law suit who sought discovery of documents in the possession of his adversary had to commence a fresh action in the court of Chancery for that purpose only. He could return to the Common law courts after discovery had been ordered, and he had armed himself with the information disclosed to him on oath, so as to fight the substantive common law suit. The necessity of going from one court to another ceases with the fusion of the law and equity jurisdictions in England by the judicature Act, 1873. In Ghana the High Court (Civil procedure rules) 2004 Order 21 rule 6, confers a statutory power on the court to order discovery in favour of any party to any cause or matter. Find equivalent in 1994 civil procedure rules. HELLEWELL V. CHIEF CONSTABLE OF DERBYSHIRE Plaintiff was fingerprinted and photographed at a police station in connection with theft and on which he was later convicted. At a later date, a local association of traders who were concerned about the level of shoplifting and harassment of shopkeepers in the town asked the police to provide photographs of individuals known to be causing such problems. The police provided them with the plaintiffs picture amongst others and directed that it was only to be shown to the shopkeepers, staff and not to be displayed publicly. The plaintiff commenced proceedings against the defendant chief constable seeking a declaratory relief and an injunction to restrain the defendant chief constable. HELD: A duty of confidence could arise when the police photographed a suspect at a police station in circumstances where the suspects consent was not required and when such a duty arose, the police were not free to make whatever use they liked of the photographs but were under certain obligations to the suspect, breach of which would be actionable by him at private law. RAMIA V. RAMIA Hand W, who had been married customarily for three years, married under the Marriage of Mohammedans Ordinance Cap. 129 (1951 Rev.), on 25 April 1958. There were five children of that marriage. In 1964, H acquired a lease of land in W's name and put up a building "Ramia House" also in W's name on the plot. Subsequently, H, claiming that W had deserted him, brought an action to have W convey the house to him on the ground that he retained the beneficial interest of the estate in the property and W only held the legal estate in trust for him. W, on the other hand, claimed that H had divested himself of any beneficial interest in the property and made an outright gift of the property to herself and her children. She therefore urged the court to apply the presumption of advancement in her favour. Counsel for H, however, sought to rebut the presumption by leading evidence to show that H had exclusively controlled the property. H's claim was dismissed. On appeal, counsel for H submitted that (i) H's exclusive control of the property defeated the presumption of advancement in W's favour; (ii) the doctrine of advancement as between husband and wife had been eroded; and (iii) there was no subsisting marriage between the parties to enable H invoke the doctrine of advancement since their marriage had not been registered within one week of celebration. The appellate court found on the evidence that (a) "Ramia House" was acquired with the expressed intention of benefiting W and her children, and (b) the marriage certificate of H and W showed that their marriage was registered on the day of celebration. Held, dismissing the appeal (per Francois J.A., Edusei and Edward Wiredu JJ.A. concurring): (1) the law on the issue of establishing a gift by way of advancement was that if the facts were consistent with a presumption of advancement, the onus was on those who disputed the gift; while if there was no presumption of advancement, there was primarily a resulting trust in favour of the person who paid the money, which had to be rebutted by [p.276] effective evidence. In the instant case W and her children were in a class that could claim the benefit of the presumption of advancement, provided an intention to benefit her could be discerned from the contemporaneous circumstances and further, if no matters in rebuttal contemporaneous with the acquisition, casting doubt that the beneficial ownership in the property was being conveyed to W existed. On the evidence the conveyance to W, with the expressed intention of benefiting her and her children, made a gift clearly manifest. Besides in the context of our local circumstances a husband's control of a wife's property, to enable his expertise to be exercised in the matrimonial interest, was not unknown and did not detract from a gift. 2) EQUITY FOLLOWS THE LAW The court of Chancery always maintained that equity only supplemented the common law and never intended to override it. Hence if there was a clear and direct rule of the common law or of statute which covered all aspects of the case equity will not intervene or attempt to alter the effect of the rule. For this reason it is said that equity follows the law. However, we are told by Cardozo J. that „Equity follows the law, but not slavishly nor always‟. This means that if there is a loop hole or any circumstance which the common law disregarded, equity would not follow the law in disregarding it but would intervene to do justice. This is precisely the role that equity came to perform. Section 13(2) of the Conveyancing decree provides as with an example, it states that a conveyance of an interest in land exhausts the whole interest of the grantor unless there appears a contrary intention expressed in the conveyance or by necessary implication. Equity also created new interests in which it did not follow the law, such as contracts, restrictive covenants and the mortgagor‟s equity of redemption. Estate Contracts: these are contracts for the sale and lease of land, so called because they create estates in land. While common law would only award damages for the breach of such contracts, equity would decree specific performance, which would compel the vendor to convey the land itself or execute the lease. This right of specific performance creates an interest in the land, a type of property right; for if , the purchaser is entitled to the equitable remedy of specific performance, he obtains an immediate equitable interest in the property because, according to another of the maxims, equity looks upon that as done which ought to be done. This equitable interest is a proprietary interest which is enforceable against third parties, except bonafide purchasers for value without notice. In most cases, notice may be given of an equitable interest by registration, so that it prevails against even purchasers for value. Restrictive covenants: At law this type of contract would bind only the parties and not the future owners. Equity however takes the view that covenants restricting the use of land can run with the land. In Tulk v Moxhay it was held that a restrictive covenant can be enforced against a later purchaser unless he bought without notice of the covenant. This is a deviation from the common law position. 3) Mortgagors equity of Redemption: Under the old law, a mortgage was an arrangement whereby a debtor conveyed his land to his creditor as security for a loan. There as a date fixed for redemption of the mortgaged property by repaying the loan. This was known as the contractual date of redemption. At law, the right to redeem was lost if the mortgagor defaulted in repaying the loan precisely on the contractual date. Equity, however takes a more lenient view and would allow the mortgagor to redeem at any time after the contractual date, regardless of any provision to the contrary in the mortgage. This is known as the mortgagors equity of redemption. In this regard equity departs from the common law. BISS V HYGATE The appellant agreed to let, and the respondent agreed to take from the appellant, a nursery garden for 6 years from March 25, 1916 at twenty pounds, payable quarterly, subject to the preparation of a formal lease. On the same day the appellant agreed to let the respondent into immediate possession, and the respondent went into possession and did such acts as digging, sowing and watering plants. On March 18 all the terms were agreed as embodied in a written lease, but it was not signed. After that date the respondent‟s wife died and he declined for that reason to go on with the matter. In an action by the appellant against the respondent for rent from March 25, the respondent pleaded the statute of frauds, and the appellant in answer set up part performance. HELD: That the respondent had gone into possession before the terms of the lease were agreed to, nevertheless, as his possession continued until after the date fixed for the commencement of the tenancy and its continuance after that date was unequivocally referable to the contract, there was a sufficient part performance to take the case out of the statute of frauds and the appellant was entitled to recover. DJAN V. OWOO On 10 January 1975 the first defendant orally agreed to sell his house situate at No. 2 West Loop, Tosano, Accra, for ¢25,000.00 to the plaintiff. The plaintiff paid, inter alia, a deposit to ¢2,500.00 and obtained two receipts signed by the first defendant in which the names of the parties appeared, and the house to be sold was described. The plaintiff subsequently asked his bankers to issue two cheques, one to the first defendant in full payment of the balance of the purchase price, and the second cheque to the second defendants to redeem the property which had been mortgaged to them by the first defendant. The first defendant refused to complete the sale and later returned the cheques to the plaintiff's bankers. The plaintiff thereupon instituted this action against the first defendant for specific performance of the agreement to purchase the house. HELD: N.R.C.D. 175, s. 3 (2), however provided that sections 1 and 2 were subject to the rules of equity including the rules relating to part-performance. When a plaintiff had wholly or partly executed his part of a parol agreement on the understanding that the defendant would do the same, the court would order specific performance of the contract on the ground that it would be fraud on the defendant's part not to carry out his side of the bargain. In the present case, it was clear from the statement of claim that the house was described with particularity and the plaintiff performed his side of the contract by making payment of the purchase price, which was known, and it would therefore be fraudulent and unconscionable on the first defendant's part to refuse to carry out his side of the contract. There had been sufficient part-performance by the plaintiff of the contract and specific performance would be granted 3) WHERE THE EQUITIES ARE EQUAL, THE LAW PREVAILS. In the case of a purchase of a legal estate for value without notice, the equities are equal between the purchaser and the beneficiaries; the purchaser‟s legal estate is allowed to prevail. The position is different where the purchaser is a purchaser of an equitable interest only. The competition is between the two equities and the rule is that the first in time prevails. Hence 4) WHERE THE EQUITIES ARE EQUAL THE FIRST IN TIME PREVAILS. ADU SARKODIE V. KARAM AND SONS LTD E. leased his house to the defendants on 1 July 1969 for a term of ten years with an option for renewal for a further term of ten years. Rent covering the period 1 July 1969 to 31 December 1975 was paid in advance. No formal agreement was [p.412] executed but letters embodying the agreed terms of the lease were signed by the parties. On 14 December 1973 E. sold the house to the plaintiff. Though the plaintiff was aware of the defendants' occupation of the house at the time of the purchase, he did not inquire of the nature of their interests in the house. The plaintiff, after the purchase, invited the defendants to attorn tenant to him but they refused on the ground that this was not necessary as they were already tenants of the plaintiff's vendor. The plaintiff thereupon issued a writ to eject the defendants. HELD: The letters embodying the agreed terms were instruments affecting land and should have been registered under Act 122 but as they were not so registered, they were of no legal effect and the defendants could not claim rights under them. Consequently, the defendants had no valid rights under the lease of which the plaintiff should take notice. The effect of this judgment was to terminate the lease, and the defendants had become statutory tenants and could only be ejected under section 17 (1) of Act 220. As the plaintiff ‟s claim for ejectment was not based on Act 220, he was not entitled to the relief sought. HE WHO SEEKS EQUITY MUST DO EQUITY. KASUMU V BABA EGBA The respondent mortgaged certain leasehold land to a licensed moneylender( of whose estate the appellants were the administrators) as security for a loan. The moneylender had admittedly kept no book recording the transaction as required by Section 19 of the Money lenders Ordinance of Nigeria and the transaction was therefore unenforceable under that section. The respondent having instituted proceedings claiming redemption of the property and recovery of possession. HELD: The principle of lodge v National Union Investment Co. ltd that a borrower, as a condition of being granted relief in the form of delivery up of securities(where the transaction was illegal) must repay such of the money borrowed as was still outstanding, was not applicable in the case of a transaction declared to be unenforceable by Statute. The ordinance in enacting that no loan which failed to satisfy the statutory requirements was to be enforced, meant that no court of law was to recognize the vendor as having a right at law to get his money back. Accordingly, the respondent was entitled to possession, cancellation of the mortgage and delivery up of the cancelled deeds and the title deeds of the property without being obliged to pay the outstanding balance of the loan. 6) HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS. This maxim unlike the former, looks to the past because it says that the suitors hands must be clean before he comes to equity. As it has been stated „he who has committed iniquity shall not have equity‟. JONES V LENTHAL But we are also admonished that „equity does not demand that its suitors shall have led blameless lives per Bradeis J. in Loughram v. Loughram. The maxim must, therefore not be interpreted too widely. General depravity or bad character will not be a bar to an equitable relief. To constitute a bar, the conduct complained of must have an immediate and necessary relation to the equity sued for. DELAY DEFEATS EQUITY. The maxim is sometimes given as „equity aids the vigilant and not the indolent‟. In Smith v. Clay Lord Camden, L.C said: a court of equity has always refused its aid to stale demands, where the 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. Delay sufficient to prevent a party from obtaining an equitable remedy is known as laches. There is laches when it would be unjust to give a remedy because a) the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver, or b) the party, by his conduct and neglect, has, though perhaps not waiving the remedy, yet put the other party in a situation in which it would be unreasonable to place him if the remedy were afterwards to be asserted. Laches consist of lapse of time coupled with circumstances which make it inequitable to enforce the claim. Laches does not bind successors. Therefore, a successor in title, who is not himself guilty of laches, may assert his rights, though his predecessor in title, could have been resisted successfully by the defence of laches. Not every type of delay will amount to laches. Delay is fatal if: - It is evidence of an agreement to abandon or release the right - Has resulted in the loss or destruction of evidence by which the claim may be rebutted - It is due to waiting to see if a venture will prosper - The plaintiff so acted as to induce the defendant to alter his position on the reasonable faith that the claim has been released or abandoned. It was said in the case of Pickard v. Sears: But the rule of law is clear, that, where one by his own words or conduct willfully causes another to believe the existence of a certain state of things , and induces him to act on that belief , so as to alter his own previous position, the former is concluded from averring against the latter o different state of things as existing at the same time. Delay should not be confused with acquiescence which is a conduct from which it can be inferred that a party has waived his right. To amount to laches there must be full knowledge. legal capacity and a free will. Therefore ignorance , disability or undue influence may be satisfactory explanations for delay. In many cases a statute now determines when there is delay. The LIMITATIONS DECREE 1972 section 6(1) provides that the period of limitation prescribed in the decree „shall not apply to any claim for specific performance or for an injunction or other equitable relief‟. In otherwords, the statute does not prescribe periods of limitation for equitable reliefs however the courts may refer to sattute to decide whether or not to grant the equitable relief. Section 6(2): „ this section shall not be construed as preventing a Court from applying by analogy any provision [on the periods of limitation in the Decree] in any proceedings where in the opinion of the Court the interests of justice so require.‟ If the period prescribed by the decree has expired, a court of equity will presume that the claim is barred by laches, and the burden will lie on the plaintiff to satisfy the court that there has been no laches. Defendant also bears burden of proving laches. IN RE MARRIAGE OF MOHAMMEDAN ORDINANCE, CAP 129; In re Registration of Marriage between Byrouthy v Akyere; Exparte Ali. Held: although no time limit was set by section 6 (10) of Cap. 129 as to when an ex parte application could be brought for the registration of an Islamic marriage after the one week specified for registration, it was [p.873] apparent from the Ordinance that time was of the essence. That was why the period of registration was stated to be one week. Such an application had to be brought within a reasonable time after the ceremony; at any rate while the marriage was subsisting. The purpose of the registration was to validate the marriage according to Islamic law. But after the marriage had been brought to an end, whether by the parties‟ own act or by operation of death, there could be no marriage subsisting which the applicant would be seeking to validate by registration. According to the affidavit the bridegroom was dead. By his death, the marriage was brought to an end. While the marriage subsisted it was not registered, so under Islamic law it remained invalid. That marriage could not now be validated by a registration 34 years after it was contracted and after its termination. No marriage existed for registration. 8 EQUITY IS EQUALITY. In the absence of a clear and sufficient reason for any other basis of division, equity will proceed on the basis that a division in equal shares is intended. As said by Lord Somers, L.C in Petit v. Smith, „equity did delight in equality‟. This age-old principle of equity is expressed in the maxim „equality is equity‟. He application of this maxim may be considered in certain circumstances:  Presumption of tenancy in common: equity has always disliked a joint tenancy with its principle of jus accrescendi. Here the right of survivorship takes precedence. Where one person with an interest passes his interest is not inherited but this then invested in the survivor and the last survivor gains sole ownership in the property. Where there is a joint tenancy equity is inclined to imply a tenancy in common whereby undivided shares of the land are owned and may pass to successors.  Severance of a joint tenancy: even in the case where, under both law and equity, there is a joint tenancy , equity will still readily treat the joint tenancy as severed so as to exclude the incidence of survivorship.  A purchase of unequal shares: where two or more persons together purchase a property with the money provided in unequal shares , the purchasers are presumed to take beneficially as tenants in common shares proportional to the sums advanced, even if there is a joint conveyance to them, unless they express a contrary intention. Where they are husband and wife, even if they were unequal shares a joint tenancy is assumed as such in the law in Ghana in an intestate situation the children may not sell off portions of the property as they succeed not as tenants in common. In other cases once o contributor passes the others are deemed to be holding his share for his successors in trust.  A joint loan or mortgage: where two or more persons together have advanced money on a mortgage , whether in equal or unequal shares , equity presumes a tenancy in common between the mortgagees.  Partnership assets: where partners acquire property , they are presumed to hold it as beneficial tenants in common. Jus accrescendi inter mercatores locum non habet: the right of survivorship has no place in business transactions.  Statutory Presumption: there is a presumption of tenancy in common in Ghana in s.14(3) of the Conveyancing Decree 1973, NRCD 175. The statute however concerns only land and is not applicable to any other property but immovable property. 14 (3) : A conveyance of an interest in land to two or more persons, except a conveyance in trust, shall create an interest in common and not in joint tenancy, unless it is expressed in such conveyance that the transferees shall take jointly, or as joint tenants, or to them and the survivor of them, or unless it manifestly appears from the tenor of the instrument that it was intended to create an interest in joint tenancy. DIWELL V. FARNES. The plaintiff, a widow and administratrix of a man who died in 1957, claimed possession from his mistress of a house. In 1941 the deceased and the mistress began to live together and a child was born in 1942. In 1945 they went to live in a rented house. The deceased was the tenant, but the mistress contributed about two-thirds of the total joint expenses. In 1954 deceased was able to purchase the house; the purchase was financed by a building society mortgage taken out by the deceased, but the installments of repayment were paid by the mistress until the house was sold. In 1956 the deceased sold the house and with the proceeds he purchased the house that is the subject matter of the present dispute Held: In all circumstances the judge was right in holding that the deceased and the defendant entered into a joint enterprise, and the maxim that equality is equity ought to be applied. The contributions of the defendant towards the rent of the rented house ought to be taken into account as well as her discharge of the mortgage installments, and her beneficial interest ought to be one-half share. MACDONALD V. MACDONALD. A wife and husband lived together with the wife‟s mother in a cottage in which the mother was tenant for life and the wife was remainderman. Later the house was sold and the proceeds of the sale was used to buy another house which was conveyed to the husband alone without their agreement. Husband also mortgaged the house, as sole mortgagor in order to raise the rest of the purchase price. Furniture for the new house was provided by the wife and mother. The money borrowed on the security of the mortgage was repayable by instalments, which, with the interest were met by the husband and his wife. Later, husband divorced his wife and re-married. After his death, his wife became sole administratrix and absolutely beneficially entitled to the whole of his estate. ON THE QUESTION WHO WAS ENTITLED TO THE HOUSE Held: The wife, husband and wife‟s mother had a substantial beneficial interest in the house, which was purchased as a joint family enterprise. Therefore as from the death of the wife‟s mother, the wife was entitled to a two-thirds share and the husband to a onethird share. RIMMER V. RIMMER. Husband and wife both of whom were wage earners bought a dwelling house to serve as a matrimonial home. Later the house was sold. When the issue arose as to how the proceeds should be divided. Held: That the proper and equitable course was to divide the proceeds of sale between them in equal shares. 9. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM. The maxim is explained in the dictum of Romily, M.R, in Parkin v. Thorold thus: „Courts of Equity make a distinction in all cases between that which is matter of substance and that which is matter of form; and if it find that by insisting on the form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat the substance.‟ The maxim has the following application among others:  Equity unlike the common law will not in a contact hold a party strictly to the contractual date of performance if he is in breach, provided that he is ready to complete within a reasonable time thereafter. (Parkin v. Thorold). In equity time is prima facie non-essential but formal, so an order for specific performance may be issued after the lapse of the time on the contract.  In equity when an agreement is negative or positive is told by the not the language but by the substance. A negative covenant in a contract is more likely to attract an injunction against it if sought then a positive covenant. But in some instances one must be careful as one may appear to be the other. As in a covenant that A will buy electrical power from B for A‟s premises for a stated period. This so understood is a positive covenant to get power from the B and not easily enforced by order of specific performance, the remedy would be breach for damages. It has been held however that the undertaking was a negative covenant preventing A from getting power from anyone else and as such was enforceable by injunction.  Equity looks down on technicalities and as such would enforce a transaction even if it lacks due formality. “ it is a principle of equity that the court does not require unnecessary formalities to be gone through.” (Metro Electric v. Ginder). Equity will excuse lack of due form, or a lack of technical requirements , and hold an agreement or transaction to be binding until the technicality or formality can be satisfied. In some cases , its implication somewhat overlaps with the maxim that equity looks on that as done that which ought to be done. MANNERS V. NEW A legal mortgagee had asked for the deeds which the mortgagor, who was his solicitor, made excuses for not giving him. The mortgagor afterwards deposited the deeds with another mortgagee as security for money advanced without notice of the legal mortgage. HELD: in an action by the legal mortgagee for foreclosure, that he had not been guilty of fraud or negligence amounting to fraud, and that he could not be postponed to the mortgagee by deposit by reason of any negligence short of that: HELD: That the legal mortgagee was entitled to recover the deeds from the mortgagee by deposit, notwithstanding he was a purchaser for value without notice; and that sec 25 and sub sect 11 of the judicature act did not alter the rule of law on the subject. 10. EQUITY LOOKS AS DONE THAT WHICH OUGHT TO BE DONE Applies often to contracts. It means equity treats a contract to do a thing as if the thing were already done. Equity will so treat it only in favor of persons entitled to enforce the contract specifically and this principle cant be invoked by volunteers. There must be sufficient act of part performance; there must be no lack of mutuality; normally it must not be a contract for personal service or requiring constant supervision. Walsh v. Londsdale; Busby v. Acquah 11. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION Called to aid when a person does an equivocal act. Where a person is under an obligation to do an act, and he does an act which may be considered as fulfilling another possible intention , it will be assumed that he prima facie intends to fulfill that obligation. An example is where a man owes a debt but later pays to the debtor without specifying for what purpose. In such a case it will be presumed that the payment was in satisfaction of the debt. Snowden v. Snowden 12. EQUITY ACTS IN PERSONAM Means that the Court of Equity wont interfere with the property itself as the Common law would nor would it order for sale of the unsuccessful defendants property in execution. It would only make an order against the defendant personally and would punish him for contempt if he disobeys. Penn v Baltimore :Specific performance was ordered of an agreement relating to land boundaries in Pennsylvania and Maryland, the defendant being in this country; but an action will not be entertained where the question is merely one of title to land outside the jurisdiction. Principle is that equity acts in personam.